EXHIBIT 4.5
EXECUTION COPY
INDENTURE
between
XXXXXXXXXX TECHNOLOGY INCORPORATED
and
LASALLE BANK NATIONAL ASSOCIATION
as Trustee
$130,000,000
2.25% Convertible Subordinated Notes due 2010*
---------------
Dated as of February 24, 2003
--------------------
* Plus an over-allotment option to purchase up to $20,000,000 principal
amount of 2.25% Convertible Subordinated Notes due 2010.
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Definitions.....................................................................................1
SECTION 1.02. Certain Other Definitions.......................................................................8
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...............................................9
SECTION 1.04. Rules of Construction...........................................................................9
ARTICLE II
The Convertible Subordinated Notes
SECTION 2.01. Form and Dating.................................................................................9
SECTION 2.02. Execution and Authentication...................................................................11
SECTION 2.03. Registrar, Paying Agent and Conversion Agent...................................................11
SECTION 2.04. Paying Agent To Hold Money in Trust............................................................12
SECTION 2.05. Holder Lists...................................................................................12
SECTION 2.06. Transfer and Exchange..........................................................................12
SECTION 2.07. Replacement Convertible Subordinated Notes.....................................................14
SECTION 2.08. Outstanding Convertible Subordinated Notes.....................................................15
SECTION 2.09. When Treasury Convertible Subordinated Notes Disregarded.......................................16
SECTION 2.10. Temporary Convertible Subordinated Notes.......................................................16
SECTION 2.11. Cancellation...................................................................................17
SECTION 2.12. Defaulted Interest.............................................................................17
SECTION 2.13. CUSIP Number...................................................................................17
SECTION 2.14. Regulation S...................................................................................17
ARTICLE III
Redemption
SECTION 3.01. Optional Redemption............................................................................18
SECTION 3.02. Notices to Trustee.............................................................................18
SECTION 3.03. Selection of Convertible Subordinated Notes To Be Redeemed.....................................18
SECTION 3.04. Notice of Redemption...........................................................................19
SECTION 3.05. Effect of Notice of Redemption.................................................................20
SECTION 3.06. Deposit of Redemption Price....................................................................20
SECTION 3.07. Convertible Subordinated Notes Redeemed in Part................................................21
SECTION 3.08. Conversion Arrangement on Call for Redemption..................................................21
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ARTICLE IV
Covenants
SECTION 4.01. Payment of Convertible Subordinated Notes......................................................22
SECTION 4.02. Commission Reports.............................................................................22
SECTION 4.03. Compliance Certificate.........................................................................22
SECTION 4.04. Maintenance of Office or Agency................................................................23
SECTION 4.05. Continued Existence............................................................................23
SECTION 4.06. Repurchase Upon Designated Event...............................................................23
SECTION 4.07. Appointments to Fill Vacancies in Trustee's Office.............................................25
SECTION 4.08. Stay, Extension and Usury Laws.................................................................26
SECTION 4.09. Taxes..........................................................................................26
SECTION 4.10. Investment Company Act.........................................................................26
ARTICLE V
Successors
SECTION 5.01. When the Company May Merge, Etc................................................................26
SECTION 5.02. Successor Corporation Substituted..............................................................27
SECTION 5.03. Purchase Option on Change of Control...........................................................27
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default..............................................................................28
SECTION 6.02. Acceleration...................................................................................30
SECTION 6.03. Other Remedies.................................................................................30
SECTION 6.04. Waiver of Past Defaults........................................................................30
SECTION 6.05. Control by Majority............................................................................31
SECTION 6.06. Limitation on Suits............................................................................31
SECTION 6.07. Rights of Holders To Receive Payment...........................................................31
SECTION 6.08. Collection Suit by Trustee.....................................................................32
SECTION 6.09. Trustee May File Proofs of Claim...............................................................32
SECTION 6.10. Priorities.....................................................................................32
SECTION 6.11. Undertaking for Costs..........................................................................33
ARTICLE VII
The Trustee
SECTION 7.01. Duties of the Trustee..........................................................................33
SECTION 7.02. Rights of the Trustee..........................................................................34
SECTION 7.03. Individual Rights of the Trustee...............................................................35
SECTION 7.04. Trustee's Disclaimer...........................................................................35
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SECTION 7.05. Notice of Defaults.............................................................................36
SECTION 7.06. Reports by the Trustee to Holders..............................................................36
SECTION 7.07. Compensation and Indemnity.....................................................................36
SECTION 7.08. Replacement of the Trustee.....................................................................37
SECTION 7.09. Successor Trustee by Merger, etc...............................................................38
SECTION 7.10. Eligibility, Disqualification..................................................................38
SECTION 7.11. Preferential Collection of Claims Against Company..............................................38
ARTICLE VIII
Satisfaction and Discharge of Indenture
SECTION 8.01. Discharge of Indenture.........................................................................39
SECTION 8.02. Deposited Moneys to be Held in Trust by Trustee................................................39
SECTION 8.03. Paying Agent to Repay Moneys Held..............................................................40
SECTION 8.04. Return of Unclaimed Moneys.....................................................................40
SECTION 8.05. Reinstatement..................................................................................40
ARTICLE IX
Amendments
SECTION 9.01. Without the Consent of Holders.................................................................40
SECTION 9.02. With the Consent of Holders....................................................................41
SECTION 9.03. Compliance with the Trust Indenture Act........................................................43
SECTION 9.04. Revocation and Effect of Consents..............................................................43
SECTION 9.05. Notation on or Exchange of Convertible Subordinated Notes......................................43
SECTION 9.06. Trustee Protected..............................................................................43
ARTICLE X
General Provisions
SECTION 10.01. Trust Indenture Act Controls..................................................................44
SECTION 10.02. Notices.......................................................................................44
SECTION 10.03. Communication by Holders with Other Holders...................................................45
SECTION 10.04. Certificate and Opinion as to Conditions Precedent............................................45
SECTION 10.05. Statements Required in Certificate or Opinion.................................................45
SECTION 10.06. Rules by Trustee and Agents...................................................................46
SECTION 10.07. Legal Holidays................................................................................46
SECTION 10.08. No Recourse Against Others....................................................................46
SECTION 10.09. Counterparts..................................................................................46
SECTION 10.10. Other Provisions..............................................................................46
SECTION 10.11. Governing Law.................................................................................47
SECTION 10.12. No Adverse Interpretation of Other Agreements.................................................47
SECTION 10.13. Successors....................................................................................47
SECTION 10.14. Severability..................................................................................47
SECTION 10.15. Table of Contents, Headings, etc..............................................................47
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ARTICLE XI
Subordination
SECTION 11.01. Agreement to Subordinate......................................................................47
SECTION 11.02. Liquidation; Dissolution; Bankruptcy..........................................................48
SECTION 11.03. Default on Designated Senior Debt.............................................................48
SECTION 11.04. Acceleration of Convertible Subordinated Notes................................................49
SECTION 11.05. When Distribution Must Be Paid Over...........................................................49
SECTION 11.06. Notice by Company.............................................................................50
SECTION 11.07. Subrogation...................................................................................50
SECTION 11.08. Relative Rights...............................................................................50
SECTION 11.09. Subordination May Not Be Impaired by Company..................................................51
SECTION 11.10. Distribution or Notice to Representative......................................................51
SECTION 11.11. Rights of Trustee and Paying Agent............................................................51
SECTION 11.12. Authorization to Effect Subordination.........................................................51
SECTION 11.13. Article Applicable to Paying Agents...........................................................52
SECTION 11.14. Senior Debt Entitled to Rely..................................................................52
SECTION 11.15. Permitted Payments............................................................................52
SECTION 11.16. Pari Passu Indebtedness.......................................................................52
ARTICLE XII
Conversion of Convertible Subordinated Notes
SECTION 12.01. Right To Convert..............................................................................52
SECTION 12.02. Exercise of Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment for
Interest or Dividends...................................................................53
SECTION 12.03. Cash Payments in Lieu of Fractional Shares....................................................54
SECTION 12.04. Conversion Price..............................................................................55
SECTION 12.05. Adjustment of Conversion Price................................................................55
SECTION 12.06. Effect of Reclassification, Consolidation, Merger or Sale.....................................63
SECTION 12.07. Taxes on Shares Issued........................................................................64
SECTION 12.08. Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock.......................65
SECTION 12.09. Responsibility of Trustee.....................................................................65
SECTION 12.10. Notice to Holders Prior to Certain Actions....................................................66
SECTION 12.11. Restriction on Common Stock Issuable Upon Conversion..........................................66
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Cross-Reference Table*
Trust Indenture Indenture
Act Section Section
----------- -------
310(a)(1)..................................................... 7.10
(a)(2)..................................................... 7.10, 10.10
(a)(3)..................................................... n/a
(a)(4)..................................................... n/a
(a)(5)..................................................... n/a
(b)........................................................ 7.08, 7.10
(c)........................................................ n/a
311(a)........................................................ 7.11
(b)........................................................ 7.11
(c)........................................................ n/a
312(a)........................................................ 2.05
(b)........................................................ 10.03
(c)........................................................ 10.03
313(a)........................................................ 7.06
(b)(1)..................................................... n/a
(b)(2)..................................................... 7.06
(c)........................................................ 7.06, 10.02
(d)........................................................ 7.06
314(a)........................................................ 4.02, 10.02
(b)........................................................ n/a
(c)(1)..................................................... 10.04
(c)(2)..................................................... 10.04
(c)(3)..................................................... n/a
(d)........................................................ n/a
(e)........................................................ 10.05
(f)........................................................ n/a
315(a)........................................................ 7.01 (b)
(b)........................................................ 7.05, 10.02
(c)........................................................ 7.01(a)
(d)........................................................ 7.01(c)
(e)........................................................ 6.11
316(a)(last sentence)......................................... 2.09
(a)(1)(A).................................................. 6.05
vi
(a)(1)(B)................................................................... 6.04
(a)(2)...................................................................... n/a
(b)......................................................................... 6.02
(c)......................................................................... 9.04
317(a)(1)...................................................................... 6.08
(a)(2)...................................................................... 6.09
(b)......................................................................... 2.04
318(a)......................................................................... 10.01
(b)......................................................................... n/a
(c)......................................................................... 10.01
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
vii
THIS INDENTURE, dated as of February 24, 2003, is
between XXXXXXXXXX TECHNOLOGY INCORPORATED, a Minnesota
corporation (the "Company"), and LASALLE BANK NATIONAL
ASSOCIATION, as trustee (the "Trustee"). The Company has duly
authorized the creation of its 2.25% Convertible Subordinated
Notes due 2010 (the "Convertible Subordinated Notes"), and to
provide therefor the Company and the Trustee have duly
authorized the execution and delivery of this Indenture. Each
party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders from time to
time of the Convertible Subordinated Notes:
ARTICLE I
Definitions
SECTION 1.01. Definitions.
"Affiliate" means, when used with reference to any person, any other
person directly or indirectly controlling, controlled by, or under direct or
indirect common control of, the referent 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 management or policies of the referent
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The terms "controlling" and "controlled"
have meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security to the extent
applicable to such transaction and as in effect from time to time.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Capital Stock" of any person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such person, but excluding any debt
securities convertible into such equity.
"Change of Control" means the occurrence of one or more of the
following events: (a) 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 13d-3 and 13d-5 under the Exchange Act) of shares
representing more than 50% of the combined voting power of the then outstanding
Voting Stock of the Company, (b) the Company consolidates with or merges into
any other corporation, any other corporation merges into the Company, or the
Company effects a share exchange, and, in the case of any such transaction, the
outstanding Common Stock of the Company is reclassified into or exchanged for
any other property or securities, unless the shareholders of the Company
immediately before such transaction own, directly or indirectly immediately
following such transaction, at least a majority of the combined voting
2
power of the then outstanding Voting Stock of the corporation resulting from
such transaction in substantially the same respective proportions as their
ownership of the Voting Stock of the Company immediately before such
transaction, (c) the Company, or the Company and its subsidiaries taken as a
whole, sells, assigns, conveys, transfers or leases all or substantially all
assets of the Company, or of the Company and its subsidiaries taken as a whole,
as applicable (other than to one or more wholly-owned subsidiaries of the
Company), (d) any time the Continuing Directors do not constitute a majority of
the Board of Directors (or, if applicable, a successor corporation to the
Company), or (e) the Company undertakes a liquidation, dissolution or winding
up; provided, however, that a Change of Control under (a), (b) and (c) above
shall not be deemed to have occurred if either (y) the Daily Market Price per
share of Common Stock for any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the later of the Change of
Control or the public announcement of the Change of Control (in the case of a
Change of Control under clause (a) above) or the period of 10 consecutive
trading days ending immediately before the Change of Control (in the case of a
Change of Control under clause (b) or (c) above) shall equal or exceed 105% of
the Conversion Price in effect on the date of such Change of Control or the
public announcement of such Change of Control, as applicable (provided that for
purposes of the foregoing, the Conversion Price shall be determined without
regard to temporary reductions thereof pursuant to Section 12.05(h)) or (z) at
least 95% of the consideration (excluding cash payments for fractional shares)
in the transaction or transactions constituting the Change of Control consists
of shares of common stock that are, or upon issuance will be, traded on the
New
York Stock Exchange or quoted on the Nasdaq National Market.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 12.06, however, shares issuable on conversion of Convertible
Subordinated 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,
however, 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.
3
"Company" means the party named as such above until a successor
replaces it in accordance with Article V and thereafter means the successor.
References to the Company shall not include any Subsidiary.
"Consolidated Subsidiary" means, with respect to any person, a
Subsidiary which for financial reporting purposes is or, in accordance with
GAAP, should be, accounted for by such person as a consolidated subsidiary.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of this Indenture or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"Convertible Subordinated Notes" means the 2.25% Convertible
Subordinated Notes due 2010 issued, authenticated and delivered under this
Indenture.
"Conversion Price" means the initial conversion price specified in the
form of Convertible Subordinated Note in Paragraph 16 of such form, as adjusted
in accordance with the provisions of Article XII.
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time the trust created by this Indenture
shall principally be administered; as of the date hereof, the Corporate Trust
Office is located at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined on the basis of the last reported sale price regular
way of the Common Stock as quoted on the Nasdaq National Market, or if the
Common Stock is not then quoted on the Nasdaq National Market, as reported on
the principal national securities exchange upon which the Common Stock is
listed.
"Default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Securities (or any successor
securities clearing agency so registered), which shall initially be DTC.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Designated Senior Debt" means (a) indebtedness outstanding under the
Company's variable rate demand note (and related letter of credit) with the City
of Hutchinson, Minnesota and (ii) any particular Senior Debt which has at the
time of a payment event of default or the giving of a Payment Blockage Notice,
as the case may be, an aggregate outstanding principal amount in excess of $5
million, if the instrument creating or
4
evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which the Company is a party) expressly provides that
such Indebtedness shall be "Designated Senior Debt" for purposes of this
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Debt to exercise the
rights of Designated Senior Debt.)
"DTC" means The Depository Trust Company, a
New York corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.
"Global Securities Legend" means the legend labeled as such and that is
set forth in Exhibit A hereto.
"Indebtedness" means, with respect to any person, all obligations,
whether or not contingent, of such person:
(i) (a) for borrowed money (including, but not
limited to, any indebtedness secured by a security interest,
mortgage or other lien on the assets of such person that is
(1) given to secure all or part of the purchase price of
property subject thereto, whether given to the vendor of such
property or to another, or (2) existing on property at the
time of acquisition thereof),
(b) evidenced by a note, debenture, bond or other
similar written instrument,
(c) under a lease required to be capitalized on the
balance sheet of the lessee under GAAP, or under any lease or
related document (including a purchase agreement) that
provides that such person is contractually obligated to
purchase or cause a third party to purchase and thereby
guarantee a minimum residual value of the lease property to
the lessor and such person's obligations under such lease or
related document to purchase or to cause a third party to
purchase such leased property,
(d) in respect of letters of credit, bank guarantees
or bankers' acceptances (including reimbursement obligations
with respect to any of the foregoing),
(e) Obligations secured by a mortgage, pledge, lien,
charge, or similar encumbrance to which the property or assets
of such person are subject,
5
whether or not the obligation secured thereby shall have been
assumed by or shall otherwise be such person's legal
liability,
(f) in respect of the balance of deferred and unpaid
purchase price of any property or assets, and
(g) under interest rate or currency swap agreements,
cap, floor and collar agreements, spot and forward contracts
and similar agreements and arrangements;
(ii) with respect to any obligation of others of the type
described in the preceding clause (i) or under clause (iii) below
assumed by or guaranteed in any manner by such person (including,
without limitation, through "take or pay" and similar arrangements),
contingent or otherwise (and the obligations of such person under any
such assumptions, guarantees or other such arrangements); and
(iii) any and all deferrals, renewals, extensions,
refinancings and refundings of, or amendments, modifications or
supplements to, any of the foregoing.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Purchasers" means Xxxxxxx Xxxxx Xxxxxx Inc. and Xxxxxxx &
Company, Inc.
"Interest Payment Date" means March 15 and September 15 of each year,
commencing with September 15, 2003.
"Issue Date" means the date on which Convertible Subordinated Notes are
first issued and authenticated under this Indenture.
"Liquidated Damages" has the meaning specified in paragraph 17 of the
form of Convertible Subordinated Note which is attached as Exhibit A hereto.
"Material Subsidiary" means any Subsidiary of the Company which at the
date of determination is a "significant subsidiary" as defined in Rule 1-02(w)
of Regulation S-X under the Securities Act and the Exchange Act.
"Maturity Date" means March 15, 2010.
