Exhibit 10.1
________________________________________________________________________________
UNITED USN, INC.
$46,000,000
9% CONVERTIBLE SUBORDINATED NOTES DUE 2004
___________________________________
INDENTURE
DATED AS OF SEPTEMBER 30, 1996
____________________________________
XXXXXX TRUST AND SAVINGS BANK,
TRUSTEE
________________________________________________________________________________
CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939, as amended,
and the Indenture, dated as of September 30, 1996
Trust Indenture Indenture
Act Section Section
----------- --------
(S)310(a)(1).................................................. 7.10
(a)(2) ................................................. 7.10
(a)(3) ................................................. N.A.
(a)(4) ................................................. N.A.
(a)(5) ................................................. 7.10
(b) .................................................. 7.08; 7.10
(c) .................................................. N.A.
(S)311(a) .................................................. 7.11
(b) .................................................. 7.11
(c) .................................................. N.A.
(S)312(a) .................................................. 7.06(a);
.................................................. 7.06(b)
(b) .................................................. 7.06(c)
(c) .................................................. 7.06(d)
(S)313(a) .................................................. 7.06(e)
(b) .................................................. N.A.
(c) .................................................. 7.06(e);
.................................................. 7.06(f)
(d) .................................................. 7.06
(S)314(a) .................................................. 4.11; 4.12
(b) .................................................. N.A
(c)(1) ................................................ 1.04; 12.03
(c)(2) ................................................ 1.04; 2.02;
................................................. 12.03
(c)(3) ................................................ N.A.
(d) ................................................. 4.22
(e) ................................................. 12.04
(f) ................................................. 4.12
(S)315(a) ................................................. 7.01(b)
(b) ................................................. 7.05(a)
(c) ................................................. 7.01(a)
(d) ................................................. 7.01(c)
(e) ................................................. 6.10
(S)316(a) ................................................. 2.08
(a)(1)(A) .............................................. 6.05
(a)(1)(B) .............................................. 6.04
(a)(2) ................................................ N.A.
(b) ................................................. 6.07
(c) ................................................. 9.05
(S)317(a)(1) ................................................. 6.03
(a)(2) ................................................ 6.08
(b) ................................................. 2.04
(S)318(a) ................................................. 12.01
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................... 1
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act.................................................... 22
SECTION 1.03. Rules of Construction.................................... 23
SECTION 1.04. Form of Documents Delivered to Trustee................... 23
SECTION 1.05. Acts of Holders.......................................... 24
ARTICLE II
THE CONVERTIBLE NOTES...................................................... 27
SECTION 2.01. Form and Dating.......................................... 27
SECTION 2.02. Execution and Authentication............................. 29
SECTION 2.03. Registrar and Paying Agent............................... 30
SECTION 2.04. Paying Agent to Hold Money in Trust...................... 31
SECTION 2.05. Global Convertible Notes................................. 32
SECTION 2.06. Transfer and Exchange.................................... 32
SECTION 2.07. Replacement Convertible Notes............................ 35
SECTION 2.08. Outstanding Convertible Notes............................ 36
SECTION 2.09. Temporary Convertible Notes.............................. 37
SECTION 2.10. Cancellation............................................. 38
SECTION 2.11. Payment of Interest; Interest Rights
Preserved........................................................ 38
SECTION 2.12. Authorized Denominations................................. 39
SECTION 2.13. Computation of Interest, etc............................. 39
SECTION 2.14. Persons Deemed Owners.................................... 40
SECTION 2.15. CUSIP Numbers............................................ 40
ARTICLE III
REDEMPTION................................................................. 40
SECTION 3.01. Notice to Trustee........................................ 40
SECTION 3.02. Selection of Convertible Notes to be
Redeemed......................................................... 40
SECTION 3.03. Notice of Redemption..................................... 41
SECTION 3.04. Effect of Notice of Redemption........................... 42
SECTION 3.05. Deposit of Redemption Price.............................. 43
SECTION 3.06. Convertible Notes Redeemed in Part....................... 43
SECTION 3.07. Optional Redemption...................................... 44
ARTICLE IV
COVENANTS.................................................................. 44
SECTION 4.01. Payment of Convertible Notes............................. 44
SECTION 4.02. Maintenance of Office or Agency.......................... 44
SECTION 4.03. Money for the Convertible Note Payments to
be Held in Trust................................................. 45
SECTION 4.04. Corporate Existence...................................... 46
SECTION 4.05. Maintenance of Property.................................. 46
SECTION 4.06. Payment of Taxes and Other Claims........................ 46
SECTION 4.07. Repurchase at the Option of Holders upon a
Change of Control................................................ 46
SECTION 4.08. Limitation on Asset Sales................................ 49
SECTION 4.09. Limitation on Issuance of Guarantees by
Restricted Subsidiaries.......................................... 54
SECTION 4.10. Restricted and Unrestricted Subsidiaries................. 55
SECTION 4.11. Reports.................................................. 55
SECTION 4.12. Compliance Certificate; Notice of Default or
Event of Default................................................. 55
SECTION 4.13. Issuance of Convertible Note Contingent
Warrants......................................................... 56
SECTION 4.14. Repurchase at the Option of Holders upon a
Termination of Trading........................................... 57
SECTION 4.15. Additional Invested Equity............................... 59
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER....................... 59
SECTION 5.01. Merger, Consolidation or Sale of Assets.................. 59
SECTION 5.02. Successor Corporation Substituted........................ 60
ARTICLE VI
DEFAULTS AND REMEDIES...................................................... 61
SECTION 6.01. Events of Default........................................ 61
SECTION 6.02. Acceleration............................................. 63
SECTION 6.03. Other Remedies........................................... 65
SECTION 6.04. Waiver of Existing Defaults.............................. 66
SECTION 6.05. Control by Majority...................................... 66
SECTION 6.06. Limitation on Suits...................................... 67
SECTION 6.07. Rights of Holders to Receive Payment..................... 67
SECTION 6.08. Trustee May File Proofs of Claim......................... 68
SECTION 6.09. Priorities............................................... 69
SECTION 6.10. Undertaking for Costs.................................... 69
SECTION 6.11. Waiver of Usury, Stay or Extension Laws.................. 70
SECTION 6.12. Trustee May Enforce Claims Without
Possession of the Convertible Notes.............................. 70
SECTION 6.13. Restoration of Rights and Remedies....................... 70
SECTION 6.14. Rights and Remedies Cumulative........................... 70
SECTION 6.15. Delay or Omission Not Waiver............................. 71
ARTICLE VII
TRUSTEE.................................................................... 71
SECTION 7.01. Duties of Trustee........................................ 71
SECTION 7.02. Rights of Trustee........................................ 72
SECTION 7.03. Individual Rights of Trustee............................. 73
SECTION 7.04. Trustee's Disclaimer..................................... 73
SECTION 7.05. Notice of Defaults....................................... 74
ii
SECTION 7.06. Preservation of Information; Reports by
Trustee to Holders............................................... 74
SECTION 7.07. Compensation and Indemnity............................... 75
SECTION 7.08. Replacement of Trustee................................... 76
SECTION 7.09. Successor Trustee by Merger.............................. 78
SECTION 7.10. Eligibility; Disqualification............................ 79
SECTION 7.11. Preferential Collection of Claims Against
Company.......................................................... 80
ARTICLE VIII
DEFEASANCE................................................................. 80
SECTION 8.01. Company's Option to Effect Legal Defeasance