"Note Custodian" means LaSalle Bank National Association, as custodian
with respect to any Global Security, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
6
"Offering Memorandum" means the final offering memorandum dated
February 18, 2003, relating to the Convertible Subordinated Notes, including all
amendments thereto.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President (whether or
not designated by a number or numbers or word or words before or after the title
"Vice President"), the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom is the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Treasurer or the Controller of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel who may
be an employee of or counsel to the Company or the Trustee except to the extent
otherwise indicated in this Indenture.
A "person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization, limited liability company
or government or any agency or political subdivision thereof.
"Redemption Date" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the date fixed by the Company for such
redemption pursuant to Article III of this Indenture and the Convertible
Subordinated Notes.
"Redemption Price" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the price fixed for such redemption
pursuant to Article III of this Indenture and the Convertible Subordinated
Notes.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Convertible Subordinated Notes and Common Stock issuable upon
conversion of such Convertible Subordinated Notes dated February 24, 2003,
between the Company and the Initial Purchasers, as such agreement may be
amended, modified or supplemented from time to time.
"Regular Record Date" means the March 1 or September 1 immediately
preceding each Interest Payment Date.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Debt or (b) with respect to any Senior
Debt that does not have any such trustee, agent or other representative, (i) in
the case of such Senior Debt issued pursuant to an agreement providing for
voting arrangements as among the holders or owners of such Senior Debt, any
holder or owner of such Senior Debt acting with the consent of the required
persons necessary to bind such holders or owners of such Senior Debt and (ii) in
the case of all other such Senior Debt, the holder or owner of such Senior Debt.
7
"Restricted Common Stock Legend" means the legend labeled as such and
that is set forth in Exhibit B hereto.
"Restricted Securities Legend" means the legend labeled as such and
that is set forth in Exhibit A hereto.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Debt" means the principal of, premium, if any, and interest on,
rent under, and any other amounts payable on or in respect of any Indebtedness
of the Company (including, without limitation, any Obligations in respect of
such Indebtedness and 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), whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions, refinancings or refundings of, or amendments,
modifications or supplements to the foregoing); provided, however, that Senior
Debt does not include (i) Indebtedness evidenced by the Convertible Subordinated
Notes or the Company's 6% Convertible Subordinated Notes due 2005, (ii) any
liability for Federal, state, local or other taxes owed or owing by the Company,
(iii) Indebtedness of the Company to any Subsidiary of the Company, (iv) trade
payables and accrued expenses (including, without limitation, accrued
compensation) of the Company for goods, services or materials purchased or
provided in the ordinary course of business, and (v) any particular Indebtedness
in which the instrument creating or evidencing the same expressly provides that
such Indebtedness shall not be senior in right of payment to, or is pari passu
with, or is subordinated or junior to, the Convertible Subordinated Notes.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other subsidiaries of that person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such person or a Subsidiary of such person or (b)
the only general partners of which are such person or of one or more
subsidiaries of such person (or any combination thereof).
"Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Convertible Subordinated Notes are
then convertible) is neither listed for trading on a U.S. national securities
exchange nor approved for trading on the Nasdaq National Market.
8
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
execution of this Indenture, except as provided in Sections 9.03 and 12.06.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means an officer in the Corporate Trust Office of the
Trustee and having direct responsibility for the administration of this
Indenture.
"U.S. Government Obligations" means direct obligation of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Convertible Subordinated Notes,
the U.S. Government Obligations shall be payable as to principal or interest on
or before such payment date in such amounts as will provide the necessary money.
U.S. Government Obligations shall not be callable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
SECTION 1.02. Certain Other Definitions.
Defined
in Section
----------
"Bankruptcy Law"........................................................................ 6.01
"Business Day".......................................................................... 10.07
"Closing Price"......................................................................... 12.05
"Conversion Agent"...................................................................... 2.03
"Current Market Price".................................................................. 12.05
"Custodian"............................................................................. 6.01
"Designated Event Date"................................................................. 4.06
"Designated Event Offer"................................................................ 4.06
"Designated Event Payment".............................................................. 4.06
"Designated Event Payment Date"......................................................... 4.06
"Event of Default"...................................................................... 6.01
"Expiration Time"....................................................................... 12.05
"Fair Market Value"..................................................................... 12.05
"Global Security"....................................................................... 2.01
"Legal Holiday"......................................................................... 10.07
"Non-electing Share".................................................................... 12.06
"Paying Agent".......................................................................... 2.03
"Payment Blockage Notice"............................................................... 11.03
"Purchased Shares"...................................................................... 12.05
"Record Date"........................................................................... 12.05
"Registrar"............................................................................. 2.03
"Securities"............................................................................ 12.05
"Trading Day"........................................................................... 12.05
"Trigger Event"......................................................................... 12.05
9
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Commission;
"indenture securities" means the Convertible Subordinated Notes;
"indenture security holder" means a holder of a Convertible
Subordinated Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Convertible Subordinated Notes means the Company or
any other obligor on the Convertible Subordinated Notes.
All other terms in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE II
The Convertible Subordinated Notes
SECTION 2.01. Form and Dating. (a) Global Securities. The Convertible
Subordinated Notes are being offered and sold by the Company pursuant to a
Purchase
10
Agreement relating to the Convertible Subordinated Notes, dated February 18,
2003, among the Company and the Initial Purchasers (the "Purchase Agreement").
The Convertible Subordinated Notes are being offered and sold (i) in
reliance on Regulation S under the Securities Act ("Regulation S") or (ii) to
"qualified institutional buyers" as defined in Rule 144A ("QIBs") in reliance on
Rule 144A under the Securities Act ("Rule 144A"), each as provided in the
Purchase Agreement, and shall be issued in the form of one or more permanent
global securities in definitive, fully registered form without interest coupons
with the Global Securities Legend and Restricted Securities Legend set forth in
Exhibit A hereto (each, a "Global Security"). Any Global Security shall be
deposited on behalf of the purchasers of the Convertible Subordinated Notes
represented thereby with the Trustee, as custodian for the Depositary, and
registered in the name of the Depositary or a nominee of the Depositary for the
accounts of participants in the Depositary (and, in the case of Convertible
Subordinated Notes held in accordance with Regulation S, registered with the
Depositary for the accounts of designated agents holding on behalf of the
Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme
("Clearstream")), duly executed by the Company and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of a Global Security 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.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b) and the written order of the Company, authenticate and
deliver initially one or more Global Securities that (i) shall be registered in
the name of Cede & Co. or other nominee of such Depositary and (ii) 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 Security held on
their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations and Instructions to Participants" of Clearstream shall be applicable
to interests in any Global
11
Securities that are held by participants through Euroclear or Clearstream. The
Trustee shall have no obligation to notify holders of any such procedures or to
monitor or enforce compliance with the same.
(c) Definitive Securities. Except as provided in Section 2.10, owners
of beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Convertible Subordinated Notes in definitive
form. If applicable, certificated Convertible Subordinated Notes in definitive
form will bear the Restricted Securities Legend set forth on Exhibit A unless
removed in accordance with Section 2.06(b).
SECTION 2.02. Execution and Authentication. One Officer shall sign the
Convertible Subordinated Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Convertible Subordinated Note no
longer holds that office at the time the Convertible Subordinated Note is
authenticated, the Convertible Subordinated Note shall nevertheless be valid.
A Convertible Subordinated Note shall not be valid until authenticated
by the manual signature of the Trustee. The signature shall be conclusive
evidence that the Convertible Subordinated Note has been authenticated under
this Indenture.
Upon a written order of the Company signed by an Officer of the
Company, the Trustee shall authenticate Convertible Subordinated Notes for
original issue up to an aggregate principal amount of $130,000,000 (plus up to
$20,000,000 aggregate principal amount of Convertible Subordinated Notes that
may be sold by the Company pursuant to the over-allotment option granted
pursuant to the Purchase Agreement) to the Initial Purchasers. The aggregate
principal amount of Convertible Subordinated Notes outstanding at any time may
not exceed that amount except as provided in Section 2.07.
The Convertible Subordinated Notes shall be issuable only in registered
form without coupons and only in denominations of $1,000 or any integral
multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Convertible Subordinated Notes. An authenticating agent
may authenticate Convertible Subordinated Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
right as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain or cause to be maintained in the City of
New York,
New York or
Chicago, Illinois, an office or agency: (i) where securities may be presented
for registration of transfer or for exchange ("Registrar"); (ii) where
Convertible Subordinated Notes may be presented for payment ("Paying Agent");
(iii) where Convertible Subordinated Notes may be presented for conversion (the
"Conversion Agent"); and (iv) where notices and demands to or upon the Company
in respect of Convertible Subordinated Notes and this Indenture may be served by
the holders of the Convertible Subordinated Notes. The Registrar shall
12
keep a Register ("Register") of the Convertible Subordinated Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars, one or
more additional paying agents and one or more additional conversion agents. The
term "Paying Agent" includes any additional paying agent, and the term
"Conversion Agent" includes any additional Conversion Agent. The Company may
change any Paying Agent, Registrar, Conversion Agent or co-registrar without
prior notice. The Company shall notify the Trustee of the name and address of
any Agent not a party to this Indenture and shall enter into an appropriate
agency agreement with any Registrar, Paying Agent, Conversion Agent or
coregistrar not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company or any of
its subsidiaries may act as Paying Agent, Registrar, Conversion Agent or
coregistrar, except that for purposes of Articles III and VIII and Section 4.06,
neither the Company nor any of its subsidiaries shall act as Paying Agent. If
the Company fails to appoint or maintain another entity as Registrar, or Paying
Agent or Conversion Agent, the Trustee shall act as such, and the Trustee shall
initially act as such.
SECTION 2.04. Paying Agent To Hold Money in Trust. The Company shall
require each Paying Agent (other than the Trustee, who hereby so agrees), to
agree in writing that the Paying Agent will hold in trust for the benefit of
holders of the Convertible Subordinated Notes or the Trustee all money held by
the Paying Agent for the payment of principal, interest or Liquidated Damages on
the Convertible Subordinated Notes, and will notify the Trustee of any default
by the Company in respect of making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary of the Company) shall have no further
liability for the money. If the Company or a Subsidiary of the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the holders of the Convertible Subordinated Notes all money held by
it as Paying Agent.
SECTION 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of holders of Convertible Subordinated Notes and shall
otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least seven Business Days before
each Interest Payment Date, and as the Trustee may request in writing within 15
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 and as of such date
as the Trustee may reasonably require of the names and addresses of holders of
Convertible Subordinated Notes.
SECTION 2.06. Transfer and Exchange. (a) When Convertible Subordinated
Notes are presented to the Registrar or a co-registrar with a request to
register a transfer or to exchange them for an equal principal amount of
Convertible Subordinated Notes of other denominations, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Company shall issue and the Trustee shall authenticate Convertible
13
Subordinated Notes at the Registrar's request, bearing registration numbers not
contemporaneously outstanding. No service charge shall be made to a holder for
any registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company and the Registrar may require payment of a
sum sufficient to cover any transfer tax or other governmental charge payable
upon exchanges pursuant to Sections 2.10, 3.07, 4.06, 9.05 or 12.02.
The Company or the Registrar shall not be required (i) to issue,
register the transfer of or exchange Convertible Subordinated Notes during a
period beginning at the opening of business 15 days before the day of any
selection of Convertible Subordinated Notes for redemption under Section 3.03
and ending at the close of business on the day of selection, (ii) to register
the transfer or exchange of any Convertible Subordinated Note so selected for
redemption in whole or in part, except the unredeemed portion of any Convertible
Subordinated Note being redeemed in part, (iii) to register the transfer of any
Convertible Subordinated Notes surrendered for repurchase pursuant to Section
4.06 or (iv) to register the transfer of any Convertible Subordinated Notes
surrendered for conversion.
All Convertible Subordinated Notes issued upon any transfer or exchange
of Convertible Subordinated 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 Convertible Subordinated Notes
surrendered upon such registration of transfer or exchange.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Sections
2.01(b) and 2.10; provided, however, that beneficial interests in a Global
Security may only be transferred to persons who take delivery thereof in the
form of a beneficial interest in the Global Security in accordance with the
transfer restrictions set forth under the heading "Notice to Investors" in the
Offering Memorandum and, if applicable, in the Restricted Securities Legend.
Except for transfers or exchanges made in accordance with Section 2.10,
transfers of a Global Security shall be limited to transfers of such Global
Security in whole, but not in part, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.
In the event that a Global Security is exchanged for Convertible
Subordinated Notes in definitive form pursuant to Section 2.10 prior to the
effectiveness of a Shelf Registration Statement with respect to such Convertible
Subordinated Notes, such exchange may occur, and such Convertible Subordinated
Notes may be further exchanged or transferred, only upon receipt by the
Registrar of (1) such Global Security or such Convertible Subordinated Notes in
definitive form, duly endorsed as provided herein, as applicable, (2)
instructions from the holder directing the Trustee to authenticate and deliver
one or more Convertible Subordinated Notes in definitive
14
form of the same aggregate principal amount as the Global Security or the
Convertible Subordinated Notes in definitive form (or portion thereof), as
applicable, to be transferred, such instructions to contain the name or names of
the designated transferee or transferees, the authorized denomination or
denominations of the Convertible Subordinated Notes in definitive form to be so
issued and appropriate delivery instructions, and (3) such certifications or
other information and, in the case of transfers pursuant to Rule 144 under the
Securities Act, legal opinions as the Company may reasonably require to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation S under the Securities Act, as the case may
be), and upon compliance with such other procedures as may from time to time be
adopted by the Company and the Registrar.
(c) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights
Agreement, if Convertible Subordinated Notes are issued upon the registration of
transfer, exchange or replacement of Convertible Subordinated Notes bearing a
Restricted Securities Legend, or if a request is made to remove such a
Restrictive Securities Legend on Convertible Subordinated Notes, the Convertible
Subordinated Notes so issued shall bear the Restricted Securities Legend, or a
Restricted Securities Legend shall not be removed, as the case may be, unless
there is delivered to the Company such satisfactory evidence, which, in the case
of a transfer made pursuant to Rule 144 under the Securities Act, may include an
opinion of counsel given in accordance with the laws in the State of
New York,
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under
the Securities Act or that such Convertible Subordinated Notes are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such satisfactory evidence, the Trustee, at the
written direction of the Company, shall authenticate and deliver Convertible
Subordinated Notes that do not bear the legend. The Company shall not otherwise
be entitled to require the delivery of a legal opinion in connection with any
transfer or exchange of Securities.
(d) Neither the Trustee nor any Agent shall have any responsibility for
any actions taken or not taken by the Depositary.
(e) The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Convertible Subordinated Notes (including any transfers between or among
the Depositary's participants or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation as is expressly required by, and to do so if and when expressly
required by, the terms of this Indenture and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
SECTION 2.07. Replacement Convertible Subordinated Notes. If the holder
of a Convertible Subordinated Note claims that its Convertible Subordinated Note
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Convertible Subordinated Note if the
Trustee's and the
15
Company's requirements are met. If required by the Trustee or the Company as a
condition of receiving a replacement Convertible Subordinated Note, the holder
of a Convertible Subordinated Note must provide a certificate of loss and an
indemnity or an indemnity bond sufficient, in the judgment of both the Company
and the Trustee, to fully protect the Company, the Trustee, any Agent and any
authenticating agent from any loss, liability, cost or expense which any of them
may suffer or incur if the Convertible Subordinated Note is replaced. The
Company and the Trustee may charge the relevant holder for their expenses in
replacing any Convertible Subordinated Note.
The Trustee or any authenticating agent may authenticate any such
substituted Convertible Subordinated 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
Convertible Subordinated Note, the Company and the Trustee 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 Convertible Subordinated Note which has matured or is about to
mature, or has been called for redemption pursuant to Article III, submitted for
repurchase pursuant to Section 4.06 or is about to be converted into Common
Stock pursuant to Article XII, shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Convertible
Subordinated 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 Convertible Subordinated 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 the 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 Convertible Subordinated Note and of the ownership
thereof.
Every replacement Convertible Subordinated Note is an additional
obligation of the Company and shall be entitled to all the benefits provided
under this Indenture equally and proportionately with all other Convertible
Subordinated Notes duly issued, authenticated and delivered hereunder.
SECTION 2.08. Outstanding Convertible Subordinated Notes. The
Convertible Subordinated Notes outstanding at any time are all the Convertible
Subordinated Notes properly authenticated by the Trustee except for those
canceled by the Trustee, those delivered to it for cancellation, and those
described in this Section 2.08 as not outstanding.
If a Convertible Subordinated Note is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory
to it that the replaced Convertible Subordinated Note is held by a bona fide
purchaser.
16
If Convertible Subordinated Notes are considered paid under Section
4.01 or converted under Article XII, they cease to be outstanding, and interest
(and Liquidated Damages, if any) on them ceases to accrue.
Subject to Section 2.09 hereof, a Convertible Subordinated Note does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Convertible Subordinated Note.
SECTION 2.09. When Treasury Convertible Subordinated Notes Disregarded.
In determining whether the holders of the required principal amount of
Convertible Subordinated Notes have concurred in any direction, waiver or
consent, Convertible Subordinated Notes owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Convertible Subordinated
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so disregarded.
SECTION 2.10. Temporary Convertible Subordinated Notes. (a) Until
definitive Convertible Subordinated Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be
substantially in the form of definitive Convertible Subordinated Notes but may
have variations that the Company considers appropriate for temporary Convertible
Subordinated Notes and shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
definitive Convertible Subordinated Notes in exchange for temporary Convertible
Subordinated Notes.
(b) A Global Security deposited with the Depositary or with the Trustee
as custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Convertible
Subordinated Notes in definitive form only if such transfer complies with
Section 2.06 and (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and in either case a successor Depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is
continuing.
(c) Any Global Security or interest thereon that is transferable to the
beneficial owners thereof in the form of certificated Convertible Subordinated
Notes in definitive form shall, if held by the Depositary, be surrendered by the
Depositary to the Trustee, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Security, an
equal aggregate principal amount of Convertible Subordinated Notes of authorized
denominations in the form of certificated Convertible Subordinated Notes in
definitive form. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the
Depositary shall direct. Any Convertible Subordinated Notes in the form of
certificated Convertible Subordinated Notes in definitive form delivered in
exchange for an interest in
17
the Global Security shall, except as otherwise provided by Section 2.06(c), bear
the Restricted Securities Legend set forth in Exhibit A hereto.
(d) Prior to any transfer pursuant to Section 2.10(b), the registered
holder of a Global Security 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 Convertible Subordinated Notes.
SECTION 2.11. Cancellation. The Company at any time may deliver
Convertible Subordinated Notes to the Trustee for cancellation. The Registrar
and Paying Agent shall forward to the Trustee any Convertible Subordinated Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else may cancel Convertible Subordinated Notes surrendered
for registration of transfer, exchange, payment, replacement, conversion,
redemption, repurchase or cancellation. Upon written instructions of the
Company, the Trustee shall destroy and dispose of canceled Convertible
Subordinated Notes as the Company directs and, after such destruction, shall
deliver a certificate of destruction to the Company. The Company may not issue
new Convertible Subordinated Notes to replace Convertible Subordinated Notes
that it has paid, redeemed or repurchased or that have been delivered to the
Trustee for cancellation or that any holder has (i) converted pursuant to
Article XII hereof, (ii) submitted for redemption pursuant to Article III hereof
or (iii) submitted for repurchase pursuant to Section 4.06 hereof (unless
revoked).
SECTION 2.12. Defaulted Interest. If the Company fails to make a
payment of interest on the Convertible Subordinated Notes, it shall pay such
defaulted interest plus, to the extent lawful, any interest payable on the
defaulted interest. It may pay such defaulted interest, plus any such interest
payable on it, to the persons who are holders of Convertible Subordinated Notes
on a subsequent special record date. The Company shall fix any such record date
and payment date. At least 15 days before any such record date, the Company
shall mail to holders of the Convertible Subordinated Notes a notice that states
the record date, payment date and amount of such interest to be paid.
SECTION 2.13. CUSIP Number. The Company in issuing the Convertible
Subordinated Notes may use a "CUSIP" number, and if so, such CUSIP number shall
be included in notices of redemption, repurchase or exchange as a convenience to
holders of Convertible Subordinated Notes; provided, however, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Convertible
Subordinated Notes and that reliance may be placed only on the other
identification numbers printed on the Convertible Subordinated Notes. The
Company will promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Regulation S. The Company agrees that it will refuse to
register any transfer of Convertible Subordinated Notes or any shares of Common
Stock issued upon conversion of Convertible Subordinated Notes that is not made
in accordance with the provisions of Regulation S under the Securities Act,
pursuant to a registration statement which has been declared effective under the
Securities Act or pursuant to an available exemption from the registration
requirements of the Securities Act; provided,
18
however, that the provisions of this Section 2.14 shall not be applicable to any
Convertible Subordinated Notes which do not bear a Restricted Securities Legend
or to any shares of Common Stock evidenced by certificates which do not bear a
Restricted Common Stock Legend.
ARTICLE III
Redemption
SECTION 3.01. Optional Redemption. The Company may redeem all or any
portion of the Convertible Subordinated Notes upon the terms and at the
Redemption Prices set forth in each of the Convertible Subordinated Notes. Any
redemption shall be made pursuant to Paragraph 5 of the Convertible Subordinated
Notes and this Article III.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Convertible Subordinated Notes pursuant to the optional redemption provisions of
paragraph 5 of the Convertible Subordinated Notes, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a Redemption Date
(unless a shorter period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount
of Convertible Subordinated Notes (if less than all) to be redeemed, (iv) the
Redemption Price and (v) the CUSIP number of the Convertible Subordinated Notes
being redeemed.
SECTION 3.03. Selection of Convertible Subordinated Notes To Be
Redeemed. If less than all the Convertible Subordinated Notes are to be
redeemed, the Trustee shall select the Convertible Subordinated Notes to be
redeemed by a method that complies with the requirements of the principal
national securities exchange, if any, on which the Convertible Subordinated
Notes are listed or quoted or, if the Convertible Subordinated Notes are not so
listed, on a pro rata basis by lot or by any other method that the Trustee
considers fair and appropriate. The Trustee shall make the selection not more
than 60 days and not less than 30 days before the Redemption Date from
Convertible Subordinated Notes outstanding and not previously called for
redemption. The Trustee may select for redemption a portion of the principal of
any Convertible Subordinated Notes that has a denomination larger than $1,000.
Convertible Subordinated Notes and portions thereof will be redeemed in the
amount of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Convertible Subordinated
Notes called for redemption also apply to portions of Convertible Subordinated
Notes called for redemption. The Trustee shall notify the Company promptly of
the Convertible Subordinated Notes or portions of Convertible Subordinated Notes
to be called for redemption.
If any Convertible Subordinated Note selected for partial redemption is
converted in part after such selection, the converted portion of such
Convertible Subordinated Note shall be deemed (so far as possible) to be the
portion to be selected for redemption. The Convertible Subordinated Notes (or
portion thereof) so selected shall be
19
deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Convertible Subordinated Note is converted in whole or in part
before the mailing of the notice of redemption. Upon any redemption of less than
all the Convertible Subordinated Notes, the Company and the Trustee may treat as
outstanding any Convertible Subordinated Notes surrendered for conversion during
the period of 15 days next preceding the mailing of a notice of redemption and
need not treat as outstanding any Convertible Subordinated Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Convertible Subordinated Note converted in part during such period.
SECTION 3.04. Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail by first class mail a
notice of redemption to each holder whose Convertible Subordinated Notes are to
be redeemed, at such holder's registered address.
The notice shall identify the Convertible Subordinated Notes to be
redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if any Convertible Subordinated Note is being redeemed in part,
the portion of the principal amount of such Convertible Subordinated Note
to be redeemed and that, after the Redemption Date, upon surrender of such
Convertible Subordinated Note, a new Convertible Subordinated Note or
Convertible Subordinated Notes in principal amount equal to the unredeemed
portion will be issued in the name of the holder thereof;
(4) that Convertible Subordinated Notes called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price;
(5) that interest and Liquidated Damages, if applicable, on
Convertible Subordinated Notes called for redemption and for which funds
have been set apart for payment, ceases to accrue on and after the
Redemption Date (unless the Company defaults in the payment of the
Redemption Price or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture);
(6) the paragraph of the Convertible Subordinated Notes pursuant to
which the Convertible Subordinated Notes called for redemption are being
redeemed; (7) the aggregate principal amount of Convertible Subordinated
Notes (if less than all) that are being redeemed;
(8) the CUSIP number of the Convertible Subordinated Notes (provided
that the disclaimer permitted by Section 2.13 may be made);
(9) the name and address of the Paying Agent;
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(10) that Convertible Subordinated Notes called for redemption may be
converted at any time prior to the close of business on the last Trading
Day immediately preceding the Redemption Date and if not converted prior to
the close of business on such date, the right of conversion will be lost;
and
(11) that in the case of Convertible Subordinated Notes or portions
thereof called for redemption on a date that is also an Interest Payment
Date, the interest payment and Liquidated Damages, if any, due on such date
shall be paid to the person in whose name the Convertible Subordinated Note
is registered at the close of business on the relevant Regular Record Date.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been 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 Convertible Subordinated Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any Convertible Subordinated Note.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at the Company's expense.
SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption
is mailed, Convertible Subordinated Notes called for redemption become due and
payable on the Redemption Date at the Redemption Price set forth in the
Convertible Subordinated Note.
SECTION 3.06. Deposit of Redemption Price. On or before the Redemption
Date, the Company shall deposit with the Trustee or with the Paying Agent money
in immediately available funds sufficient to pay the Redemption Price of and
accrued interest (together with Liquidated Damages, if any) on all Convertible
Subordinated Notes to be redeemed on that date. The Trustee or the Paying Agent
shall return to the Company any money not required for that purpose.
On and after the Redemption Date, unless the Company shall default in
the payment of the Redemption Price, interest and Liquidated Damages, if
applicable, will cease to accrue on the principal amount of the Convertible
Subordinated Notes or portions thereof called for redemption and for which funds
have been set apart for payment, and such Convertible Subordinated Notes, or
portions thereof, shall cease after the close of business on the Business Day
immediately preceding the Redemption Date to be convertible into Common Stock
and, except as provided in this Section 3.06 and Section 8.04, to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Convertible Subordinated Notes, or portions thereof,
except the right to receive the Redemption Price thereof and unpaid interest and
Liquidated Damages, if any, to (but excluding) the Redemption Date. In the case
of Convertible Subordinated Notes or portions thereof redeemed on a Redemption
Date which is also an Interest Payment Date, the interest payment and Liquidated
Damages, if any, due on such date shall be paid to the
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person in whose name the Convertible Subordinated Note is registered at the
close of business on the relevant Regular Record Date.
SECTION 3.07. Convertible Subordinated Notes Redeemed in Part. Upon
surrender of a Convertible Subordinated Note that is redeemed in part only, the
Company shall issue and the Trustee shall authenticate and deliver to the holder
of a Convertible Subordinated Note a new Convertible Subordinated Note equal in
principal amount to the unredeemed portion of the Convertible Subordinated Note
surrendered, at the expense of the Company, except as specified in Section 2.06.
SECTION 3.08. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Convertible Subordinated Notes, the Company
may arrange for the purchase and conversion of any Convertible Subordinated
Notes by an arrangement with one or more investment bankers or other purchasers
to purchase such Convertible Subordinated Notes by paying to the Trustee in
trust for the holders, on or before the date fixed for redemption, an amount not
less than the applicable Redemption Price, together with interest and Liquidated
Damages, if any, accrued to the date fixed for redemption, of such Convertible
Subordinated Notes. Notwithstanding anything to the contrary contained in this
Article III, the obligation of the Company to pay the Redemption Price of such
Convertible Subordinated Notes, together with interest and Liquidated Damages,
if any, accrued to the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by the purchasers.
If such an agreement is entered into, a copy shall be filed with the Trustee
prior to the date fixed for redemption. Any Convertible Subordinated 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 XII) 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 Convertible Subordinated 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 moneys
deposited with it by the Company for the redemption of Convertible Subordinated
Notes. Without the Trustee's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Convertible
Subordinated 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 defend 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 Convertible
Subordinated Notes between the Company and such purchasers to which the Trustee
has not consented in writing, 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.
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ARTICLE IV
Covenants
SECTION 4.01. Payment of Convertible Subordinated Notes. The Company
shall pay the principal of and interest (and Liquidated Damages, if any) on the
Convertible Subordinated Notes on the dates and in the manner provided in the
Convertible Subordinated Notes. Principal, interest, Liquidated Damages, the
Redemption Price and the Designated Event Payment shall be considered paid on
the date due if the Trustee or Paying Agent (other than the Company or a
Subsidiary of the Company) holds as of 10:00 a.m.,
New York City time, on that
date immediately available funds designated for and sufficient to pay all
principal, interest (and Liquidated Damages, if any), the Redemption Price or
the Designated Event Payment then due; provided, however, that money held by the
Agent for the benefit of holders of Senior Debt pursuant to the provisions of
Article XI or the payment of which to the holders of the Convertible
Subordinated Notes is prohibited by Article XI shall not be considered to be
designated for the payment of any principal of or interest (or Liquidated
Damages, if any) on the Convertible Subordinated Notes within the meaning of
this Section 4.01.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by Convertible Subordinated Notes,
compounded semiannually; and (ii) overdue installments of interest (without
regard to any applicable grace period) at the same rate, compounded
semiannually.
SECTION 4.02. Commission Reports. The Company shall comply with Section
314(a) of the TIA.
SECTION 4.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has fully performed its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company is not in default in the performance or
observance of any of the terms and conditions hereof (or, if any Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge) and, that to the best of his or
her knowledge, no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest (or Liquidated Damages, if
any) on the Convertible Subordinated Notes are prohibited.
The Company shall, so long as any of the Convertible Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
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SECTION 4.04. Maintenance of Office or Agency. The Company shall
maintain or cause to be maintained the office or agency required under Section
2.03. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
maintained 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, presentations, surrenders, notices and demands with respect to
the Convertible Subordinated Notes may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Convertible Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designation.
SECTION 4.05. Continued Existence. Subject to Article V, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
SECTION 4.06. Repurchase Upon Designated Event. Following a Designated
Event (the date of each such occurrence being the "Designated Event Date"), the
Company shall notify the holders of Convertible Subordinated Notes in writing of
such occurrence and shall make an offer (the "Designated Event Offer") to
repurchase all Convertible Subordinated Notes then outstanding at a repurchase
price in cash (the "Designated Event Payment") equal to 100% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to, but excluding, the Designated Event Payment Date (as defined below).
Notice of a Designated Event shall be mailed by or at the direction of
the Company to the holders of Convertible Subordinated Notes as shown on the
Register of such holders maintained by the Registrar not more than 20 days after
the applicable Designated Event Date at the addresses as shown on the Register
of holders maintained by the Registrar, with a copy to the Trustee and the
Paying Agent. The Designated Event Offer shall remain open until a specified
date (the "Designated Event Offer Termination Date") which is at least 20
Business Days from the date such notice is mailed. During the period specified
in such notice, holders of Convertible Subordinated Notes may elect to tender
their Convertible Subordinated Notes in whole or in part in integral multiples
of $1,000 in exchange for cash. Payment shall be made by the Company in respect
of Convertible Subordinated Notes properly tendered pursuant to this Section
4.06 on a specified Business Day (the "Designated Event Payment Date") which
shall be no later than 60 days after the applicable Designated Event.
The notice, which shall govern the terms of the Designated Event Offer,
shall include such disclosures as are required by law and shall state:
(a) that a Designated Event Offer is being made pursuant to this
Section 4.06 and that all Convertible Subordinated Notes will be accepted
for payment;
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(b) the event, transaction or transactions that constitute the
Designated Event;
(c) the Designated Event Payment for each Convertible Subordinated
Note, the Designated Event Offer Termination Date and the Designated Event
Payment Date;
(d) that any Convertible Subordinated Note not accepted for payment
will continue to accrue interest and Liquidated Damages, if applicable, in
accordance with the terms thereof;
(e) that, unless the Company defaults on making the Designated Event
Payment, any Convertible Subordinated Note accepted for payment pursuant to
the Designated Event Offer shall cease to accrue interest and Liquidated
Damages, if applicable, on the Designated Event Payment Date and no further
interest or Liquidated Damages shall accrue on or after such date;
(f) that holders electing to have Convertible Subordinated Notes
repurchased pursuant to a Designated Event Offer will be required to
surrender their Convertible Subordinated Notes to the Paying Agent at the
address specified in the notice prior to 5:00 p.m.,
New York City time, on
the Designated Event Offer Termination Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee
and the Paying Agent;
(g) that holders of Convertible Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00
p.m.,
New York City time, on the Designated Event Offer Termination Date, a
facsimile transmission or letter setting forth the name of the holder, the
principal amount of Convertible Subordinated Notes the holder delivered for
purchase, the Convertible Subordinated Note certificate number (if any) and
a statement that such holder is withdrawing his election to have such
Convertible Subordinated Notes purchased;
(h) that holders whose Convertible Subordinated Notes are repurchased
only in part will be issued Convertible Subordinated Notes equal in
principal amount to the unpurchased portion of the Convertible Subordinated
Notes surrendered;
(i) the instructions that holders must follow in order to tender their
Convertible Subordinated Notes; and
(j) that in the case of a Designated Event Payment Date that is also
an interest payment date, the interest payment and Liquidated Damages, if
any, due on such date shall be paid to the person in whose name the
Convertible Subordinated Note is registered at the close of business on the
relevant Designated Event Offer Termination Date.
On the Designated Event Offer Termination Date, the Company shall (i)
accept for payment all Convertible Subordinated Notes or portions thereof
properly tendered pursuant to the Designated Event Offer, (ii) deposit with the
Paying Agent money sufficient
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to pay the Designated Event Payment with respect to all Convertible Subordinated
Notes or portions thereof so tendered and accepted and (iii) deliver or cause to
be delivered to the Trustee the Convertible Subordinated Notes so accepted
together with an Officers' Certificate setting forth the aggregate principal
amount of Convertible Subordinated Notes or portions thereof tendered to and
accepted for payment by the Company. On the Designated Event Payment Date, the
Paying Agent shall mail or deliver the Designated Event Payment to the holders
of Convertible Subordinated Notes so accepted and the Trustee shall promptly
authenticate and mail or cause to be transferred by book entry to such holders a
new Convertible Subordinated Note equal in principal amount to any unpurchased
portion of the Convertible Subordinated Note surrendered, if any; provided,
however, that such new Convertible Subordinate Notes will be in a principal
amount of $1,000 or an integral multiple thereof. Any Convertible Subordinated
Notes not so accepted shall be promptly mailed or delivered by the Company to
the holder thereof.
In the case of any reclassification, change, consolidation, merger,
share exchange, combination or sale or conveyance to which Section 12.06 applies
in which the Common Stock of the Company is changed or exchanged as a result
into the right to receive stock, securities or other property or assets
(including cash) which includes shares of common stock of the Company or another
person that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate Fair Market Value of such stock, securities other property and assets
(including cash) (as determined by the Company, which determination shall be
conclusive and binding), then the person formed by such consolidation or
resulting from such merger or share exchange or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (which shall comply with the TIA as in force at the date of execution
of such supplemental indenture) modifying the provisions of this Indenture
relating to the right of holders of Convertible Subordinated Notes to cause the
Company to repurchase Convertible Subordinated Notes following a Designated
Event, including the applicable provisions of this Section 4.06 and the
definitions of Designated Event, Change of Control and Termination of Trading,
as appropriate, as determined in good faith by the Company (which determination
shall be conclusive and binding), to make such provision apply to such common
stock and the issuer thereof if different from the Company and Common Stock of
the Company (in lieu of the Company and the Common Stock of the Company).