or Covenant Defeasance........................................... 80
SECTION 8.02. Legal Defeasance and Discharge........................... 80
SECTION 8.03. Covenant Defeasance...................................... 81
SECTION 8.04. Conditions to Defeasance or Covenant
Defeasance....................................................... 81
SECTION 8.05. Deposited Money and U.S. Government
Obligations to be Held in Trust; Miscellaneous
Provisions....................................................... 83
SECTION 8.06. Reinstatement............................................ 83
ARTICLE IX
AMENDMENTS................................................................. 84
SECTION 9.01. Without Consent of Holders............................... 84
SECTION 9.02. With Consent of Holders.................................. 85
SECTION 9.03. Effect of Supplemental Indentures........................ 86
SECTION 9.04. Compliance with Trust Indenture Act...................... 86
SECTION 9.05. Revocation and Effect of Consents and
Xxxxxxx.......................................................... 86
SECTION 9.06. Notation on or Exchange of Convertible Notes............. 87
SECTION 9.07. Trustee to Execute Supplemental Indentures............... 87
SECTION 9.08. Solicitation of Consents................................. 88
ARTICLE X
CONVERTIBLE NOTE GUARANTEES................................................ 89
SECTION 10.01. Convertible Note Guarantees.............................. 89
SECTION 10.02. Limitation of Guarantor's Liability...................... 92
SECTION 10.03. Execution and Delivery of Convertible Note
Guarantees....................................................... 92
SECTION 10.04. When a Guarantor May Merge, etc.......................... 93
SECTION 10.05. Release of a Guarantor................................... 93
ARTICLE XI
SUBORDINATION OF CONVERTIBLE NOTES AND CONVERTIBLE NOTE
GUARANTEES................................................................. 94
SECTION 11.01. Convertible Notes and Convertible Note
Guarantees Subordinated to Senior Indebtedness................... 94
iii
SECTION 11.02. Payment Over of Proceeds Upon Dissolution,
etc.............................................................. 94
SECTION 11.03. Prior Payment to Senior Indebtedness upon
Acceleration of Convertible Notes. ....................... 96
SECTION 11.04. No Payment When Senior Indebtedness in
Default.......................................................... 96
SECTION 11.05. Payment Permitted If No Default.......................... 97
SECTION 11.06. Subrogation to Rights of Holders of Senior
Indebtedness..................................................... 98
SECTION 11.07. Provisions Solely to Define Relative Rights.............. 98
SECTION 11.08. Trustee to Effectuate Subordination...................... 98
SECTION 11.09. No Waiver of Subordination Provisions.................... 98
SECTION 11.10. Notice to Trustee........................................ 99
SECTION 11.11. Reliance on Judicial Order or Certificate of
Liquidating Agent................................................ 100
SECTION 11.12. Trustee Not Fiduciary for Holders of Senior
Indebtedness..................................................... 101
SECTION 11.13. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's Rights................... 101
SECTION 11.14. Article Applicable to Paying Agents...................... 101
SECTION 11.15. Certain Conversions Deemed Payment....................... 101
ARTICLE XII
CONVERSION OF CONVERTIBLE NOTES............................................ 102
SECTION 12.01. Conversion Privilege and Conversion Price................ 102
SECTION 12.02. Exercise of Conversion Privileges........................ 103
SECTION 12.03. Fractions of Shares...................................... 104
SECTION 12.04. Adjustment of Conversion Price........................... 105
SECTION 12.05. Notice of Adjustments of Conversion Price................ 114
SECTION 12.06. Notice of Certain Corporate Action....................... 115
SECTION 12.07. Company to Reserve Common Stock.......................... 116
SECTION 12.08. Taxes on Conversions..................................... 116
SECTION 12.09. Covenant as to Common Stock.............................. 116
SECTION 12.10. Cancellation of Converted Convertible Notes.............. 116
SECTION 12.11. Provisions as to Consolidation, Merger or
Sale of Assets................................................... 117
ARTICLE XIII
SATISFACTION AND DISCHARGE................................................. 118
SECTION 13.01. Satisfaction and Discharge............................... 118
SECTION 13.02. Application of Trust Money............................... 119
SECTION 13.03. Repayment to the Company................................. 119
SECTION 13.04. Reinstatement............................................ 120
ARTICLE XIV
MISCELLANEOUS.............................................................. 120
SECTION 14.01. Trust Indenture Act Controls............................ 120
SECTION 14.02. Notices................................................. 120
SECTION 14.03. Certificate and Opinion as to Conditions
Precedent........................................................ 121
iv
SECTION 14.04. Statements Required in Certificate or
Opinion.......................................................... 121
SECTION 14.05. Communications by Holders with Other Holders............ 121
SECTION 14.06. Rules by Trustee, Paying Agent and Registrar............ 122
SECTION 14.07. Payments on Business Days............................... 122
SECTION 14.08. Governing Law........................................... 122
SECTION 14.09. No Recourse Against Others.............................. 122
SECTION 14.10. Successors.............................................. 122
SECTION 14.11. Counterparts............................................ 122
SECTION 14.12. Table of Contents; Headings............................. 122
SECTION 14.13. Severability............................................ 123
SECTION 14.14. Further Instruments and Acts............................ 123
SECTION 14.15. Independent Covenants................................... 123
v
EXHIBIT A FORM OF GLOBAL CONVERTIBLE NOTE
EXHIBIT B FORM OF CERTIFICATED CONVERTIBLE NOTE
EXHIBIT C REGISTRATION RIGHTS AGREEMENT
EXHIBIT D WARRANT AGREEMENT
SCHEDULE A
EXISTING AGREEMENTS OR STOCK OPTIONS
INVOLVING COMMON STOCK
vi
INDENTURE, dated as of September 30, 1996, between UNITED USN, INC., a
Delaware corporation (the "Company"), having its principal office at 00 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000-0000, and XXXXXX TRUST AND
SAVINGS BANK, as trustee hereunder (the "Trustee"), having its Corporate Trust
Office at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issue of its 9%
Convertible Subordinated Notes due 2004 (the "Convertible Notes") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor), the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Convertible Notes, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly issued
by the Company, the valid obligations of the Company and to make this Indenture
a valid instrument of the Company, in accordance with their respective terms,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in consideration
of the premises and the purchase of the Initial Convertible Notes by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Convertible Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or unless the context otherwise requires:
"Accreted Value" means, with respect to the Convertible Notes, for any
--------------
Specified Date, the amount provided below for each $1,000 principal amount at
Stated Maturity of the Convertible Notes:
(a) If the Specified Date occurs on one of the following dates (each
a "Semi-Annual Accrual Date"), the Accreted Value will equal the amount set
forth below for such Semi-Annual Accrual Date:
1
Semi-Annual Accrual Date Accreted Value
------------------------ --------------
March 30, 1997.................. $ 802.45
September 30, 1997.............. 838.56
March 30, 1998.................. 876.30
September 30, 1998.............. 915.73
March 30, 1999.................. 956.94
September 30, 1999.............. 1,000.00
(b) if the Specified Date occurs before the first Semi-Annual Accrual
Date, the Accreted Value will equal the sum of (i) $767.90 and (ii) an
amount equal to the product of (y) the Accreted Value of the first Semi-
Annual Accrual Date less the original issue price multiplied by (z) a
fraction, the numerator of which is the number of days from the Issue Date
to the Specified Date, using a 360-day year of twelve 30-day months, and
the denominator of which is the number of days elapsed from the Issue Date
to the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-
day months;
(c) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (i) the Accreted Value for
the Semi-Annual Accrual Date immediately preceding such Specified Date and
(ii) an amount equal to the product of (y) the Accreted Value for the
immediately following Semi-Annual Accrual Date less the Accreted Value for
the immediately preceding Semi-Annual Accrual Date multiplied by (z) a
fraction, the numerator of which is the number of days from the immediately
preceding Semi-Annual Accrual Date to the Specified Date, using a 360-day
year of twelve 30-day months, and the denominator of which is 180; or
(d) if the Specified Date occurs after the last Semi-Annual Accrual
Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means, with respect to any specified Person,
---------------------
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such Person merging with or into or becoming a Subsidiary of
such specified Person.