The Designated Event Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act, and all applicable tender
offer rules promulgated thereunder, to the extent such laws and regulations are
then applicable and shall include all instructions and materials that the
Company shall reasonably deem necessary to enable such holders of Convertible
Subordinated Notes to tender their Convertible Subordinated Notes.
SECTION 4.07. 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 7.08, a Trustee, so that there
shall at all times be a Trustee hereunder.
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SECTION 4.08. 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 wherever enacted, now or at any time
hereafter enforced, that may affect the Company's obligation to pay the
Convertible Subordinated Notes; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
insofar as such law applies to the Convertible Subordinated Notes, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law has been enacted.
SECTION 4.09. Taxes. The Company shall, and shall cause each of its
subsidiaries to, pay prior to delinquency all taxes, assessments and government
levies; provided, however, that the Company shall not be required to pay or
cause to be paid any such tax, assessment or levy (i) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company and
its subsidiaries taken as a whole, or (ii) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings.
SECTION 4.10. Investment Company Act. As long as any Convertible
Subordinated Notes are outstanding, the Company will conduct its business and
operations so as not to become an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
will take all steps required in order for it to continue not to be an
"investment company" and not to be required to be registered under the
Investment Company Act, including, if necessary, redeployment of the assets of
the Company.
ARTICLE V
Successors
SECTION 5.01. When the Company May Merge, Etc. The Company may not, in
a single transaction or series of related transactions, consolidate or merge
with or into or effect a share exchange with (whether or not the Company is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets to, any person
as an entirety or substantially as an entirety unless:
(a) either
(i) the Company shall be the surviving or continuing
corporation, or
(ii) the person formed by or surviving any such consolidation,
merger or share exchange (if other than the Company) or the person
which acquires by sale, assignment, transfer, lease, conveyance or
other disposition the properties and assets of the Company
substantially as an entirety
(1) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the
District of Columbia and
27
(2) shall expressly assume, by supplemental indenture in form
reasonably satisfactory to the Trustee, executed and delivered to the
Trustee, the due and punctual payment of the principal of, and premium,
if any, and interest and Liquidated Damages, if any, on all of the
Convertible Subordinated Notes and the performance of every covenant of
the Convertible Subordinated Notes and this Indenture and the
Registration Rights Agreement on the part of the Company to be
performed or observed, including, without limitation, modifications to
rights of holders to cause the repurchase of Convertible Subordinated
Notes upon a Designated Event in accordance with the penultimate
paragraph of Section 4.06 and conversion rights in accordance with
Section 12.06 to the extent required by such Sections;
(b) immediately after giving effect to such transaction no Default and
no Event of Default shall have occurred and be continuing; and
(c) the Company or such successor person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating
that such consolidation, merger, share exchange, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this provision of
this Indenture and that all conditions precedent in this Indenture relating
to such transaction have been satisfied.
For purposes of this Section 5.01, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of the
Company, the capital stock of which individually or in the aggregate constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 5.02. Successor Corporation Substituted. Upon any such
consolidation, merger, share exchange, sale, assignment, conveyance, lease,
transfer or other disposition in accordance with Section 5.01, the successor
person formed by such consolidation or share exchange or into which the Company
is merged or to which such sale, assignment, conveyance, lease, transfer or
other disposition is made will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein, and
thereafter (except in the case of a lease) the predecessor corporation will be
relieved of all further obligations and covenants under this Indenture and the
Convertible Subordinated Notes.
SECTION 5.03. Purchase Option on Change of Control. This Article V does
not affect the obligations of the Company (including without limitation any
successor to the Company) under Section 4.06.
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ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" with respect to
any Convertible Subordinated Notes occurs if:
(a) the Company defaults in the payment (whether or not such payment is
prohibited by the subordination provisions set forth in Article XI of this
Indenture) of principal of, or premium, if any, on the Convertible
Subordinated Notes when due at maturity, upon repurchase, upon acceleration
or otherwise, including, without limitation, failure of the Company to make
any optional redemption payment when required pursuant to Article III; or
(b) the Company defaults in the payment (whether or not such payment
is prohibited by the subordination provisions set forth in Article XI of
this Indenture) of any installment of interest or Liquidated Damages on the
Convertible Subordinated Notes when due (including any interest or
Liquidated Damages payable in connection with a repurchase pursuant to
Section 4.06 or in connection with any optional redemption payment pursuant
to Article III) and continuance of such default for 30 days or more; or
(c) the Company defaults in the payment of the Designated Event
Payment in respect of the Convertible Subordinated Notes on the date
therefor, whether or not such payment is prohibited by the subordination
provisions set forth in Article XI of this Indenture; or
(d) the Company fails to provide timely notice of any Designated Event
in accordance with Section 4.06; or
(e) the Company defaults (other than a default set forth in clauses
(a), (b), (c) or (d) above) in the performance of, or breaches, any other
covenant or warranty of the Company set forth in this Indenture or the
Convertible Subordinated Notes and fails to remedy such default or breach
within a period of 60 days after the receipt of written notice from the
Trustee or the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes; or
(f) a default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Company or any
Subsidiary of the Company (or the payment of which is guaranteed or secured
by the Company or any of its subsidiaries), whether such Indebtedness or
guarantee exists on the date of this Indenture or is created thereafter,
which default (i) is caused by a failure to pay when due any principal of
such Indebtedness within the grace period provided for in such Indebtedness
(which failure continues beyond any applicable grace period) (a "Payment
Default") or (ii) results in the acceleration of such Indebtedness prior to
its express maturity (without such acceleration being rescinded or
annulled) and, in each
29
case, the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness under which there is a
Payment Default or the maturity of which has been so accelerated,
aggregates $10,000,000 or more and such Payment Default is not cured or
such acceleration is not annulled within 30 days after receipt of written
notice by the Company from the Trustee or by the Company and the Trustee
from any holder of Convertible Subordinated Notes; or
(g) failure to pay a final, nonappealable judgment or final,
nonappealable judgments (other than any judgment as to which a reputable
insurance company has accepted full liability) for the payment of money
entered by a court or courts of competent jurisdiction against the Company
or any Material Subsidiaries of the Company, which judgments remain
unstayed, unbonded or undischarged for a period of 60 days, provided that
the aggregate amount of all such judgments exceeds $10,000,000; or
(h) the Company or any Material Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors,
or
(v) makes the admission in writing that it generally is unable to
pay its debts as the same become due; or
(i) a court of competent jurisdiction enters a judgment, order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material Subsidiary
in an involuntary case, and the order or decree remains unstayed and
in effect for 90 days,
(ii) appoints a Custodian of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
90 days, or
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
90 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
30
SECTION 6.02. Acceleration. If an Event of Default (other than an Event
of Default with respect to the Company specified in clauses (h) and (i) of
Section 6.01) occurs and is continuing, then and in every such case the Trustee,
by written notice to the Company, or the holders of at least 25% in aggregate
principal amount of the then outstanding Convertible Subordinated Notes, by
written notice to the Company and the Trustee, may declare the unpaid principal
of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if
any, on all the Convertible Subordinated Notes to be due and payable. Upon such
declaration, such principal amount, premium, if any, and accrued and unpaid
interest and Liquidated Damages, if any, shall become immediately due and
payable, notwithstanding anything contained in this Indenture or the Convertible
Subordinated Notes to the contrary, but subject to the provisions of Article XI.
If any Event of Default with respect to the Company specified in clauses (h) or
(i) of Section 6.01 occurs, all unpaid principal of, and premium, if any, and
accrued and unpaid interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes then outstanding shall become automatically due and payable
subject to the provisions of Article XI, without any declaration or other act on
the part of the Trustee or any holder of Convertible Subordinated Notes.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Subordinated Notes by notice to the Trustee may rescind
an acceleration of the Convertible Subordinated Notes and its consequences if
all existing Events of Default (other than nonpayment of principal of and
premium, if any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes which has become due solely by virtue of such acceleration)
have been cured or waived and if the rescission would not conflict with any
judgment or decree of any court of competent jurisdiction. No such rescission
shall affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest or Liquidated
Damages, if applicable, on the Convertible Subordinated Notes or to enforce the
performance of any provision of the Convertible Subordinated Notes or this
Indenture. The Trustee may maintain a proceeding even if it does not possess any
of the Convertible Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any holder of a Convertible
Subordinated Note in exercising any right or remedy occurring upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.04. Waiver of Past Defaults. The holders of a majority in
aggregate principal amount of the Convertible Subordinated Notes then
outstanding may, on behalf of the holders of all the Convertible Subordinated
Notes, waive an existing Default or Event of Default and its consequences,
except a Default or Event of Default in the payment of the principal of, and
premium, if any, or interest or Liquidated Damages, if applicable, on the
Convertible Subordinated Notes (other than the non-payment of principal of, and
premium, if any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes which has become due solely by virtue of an acceleration
which has
31
been duly rescinded as provided above), or in respect of a covenant or provision
of this Indenture which cannot be modified or amended without the consent of all
holders of Convertible Subordinated Notes; provided, however, that in order to
waive any provisions of Article XI, holders of at least 75% in aggregate
principal amount of Convertible Subordinated Notes then outstanding must consent
to such waiver if such waiver would adversely affect the rights of holders of
Convertible Subordinated Notes. When a Default or Event of Default is waived, it
is cured and stops continuing. No waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority. The holders of a majority in
aggregate principal amount of the then outstanding Convertible Subordinated
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture that the Trustee determines may be unduly prejudicial to
the rights of other holders of Convertible Subordinated Notes or that may
involve the Trustee in personal liability; provided, however, that the Trustee
shall have no duty or obligation (subject to Section 7.01) to ascertain whether
or not such actions or forebearances are unduly prejudicial to such holders;
provided further, however that the Trustee may take any other action the Trustee
deems proper that is not inconsistent with such directions.
SECTION 6.06. Limitation on Suits. A holder of a Convertible
Subordinated Note may not pursue any remedy with respect to this Indenture or
the Convertible Subordinated Notes unless:
(a) the holder gives to the Trustee notice of a continuing Event of
Default;
(b) the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes make a written request to
the Trustee to pursue the remedy;
(c) such holder or holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 30
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 30-day period the holders of a majority in
aggregate principal amount of the then outstanding Convertible Subordinated
Notes do not give the Trustee a direction inconsistent with the request.
A holder of a Convertible Subordinated Note may not use this Indenture
to prejudice the rights of another holder or to obtain a preference or priority
over another holder.
SECTION 6.07. Rights of Holders To Receive Payment. Subject to the
provisions of Article XI hereof, notwithstanding any other provision of this
Indenture, the right of any holder of a Convertible Subordinated Note to receive
payment of principal,
32
premium, if any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Note, on or after the respective due dates expressed in the
Convertible Subordinated Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, or to bring suit for the enforcement
of the right to convert the Convertible Subordinated Note shall not be impaired
or affected without the consent of the holder of a Convertible Subordinated
Note.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a), (b) or (c) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal, premium, if any, and interest and
Liquidated Damages, if any, remaining unpaid on the Convertible Subordinated
Notes and interest on overdue principal, premium, if any, and interest and
Liquidated Damages, if any, and such further amount as shall be sufficient to
cover the costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the holders of
Convertible Subordinated Notes allowed in any judicial proceedings relative to
the Company, its creditors or its property. Nothing contained herein shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any holder of a Convertible Subordinated Note any plan of
reorganization, arrangement, adjustment or composition affecting the Convertible
Subordinated Notes or the rights of any holder thereof, or to authorize the
Trustee to vote in respect of the claim of any holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07, including
payment of all compensation, expenses and liabilities incurred, and all
advances made, by the Trustee, and the costs and expenses of collection;
Second: to holders of Senior Debt to the extent required by Article XI;
Third: to holders of Convertible Subordinated Notes for
amounts due and unpaid on the Convertible Subordinated Notes for principal,
premium, if any, and interest and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Convertible Subordinated Notes for principal, premium,
if any, and interest and Liquidated Damages, if any, respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a
record date and payment date for any payment to holders of Convertible
Subordinated Notes.
33
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit, other than the Trustee, of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by
holders of more than 10% in principal amount of the then outstanding Convertible
Subordinated Notes.
ARTICLE VII
The Trustee
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed. Whether or
not herein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article VII.
SECTION 7.01. Duties of the Trustee. (a) If an Event of Default known
to a Trust Officer of the Trustee has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(1) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture, and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the form required by
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
34
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that is in any way related to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any financial liability in the performance of any
of its duties or the exercise of any of its rights and powers hereunder, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk of liability is not reasonably assured to
it.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
SECTION 7.02. Rights of the Trustee. (a) The Trustee may rely on and
shall be protected in acting or refraining from acting upon any resolution,
Officers' Certificate, or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, security or other document believed by
it to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter contained therein.
(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 is herein specifically prescribed). In addition,
before the Trustee acts or refrains from acting, it may require an Officers'
Certificate, an opinion of Counsel or both. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and other persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith without negligence or willful misconduct which it believes to
be authorized or within its discretion, rights or powers.
35
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(g) 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
discretion of any of the holders of Convertible Subordinated Notes pursuant to
the provisions of this Indenture, unless such holders have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred therein or thereby.
(h) 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, consent, order, security or other document
unless requested in writing to do so by the holders of not less than a majority
in aggregate principal amount of the Convertible Subordinated Notes then
outstanding, provided that if the Trustee determines in its discretion to make
any such investigation, then it shall be entitled, upon reasonable prior notice
and during normal business hours, to examine the books and records and the
premises of the Company, personally or by agent or attorney, and 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 reimbursed by the Company upon
demand.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct.
(j) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether an
adjustment is required and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received the notice from the Company
contemplated by Section 12.05(j).
SECTION 7.03. Individual Rights of the Trustee. Subject to Sections
7.10 and 7.11, the Trustee in its individual or any other capacity may become
the owner or pledgee of Convertible Subordinated Notes with the same rights it
would have if it were not the Trustee and may otherwise deal with the Company or
an Affiliate of the Company and receive, collect, hold and retain collections
from the Company with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Convertible Subordinated Notes. It shall not be
accountable for the Company's use of the proceeds from the Convertible
Subordinated Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture. It shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any
36
statement in the Convertible Subordinated Notes or any other document in
connection with the sale of the Convertible Subordinated Notes or pursuant to
this Indenture other than its certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to a Trust Officer of the Trustee,
the Trustee shall mail to each holder of a Convertible Subordinated Note a
notice of the Default or Event of Default within 60 days after it occurs. A
Default or an Event of Default shall not be considered known to a Trust Officer
of the Trustee unless it is a Default or Event of Default in the payment of
principal, premium, if any, or interest or Liquidated Damages, if any, when due
under Section 6.01(a), (b) or (c) or a Trust Officer of the Trustee shall have
received notice thereof, in accordance with this Indenture, from the Company or
from the holders of a majority in principal amount of the outstanding
Convertible Subordinated Notes. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest or Liquidated
Damages, if any, on any Convertible Subordinated Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of the holders of the
Convertible Subordinated Notes.
SECTION 7.06. Reports by the Trustee to Holders. Within 60 days after
the reporting date stated in Section 10.10, the Trustee shall mail to holders of
Convertible Subordinated Notes a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2).
The Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
A copy of each report at the time of its mailing to holders of
Convertible Subordinated Notes shall be filed, at the expense of the Company, by
the Trustee with the Commission and each stock exchange or securities market, if
any, on which the Convertible Subordinated Notes are listed. The Company shall
timely notify the Trustee when the Convertible Subordinated Notes are listed or
quoted on any stock exchange or securities market.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation for its acceptance of this Indenture and its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by or on behalf of it in addition to the compensation for its services.
Such expenses may include the reasonable compensation, disbursements and
expenses of the Trustee's agents, counsel and other persons not regularly in its
employ.
The Company shall indemnify the Trustee against, and defend and hold
the Trustee harmless from, any loss, liability or expense incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture and the
37
trusts hereunder, including the costs and expenses of defending itself against
or investigating any claim of liability in the premises, except as set forth in
the next paragraph. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim with counsel designated by the Company, who may be outside
counsel to the Company but shall in all events be reasonably satisfactory to the
Trustee, and the Trustee shall cooperate in the defense. In addition, the
Trustee may retain one separate counsel and, if deemed advisable by such
counsel, local counsel, and the Company shall pay the reasonable fees and
expenses of such separate counsel and local counsel. The indemnification herein
extends to any settlement; provided, however, that the Company will not be
liable for any settlement made without its consent; provided further, however,
that such consent will not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or willful
misconduct.
The Trustee shall have a lien prior to the Convertible Subordinated
Notes on all money or property held or collected by the Trustee to secure the
Company's payment obligations in this Section 7.07, except that held in trust to
pay principal, premium, if any, and interest and Liquidated Damages, if any, on
Convertible Subordinated Notes. Such liens and the Company's obligations under
this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08. Replacement of the Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company. The holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes may
remove the Trustee by so notifying the Trustee and the Company in writing and
may appoint a successor Trustee. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
38
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Convertible
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Convertible
Subordinated Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any holder of a Convertible
Subordinated Note who has been a holder for at least six months fails to comply
with Section 7.10, such holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to holders of Convertible Subordinated Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided that all sums owing to the retiring Trustee hereunder have
been paid and subject to the lien provided for in Section 7.07. Notwithstanding
the replacement of the Trustee pursuant to this Section 7.08, the Company's
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee with respect to expenses and liabilities incurred by it prior to such
replacement.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
SECTION 7.09. Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business (including the trust created by this
Indenture) to, another corporation or national banking association, the
resulting, surviving or transferee corporation or national banking association
without any further act shall be the successor Trustee with the same effect as
if the successor Trustee had been named as the Trustee herein.
SECTION 7.10. Eligibility, Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310 (a) (1).
The Trustee shall always have a combined capital and surplus as stated in
Section 10.10. The Trustee is subject to TIA Section 310(b) regarding the
disqualification of a trustee upon acquiring a conflicting interest.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship set forth in TIA
39
Section 311(b). A Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
Satisfaction and Discharge of Indenture
SECTION 8.01. Discharge of Indenture. When (a) the Company delivers to
the Trustee for cancellation all Convertible Subordinated Notes theretofore
authenticated (other than any Convertible Subordinated Notes which have been
destroyed, lost or stolen and in lieu of or in substitution for which other
Convertible Subordinated Notes have been authenticated and delivered) and not
theretofore canceled, or (b) all the Convertible Subordinated Notes not
theretofore canceled or delivered to the Trustee for cancellation have become
due and payable, or by their terms will 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, or are
delivered to the Trustee for conversion in accordance with this Indenture, and
the Company deposits with the Trustee, in trust, amounts sufficient to pay at
maturity or upon redemption of all of the Convertible Subordinated Notes (other
than any Convertible Subordinated Notes which have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Convertible
Subordinated Notes have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest and Liquidated Damages, if any, 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 also pays, or causes 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) rights of registration of transfer, substitution,
replacement and exchange and conversion of Convertible Subordinated Notes, (ii)
rights hereunder of holders of Convertible Subordinated Notes to receive
payments of principal of and premium, if any, and interest, and Liquidated
Damages, if any, on, the Convertible Subordinated Notes, (iii) the obligations
under Sections 2.03 and 8.05 hereof and (iv) 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 10.04 and at the Company's cost and expense, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees 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 Convertible
Subordinated Notes.
SECTION 8.02. Deposited Moneys to be Held in Trust by Trustee. Subject
to Section 8.04, all moneys deposited with the Trustee pursuant to Section 8.01
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article XI, either directly or through the Paying Agent, to the
holders of the particular Convertible Subordinated Notes for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and
40
interest, and Liquidated Damages, if any, and premium, if any.
SECTION 8.03. Paying Agent to Repay Moneys Held. Upon the satisfaction
and discharge of this Indenture, all moneys then held by any Paying Agent (other
than the Trustee) shall, upon the Company's demand, 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 moneys.
SECTION 8.04. Return of Unclaimed Moneys. Subject to the requirements
of applicable law, any moneys deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest or Liquidated Damages, if any,
on Convertible Subordinated Notes and not applied but remaining unclaimed by the
holders thereof for two years after the date upon which the principal of,
premium, if any, or interest, or Liquidated Damages, if any, on such Convertible
Subordinated Notes, as the case may be, have become due and payable, shall be
repaid to the Company by the Trustee on demand; provided, however, that the
Company, or the Trustee at the request of the Company, shall have first caused
notice of such payment to the Company to be mailed to each holder of a
Convertible Subordinated Note entitled thereto no less than 30 days prior to
such payment and all liability of the Trustee shall thereupon cease with respect
to such moneys; and the holder of any of the Convertible Subordinated 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 8.05. Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 8.02 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Convertible Subordinated Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.01 until such time as
the Trustee or the Paying Agent is permitted to apply all such money in
accordance with Section 8.02; provided, however, that if the Company makes any
payment of interest, Liquidated Damages, if any, on or principal or premium, if
any, of any Convertible Subordinated Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders
thereof to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without the Consent of Holders. The Company and the
Trustee may amend this Indenture or the Convertible Subordinated Notes without
notice to or the consent of any holder of a Convertible Subordinated Note for
the purposes of:
(a) curing any ambiguity or correcting or supplementing any
defective or inconsistent provision contained in this Indenture or making
any other changes in the
41
provisions of this Indenture which the Company and the Trustee may deem
necessary or desirable, provided such amendment does not materially and
adversely affect the legal rights under this Indenture of the holders of
Convertible Subordinated Notes;
(b) providing for uncertificated Convertible Subordinated Notes in
addition to or in place of certificated Convertible Subordinated Notes;
(c) evidencing the succession of another person to the Company
and providing for the assumption by such successor of the covenants and
obligations of the Company thereunder and in the Convertible Subordinated
Notes as permitted by Section 5.01;
(d) providing for conversion rights or repurchase rights of
holders of Convertible Subordinated Notes in the event of consolidation,
merger, share exchange or sale of all or substantially all of the assets of
the Company as required to comply with Sections 5.01 or 12.06;
(e) reducing the Conversion Price;
(f) evidencing and providing for the acceptance of appointment under
this Indenture of a successor Trustee;
(g) making any changes that would provide the holders of the
Convertible Subordinated Notes with any additional rights or benefits or
that do not adversely affect the legal rights under this Indenture of any
such holder; or
(h) complying with the requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the TIA.
SECTION 9.02. With the Consent of Holders. Subject to Section 6.07, the
Company and the Trustee may amend this Indenture or the Convertible Subordinated
Notes with the written consent of the holders of at least a majority in
principal amount of the then outstanding Convertible Subordinated Notes
(including consents obtained in connection with a tender offer or exchange offer
for Convertible Subordinated Notes).
Subject to Sections 6.04 and 6.07, the holders of a majority in
principal amount of the Convertible Subordinated Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for Convertible Subordinated Notes) may also waive compliance in a particular
instance by the Company with any provision of this Indenture or the Convertible
Subordinated Notes.
However, without the consent of each holder of a Convertible
Subordinated Note affected, an amendment or waiver under this Section may not
(with respect to any Convertible Subordinated Notes held by a non-consenting
holder):
(a) reduce the principal amount of Convertible Subordinated Notes whose
holders must consent to an amendment, supplement or waiver;
42
(b) reduce the principal of or premium on or change the fixed
maturity of any Convertible Subordinated Note or alter the redemption or
mandatory repurchase provisions with respect thereto;
(c) reduce the rate of, or change the time for payment of,
interest, including defaulted interest, or Liquidated Damages on any
Convertible Subordinated Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest or Liquidated Damages, if any,
on the Convertible Subordinated Notes (except a rescission of acceleration
of the Convertible Subordinated Notes by the holders of at least a majority
in aggregate principal amount of the Convertible Subordinated Notes then
outstanding and a waiver of the payment default that resulted from such
acceleration);
(e) make the principal of, or premium, if any, or interest or
Liquidated Damages, if any, on, any Convertible Subordinated Note payable
in money other than as provided for herein and in the Convertible
Subordinated Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or Events of Default or the rights of
holders of Convertible Subordinated Notes to receive payments of principal
of, premium, if any, or interest or Liquidated Damages on the Convertible
Subordinated Notes;
(g) waive a redemption or mandatory repurchase payment with respect to
any Convertible Subordinated Notes;
(h) except as permitted herein (including Section 9.01(a)),
increase the Conversion Price or modify the provisions contained herein
relating to conversion of the Convertible Subordinated Notes in a manner
adverse to the holders thereof; or
(i) make any change to the abilities of holders of Convertible
Subordinated Notes to enforce their rights under this Indenture.
To secure a consent of the holders of Convertible Subordinated Notes
under this Section 9.02, it shall not be necessary for such holders to approve
the particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section 9.02 becomes effective,
the Company shall mail to holders of Convertible Subordinated Notes a notice
briefly describing the amendment or waiver.
In order to amend any provisions of Article XI, holders of at least 75%
in aggregate principal amount of Convertible Subordinated Notes then outstanding
must consent to such amendment if such amendment would adversely affect the
rights of holders of Convertible Subordinated Notes.
43
SECTION 9.03. Compliance with the Trust Indenture Act. Every amendment
to this Indenture or the Convertible Subordinated Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a holder of a Convertible
Subordinated Note is a continuing consent by the holder and every subsequent
holder of a Convertible Subordinated Note or portion of a Convertible
Subordinated Note that evidences the same debt as the consenting holder's
Convertible Subordinated Note, even if notation of the consent is not made on
any Convertible Subordinated Note. However, any such holder or subsequent holder
may revoke the consent as to his or her Convertible Subordinated Note or portion
of a Convertible Subordinated Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the holders of the requisite principal amount of
Convertible Subordinated Notes have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the holders of Convertible Subordinated Notes
entitled to consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
persons who were holders of Convertible Subordinated Notes at such record date
(or their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date.
After an amendment or waiver becomes effective it shall bind every
holder of a Convertible Subordinated Note, unless it is of the type described in
clauses (a) - (i) of Section 9.02. In such case, the amendment or waiver shall
bind each holder of a Convertible Subordinated Note who has consented to it and
every subsequent holder of a Convertible Subordinated Note or portion of a
Convertible Subordinated Note that evidences the same debt as the consenting
holder's Convertible Subordinated Note.
SECTION 9.05. Notation on or Exchange of Convertible Subordinated
Notes. Convertible Subordinated Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article IX may, and
shall if required by the Trustee, bear a notation in the form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Convertible Subordinated Notes so modified as to
conform, in the opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for outstanding Convertible Subordinated
Notes without charge to the holders of the Convertible Subordinated Notes,
except as specified in Section 2.06.
SECTION 9.06. Trustee Protected. The Trustee shall sign any amendment
or supplemental indenture authorized pursuant to this Article IX if such
amendment or supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee.
44
If such amendment or supplemental indenture does adversely affect the
rights, duties, liabilities or immunities of the Trustee, the Trustee may, but
need not, sign it. In signing such amendment or supplemental indenture, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Officers' Certificate and an opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE X
General Provisions
SECTION 10.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), such duties imposed by such section of the TIA shall control. If any
provision of this Indenture expressly modifies or excludes any provision of the
TIA that may be so modified or excluded, the Indenture provision so modifying or
excluding such provision of the TIA shall be deemed to apply.
SECTION 10.02. Notices. Any notice or communication by the Company or
the Trustee to the other is duly given if in writing and delivered in person or
mailed by first-class mail, with postage prepaid (registered or certified,
return receipt requested), or sent by facsimile or overnight air couriers
guaranteeing next day delivery, to the other's address as stated in Section
10.10. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to holders of
Convertible Subordinated Notes) shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when transmission is
confirmed, if transmitted by facsimile; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery. Notwithstanding the foregoing, all notices to the Trustee shall be
effective only upon receipt by a Trust Officer.
Any notice or communication to a holder of a Convertible Subordinated
Note shall be mailed by first-class mail, with postage prepaid, to his or her
address shown on the Register kept by the Registrar. Failure to mail a notice or
communication to a holder or any defect in it shall not affect its sufficiency
with respect to other holders.
If a notice or communication to a holder of a Convertible Subordinated
Note is sent in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.
If the Company sends a notice or communication to holders of
Convertible Subordinated Notes, it shall send a copy to the Trustee and each
Agent at the same time.
All notices or communications shall be in writing.
45
SECTION 10.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to TIA Section 312(b) with other holders with respect to
their rights under this Indenture or the Convertible Subordinated Notes. The
Company, the Trustee, the Registrar and the paying agent shall have the
protection of TIA Section 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such person, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his or her certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her opinion may be based as aforesaid are erroneous.
46
Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representation by an accountant (who may be an employee of the
Company), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect to
the accounting matters upon which his or her certificate, statement or opinion
may be based as aforesaid is erroneous.
SECTION 10.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by, or a meeting of, holders of Convertible
Subordinated Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 10.07. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions in the City of
New York or
Chicago, Illinois are not required to be open, and a "Business Day" is any day
that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period. If
any date specified in this Indenture, including, without limitation, a
Redemption Date under Paragraph 5 of the Convertible Subordinated Notes, is a
Legal Holiday, then such date shall be the next succeeding Business Day.
SECTION 10.08. No Recourse Against Others. No director, officer,
employee, shareholder or Affiliate, as such, of the Company from time to time
shall have any liability for any obligations of the Company under the
Convertible Subordinated Notes or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation. Each holder by
accepting a Convertible Subordinated Note waives and releases all such
liability. This waiver and release are part of the consideration for the
Convertible Subordinated Notes. Each of such directors, officers, employees,
shareholders and Affiliates of the Company is a third party beneficiary of this
Section 10.08.
SECTION 10.09. Counterparts. This Indenture may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 10.10. Other Provisions. The Company initially appoints the
Trustee as Paying Agent, Registrar and authenticating agent.
The reporting date for Section 7.06 is May 15 of each year. The first
reporting date is the May 15 following the issuance of Convertible Subordinated
Notes hereunder.
The Trustee shall always have, or shall be a Subsidiary of a bank or
bank holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
47
Xxxxxxxxxx Technology Incorporated
00 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Trustee's address is:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SECTION 10.11. Governing Law. The internal laws of the State of
New
York shall govern this Indenture and the Convertible Subordinated Notes, without
regard to the conflict of laws provisions thereof.
SECTION 10.12. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or a Subsidiary. Any such other indenture, loan or debt agreement
may not be used to interpret this Indenture.
SECTION 10.13. Successors. All agreements of the Company in this
Indenture and the Convertible Subordinated Notes shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 10.14. Severability. In case any provision in this Indenture or
in the Convertible Subordinated Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.15. Table of Contents, Headings, etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
ARTICLE XI
Subordination
SECTION 11.01. Agreement to Subordinate. The Company agrees, and each
holder of Convertible Subordinated Notes by accepting a Convertible Subordinated
Note agrees, that the indebtedness evidenced by the Convertible Subordinated
Note is subordinated in right of payment, to the extent and in the manner
provided in this Article XX,
00
to the prior payment in full in cash or payment satisfactory to holders of
Senior Debt of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
SECTION 11.02. Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshaling of the Company's assets and liabilities:
(a) holders of Senior Debt shall be entitled to receive payment in full
of all Obligations due in respect of such Senior Debt (including interest
after the commencement of any such proceeding at the rate specified in the
applicable Senior Debt) in cash or other payment satisfactory to the
holders of the Senior Debt before holders of Convertible Subordinated Notes
shall be entitled to receive any payment with respect to the Convertible
Subordinated Notes; and
(b) until all Senior Debt is paid in full in cash or other payment
satisfactory to the holders of the Senior Debt, any distribution to which
holders of Convertible Subordinated Notes would be entitled but for this
Article XI shall be made to holders of Senior Debt, as their interests may
appear.
SECTION 11.03. Default on Designated Senior Debt. Anything in this
Indenture to the contrary notwithstanding, no payment on account of principal of
or premium, if any, interest or Liquidated Damages, if any, on or other amounts
due on the Convertible Subordinated Notes (including without limitation the
making of a deposit pursuant to Section 3.06 or 4.06), and no redemption,
repurchase, or other acquisition of the Convertible Subordinated Notes, shall be
made by or on behalf of the Company unless:
(a) full payment of all amounts then due for principal of and interest
on, and of all other amounts then due on, all Designated Senior Debt has
been made or duly provided for pursuant to the terms of the instruments
governing such Designated Senior Debt; and
(b) at the time for, and immediately after giving effect to, any such
payment, redemption, repurchase or other acquisition, there shall not exist
under any Designated Senior Debt, or any agreement pursuant to which any
Designated Senior Debt is issued, any default which shall not have been
cured or waived and which default shall have resulted in the full amount of
such Designated Senior Debt being declared due and payable.
In addition, if the Trustee shall receive written notice from the
holders of Designated Senior Debt or their Representative (a "Payment Blockage
Notice") that there has occurred and is continuing under such Designated Senior
Debt, or any agreement pursuant to which such Designated Senior Debt is issued,
any non-payment default, which default shall not have been cured or waived,
giving the holders of such Designated Senior Debt the right to declare such
Designated Senior Debt immediately due and payable, then,
49
anything in this Indenture to the contrary notwithstanding, no payment on
account of the principal of or premium, if any, interest or Liquidated Damages,
if any, on or any other amounts due on the Convertible Subordinated Notes
(including without limitation the making of a deposit pursuant to Section 3.06
or 4.06), and no redemption, repurchase or other acquisition of the Convertible
Subordinated Notes, shall be made by or on behalf of the Company during the
period (the "Payment Blockage Period") commencing on the date of receipt of the
Payment Blockage Notice and ending on the earliest of (i) the date on which such
default shall have been cured or waived, (ii) 179 days from the receipt of the
Payment Blockage Notice and (iii) the date the Payment Blockage Notice is
withdrawn by the holders of such Designated Senior Debt. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in Section 11.02 and the first sentence of this Section
11.03), unless the holders of such Designated Senior Debt or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Debt, the Company may resume payments on the Convertible Subordinated Notes
after the end of such Payment Blockage Period. Not more than one Payment
Blockage Notice may be given in any consecutive 365-day period, irrespective of
the number of defaults with respect to one or more issues of Designated Senior
Debt during such period.
SECTION 11.04. Acceleration of Convertible Subordinated Notes. In the
event of the acceleration of the Convertible Subordinated Notes because of an
Event of Default, the Company may not make any payment or distribution to the
Trustee or any holder of Convertible Subordinated Notes in respect of
Obligations with respect to Convertible Subordinated Notes and may not acquire
or purchase from the Trustee or any holder of Convertible Subordinated Notes any
Convertible Subordinated Notes until all Senior Debt has been paid in full in
cash or other payment satisfactory to the holders of Senior Debt or such
acceleration is rescinded in accordance with the terms of this Indenture.
If payment of the Convertible Subordinated Notes is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior Debt
or trustees of such Senior Debt of the acceleration.