"Act" when used with respect to any Holder, has the meaning set forth in
---
Section 1.05 hereof.
"Additional Invested Equity" means the net cash proceeds from the sale to
--------------------------
Persons, other than the Holders of the Convertible Notes, of Capital
Stock not maturing and not
2
redeemable prior to September 30, 2004; provided that the terms of any such
--------
Capital Stock do not provide for any redemption or repurchase, whether pursuant
to a sinking fund or otherwise, or permit any cash dividend prior to the Stated
Maturity of the Convertible Notes.
"Additional Warrants" means the Additional Warrants which may be issued
-------------------
pursuant to Section 4.15 hereof and the Warrant Agreement if the Company does
not achieve consolidated total revenues (calculated in accordance with GAAP) of
at least $8,500,000 for the period from June 1, 1997 through June 30, 1997 and
if, among other things, by September 30, 1997, the Company has not either
consummated a Qualified Public Offering or been sold pursuant to a Qualified
Sale of the Company.
"Adjusted Net Assets" of a Guarantor at any date means the amount by which
-------------------
the fair value of the assets and Property of such Guarantor exceeds the total
amount of liabilities, including without limitation, contingent liabilities
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under the Guarantee of such
Guarantor at such date.
"Affiliate" means, as to any Person, any other Person which directly or
---------
indirectly controls, or is under common control with, or is controlled by, such
Person; provided that each Unrestricted Subsidiary shall be deemed to be an
Affiliate of the Company and of each other Subsidiary of the Company; provided
--------
that any lender under a Credit Facility shall not be deemed to be an Affiliate
solely as the result of the Credit Facility; and provided, further, that neither
-------- -------
the Company nor any of its Wholly-Owned Restricted Subsidiaries shall be deemed
to be Affiliates of each other. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "under common
control with" and "controlled by"), and as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise; provided that
--------
beneficial ownership of 10% or more of the Voting Stock of a Person (on a fully
diluted basis) shall be deemed to be control.
"Agent Member" has the meaning set forth in Section 2.05(a) hereof.
------------
"Asset Sale" means, with respect to any Person, any transfer,
----------
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger) by such Person or any of
its Restricted Subsidiaries to any Person other than to such Person or a
Restricted Subsidiary of such Person, in one transaction or a series of related
transaction actions (each hereinafter referred to as a "Disposition"), of (a)
Capital Stock of or other equity interests
3
in any Restricted Subsidiary (other than director's qualifying shares) except as
provided in clause (iv) of this definition, (b) all or substantially all of the
assets of any division or line of business of such Person or of any of the
Restricted Subsidiaries or (c) Property or assets of such Person or any of its
Restricted Subsidiaries, the Fair Market Value of which exceeds $500,000, other
than (i) a Disposition of Property in the ordinary course of business and
consistent with industry practice, (ii) a Disposition of Eligible Cash
Equivalents, (iii) a Disposition that constitutes a Restricted Payment permitted
under Section 4.13 of the Senior Note Indenture as in effect on the Issue Date,
(iv) a Disposition of no more than 10 percent of the Capital Stock of USN
Solutions on a fully diluted basis pursuant to the exercise of the USN Solutions
Option, (v) a Disposition by the Company in connection with a transaction
permitted under Article V hereof and (vi) contribution of assets to any
Unrestricted Subsidiary constituting an Investment otherwise permitted under the
Senior Note Indenture as in effect on the Issue Date.
"Asset Sale Offer" has the meaning set forth in Section 4.08(c) hereof.
----------------
"Asset Sale Payment Date" has the meaning set forth in Section 4.08(d)(ii)
-----------------------
hereof.
"Asset Sale Purchase Price" has the meaning set forth in Section 4.08(c)
-------------------------
hereof.
"Board of Directors" means, with respect to any Person, the Board of
------------------
Directors (or similar governing body) of such Person or any committee of the
Board of Directors (or similar governing body) duly authorized to act on behalf
of such Board of Directors (or similar governing body).
"Board Resolution" means a duly adopted resolution of the Board of
----------------
Directors of a Person in full force and effect at the time of determination and
certified as such by the Secretary or an Assistant Secretary of such Person.
"BT" means BT Capital Partners, Inc.
--
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
------------
that is not a day on which banking institutions in The City of New York or the
City of Chicago are authorities authorized or obligated by law, executive order
or regulation to close.
"Capital Lease Obligation" of any Person means the obligation to pay rent
------------------------
or other payment amounts under a lease of (or other Indebtedness arrangement
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
4
the face of a balance sheet of such Person prepared in accordance with GAAP and
the Stated Maturity thereof shall be the date of the last payment of rent or any
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.
"Capital Stock" in any Person means any and all shares, interests,
-------------
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than Indebtedness convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Cash Proceeds" means, with respect to any Asset Sale or issuance or sale
-------------
of Capital Stock by any Person, the aggregate consideration received in respect
of such sale or issuance by such Person in the form of cash and Eligible Cash
Equivalents; provided that with regard to an Asset Sale, any liabilities (as
--------
shown on the Company's or such Restricted Subsidiary's most recent balance sheet
or in the notes thereto) of the Company or any Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Convertible Notes or
Convertible Note Guarantees, if any) which are assumed by the transferee of any
such assets and from which the Company and such Restricted Subsidiary are
completely released shall be deemed Cash Proceeds.
"Certificated Convertible Notes" means the Certificated Convertible Notes
------------------------------
issued in definitive, fully registered form to beneficial owners of interests in
the Global Convertible Note pursuant to Section 2.06(b) hereof.
"Change of Control" shall be deemed to occur if (i) the sale, conveyance,
-----------------
transfer or lease (other than to the Company or any Wholly-Owned Restricted
Subsidiary of the Company), whether direct or indirect, of all or substantially
all of the assets of the Company or of the Company and its Restricted
Subsidiaries taken as a whole to any "person" or "group" (within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to
either of the foregoing, including any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule 13d-
5(b)(i) under the Exchange Act) shall have occurred; or (ii) any "person" or
"group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange
Act or any successor provision to either of the foregoing, including any group
acting for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-5(b)(i) under the Exchange Act), other than any Permit
xxx Xxxxxx or Permitted Holders, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of more than 35 percent of the total voting
power of all classes of the Voting Stock of the Company (including any warrants,
options or rights to acquire such Voting Stock), calculated on a fully diluted
basis, and such voting power percentage is greater than or equal to the total
voting power percentage then beneficially
5
owned by the Permitted Holders in the aggregate; or (iii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election or appointment by such board or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Change of Control Offer" has the meaning set forth in Section 4.07(a)
-----------------------
hereof.
"Change of Control Payment Date" has the meaning set forth in Section
------------------------------
4.07(b)(ii) hereof.
"Change of Control Purchase Price" has the meaning set forth in Section
--------------------------------
4.07(a) hereof.
"Chase" means Chase Capital Partners.
-----
"CIBC" means CIBC Wood Gundy Ventures, Inc.
----
"Class A Common Stock" means the Class A Common Stock, par value $0.01 per
--------------------
share, of the Company.
"clearing agency" has the meaning set forth in Section 3(a)(23) of the
---------------
Exchange Act.