SECTION 11.05. When Distribution Must Be Paid Over. In the event that
the Trustee, any holder of Convertible Subordinated Notes or any other person
receives any payment or distributions of assets of the Company of any kind with
respect to the Convertible Subordinated Notes in contravention of any
subordination terms contained in this Indenture, whether in cash, property or
securities, including, without limitation, by way of set-off or otherwise, then
such payment shall be held by the recipient in trust for the benefit of holders
of Senior Debt, and shall be immediately paid over and delivered to the holders
of Senior Debt or their Representative, to the extent necessary to make payment
in full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor, to or for the holders
of Senior Debt; provided, however, that the foregoing shall apply to the Trustee
only if a Trust Officer of the Trustee has actual knowledge (as determined in
accordance with Section 11.11) that such payment or distribution is prohibited
by this Indenture.
50
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article XI, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of holders of Convertible
Subordinated Notes or the Company or any other person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this Article XI,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 11.06. Notice by Company. The Company shall promptly notify the
Trustee of any facts known to the Company that would cause a payment of any
Obligations with respect to the Convertible Subordinated Notes or the purchase
of any Convertible Subordinated Notes by the Company to violate this Article XI,
but failure to give such notice shall not affect the subordination of the
Convertible Subordinated Notes to the Senior Debt as provided in this Article
XI.
SECTION 11.07. Subrogation. After all Senior Debt is paid in full and
until the Convertible Subordinated Notes are paid in full, holders of
Convertible Subordinated Notes shall be subrogated (equally and ratably with all
other indebtedness pari passu with the Convertible Subordinated Notes) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the holders of
Convertible Subordinated Notes have been applied to the payment of Senior Debt.
A distribution made under this Article XI to holders of Senior Debt that
otherwise would have been made to holders of Convertible Subordinated Notes is
not, as between the Company and holders of Convertible Subordinated Notes, a
payment by the Company on the Convertible Subordinated Notes.
SECTION 11.08. Relative Rights. This Article XI defines the relative
rights of holders of Convertible Subordinated Notes and holders of Senior Debt.
Nothing in this Indenture shall:
(a) impair, as between the Company and holders of Convertible
Subordinated Notes, the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Convertible Subordinated Notes in
accordance with their terms;
(b) affect the relative rights of holders of Convertible Subordinated
Notes and creditors (other than with respect to Senior Debt) of the
Company, other than their rights in relation to holders of Senior Debt; or
(c) prevent the Trustee or any holder of Convertible Subordinated Notes
from exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to holders of Convertible
Subordinated Notes.
51
If the Company fails because of this Article XI to pay principal of,
premium, if any, or interest or Liquidated Damages, if any, on a Convertible
Subordinated Note on the due date, the failure is still a Default or Event of
Default.
SECTION 11.09. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Debt to enforce the subordination of the indebtedness
evidenced by the Convertible Subordinated Notes shall be impaired by any act or
failure to act by the Company or any holder of Convertible Subordinated Notes or
by the failure of the Company or any such holder to comply with this Indenture.
SECTION 11.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article XI, the Trustee and the holders of Convertible Subordinated
Notes shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the holders of Convertible Subordinated Notes for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XI.
SECTION 11.11. Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article XI or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee may continue to make payments on the Convertible Subordinated Notes,
unless a Trust Officer shall have received at least two Business Days prior to
the date of such payment or distribution written notice of facts that would
cause such payment or distribution with respect to the Convertible Subordinated
Notes to violate this Article XI. Only the Company or a Representative may give
the notice.
Nothing in this Article XI shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 11.12. Authorization to Effect Subordination. Each holder of a
Convertible Subordinated Note by the holder's acceptance thereof authorizes and
directs the Trustee on the holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article XI, and appoints the Trustee to act as the holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the
52
holders of any Senior Debt or their Representatives are hereby authorized to
file an appropriate claim for and on behalf of the holders of the Convertible
Subordinated Notes.
SECTION 11.13. Article Applicable to Paying Agents. In case 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 XI
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article XI in
addition to or in place of the Trustee; provided, however, that the second and
third paragraphs of Section 11.11 shall not apply to the Company or any
Subsidiary of the Company if it or such Subsidiary acts as Paying Agent.
SECTION 11.14. Senior Debt Entitled to Rely. The holders of Senior Debt
shall have the right to rely upon this Article XI, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless the holders affected thereby shall have agreed in writing
thereto.
SECTION 11.15. Permitted Payments. Notwithstanding anything to the
contrary in this Article XI, the holders of Convertible Subordinated Notes may
receive and retain at any time on or prior to the Maturity Date (i) securities
that are subordinated to at least the same extent as the Convertible
Subordinated Notes to (a) Senior Debt and (b) any securities issued in exchange
for Senior Debt and (ii) payments and other distributions made from any trust
created pursuant to Section 8.01.
SECTION 11.16. Pari Passu Indebtedness. The Company's 6% Convertible
Subordinated Notes due 2005 issued under the Indenture dated as of March 18,
1998, between the Company and U.S. Bank National Association, is pari passu with
the Convertible Subordinated Notes.
ARTICLE XII
Conversion of Convertible Subordinated Notes
SECTION 12.01. Right To Convert. Subject to and upon compliance with
the provisions of this Indenture, each holder of Convertible Subordinated Notes
shall have the right, at his or her option, at any time on or before the close
of business on the last Trading Day prior to the Maturity Date (except that, (a)
with respect to any Convertible Subordinated Note or portion thereof which is
called for redemption prior to such date, such right shall terminate, except as
provided in the fourth paragraph of Section 12.02, at the close of business on
the last Trading Day preceding the date fixed for redemption (unless the Company
defaults in payment of the Redemption Price in which case the conversion right
will terminate at the close of business on the date such default is cured) and
(b) with respect to any Convertible Subordinated Note or portion thereof subject
to a duly completed election for repurchase, such right shall terminate at the
close of business on the Designated Event Offer Termination Date (unless the
Company defaults in the payment due upon repurchase or such holder elects to
withdraw the submission of such election to repurchase in accordance with
section 4.06)) to convert the principal amount of any Convertible
53
Subordinated Note held by such holder, 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 Convertible
Subordinated Note or portion thereof to be converted by the Conversion Price in
effect at such time, by surrender of the Convertible Subordinated Note so to be
converted in whole or in part in the manner provided in Section 12.02. A holder
of Convertible Subordinated Notes is not entitled to any rights of a holder of
Common Stock until such holder of Convertible Subordinated Notes has converted
his or her Convertible Subordinated Notes to Common Stock, and then only to the
extent such Convertible Subordinated Notes are deemed to have been converted to
Common Stock under this Article XII.
SECTION 12.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. To exercise, in
whole or in part, the conversion privilege with respect to any Convertible
Subordinated Note, the holder of such Convertible Subordinated Note shall
surrender such Convertible Subordinated Note, duly endorsed, at an office or
agency maintained by the Company pursuant to Section 4.04, accompanied by the
funds, if any, required by the last paragraph of this Section 12.02, and shall
give written notice of conversion in the form provided on the Convertible
Subordinated Notes (or such other notice which is acceptable to the Company) to
the office or agency that the holder of Convertible Subordinated Notes elects to
convert such Convertible Subordinated Note or such portion thereof specified in
said notice. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
which are issuable on such conversion shall be issued, and shall be accompanied
by transfer taxes, if required pursuant to Section 12.07. Each such Convertible
Subordinated Note surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as the registration of such
Convertible Subordinated Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder of Convertible Subordinated Notes or his or her duly authorized
attorney. The holder of such Convertible Subordinated Notes will not be required
to pay any tax or duty which may be payable in respect of the issue or delivery
of Common Stock on conversion, but will be required to pay any tax or duty which
may be payable in respect of any transfer involved in the issue or delivery of
Common Stock in a name other than the same name as the registration of such
Convertible Subordinated Note.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
holder at the office or agency maintained by the Company for such purpose
pursuant to Section 4.04, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Convertible
Subordinated Note or portion thereof in accordance with the provisions of this
Article XII 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
12.03 (which payment, if any, shall be paid no later than five Business Days
after satisfaction of the requirements for conversion set forth above).
Certificates representing shares of Common Stock will not be issued or delivered
unless all taxes and duties, if any, payable by the holder have been paid. In
case any Convertible Subordinated Note of a
54
denomination of an integral multiple greater than $1,000 is surrendered for
partial conversion, and subject to Section 2.02, the Company shall execute, and
the Trustee shall authenticate and deliver to the holder of the Convertible
Subordinated Note so surrendered, without charge to him or her, a new
Convertible Subordinated Note or Convertible Subordinated Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Convertible Subordinated Note.
Each conversion shall be deemed to have been effected as to any such
Convertible Subordinated Note (or portion thereof) on the date on which the
requirements set forth above in this Section 12.02 have been satisfied as to
such Convertible Subordinated Note (or portion thereof), and the person in whose
name any certificate or certificates for shares of Common Stock are 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 Company's stock transfer books are 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 Convertible Subordinated Note is
surrendered.
Any Convertible Subordinated Note or portion thereof surrendered for
conversion during the period from the close of business on the record date for
any interest payment through the close of business on the last Trading Day
immediately preceding such interest payment date shall (unless such Convertible
Subordinated Note or portion thereof being converted has been called for
redemption on a date during the period from the close of business on such record
date to the close of business on the last Trading Day immediately preceding the
corresponding interest payment date pursuant to a notice of redemption mailed by
the Company to the holders in accordance with the provisions of Section 3.04) be
accompanied by payment, in funds acceptable to the Company, of an amount equal
to the interest and Liquidated Damages, if any, otherwise payable on such
interest payment date on the principal amount being converted; provided,
however, that such payment may be reduced by the amount of any existing payment
default in respect of such Convertible Subordinated Notes. An amount equal to
such payment shall be paid by the Company on such interest payment date to the
holder of such Convertible Subordinated Note at the close of business on such
record date. Except as provided above in this Section 12.02, no adjustment shall
be made for interest and Liquidated Damages, if any, accrued on any Convertible
Subordinated Note converted or for dividends on any shares issued upon the
conversion of such Convertible Subordinated Note as provided in this Article
XII. If any Convertible Subordinated Note is converted after a record date for
the payment of interest and prior to the next succeeding interest payment date,
interest payable on such interest payment date shall be payable notwithstanding
such conversion, and such interest shall be paid to the holder of such
Convertible Subordinated Note on the applicable record date.
SECTION 12.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Convertible Subordinated Notes. If more than one
Convertible Subordinated 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
55
aggregate principal amount of the Convertible Subordinated 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 Convertible Subordinated Note or Convertible Subordinated Notes, the
Company shall make an adjustment therefor in cash based upon the Current Market
Price of the Common Stock on the last Trading Day prior to the date of
conversion.
SECTION 12.04. Conversion Price. The conversion price shall be as
specified in the form of Convertible Subordinated Note attached as Exhibit A
hereto, subject to adjustment as provided in this Article XII.
SECTION 12.05. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:
(a) If 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 shareholders
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 12.05(g)) 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 12.05(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) If the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, if the outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(c) If the Company shall issue rights or warrants to all or
substantially all holders of its outstanding shares of Common Stock
entitling them to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price (as defined in Section
12.05(g)) on the Record Date fixed for the determination of shareholders
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
56
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 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 shareholders 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 be 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. If 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 shareholders 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,
with the value of such consideration, if other than cash, to be determined
by the Board of Directors.
(d) If the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section
12.05(a) applies) or evidences of its indebtedness, cash or other assets
(including securities, but excluding (i) any rights or warrants of a type
referred to in Section 12.05(c) and (ii) dividends and distributions paid
exclusively in cash) (the foregoing hereinafter in this Section 12.05(d)
called the "Securities"), then, in each such case, the Conversion Price
shall be reduced so that the same shall be equal to the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on the Record Date (as defined in Section 12.05(g)) with
respect to such distribution by a fraction of which the numerator shall be
the Current Market Price (determined as provided in Section 12.05(g)) on
such date less the 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) 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. If such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the Fair Market Value of any
distribution for purposes of this Section 12.05(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
57
period used in computing the Current Market Price pursuant to Section 12.05(g)
to the extent possible.
Notwithstanding any other provision of Section 12.05(c) or this Section
12.05(d) to the contrary, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any shareholder rights plan) shall be deemed not to have
been distributed for purposes of Section 12.05(c) or this Section 12.05(d), as
applicable, if the Company makes proper provision so that each holder of
Convertible Subordinated Notes who converts a Convertible Subordinated Note (or
any portion thereof) after the date fixed for determination of shareholders
entitled to receive such distribution shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion, the amount and kind of such distributions that such holder would
have been entitled to receive if such holder had, immediately prior to such
determination date, converted such Convertible Subordinated Note into Common
Stock, and, in the case of this Section 12.05(d), interest accrued as a
consequence of the investment, in U.S. Government Obligations with a maturity of
not more than three months, of the cash amount that such holder would have been
so entitled to receive.
Rights or warrants distributed by the Company to all or substantially
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 12.05(d) (and no adjustment
to the Conversion Price under this Section 12.05(d) shall be required) until the
occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment to the
Conversion Price under this Section 12.05(d) shall be made. If any such rights
or warrants, including any such existing rights or warrants distributed prior to
the date of this Indenture, are subject to subsequent events, upon the
occurrence of each of which such rights or warrants shall become exercisable to
purchase different securities, evidences of indebtedness or other assets, then
the occurrence of each such event shall be deemed to be such date of issuance
and record date with respect to new rights or warrants (and a termination or
expiration of the existing rights or warrants 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 with respect thereto, that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 12.05(d) was made, (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 or holders of Common Stock with respect to such rights or
58
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 which shall have expired or been
terminated without exercise by any holders thereof, the Conversion Price shall
be readjusted as if such rights and warrants had not been issued.
For purposes of this Section 12.05(d) and Sections 12.05(a) and (c),
any dividend or distribution to which this Section 12.05(d) is applicable that
also includes shares of Common Stock to which Section 12.05(a) applies, or
rights or warrants to subscribe for or purchase shares of Common Stock to which
Section 12.05(c) 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 12.05(a) or (c) applies (and any Conversion Price
reduction required by this Section 12.05(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 12.05(a) and (c) with
respect to such dividend or distribution shall then be made, except that (A) the
Record Date of such dividend or distribution shall be substituted as "the date
fixed for the determination of shareholders entitled to receive such dividend or
other distribution", "Record Date fixed for such determination" and "Record
Date" within the meaning of Section 12.05(a) and as "the date fixed for the
determination of shareholders entitled to receive such rights or warrants", "the
Record Date fixed for the determination of the shareholders entitled to receive
such rights or warrants" and "such Record Date" within the meaning of Section
12.05(c) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 12.05(a)).
(e) If the Company shall, by dividend or otherwise, distribute cash to
all holders of its Common Stock (excluding any cash that is distributed upon a
merger, share exchange or consolidation to which Section 12.06 applies or as
part of a distribution referred to in Section 12.05(d)) in an aggregate amount
that, combined together with (1) the aggregate amount of any other such all cash
distributions to all holders of its Common Stock within the 12 months preceding
the date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 12.05(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 resolution of the Board of
Directors) of consideration payable in respect of any tender offer by the
Company or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section 12.05(f)
has been made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 12.05(g)) on the Record Date with respect to
such distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date, the Conversion Price shall be reduced so that the same shall
59
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 Record Date; provided, however, that if 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
holder of Convertible Subordinated Notes shall have the right to receive upon
conversion of a Convertible Subordinated Note (or any portion thereof) the
Common Stock issuable upon such conversion and the amount of cash such holder
would have received had such holder converted such Convertible Subordinated Note
(or portion thereof) immediately prior to such Record Date. If such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(f) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires 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 resolution of the Board of Directors)
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 resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the Common Stock, expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this Section 12.05(f) has been made and (2) the aggregate amount of any
all-cash distributions to all holders of the Common Stock within the 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to Section 12.05(e) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in Section 12.05(g))
as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on the date of
the Expiration Time by a fraction 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 amount of cash plus
60
the Fair Market Value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (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. If the Company is obligated to purchase shares pursuant to any
such tender offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made. If the application of
this Section 12.05(f) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 12.05(f).
(g) For purposes of this Section 12.05, the following terms shall have
the meanings indicated:
(1) "Closing Price" with respect to any securities on any day
means the closing price on such day or, if no closing price is
available, the average of the reported high and low prices on such day,
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 national market or exchange, on the principal national
securities 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 high and low 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 resolution of the Board of Directors.
(2) "Current Market Price" means the average of the daily
Closing Prices per share of Common Stock for the 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 Sections 12.05(a),
(b), (c), (d), (e) or (f) occurs during such 10 consecutive Trading
Days, the Closing Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by
the same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the
61
"ex" date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.05(a), (b), (c), (d), (e) or
(f) occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event, and (3) if the "ex"
date for the issuance 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 Sections 12.05(d) or (f),
whose determination shall be conclusive and described in a resolution
of the Board of Directors) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such "ex"
date. For purposes of any computation under Section 12.05(f), the
Current Market Price on any date shall be deemed to be the average of
the daily Closing Prices per share of Common Stock for such day and the
next two succeeding Trading Days; provided, however, that if the "ex"
date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 12.05(a), (b), (c), (d), (e) or (f) occurs on or
after the Expiration Time for the tender or exchange offer requiring
such computation and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, (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 12.05, such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate the
intent of this Section 12.05 and to avoid unjust or inequitable results
as determined in good faith by the Board of Directors.
62
(3) "Fair Market Value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(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 shareholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract or
otherwise).
(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 securities exchange, a day on which the New York Stock
Exchange or such other national securities 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.