"Closing Price" on any Trading Day with respect to the per share price of
-------------
any shares of Capital Stock means the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Capital Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on The Nasdaq
National Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on such automated quotation system but
the issuer is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange
Act) and the principal securities exchange on which such shares are listed or
admitted to trading is a Designated Offshore Securities Market (as defined in
Rule 902(a) under the Securities Act), the average of the reported closing bid
and asked prices regular way on such principal exchange, or, if such shares are
not listed or admitted to trading on any national securities exchange or quoted
on such automated quotation system and the issuer and principal securities
exchange do not meet such requirements, the average of
6
the closing bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm that is selected from time to time by
the Company for that purpose and is reasonably acceptable to the Trustee.
"Commission" means the United States Securities and Exchange Commission, as
----------
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Indenture such commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, the body
performing such duties at such time.
"Common Stock" means any stock of any class of any Person 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 such Person
and which is not subject to redemption by such Person, including, without
limitation, the Company's Class A Common Stock, $.01 par value. However, subject
to the provisions of Section 12.11, shares issuable on conversion of the
Convertible Notes shall include only shares of the class designated as Class A
Common Stock of the Company at the date of this Indenture or shares of any class
or classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided
--------
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the propor-
tion which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the party named as such in the preamble to this Indenture
-------
until a successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means such successor.
"Company Order" means a written order signed in the name of the Company by
-------------
(i) its Chairman of the Board, its President, its Chief Executive Officer, its
Chief Operating Officer, a Vice Chairman or a Vice President, and (ii) its Chief
Financial Officer, its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.
"Consolidated Net Worth" of any Person means the consolidated ed
----------------------
stockholders' equity of such Person and its Restricted Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, less amounts
attributable to Disqualified Stock of such Person.
7
"Constituent Person" has the meaning set forth in Section 12.11 hereof.
------------------
"Conversion Price" has the meaning set forth in Section 12.01 hereof.
----------------
"Conversion Reset" has the meaning set forth in Section 12.01 hereof.
----------------
"Conversion Reset Price" has the meaning set forth in Section 12.01 hereof.
----------------------
"Convertible Note Contingent Warrants" means the Convertible Note
------------------------------------
Contingent Warrants to be issued by the Company to Holders of Convertible Notes
pursuant to the Warrant Agreement in the event that the Company has not, on or
prior to September 30, 1999, (i) consummated a Qualified Public Offering or (ii)
been sold pursuant to a Qualified Sale of the Company.
"Convertible Note Guarantee" means a guarantee of the payment of the
--------------------------
Convertible Notes in the form of a supplemental indenture to this Indenture to
be executed and delivered by a Restricted Subsidiary, if and as required by and
pursuant to Section 4.10 hereof.
"Convertible Note Shares Shelf Registration Agreement" means the
----------------------------------------------------
Convertible Note Shares Shelf Registration Statement of the Company pursuant to
the provisions of the Registration Rights Agreement that covers the issuance, or
to the extent not permitted by applicable law, the resale of all shares of
Common Stock issuable upon the conversion of the Convertible Notes to the extent
and in the manner provided therein on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the Commission,
and all amendments and supplements to such registration statement, including
post-effective amendments, and in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Convertible Note Shelf Registration Statement" means the Convertible Note
---------------------------------------------
Shelf Registration Statement of the Company pursuant to the provisions of the
Registration Rights Agreement relating to all Convertible Notes which are
subject to restrictions on transfer.
"Convertible Notes" has the meaning set forth in the Recitals of the
-----------------
Company and more particularly means any of the Convertible Notes authenticated
and delivered under this Indenture.
"Corporate Trust Office" means the principal office of the Trustee at
----------------------
which at any particular time its corporate trust business shall be principally
administered, which office is, at
8
the date of execution of this Indenture, located at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000.
"Covenant Defeasance" has the meaning set forth in Section 8.03 hereof.
-------------------
"Credit Facility" means one or more credit agreements, loan agreements or
---------------
similar agreements providing for working capital advances, term loans, letter of
credit facilities or similar advances, loans or facilities to the Company, with
a bank or syndicate of banks or other financial institutions, as such may be
amended, renewed, extended, supplemented, refinanced and replaced or refunded
from time to time.
"Current Market Price" has the meaning set forth in Section 12.04(h)
--------------------
hereof.
"Default" means any event, act or condition, the occurrence of which is, or
-------
after notice or the passage of time or both would be, an Event of Default.
"Default Amount" has the meaning set forth in Section 6.02 hereof.
--------------
"Defaulted Interest" has the meaning set forth in Section 2.11 hereof.
------------------
"Defeasance" has the meaning set forth in Section 8.02 hereof.
----------
"Depositary" means The Depository Trust Company, its nominees, and
----------
their respective successors.
"Disposition" has the meaning set forth in the definition of "Asset Sale"
-----------
in this Section 1.01.
"Disqualified Stock" means any Capital Stock which, by its terms (or by the
------------------
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event or otherwise, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, or is exchangeable for
Indebtedness at any time, in whole or in part, on or prior to the Stated
Maturity of the Convertible Notes.
"Eligible Cash Equivalents" means (i) securities issued or directly and
-------------------------
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof, provided that the full faith and credit of the United
--------
States of America is pledged in support thereof; (ii) time deposits,
certificates of deposit or Eurodollar deposits of any commercial bank organized
in the United States having capital and surplus in excess of $500,000,000, with
a maturity date not more than one year from
9
the date of acquisition; (iii) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above; (iv) direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing, or subject to tender at the option of the
holder thereof, within 90 calendar days after the date of acquisition thereof
and, at the time of acquisition, having a rating of A or better from Standard &
Poor's or A-2 or better from Moody's; (v) commercial paper issued by the parent
corporation of any commercial bank organized in the United States having capital
and surplus in excess of $500,000,000 and commercial paper issued by others
having one of the two highest ratings obtainable from either of Standard &
Poor's or Moody's and in each case maturing within 270 days after the date of
acquisition; (vi) overnight bank deposits and bankers' acceptances at any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000; (vii) deposits available for withdrawal on demand with a
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000, and (viii) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (vi).
"Enterprises" means Enterprises & Transcommunications, L.P.
-----------
"Event of Default" has the meaning set forth in Section 6.01 hereof.
----------------
"'ex' date," (i) 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 Prices were
obtained without the right to receive such issuance or distribution, (ii) 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
construction becomes effective, and (iii) 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 with the last time that tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended).
"Excess Proceeds" has the meaning set forth in Section 4.08 hereof.
---------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder.
"Exchange Rate Obligation" means, with respect to any Person, any currency
------------------------
swap agreements, forward exchange rate
10
agreements, foreign currency futures or options, exchange rate collar
agreements, exchange rate insurance or other agreements or arrangements, or
combination thereof, designed to provide protection against fluctuations in
currency exchange rates.
"Fair Market Value" means, with respect to any asset or Property, the sale
-----------------
value that could be obtained in an arms-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy, as determined in good faith by the Board of
Directors of the Company or a Restricted Subsidiary, as applicableble.
"Final Memorandum" means the final Offering Memorandum, dated September 23,
----------------
1996, used in connection with the Initial Placement, as supplemented on
September 23, 1996, September 24, 1996, September 26, 1996, September 30, 1996
and September 30, 1996.
"GAAP" means United States generally accepted accounting principles,
----
consistently applied, as 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, that are applicable to the circumstances as of the date of
determination; provided that, except as otherwise specifically provided herein,
--------
all calculations made for purposes of determining compliance with this Indenture
shall utilize GAAP as in effect on the Issue Date.
"Global Convertible Note" has the meaning set forth in Section 2.01(c)
-----------------------
hereof.
"guarantee" means any direct or indirect obligation, contingent or
---------
otherwise, of a Person guaranteeing or having the economics effect of
guaranteeing any Indebtedness of any other Person in any manner. The terms
"guaranteed," "guaranteeing" and "guarantor" shall have correlative meanings.
"Guaranteed Indebtedness" has the meaning set forth in Section 4.10(a)
-----------------------
hereof.
"Guarantor" means a Restricted Subsidiary that hereafter becomes a
---------
Guarantor pursuant to Section 4.10 hereof and executes and delivers a
supplemental indenture to this Indenture relating to its Convertible Note
Guarantee.
"Xxxxxxx" means Xxxxxxx Venture Capital Associates.
-------
"Holder" means (i) in the case of any Certificated Convertible Note, the
------
Person in whose name such Certificated Note
11
is registered in the Security Register and (ii) in the case of any Global
Convertible Note, the Depositary.
"Indebtedness" means at any time (without duplication), with respect to any
------------
Person, whether recourse is to all or a portion of the assets of such Person,
and whether or not contingent, (i) any obligation of such Person for money
borrowed, (ii) any obligation of such Person evidenced by bonds, debentures,
notes, guarantees or other similar instruments, including, without limitation,
any such obligations incurred in connection with the acquisition of Property,
assets or businesses, excluding trade accounts payable made in the ordinary
course of business which are not more than 90 days overdue or which are being
contested in good faith and by appropriate proceedings, (iii) any reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person, (iv)
any obligation of such Person issued or assumed as the deferred purchase price
of Property, assets or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business, which in either case are
not more than 90 days overdue or which are being contested in good faith and by
appropriate proceedings, and for which adequate reserves are being maintained on
the books of the Company in accordance with GAAP), (v) any Capital Lease
Obligation of such Person, (vi) the maximum fixed redemption or repurchase price
of Disqualified Stock of such Person and, to the extent held by other Persons,
the maximum fixed redemption or repurchase price of Disqualified Stock of such
Person's Restricted Subsidiaries, at the time of determination, (vii) the
notional amount of any Interest Hedging Obligations or Exchange Rate Obligations
of such Person at the time of determination and (viii) any obligation of the
type referred to in clauses (i) through (vii) of this definition of another
Person and all dividends and distributions of another Person the payment of
which, in either case, such Person has guaranteed or is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise.
"Indenture" means this instrument as originally executed or as it may from
---------
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument, and any such supplemental indenture, respectively.
"Independent Financial Expert" has the meaning set forth in Section
----------------------------
12.04(g) hereof.
"Initial Placement" means the initial sales of the Convertible Notes by
-----------------
the Initial Purchasers.
12
"Initial Purchasers" means the Initial Purchasers, as such term is defined
------------------
in the Purchase Agreement.
"Initial Warrants" means the Initial Warrants originally issued by the
----------------
Company pursuant to the Warrant Agreement as part of the Units.
"Interest Hedging Obligation" means, with respect to any Person, an
---------------------------
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its Restricted
Subsidiaries' exposure to fluctuations in interest rates.
"Interest Payment Date" means the Stated Maturity of an installment of
---------------------
interest on the Convertible Notes.
"Investment" in any Person means any direct, indirect or contingent (i)
----------
advance or loan to, guarantee of any Indebtedness of, extension of credit or
capital contribution to, such Person, (ii) acquisition of any shares of Capital
Stock, bonds, notes, debentures or other securities of such Person, or (iii)
acquisition, by purchase or otherwise, of all or substantially all of the
business, assets or stock or other evidence of beneficial ownership of such
Person; provided that Investments shall exclude accounts receivable and other
--------
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices. The amount of an Investment shall be the original cost
of such Investment, plus the cost of all additions thereto and minus the amount
---- -----
of any portion of such Investment repaid to such Person in cash as a repayment
of principal or a return of capital, as the case may be, but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment. In determining the amount of any
Investment involving a transfer of any Property or other assets other than cash,
such Property or other assets shall be valued at its Fair Market Value at the
time of such transfer.
"Issue Date" means the date on which the Convertible Notes are first
----------
authenticated and delivered under this Indenture.
"Joint Venture" means a Telecommunications Company of which less than 50
-------------
percent of the Voting Stock is held by the Company; provided that the management
--------
and operations of such Person are controlled by a Strategic Investor or by the
Company pursuant to (i) the charter documents of such Person, or (ii) an
agreement among the holders of the Voting Stock of such Person, or (iii) a
management agreement between the Company and such Person.
"junior securities" has the meaning set forth in Section 11.15 hereof.
-----------------
13
"Lien" means, with respect to any Property or other asset, any mortgage or
----
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance, preference,
priority or other security or similar agreement or preferential arrangement of
any nature whatsoever on or with respect to such Property or other asset
(including, without limitation, any conditional sale or title retention
agreement having substantially the same economic effect as any of the
foregoing).
"Maturity" means, when used with respect to a Convertible Note, the date on
--------
which the principal of such Convertible Note becomes due and payable as provided
therein or in this Indenture, whether on the date specified in such Convertible
Note as the fixed date on which the principal of such Convertible Note is due
and payable, on the Change of Control Payment Date or Asset Sale Payment Date or
upon an offer to repurchase upon a Termination of Trading of the Common Stock of
the Company, as applicable, or by declaration of acceleration, call for
redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc., or, if Xxxxx'x Investors
-------
Service, Inc. shall cease rating the specified debt securities and such ratings
business with respect thereto shall have been transferred to a successor Person,
such successor Person; provided that if Xxxxx'x Investors Service, Inc. ceases
--------
rating the specified debt securities and its rating business with respect
thereto shall not have been transferred to any successor Person or such
successor Person is Standard & Poor's, then "Moody's" shall mean any other
nationally recognized rating agency (other than Standard & Poor's) that rates
the specified debt securities selected by the Trustee.
"NASD" means the National Association of Securities Dealers, Inc.
----
"Net Cash Proceeds" means, with respect to the sale of any Property or
-----------------
assets by any Person or any of its Restricted Subsidiaries, Cash Proceeds
received net of (i) all reasonable out-of-pocket expenses of such Person or such
Restricted Subsidiary incurred in connection with such a sale, including,
without limitation, all legal, title and recording tax expenses, commissions
and other fees and expenses incurred (but excluding any finder's fee or broker's
fee payable to any Affiliate of such Person) and all federal, state, foreign and
local taxes arising in connection with such sale that are paid or required to be
accrued as a liability under GAAP by such Person or its Restricted
Subsidiaries, (ii) all payments made or required to be made by such Person or
its Restricted Subsidiaries on any Indebtedness which is secured by such
Properties or assets in accordance with the terms of any Lien upon or with
respect to such Properties or assets or which must, by the terms of such Lien,
or in order to obtain a necessary consent to such transaction or by applicable
law, be repaid in connection with
14
such sale and (iii) all contractually required distributions and other payments
made to minority interest holders (but excluding distributions and payments to
Affiliates of such Person) in Restricted Subsidiaries of such Person as a result
of such transaction; provided that, in the event that any consideration for a
--------
transaction (which would otherwise constitute Net Cash Proceeds) is required to
be held in escrow pending determination of whether a purchase price adjustment
will be made, such consideration (or any portion thereof) shall become Net Cash
Proceeds only at such time as it is released to such Person or its Restricted
Subsidiaries from escrow; provided, further, that any non-cash consideration
-------- -------
received in connection with any transaction, which is subsequently converted to
cash, shall be deemed to be Net Cash Proceeds at such time, and shall thereafter
be applied in accordance with the applicable provisions of this Indenture.
"nonelecting share" has the meaning set forth in Section 12.11 hereof.
-----------------
"Northwood Entities" means Northwood Capital Partners LLC and Northwood
------------------
Ventures.
"Obligors" means the Company and the Guarantors, if any; "Obligor" means
--------
any of the Obligors, singly.