(h) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 12.05(a), (b), (c), (d),
(e) and (f), as the Board of Directors considers to be advisable to avoid
or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
The Company from time to time may, to the extent permitted by law,
reduce the Conversion Price by any amount for any period of at least 20
days, if the Board of Directors has made a determination that such
reduction would be in the Company's best interests, which determination
shall be conclusive and described in a resolution of the Board of
Directors. The reduction in Conversion Price shall be irrevocable during
this period. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the holders of Convertible
Subordinated Notes at his or her last address appearing on the Register of
holders maintained for that purpose a notice of the reduction at least 15
days prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which
it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this
Section 12.05(i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article XII shall be made by the
63
Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
(j) 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. 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 each holder of Convertible
Subordinated Notes at his or her last address appearing on the Register of
holders maintained for that purpose within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
(k) In any case in which this Section 12.05 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 issuing to the holder
of any Convertible Subordinated 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.
(l) For purposes of this Section 12.05, 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 shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
SECTION 12.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur: (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, share
exchange or combination of the Company with another person, or (iii) any sale or
conveyance of the properties and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which holders of
Common Stock shall receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the TIA as in
force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that the
Convertible Subordinated Notes shall be convertible into the kind and amount of
shares of
64
stock and other securities or property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, share exchange,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of the Convertible Subordinated Notes (assuming,
for such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Convertible Subordinated Notes) immediately prior
to such reclassification, change, consolidation, merger, share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his or her rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
share exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
share exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election have not been exercised
("Non-electing Share"), then, for the purposes of this Section 12.06, the kind
and amount of securities, cash or other property receivable upon such
consolidation, merger, share exchange, sale or conveyance for each Non-electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-electing Shares). Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XII. If, in the case of any such
reclassification, change, consolidation, merger, share exchange, combination,
sale or conveyance, the stock or other securities and assets receivable
thereupon by a holder of shares of Common Stock includes shares of stock or
other securities and assets of a person other than the successor or purchasing
person, as the case may be, in such reclassification, change, consolidation,
merger, share exchange, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other person and shall contain such
additional provisions to protect the interests of the holders of the Convertible
Subordinated Notes as the Board of Directors shall reasonably consider necessary
by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Convertible Subordinated Notes at his
or her address appearing on the Register of holders for that purpose within 20
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section 12.06 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, share exchanges,
combinations, sales and conveyances.
If this Section 12.06 applies to any event or occurrence, Section 12.05
shall not apply.
SECTION 12.07. Taxes on Shares Issued. The issue of stock certificates
on conversions of Convertible Subordinated Notes shall be made without charge to
the converting holder 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 Convertible Subordinated Note converted, and the
Company shall not be required to issue or
65
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 12.08. 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 Convertible Subordinated Notes from time to
time as such Convertible Subordinated 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 Convertible Subordinated Notes, the Company shall 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 Convertible Subordinated Notes will be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company further covenants that as long as the Common Stock is
quoted on the Nasdaq National Market, or its successor, the Company shall cause
all Common Stock issuable upon conversion of the Convertible Subordinated Notes
to be eligible for such quotation in accordance with, and at the times required
under, the requirements of such market, and if at any time the Common Stock
becomes listed on the New York Stock Exchange or any other national securities
exchange, the Company shall cause all Common Stock issuable upon conversion of
the Convertible Subordinated Notes to be so listed and remain listed.
SECTION 12.09. Responsibility of Trustee. The Trustee shall not at any
time be under any duty of responsibility to any holders of Convertible
Subordinated 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 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 Convertible Subordinated Note; and the Trustee makes no
representations with respect thereto. Subject to the provisions of Section 7.01,
the Trustee shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Convertible
Subordinated Note for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article
XII. Without limiting the generality of the foregoing, the Trustee shall not
have any responsibility to determine the correctness of any provisions contained
in any supplemental indenture entered into pursuant to Section 12.06 relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by holders of Convertible Subordinated Notes upon
the conversion of their Convertible Subordinated
66
Notes after any event referred to in such Section 12.06 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 7.01,
may accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate and Opinion of
Counsel (which the Company shall be obligated to file with the Trustee prior to
the execution of any such supplemental indenture) with respect thereto.
SECTION 12.10. Notice to Holders Prior to Certain Actions. If
(a) the Company declares a dividend (or any other
distribution) on its Common Stock (other than in cash out of retained
earnings);
(b) the Company authorizes the granting to the holders of its Common
Stock of rights or warrants to subscribe for or purchase any share of any
class of Common Stock or any other rights or warrants (other than rights or
warrants referred to in the second paragraph of Section 12.05(d));
(c) there is any reclassification of the Common Stock (other than a
subdivision or combination of 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, merger or share exchange 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) there is any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Convertible Subordinated Notes at his or her address appearing on
the Register maintained for that purpose as promptly as possible but in any
event at least 15 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 or distribution of 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 or distribution are to be determined, or (y) the date
on which such reclassification, consolidation, merger, share exchange, 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,
share exchange, 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, share exchange, sale, transfer, dissolution, liquidation or winding-up.
SECTION 12.11. Restriction on Common Stock Issuable Upon
Conversion. (a) Shares of Common Stock to be issued upon conversion of
Convertible Subordinated Notes prior to the effectiveness of a Shelf
Registration Statement shall be physically delivered in certificated form to the
holders converting such Securities, and the certificate
67
representing such shares of Common Stock shall bear the Restricted Common Stock
Legend unless removed in accordance with Section 12.11(c).
(b) If (i) shares of Common Stock to be issued upon conversion of a
Convertible Subordinated Note prior to the effectiveness of a Shelf Registration
Statement are to be registered in a name other than that of the holder of such
Convertible Subordinated Note or (ii) shares of Common Stock represented by a
certificate bearing the Restricted Common Stock Legend are transferred
subsequently by such holder, then, unless the Shelf Registration Statement has
become effective and such shares are being transferred pursuant to the Shelf
Registration Statement, the holder must deliver to the transfer agent for the
Common Stock a certificate in substantially the form of Exhibit C as to
compliance with the restrictions on transfer applicable to such shares of Common
Stock, and neither the transfer agent nor the registrar for the Common Stock
shall be required to register any transfer of such Common Stock not so
accompanied by a properly completed certificate.
(c) Except in connection with a Shelf Registration Statement, if
certificates representing shares of Common Stock are issued upon the
registration of transfer, exchange or replacement of any other certificate
representing shares of Common Stock bearing the Restricted Common Stock Legend,
or if a request is made to remove such Restricted Common Stock Legend from
certificates representing shares of Common Stock, the certificates so issued
shall bear the Restricted Common Stock Legend, or the Restricted Common Stock
Legend shall not be removed, as the case may be, unless there is delivered to
the Company such satisfactory evidence, which, in the case of a transfer made
pursuant to Rule 144 under the Securities Act, may include an opinion of counsel
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under
the Securities Act or that such shares of Common Stock are securities that are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such reasonably satisfactory evidence, the Company
shall cause the transfer agent for the Common Stock to countersign and deliver
certificates representing shares of Common Stock that do not bear the legend.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
XXXXXXXXXX TECHNOLOGY INCORPORATED
By /s/ Xxxx X. Xxxxx
--------------------------------------------
Name: Xxxx X. Xxxxx
Title: Treasurer
LASALLE BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: First Vice President
EXHIBIT A
(Face of Security)
[Global Securities Legend]
[The following legend shall appear on the face of each Global Security:
THIS CONVERTIBLE SUBORDINATED NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE
SUBORDINATED NOTE FOR ALL PURPOSES.]
[The following legend shall appear on the face of each Global Security
for which The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY THE AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
CONVERTIBLE SUBORDINATED NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED
CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE 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.]
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE
A-1
MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN
(1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k) (2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS
PERMITTED BY THE SECURITIES ACT.
A-2
No.
-------
$ CUSIP 448407 AD 8
------------
XXXXXXXXXX TECHNOLOGY INCORPORATED
2.25% CONVERTIBLE SUBORDINATED NOTE DUE 2010
promises to pay to [ ] or registered assigns, the principal sum of ______
Dollars on March 15, 2010
Interest Payment Dates: March 15 and September 15, commencing September 15,
2003
Regular Record Dates: March 1 and September 1
XXXXXXXXXX TECHNOLOGY INCORPORATED,
By
-----------------------------------
Name:
Title:
Certificate of Authentication
This is one of the Convertible Subordinated Notes described in the within
mentioned Indenture.
LASALLE BANK NATIONAL
ASSOCIATION, as Trustee
By
--------------------------------
Authorized Signatory
Dated:
A-3
(Back of Security)
A-4
XXXXXXXXXX TECHNOLOGY INCORPORATED
2.25% CONVERTIBLE SUBORDINATED NOTE DUE 2010
1. INTEREST. Xxxxxxxxxx Technology Incorporated, a Minnesota corporation
(the "Company"), promises to pay interest on the principal amount of
this Convertible Subordinated Note at the rate per annum shown above.
The Company will pay interest semi-annually in arrears on March 15 and
September 15 of each year, beginning September 15, 2003. Interest on
the Convertible Subordinated Notes will accrue from the most recent
interest payment date to which interest has been paid or, if no
interest has been paid, from February 24, 2003. Interest (and
Liquidated Damages, if any) will be computed on the basis of a 360-day
year composed of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest (and Liquidated
Damages, if any) on the Convertible Subordinated Notes (except
defaulted interest) to the person in whose name each Convertible
Subordinated Note is registered at the close of business on the March 1
or September 1 immediately preceding the relevant interest payment date
(each a "Regular Record Date") (other than with respect to a
Convertible Subordinated Note or portion thereof called for redemption
on a Redemption Date, or repurchased in connection with a Designated
Event on a repurchase date, during the period from the close of
business on a Regular Record Date to (but excluding) the next
succeeding interest payment date, in which case accrued interest (and
Liquidated Damages, if any) shall be payable (unless such Convertible
Subordinated Note or portion thereof is converted) to the holder of the
Convertible Subordinated Note or portion thereof redeemed or
repurchased in accordance with the applicable redemption or repurchase
provisions of the Indenture). The holder must surrender Convertible
Subordinated Notes to a Paying Agent to collect principal payments. The
Company will pay the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Convertible Subordinated Notes at
the office or agency of the Company maintained for such purpose, in
money of the United States that at the time of payment is legal tender
for payment of public and private debts. Until otherwise designated by
the Company, the Company's office or agency maintained for such purpose
will be the principal Corporate Trust Office of the Trustee (as defined
below). However, the Company may pay principal, premium, if any, and
interest and Liquidated Damages, if any, by check payable in such
money, and may mail such check to the holders of the Convertible
Subordinated Notes their respective addresses as set forth in the
Register of holders of Convertible Subordinated Notes.
3. PAYING AGENT AND REGISTRAR. LaSalle Bank National Association (together
with any successor Trustee under the Indenture referred to below, the
"Trustee"), will act as Paying Agent and Registrar. The Company may
change the Paying Agent, Registrar or co-registrar without prior
notice. Subject to certain limitations in the Indenture, the Company or
any of its subsidiaries may act in any such capacity.
A-5
4. INDENTURE. The Company issued the Convertible Subordinated Notes under
an Indenture dated as of February 24, 2003 (the "Indenture") between
the Company and the Trustee. The terms of the Convertible Subordinated
Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (the "TIA")
as in effect on the date of the Indenture. The Convertible Subordinated
Notes are subject to, and qualified by, all such terms, certain of
which are summarized hereon, and holders are referred to the Indenture
and the TIA for a statement of such terms. The Convertible Subordinated
Notes are unsecured subordinated obligations of the Company limited to
(except as otherwise provided in the Indenture) up to $130,000,000 in
aggregate principal amount, unless an election has been made as set
forth in Article II of the Indenture to increase such aggregate
principal amount to an amount not to exceed $150,000,000. Capitalized
terms not defined below have the same meaning as is given to them in
the Indenture.
5. OPTIONAL REDEMPTION. On or after March 20, 2008, the Company shall have
the option to redeem the Convertible Subordinated Notes, in whole or
from time to time in part, at the following Redemption Prices
(expressed as percentages of principal amount), if redeemed during the
twelve month period beginning March 15 of each year indicated (March 20
with respect to 2008) plus accrued and unpaid interest (and Liquidated
Damages, if any) to, but excluding, the date fixed for redemption:
Redemption
Year Redemption Price
---- ----------------
2008...................................... 100.64%
2009...................................... 100.32%
Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the date fixed for
redemption to each holder of Convertible Subordinated Notes to be
redeemed at his or her registered address. Convertible Subordinated
Notes in denominations larger than $1,000 may be redeemed in part but
only in integral multiples of $1,000. If less than all the Convertible
Subordinated Notes are to be redeemed, the Trustee shall select the
Convertible Subordinated Notes to be redeemed by a method that complies
with the requirements of the principal national securities exchange, if
any, on which the Convertible Subordinated Notes are listed or quoted,
or, if the Convertible Subordinated Notes are not so listed, on a pro
rata basis by lot or by any other method that the Trustee considers
fair and appropriate. On and after the Redemption Date, interest (and
Liquidated Damages, if any) ceases to accrue on Convertible
Subordinated Notes or portions thereof called for redemption (unless
the Company defaults in the payment of the Redemption Price). If this
Convertible Subordinated Note is redeemed on a date which is also an
Interest Payment Date, the interest payment (and Liquidated Damages, if
any) due on such date will be paid to the person in whose name this
Convertible Subordinated Note is registered at the close of business on
the relevant Regular Record Date.
A-6
6. DESIGNATED EVENT. Upon the occurrence of a Designated Event, the
Company shall make a Designated Event Offer to repurchase all
outstanding Convertible Subordinated Notes at a price equal to 100% of
the aggregate principal amount of the Convertible Subordinated Notes,
plus accrued and unpaid interest (and Liquidated Damages, if any) to,
but excluding, the date of repurchase, such offer to be made as
provided in the Indenture. To accept the Designated Event Offer, the
holder hereof must comply with the terms thereof, including
surrendering this Convertible Subordinated Note, with the "Option of
Holder to Elect Repurchase" portion hereof completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent, at the
address specified in the notice of the Designated Event Offer mailed to
holders as provided in the Indenture, prior to the Designated Event
Offer Termination Date.
7. SUBORDINATION. The Company's payment of the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes is subordinated to the prior payment in full of the
Company's Senior Debt as set forth in the Indenture. Each holder of
Convertible Subordinated Notes by his or her acceptance hereof
covenants and agrees that all payments of the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes by the Company shall be subordinated in accordance
with the provisions of Article XI of the Indenture, and each holder of
Convertible Subordinated Notes accepts and agrees to be bound by such
provisions.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated Notes
are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. The transfer of Convertible Subordinated
Notes may be registered and Convertible Subordinated Notes may be
exchanged as provided in the Indenture. As a condition of transfer, the
Registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents, and the
Company and the Registrar may require a holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company or the
Registrar need not exchange or register the transfer of any Convertible
Subordinated Note or portion of a Convertible Subordinated Note
selected for redemption or submitted for repurchase or surrendered for
conversion. Also, the Company or the Registrar need not exchange or
register the transfer of any Convertible Subordinated Note for a period
of 15 days before a selection of Convertible Subordinated Notes to be
redeemed.
9. PERSONS DEEMED OWNERS. The registered holder of a Convertible
Subordinated Note shall be treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or
the Convertible Subordinated Notes may be amended or supplemented with
the consent of the holders of at least a majority in principal amount
of the then outstanding Convertible Subordinated Notes, and any
existing default may be waived with the consent of the holders of a
majority in principal amount of the then outstanding Convertible
Subordinated Notes.
A-7
Without the consent of any holder, the Indenture or the
Convertible Subordinated Notes may be amended to: (a) cure any
ambiguity or correct or supplement any defective or inconsistent
provision contained in the Indenture, or make any other changes in the
provisions of the Indenture which the Company and the Trustee may deem
necessary or desirable provided such amendment does not materially and
adversely affect the legal rights under the Indenture of the holders of
Convertible Subordinated Notes; (b) provide for uncertificated
Convertible Subordinated Notes in addition to or in place of
certificated Convertible Subordinated Notes; (c) evidence the
succession of another person to the Company and provide for the
assumption by such successor of the covenants and obligations of the
Company thereunder and in the Convertible Subordinated Notes as
permitted by Section 5.01 of the Indenture; (d) provide for conversion
rights or repurchase rights of holders of Convertible Subordinated
Notes in the event of consolidation, merger, share exchange or sale of
all or substantially all of the assets of the Company as required to
comply with Sections 5.01 or 12.06 of the Indenture; (e) reduce the
Conversion Price; (f) evidence and provide for the acceptance of the
appointment under the Indenture of a successor Trustee; (g) make any
change that would provide any additional rights or benefits to the
holders of Convertible Subordinated Notes or that does not adversely
affect the legal rights under the Indenture of any such holder; or (h)
comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the TIA.