"Officer" means the Chairman of the Board of Directors, a Vice Chairman of
-------
the Board of Directors, the President, the Chief Executive Officer, the Chief
Operating Officer, a Vice President, the Chief Financial Officer, the Chief
Accounting Officer, the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary.
"Officers' Certificate" means a certificate signed by (i) the Chairman of
---------------------
the Board of Directors, a Vice Chairman of the Board of Directors, the
President, the Chief Executive Officer, the Chief Operating Officer or a Vice
President, and (ii) the Chief Financial Officer, the Chief Accounting Officer,
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company or a Restricted Subsidiary and delivered to the Trustee, which
certificate shall comply with the provisions of Sections 1.04, 14.03 and 14.04
hereof.
"Opinion of Counsel" means a written opinion from legal counsel (who may be
------------------
counsel to the Company or the Trustee) who is acceptable to the Trustee, which
opinion shall comply with the provisions of Sections 1.04, 14.03 and 14.04
hereof; provided that any Opinion of Counsel delivered pursuant to Section 8.04
--------
hereof shall not be rendered by an employee of the Company or any of its
Subsidiaries.
"Paying Agent" means any Person authorized by the Company to make payments
------------
of principal, premium or interest (including
15
Special Interest, if any) with respect to the Convertible Notes on behalf of the
Company.
"Pari Passu Indebtedness" means any Indebtedness (secured or unsecured) of
-----------------------
the Company or any Guarantor that ranks pari passu in the right of payment with
----------
the Senior Notes or the Senior Note Guarantees, as applicable.
"Permitted Holders" means Xxxxxx X. Xxxxxxxxxxx, X. Xxxxxx Xxxxxxx and
-----------------
Xxxxxx X. Xxxxxxxx and Xxxxx, CIBC, Xxxxxxx, XX, the Northwood Entities,
Enterprises, and Xxxxxxx Xxxxx Global Allocation Fund, Inc. and any of their
respective Subsidiaries (or a wholly-owned Subsidiary of the sole stockholder of
any of the foregoing Persons).
"Permitted Merger" has the meaning set forth in Section 5.01 hereof.
----------------
"Person" means any individual, corporation, partnership, joint venture,
------
limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof or any other entity or similar
person.
"Preferred Stock" means any Capital Stock of a Person, however designated,
---------------
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Private Placement Legend" means the legend in the form set forth in
------------------------
Section 2.01(d)(i) hereof.
"Property" means, with respect to any Person, any interest of such Person
--------
in any kind of property or asset, whether real, personal or mixed, tangible or
intangible, excluding Capital Stock in any other Person.
"Public Equity Offering" means an underwritten public offering of Capital
----------------------
Stock (other than Disqualified Stock) of the Company pursuant to an effective
registration statement filed under the Securities Act.
"Purchase Agreement" means the Purchase Agreement relating to the Units and
------------------
the Convertible Notes, dated September 23, 1996, among the Company and the
Initial Purchasers.
"Qualified Public Offering" means a Public Equity Offering resulting in net
-------------------------
proceeds to the Company of at least $35,000,000.
"Qualified Sale of the Company" means a sale of the Capital Stock or assets
-----------------------------
of the Company or a merger or consolidation involving the Company, pursuant to
which holders of Capital Stock of the Company receive cash proceeds and/or
publicly traded
16
securities having a fair market value of at least $122,500,000 in the aggregate,
or a sale of assets of the Company pursuant to which the Company receive net
cash proceeds and/or publicly traded securities having a fair market value of at
least $122,500,000 in the aggregate.
"Qualified Stock" of any Person means a class of Capital Stock other than
---------------
Disqualified Stock.
"Record Date" means, for the interest payable on any Interest Payment
-----------
Date, the date specified in Section 2.11 hereof.
"Record Expiration Date" has the meaning set forth in Section 1.05 hereof.
----------------------
"Redemption Date" means, when used with respect to any Convertible Note or
---------------
part thereof to be redeemed hereunder, the date fixed for redemption of such
Convertible Notes pursuant to the terms of the Convertible Notes and this
Indenture.
"Redemption Price" means, when used with respect to any Convertible Note or
----------------
part thereof to be redeemed hereunder, the price fixed for redemption of such
Convertible Note pursuant to the terms of the Convertible Notes and this
Indenture, plus accrued and unpaid interest thereon, if any, (including Special
Interest, if any) to the Redemption Date.
"Registrable Securities" shall mean the Convertible Notes and the Common
----------------------
Stock issuable upon the conversion thereof; provided that the Convertible Notes
--------
and such Common Stock shall cease to be Registrable Securities when (i) in the
case of the Convertible Notes, a Convertible Note Shelf Registration Statement
with respect to the Convertible Notes shall have been declared effective under
the Securities Act and the Convertible Notes shall have been disposed of
pursuant to such Convertible Note Shelf Registration Statement, (ii) (A) in the
case of the Common Stock, except as otherwise provided in clause (ii)(B), a
Convertible Note Shares Shelf Registration Statement with respect to such Common
Stock shall have been declared effective under the Securities Act and such
Common Stock shall have been disposed of pursuant to such Convertible Note
Shares Shelf Registration Statement, or (B) in the case of any Common Stock
actually issued upon conversion of Convertible Notes, a Convertible Note Shares
Shelf Registration Statement with respect to the issuance of such Common Stock
shall have been declared effective under the Securities Act and, following the
issuance thereof, such Common Stock is not subject to restrictions on transfer
pursuant to the Securities Act, (iii) the Convertible Notes or such Common Stock
may be distributed to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A under the Securities Act) under the
Securities Act or (iv) the Convertible Notes or such Common Stock shall have
ceased to be outstanding.
17
"Registrar" has the meaning set forth in Section 2.03 hereof.
---------
"Registration Rights Agreement" means the Registration Rights Agreement,
-----------------------------
dated September 30, 1996, among the Company and the Initial Purchasers, and
attached hereto as Exhibit C and any other Registration Rights Agreement that
relates to the Convertible Notes.
"Repurchase Date" has the meaning set forth in Section 4.14(a) hereof.
---------------
"Repurchase Price" has the meaning set forth in Section 4.14(a) hereof.
----------------
"Required Filing Date" has the meaning set forth in Section 4.11 hereof.
--------------------
"Reset Date" has the meaning set forth in Section 12.01 hereof.
----------
"Reset Event" has the meaning set forth in Section 12.01 hereof.
-----------
"Restricted Subsidiary" means (i) with respect to any Person other than the
---------------------
Company and its Subsidiaries, a Subsidiary of such Person, and (ii) with respect
to the Company, any Subsidiary of the Company that has not been classified as an
Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act (including any
--------
successor regulation thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
---------
successor regulation thereto), as it may be amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Security Register" has the meaning set forth in Section 2.03 hereof.
-----------------
"Senior Indebtedness" means all obligations of the Company under the Senior
-------------------
Notes, the Senior Note Indenture and the Senior Note Guarantees contained in the
Senior Note Indenture, if any.
"Senior Note Asset Sale Offer" means an "Asset Sale Offer" as defined in
----------------------------
and made pursuant to the provisions of the Senior Note Indenture.
18
"Senior Note Contingent Warrants" means the Warrants to be issued to the
-------------------------------
holders of Senior Notes pursuant to the Warrant Agreement and Section 4.20 of
the Senior Note Indenture.
"Senior Note Guarantees" means a guarantee of payment of the Senior Notes
----------------------
in the form of a supplemental indenture to the Senior Note Indenture to be
executed and delivered pursuant to Section 4.10 thereof.
"Senior Note Indenture" means the Indenture, dated the date hereof, between
---------------------
the Company and Xxxxxx Trust and Savings Bank, as trustee thereunder, relating
to the Senior Notes, as amended and supplemented from time to time.
"Senior Note Trustee" means Xxxxxx Trust and Savings Bank, as trustee under
-------------------
the Senior Note Indenture and any successor appointed in accordance with the
terms thereof.
"Senior Notes" means the 14% Senior Discount Notes due 2003 of the Company
------------
to be issued pursuant to the Senior Note Indenture.
"Shelf Registration Statement" has the meaning set forth in the
----------------------------
Registration Rights Agreement.
"Significant Restricted Subsidiary" means a Restricted Subsidiary that is a
---------------------------------
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act.
"Special Interest" shall have the meaning ascribed to such term in the
----------------
Registration Rights Agreement.
"Special Record Date" means a date fixed by the Trustee pursuant to Section
-------------------
2.11 for the payment of Defaulted Interest.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division of
-----------------
XxXxxx-Xxxx, Inc., or, if Standard & Poor's Ratings Group shall cease rating the
specified debt securities and such ratings business with respect thereto shall
have been transferred to a successor Person, such successor Person; provided
--------
that if Standard & Poor's Ratings Group ceases rating the specified debt
securities and its ratings business with respect thereto shall not have been
transferred to any successor Person or such successor Person is Xxxxx'x, then
"Standard & Poor's" shall mean any other nationally recognized rating agency
(other than Xxxxx'x) that rates the specified debt securities selected by the
Trustee.
"Stated Maturity" means, with respect to any security, the date specified
---------------
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but
19
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency unless such
contingency has occurred), and, when used with respect to any installment of
interest on such security, the fixed date on which such installment of interest
is due and payable.
"Strategic Investor" means, with respect to any relevant transaction, a
------------------
Telecommunications Company which, both as of the Business Day immediately before
the day of the closing of such transaction and the Business Day immediately
after the day of the closing of such transaction, has, or whose parent has, an
equity market capitalization, a net asset value or annual revenues of at least
$2,000,000,000 on a consolidated basis. For purposes of this definition, the
term "parent" means any Person of which the relevant Strategic Investor is a
Subsidiary.
"Subsidiary" means, with respect to any Person, (i) any corporation more
----------
than 50 percent of the outstanding shares of Voting Stock of which is owned,
directly or indirectly, by such Person, or by one of more other Subsidiaries of
such Person, or by such Person and one or more other Subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50 percent of the outstanding partnership or similar interests of which are
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and (iii) any limited partnership of which such
Person or any Subsidiary of such Person is a general partner.
"Surviving Entity" has the meaning set forth in Section 5.01(a) hereof.
----------------
"Telecommunications Assets" means, with respect to any Person, assets
-------------------------
(including, without limitation, rights of way, trademarks and licenses to use
copyrighted material) that are utilized by such Person, directly or indirectly,
for the design, development, construction, installation, integration, operation,
management or provision of telecommunications systems and/or services, including
without limitation, any businesses or services in which the Company is
currently engaged and including any computer systems used in a
Telecommunications Business. Telecommunications Assets shall also include stock,
joint venture or partnership interests in another Person, provided that
substantially all of the assets of such other Person consist of
Telecommunications Assets, and provided, further, that if such stock, joint
venture or partnership interests are held by the Company or a Restricted
Subsidiary, such other Person either is, or immediately following the relevant
transaction shall become, a Restricted Subsidiary of the Company unless such
Person is a Joint Venture. The determination of what constitutes
Telecommunication Assets shall be made by the Board of Directors and evidenced
by a Board Resolution delivered to the Trustee.
20
"Telecommunications Business" means the business of (i) transmitting, or
---------------------------
providing services relating to the transmission of, voice, video or data through
owned or leased transmission facilities, (ii) creating, developing or marketing
communications related network equipment, software and other devices for use in
(i) above or (iii) evaluating, participating or pursuing any other activity or
opportunity that is related to those specified in (i) or (ii) above and
includes, without limitation, any business in which the Company and its
Restricted Subsidiaries are currently engaged on the Issue Date.
"Telecommunications Company" means any Person substantially all of the
--------------------------
assets of which consist of Telecommunications Assets.
"Temporary Convertible Notes" has the meaning set forth in Section 2.09
---------------------------
hereof.
"Termination of Trading" means that the Class A Common Stock (or other
----------------------
Common Stock into which the Convertible Notes are then convertible) had been
listed for trading on a U.S. national securities exchange or approved for
trading on an established over-the-counter trading market in the United States
and such Capital Stock thereafter becomes neither so listed nor so approved.
"Trading Day" means, with respect to a securities exchange or automated
-----------
quotation system, a day on which such exchange or system is open for a full day
of trading.
"Trigger Event" shall have the meaning set forth in Section 12.04(e)
-------------
hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
-------------------
(S)(S) 77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.04 hereof, provided that in the event the Trust Indenture
--------
Act of 1939 is amended after such date, "Trust Indenture Act" means, to the
extent required by any such amendment, the Trust Indenture Act of 1939, as so
amended.
"Trust Officer" means any officer or assistant officer of the Trustee
-------------
assigned by the Trustee to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
-------
replaces it in accordance with the provisions of this Indenture and, thereafter,
means such successor.
"U.S. Government Obligations" means (i) securities that are (a) direct
---------------------------
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
21
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and (ii) depository receipts issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any U.S. Government Obligation which is specified in clause (i) above and held
by such bank for the account of the holder of such depository receipt, or with
respect to any specific payment of principal or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as required by
--------
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest of the U.S. Government Obligation evidenced by such
depository receipt.
"Unit" means a Unit consisting of one Senior Note, in the principal amount
----
of $1,000, and one Warrant to purchase approximately 1.27 shares of the
Company's Class A Common Stock, as described in the Purchase Agreement.
"Unrestricted Subsidiary" means any Subsidiary of the Company that the
-----------------------
Company has classified as an "Unrestricted Subsidiary" and that has not been
reclassified as a Restricted Subsidiary, pursuant to Section 4.10 hereof.
"Voting Stock" means, with respect to any Person, securities of any class
------------
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the Board of Directors or comparable body of such Person.
"Warrant" means a Warrant issued by the Company pursuant to the Warrant
-------
Agreement.
"Warrant Agent" means the Warrant Agent, as such term is defined in the
-------------
Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement, dated as of September 30,
-----------------
1996, between the Company and Xxxxxx Trust and Savings Bank, as Warrant Agent
thereunder, and attached hereto as Exhibit D.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms incorporated by reference in this
Indenture have the following meanings:
22
"indenture securities" means the Convertible Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or other
obligor on the Convertible Notes, if any.
All other Trust Indenture Act terms used or incorporated by reference in
this Indenture that are defined by the Trust Indenture Act, defined by Trust
Indenture Act reference to another statute or defined by Commission rule have
the meanings assigned to them therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
---------------------
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(c) the words "herein," "hereof" and hereunder," and other words of
similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(d) "or" is not exclusive;
(e) "including" means including without limitation;
(f) words in the singular include the plural, and words in the plural
include the singular;
(g) when used with respect to the Senior Notes or the Convertible
Notes, the term "principal amount" shall mean the principal amount thereof at
the Stated Maturity of such principal amount; and
(h) unless otherwise expressly provided herein, the principal amount
of any Preferred Stock shall be the greater of (i) the maximum liquidation value
of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock.
SECTION 1.04. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not
23
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company or a Guarantor may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters, upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or a
Guarantor stating that the information with respect to such factual matters is
in the possession of the Company or such Guarantor, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.05. Acts of Holders. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments, of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are received by the Trustee and, where it is hereby expressly required, to the
Company and the Guarantors, if any. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Company and the Guarantors, if any,
if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by an
acknowledgment of notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing
24
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than such signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of the signer's
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Convertible Notes shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder shall bind every future Holder of the same Convertible
Note and the Holder of every Convertible Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company or
the Guarantors, if any, in reliance thereon, whether or not notation of such
action is made upon such Convertible Note.