Without the consent of each holder affected, an amendment or
waiver may not (with respect to any Convertible Subordinated Notes held
by a nonconsenting holder): (a) reduce the principal amount of
Convertible Subordinated Notes whose holders must consent to an
amendment, supplement or waiver; (b) reduce the principal of, or
premium on, or change the fixed maturity of any Convertible
Subordinated Note or alter the provisions with respect to the
redemption or mandatory repurchase of the Convertible Subordinated
Notes; (c) reduce the rate of or change the time for payment of
interest, including defaulted interest, or Liquidated Damages, if any,
on any Convertible Subordinated Notes; (d) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest
or Liquidated Damages, if any, on the Convertible Subordinated Notes
(except a rescission of acceleration of the Convertible Subordinated
Notes by the holders of at least a majority in aggregate principal
amount of the Convertible Subordinated Notes and a waiver of the
payment default that resulted from such acceleration); (e) make the
principal of, or premium, if any, or interest or Liquidated Damages, if
any, on, any Convertible Subordinated Note payable in money other than
as provided for in the Indenture and in the Convertible Subordinated
Notes; (f) make any change in the provisions of the Indenture relating
to waivers of past Defaults or the rights of holders of Convertible
Subordinated Notes to receive payments of principal of, premium, if
any, or interest or Liquidated Damages, if any, on the Convertible
Subordinated Notes; (g) waive a redemption or mandatory repurchase
payment with respect to any Convertible Subordinated Note; (h) except
as permitted by the Indenture (including Section 9.01(a)), increase the
Conversion Price or modify the provisions of the Indenture relating to
conversion of the Convertible Subordinated Notes in a manner adverse to
the holders thereof or (i) make any change to the ability
A-8
of holder of Convertible Subordinated Notes to enforce their rights
under the Indenture. In addition, any amendment to the provisions of
Article XI of the Indenture (which relate to subordination) will
require (1) the consent of the holders of at least 75% in aggregate
principal amount of the Convertible Subordinated Notes then outstanding
if such amendment would adversely affect the rights of holders of
Convertible Subordinated Notes and (2) the consent of each holder of
Senior Debt if such amendment would diminish the rights of such holder
of Senior Debt.
11. DEFAULTS AND REMEDIES. An Event of Default is: (a) default in payment
of the principal of, or premium, if any, on the Convertible
Subordinated Notes, when due at maturity, upon repurchase, upon
acceleration or otherwise, whether or not such payment is prohibited by
the subordination provisions of the Indenture; (b) default for 30 days
or more in payment of any installment of interest or Liquidated Damages
on the Convertible Subordinated Notes, whether or not such payment is
prohibited by the subordination provisions of the Indenture; (c)
default in the payment of the Designated Event Payment in respect of
the Convertible Subordinated Notes on the date therefor, whether or not
such payment is prohibited by the subordination provisions of the
Indenture; (d) failure to provide timely notice of a Designated Event;
(e) default by the Company (other than a default set forth in clauses
(a), (b), (c) or (d) above) for 60 days or more after notice in the
observance or performance of any other covenants in the Indenture; (f)
default under any credit agreement, mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its subsidiaries (or the payment of which is guaranteed or secured by
the Company or any of its subsidiaries), whether such Indebtedness or
guarantee exists on the date of the Indenture or is created thereafter,
which default (i) is caused by a failure to pay when due any principal
of such Indebtedness within the grace period provided for in such
Indebtedness (which failure continues beyond any applicable grace
period) (a "Payment Default") or (ii) results in the acceleration of
such Indebtedness prior to its express maturity (without such
acceleration being rescinded or annulled) and, in each case, the
principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness under which there is a Payment
Default or the maturity of which has been so accelerated, aggregates
$10,000,000 or more and such Payment Default is not cured or such
acceleration is not annulled within 30 days after notice; or (g)
failure by the Company or any Material Subsidiary of the Company to pay
final, nonappealable judgments (other than any judgment as to which a
reputable insurance company has accepted full liability) aggregating in
excess of $10,000,000, which judgments are not stayed, bonded or
discharged within 60 days after their entry; or (h) certain events
involving bankruptcy, insolvency or reorganization of the Company or
any Material Subsidiary. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal
amount of the then outstanding Convertible Subordinated Notes may
declare the unpaid principal of, premium, if any, and accrued and
unpaid interest and Liquidated Damages, if any, on all Convertible
Subordinated Notes then outstanding to be due and payable immediately,
except that in the case of an Event of Default arising from certain
events of bankruptcy, insolvency, or reorganization with respect to the
Company, all outstanding
A-9
Convertible Subordinated Notes become due and payable without further
action or notice. Holders of Convertible Subordinated Notes may not
enforce the Indenture or the Convertible Subordinated Notes except as
provided in the Indenture. The Trustee may require an indemnity
satisfactory to it before it enforces the Indenture or the Convertible
Subordinated Notes. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Convertible
Subordinated Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from holders notice of any
continuing default (except a default in payment of principal, premium,
if any, or interest or Liquidated Damages, if applicable) if it
determines that withholding notice is in their interests. The Company
must furnish annual compliance certificates to the Trustee.
12. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or
continue loans to or guaranteed by, accept deposits from and perform
services for the Company or its Affiliates and may otherwise deal with
the Company or its Affiliates as if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee, shareholder
or Affiliate, as such, of the Company shall have any liability for any
obligations of the Company under the Convertible Subordinated Notes or
the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each holder by accepting a
Convertible Subordinated Note waives and releases all such liability.
The waiver and release are part of the consideration for the
Convertible Subordinated Notes.
14. AUTHENTICATION. This Convertible Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an
authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name of a
holder or an assignee, such as: TEN CO = tenants in common, TEN ENT =
tenants by the entireties, JT TEN = joint tenants with right of
survivorship and not as tenants in common, CUST = Custodian and U/G/M/A
= Uniform Gifts to Minors Act.
16. CONVERSION. Subject to and upon compliance with the provisions of the
Indenture, the registered holder of this Convertible Subordinated Note
has the right at any time on or before the close of business on the
last Trading Day prior to the Maturity Date (or in case this
Convertible Subordinated Note or any portion hereof is (a) called for
redemption prior to such date, before the close of business on the last
Trading Day preceding the date fixed for redemption (unless the Company
defaults in payment of the Redemption Price in which case the
conversion right will terminate at the close of business on the date
such default is cured) or (b) subject to a duly completed election for
repurchase, on or before the close of business on the Designated Event
Offer Termination Date (unless the Company defaults in payment due upon
repurchase or such holder elects to withdraw the submission of such
election to repurchase ) to convert the principal amount hereof, or any
portion of such principal amount which is $1,000 or an integral
multiple thereof, into that
A-10
number of fully paid and non-assessable shares of common stock of the
Company ("Common Stock") obtained by dividing the principal amount of
the Convertible Subordinated Note or portion thereof to be converted by
the conversion price of $29.84 per share, as adjusted from time to time
as provided in the Indenture (the "Conversion Price"), upon surrender
of this Convertible Subordinated Note to the Company at the office or
agency maintained for such purpose (and at such other offices or
agencies designated for such purpose by the Company), accompanied by
written notice of conversion duly executed (and if the shares of Common
Stock to be issued on conversion are to be issued in any name other
than that of the registered holder of this Convertible Subordinated
Note by instruments of transfer, in form satisfactory to the Company,
duly executed by the registered holder or its duly authorized attorney)
and, in case such surrender shall be made during the period from the
close of business on the Regular Record Date immediately preceding any
Interest Payment Date through the close of business on the last Trading
Day immediately preceding such Interest Payment Date (unless this
Convertible Subordinated Note or the portion thereof being converted
has been called for redemption on a date in such period), also
accompanied by payment, in funds acceptable to the Company, of an
amount equal to the interest and Liquidated Damages, if any, otherwise
payable on such Interest Payment Date on the principal amount of this
Convertible Subordinated Note then being converted. Subject to the
aforesaid requirement for a payment in the event of conversion after
the close of business on a Regular Record Date immediately preceding an
Interest Payment Date, no adjustment shall be made on conversion for
interest or Liquidated Damages accrued hereon or for dividends on
Common Stock delivered on conversion. The right to convert this
Convertible Subordinated Note is subject to the provisions of the
Indenture relating to conversion rights in the case of certain
consolidations, mergers, share exchanges or sales or transfers of
substantially all the Company's assets.
The Company shall not issue fractional shares or scrip
representing fractions of shares of Common Stock upon any such
conversion, but shall make an adjustment therefor in cash based upon
the current market price of the Common Stock on the last Trading Day
prior to the date of conversion.
17. REGISTRATION RIGHTS AGREEMENT. The holder of this Convertible
Subordinated Note is entitled to the benefits of a Registration Rights
Agreement, dated February 24, 2003, between the Company and the Initial
Purchasers (the "Registration Rights Agreement"). Pursuant to the
Registration Rights Agreement the Company has agreed for the benefit of
the holders of the Convertible Subordinated Notes and the Common Stock
issued and issuable upon conversion of the Convertible Subordinated
Notes, that (i) it will, at its cost, within 90 days after the Issue
Date, file a shelf registration statement (the "Shelf Registration
Statement") with the Securities and Exchange Commission (the
"Commission") with respect to resales of the Convertible Subordinated
Notes and the Common Stock issuable upon conversion thereof, (ii) the
Company will use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission under
the Securities Act within 180 days after the Issue Date and (iii) the
Company will use its reasonable best efforts to keep such Shelf
Registration Statement continuously
A-11
effective under the Securities Act until the earliest of (a) the second
anniversary of the Issue Date or, if later, the second anniversary of
the last date on which any Convertible Subordinated Notes are issued
upon exercise of the Initial Purchasers' over-allotment option, (b) the
date on which all the Convertible Subordinated Notes and the Common
Stock issuable upon conversion thereof may be sold to persons who are
not "affiliates" (as defined in Rule 144) of the Company pursuant to
paragraph (k) of Rule 144 (or any successor provision) promulgated by
the Commission under the Securities Act and (c) the date as of which
the Convertible Subordinated Notes or the Common Stock issuable upon
conversion thereof have been transferred pursuant to Rule 144 under the
Securities Act (or any similar provision then in force) or sold
pursuant to such Shelf Registration Statement.
If the Shelf Registration Statement (i) is not filed with the
Commission on or prior to 90 days, or has not been declared effective
by the Commission within 180 days, after the Issue Date or (ii) is
filed and declared effective but shall thereafter cease to be effective
(without being succeeded immediately by a replacement shelf
registration statement filed and declared effective) or cease to be
usable (including, without limitation, as a result of a Suspension
Period as defined below) for the offer and sale of Transfer Restricted
Securities (as defined below) for a period of time (including any
Suspension Period) which shall exceed 60 days in the aggregate in any
12-month period during the period the Company is required to keep the
Shelf Registration Statement continuously effective (each such event
referred to in clauses (i) and (ii) being referred to herein as a
"Registration Default"), the Company will pay liquidated damages
("Liquidated Damages") to each holder of Transfer Restricted Securities
which has complied with its obligations under the Registration Rights
Agreement. The amount of Liquidated Damages payable during any period
in which a Registration Default shall have occurred and be continuing
is that amount which is equal to one-quarter of one percent (25 basis
points) per annum per $1,000 principal amount of Securities and $2.50
per annum per 33.5121 shares of Common Stock (subject to adjustment
from time to time in the event of a stock split, stock recombination,
stock dividend and the like) constituting Transfer Restricted
Securities for the first 90 days during which a Registration Default
has occurred and is continuing and one-half of one percent (50 basis
points) per annum per $1,000 principal amount of Securities and $5.00
per annum per 33.5121 shares of Common Stock (subject to adjustment as
set forth above) constituting Transfer Restricted Securities for any
additional days during which such Registration Default has occurred and
is continuing. The Company will pay all accrued Liquidated Damages by
wire transfer of immediately available funds or by Federal funds check
on each date specified in the Registration Rights Agreement, and
Liquidated Damages will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. Following the cure of a
Registration Default, Liquidated Damages will cease to accrue with
respect to such Registration Default.
"Transfer Restricted Securities" means each Convertible
Subordinated Note and each share of Common Stock issued on conversion
thereof until the date on which such Convertible Subordinated Note or
share, as the case may be, (i) has been transferred pursuant to the
Shelf Registration Statement or another registration
A-12
statement covering such Convertible Subordinated Note or share which
has been filed with the Commission pursuant to the Securities Act, in
either case after such registration statement has become and while such
registration statement is effective under the Securities Act, (ii) has
been transferred pursuant to Rule 144 under the Securities Act (or any
similar provision then in force), or (iii) may be sold or transferred
pursuant to Rule 144(k) under the Securities Act (or any similar
provision then in force).
Pursuant to the Registration Rights Agreement, the Company may
suspend the use of the prospectus which is a part of the Shelf
Registration Statement for not more than 60 days (whether or not
consecutive) in any twelve-month period under certain circumstances (a
"Suspension Period"); provided, however, that the existence of a
Suspension Period will not prevent the occurrence of a Registration
Default or otherwise limit the obligation of the Company to pay
Liquidated Damages.
The above description of certain provisions of the
Registration Rights Agreement is qualified by reference to, and is
subject in its entirety to, the more complete description thereof
contained in the Registration Rights Agreement.
The Company will furnish to any holder upon written request
and without charge a copy of the Indenture and the Registration Rights
Agreement. Requests may be made to: Xxxxxxxxxx Technology Incorporated,
00 Xxxx Xxxxxxxx Xxxx Xxxxx X.X., Xxxxxxxxxx, Xxxxxxxxx 00000-0000,
Attention: Secretary.
A-13
FORM OF CONVERSION NOTICE
To: XXXXXXXXXX TECHNOLOGY INCORPORATED
The undersigned owner of the Convertible Subordinated Note hereby
irrevocably exercises the option to convert this Convertible Subordinated Note,
or portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Xxxxxxxxxx Technology Incorporated in
accordance with the terms of the Indenture referred to in this Convertible
Subordinated Note, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and
Convertible Subordinated Notes representing any unconverted principal amount
hereof, be issued and delivered to the owner hereof unless a different name has
been indicated below. If shares or any portion of this Convertible Subordinated
Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest, Liquidated Damages and taxes accompanies this Convertible Subordinated
Note.
Dated:
Fill in for registration of shares if to be ----------------------------------
delivered, and Convertible Subordinated Notes if to
be issued, other than to and in the name of the owner ----------------------------------
(Please Print):
----------------------------------
Signature
---------------------------------- Principal amount to be converted (if less than all):
(Name)
---------------------------------------
$____,000
----------------------------------
(Street Address) --------------------------------------
Social Security or other Taxpayer Identification
Number
----------------------------------
(City, State and Zip Code)
Signature Guarantee:
-------------------------------------
Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Convertible Subordinated Notes are to be delivered, other than to and in the
name of the registered holder.
A-14
ASSIGNMENT FORM
To assign this Convertible Subordinated Note, fill in the form below:
(I) or (we) assign and transfer this Convertible Subordinated Note to
-------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________ agent to transfer this
Convertible Subordinated Note on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
----------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Convertible Subordinated Note)
Date:
-----------------------------
Medallion Signature Guarantee:
-------------------------------------
[FOR INCLUSION ONLY IF THIS CONVERTIBLE SUBORDINATED NOTE BEARS A RESTRICTED
SECURITIES LEGEND] In connection with any transfer of any of the Convertible
Subordinated Notes evidenced by this certificate which are "restricted
securities" (as defined in Rule 144 (or any successor thereto) under the
Securities Act), the undersigned confirms that such Convertible Subordinated
Notes are being transferred:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to and in compliance with Rule 144A under the Securities
Act of 1933; or
(3) [_] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) [_] pursuant to an exemption from registration under the Securities Act
of 1933 provided by Rule 144 thereunder.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Convertible Subordinated Notes evidenced by this certificate in the name of
any person
A-15
other than the registered holder thereof; provided, however, that if box (3) or
(4) is checked, the Trustee may require, prior to registering any such transfer
of the Convertible Subordinated Notes, such certifications and other
information, and if box (4) is checked such legal opinions, as the Company has
reasonably requested in writing, by delivery to the Trustee of a standing letter
of instruction, to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.
Your Signature:
----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Convertible Subordinated Note)
Date:
---------------------------------
Medallion Signature Guarantee:
------------------------------------------
A-16
OPTION OF HOLDER TO ELECT REPURCHASE
If you wish to have this Convertible Subordinated Note repurchased by
the Company pursuant to Section 4.06 of the Indenture, check the Box: [_]
If you wish to have a portion of this Convertible Subordinated Note
purchased by the Company pursuant to Section 4.06 of the Indenture, state the
amount (in multiples of $1,000): $_____.
Date: Your Signature:
-------- ----------------------------------------------
(Sign exactly as your name appears on the other
side of this Convertible Subordinated Note)
Medallion Signature Guarantee:
-------------------------------------------------
A-17
EXHIBIT B
FORM OF RESTRICTED COMMON STOCK LEGEND
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN
AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF
THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) NOT A U.S.
PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
EXCEPT AS PERMITTED BY THE SECURITIES ACT."
B-1
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER OF RESTRICTED COMMON STOCK
(Transfers pursuant to Section 12.11(c) of the Indenture) [NAME AND
ADDRESS OF COMMON STOCK TRANSFER AGENT]
Re: Xxxxxxxxxx Technology Incorporated 2.25% Convertible Subordinated Notes
due 2010 (the "Convertible Subordinated Notes")
Reference is hereby made to the Indenture dated as of February 24, 2003
(the "Indenture") between Xxxxxxxxxx Technology Incorporated and LaSalle Bank
National Association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
This letter relates to ______ shares of Common Stock represented by the
accompanying certificates that were issued upon conversion of Convertible
Subordinated Notes and which are held in the name of [name of transferor] (the
"Transferor") to effect the transfer of such Common Stock.
In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [_] pursuant to and in compliance with Rule 144A under the Securities
Act of 1933; or
(3) [_] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) [_] pursuant to an exemption from registration under the Securities Act
of 1933 provided by Rule 144 thereunder.
Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Common Stock evidenced by this certificate in the name of
any person other than the registered holder thereof; provided, however, that if
box (3) or (4) is checked, the transfer agent may require, prior to registering
any such transfer of the Common Stock such certifications and other information,
and if box (4) is checked such legal opinions, as the Company has reasonably
requested in writing, by delivery to the transfer agent of a standing letter of
instruction, to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.
C-1
(Name of Transferor],
By
-----------------------------------------
Name:
Title:
Dated:
C-2