The Company may set any day as a record date for the purpose of determining
the Holders of outstanding Convertible Notes entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Convertible Notes, provided that the Company may not set a record date for,
--------
and the provisions of this paragraph shall not apply with respect to, the giving
or making of any notice, declaration, request or direction referred to in the
next paragraph. If any record date is set pursuant to this paragraph, the
Holders of outstanding Convertible Notes on such record date, and no other
Holders, shall be entitled to take the relevant actions whether or not such
Holders remain Holders after such record date; provided that no such action
--------
shall be effective hereunder unless taken on or prior to the applicable Record
Expiration Date by Holders of the requisite principal amount of outstanding
Convertible Notes on such record date; and provided, further, that for the
-------- -------
purpose of determining whether Holders of the requisite principal amount of such
Convertible Notes have taken such action, no Convertible Note shall be deemed to
have been outstanding on such record date unless it is also outstanding on the
date such action is to become effective. Nothing in this paragraph shall
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), nor shall anything in this paragraph be
construed to render ineffective any action taken by Holders of the requisite
principal amount of outstanding Convertible Notes on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company at its own expense, shall cause notice of such record
25
date, the proposed action by Holders and the applicable Record Expiration Date
to be given to the Trustee in writing and to each Holder of Convertible Notes in
the manner set forth in Section 14.02 hereof.
The Trustee may set any day as a record date for the purpose of determining
the Holders of outstanding Convertible Notes entitled to join in the giving or
making of (i) any notice of Default under Section 6.01(d) hereof, (ii) any
declaration of acceleration referred to in Section 6.02 hereof, (iii) any
request to institute proceedings referred to in Section 6.06 hereof or (iv) any
direction referred to in Section 6.05 hereof. If any record date is set pursuant
to this paragraph, the Holders of outstanding Convertible Notes on such record
date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
--------
hereunder unless taken on or prior to the applicable Record Expiration Date by
Holders of the requisite principal amount of outstanding Convertible Notes on
such record date; and provided, further, that for the purpose of determining
-------- -------
whether Holders of the requisite principal amount of such Convertible Notes have
taken such action, no Convertible Note shall be deemed to have been outstanding
on such record date unless it is also outstanding on the date such action is to
become effective. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action (where upon the record
date previously set shall automatically and with out any action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of outstanding Convertible Notes on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company's expense, shall cause notice of such record date, the matter(s)
to be submitted for potential action by Holders and the applicable Record
Expiration Date to be given to the Company in writing and to each Holder of
Convertible Notes in the manner set forth in Section 14.02 hereof.
With respect to any record date set pursuant to this Section 1.05, the
party hereto that sets such record date may designate any day as the "Record
Expiration Date" and from time to time may change the Record Expiration Date to
any earlier or later day, provided that no such change shall be effective unless
--------
notice of the proposed new Record Expiration Date is given to the other party
hereto in writing, and to each Holder of Convertible Notes in the manner set
forth in Section 14.02 hereof, on or before the existing Record Expiration Date.
If a Record Expiration Date is not designated with respect to any record date
set pursuant to this Section 1.05, the party hereto that set such record date
shall be deemed to have initially designated the 180th day after such record
date as the Record Expiration Date with respect
26
thereto, subject to its right to change the Record Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Record Expiration Date
shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Convertible Note may do so with
regard to all or any part of the principal amount of such Convertible Note or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
ARTICLE II
THE CONVERTIBLE NOTES
SECTION 2.01. Form and Dating. (a) The Convertible Notes and the
----------------
certificate of authentication of the Trustee thereon shall be substantially in
the form of Exhibit A or Exhibit B hereto, as applicable, which are hereby
incorporated in and expressly made a part of this Indenture.
(b) The Convertible Notes may have such letters, numbers or other
marks of identification and such legends and endorsements, stamped, printed,
lithographed or engraved thereto, (i) as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture, (ii) such as may be
required to comply with this Indenture, any law or any rule of any securities
exchange on which the Convertible Notes may be listed and (iii) such as may be
necessary to conform to customary usage. Each Note shall be dated the date of
its authentication by the Convertible Trustee.
(c) The Convertible Notes shall be issued initially in the form of one
or more permanent, global notes in definitive, fully registered form, without
coupons, substantially in the form of Exhibit A hereto (each a "Global
Convertible Note"). Upon issuance, each such Global Convertible Note shall be
duly executed by the Company and authenticated by the Trustee as hereinafter
provided and deposited with the Trustee as custodian for the Depositary. Any
Certificated Convertible Note that may be issued pursuant to Section 2.06(b)
hereof shall be issued in the form of a note in definitive, fully registered
form, without coupons, substantially in the form set forth in Exhibit B hereto.
Upon issuance, any such Certificated Convertible Note shall be duly executed by
the Company and authenticated by the Trustee as hereinafter provided.
(d) The following legends shall appear on each Global Convertible Note
and each Certificated Convertible Note as indicated below:
27
(i) Except as provided in Section 2.06(a)(iii) hereof, each Global
Convertible Note and Certificated Convertible Note shall bear the following
legend on the face thereof:
THIS CONVERTIBLE NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (3) TO A LIMITED NUMBER OF
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO THEIR
PURCHASE OF ANY SECURITIES OFFERED HEREBY, DELIVER TO THE INITIAL
PURCHASERS A LETTER CONCERNING CERTAIN REPRESENTATIONS AND AGREEMENTS
AND (B) IN ACCORDANCE WITH ALL APPLICABLE LAWS OF THE STATES OF THE
UNITED STATES.
(ii) Each Global Convertible Note shall bear the following legend on
the face thereof:
UNLESS THIS CONVERTIBLE NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO UNITED USN, INC. OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY
CONVERTIBLE NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE
DEPOSITORY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CONVERTIBLE NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY
TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS CONVERTIBLE GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.06 OF THE INDENTURE, DATED AS OF SEPTEMBER 30,
1996, BETWEEN
28
UNITED USN, INC. AND THE TRUSTEE NAMED XXXXXXX, PURSUANT TO WHICH THIS
CONVERTIBLE NOTE WAS ISSUED.
(e) Definitive Convertible Notes shall be typed, printed, lithographed
or engraved or produced by any combination of such methods or produced in any
other manner permitted by the rules of any securities exchange on which such
Convertible Notes may be listed, all as determined by the Officers of the
Company executing such Convertible Notes, as evidenced by their execution of
such Convertible Notes.
SECTION 2.02. Execution and Authentication. The aggregate principal
----------------------------
amount at Stated Maturity of Convertible Notes outstanding at any time shall not
exceed $46,000,000 except as provided in Section 2.07 hereof. The Convertible
Notes shall be executed on behalf of the Company by its Chief Executive Officer,
its Chief Operating Officer, its President or any Vice President, under its
corporate seal reproduced or imprinted on the Convertible Notes by facsimile or
otherwise, and shall be attested by the Company's Secretary or one of its
Assistant Secretaries, in each case by manual or facsimile signature.
In case any Officer of the Company whose signature shall have been placed
upon any of the Convertible Notes shall cease to be such Officer of the Company
before authentication of such Convertible Notes by the Trustee and the issuance
and delivery thereof, such Convertible Notes may, nevertheless, be
authenticated by the Trustee and issued and delivered with the same force and
effect as though such Person had not ceased to be such Officer of the Company.
Notwithstanding any other provision hereof, the Trustee shall authenticate
and deliver Convertible Notes only upon receipt by the Trustee of an Officers'
Certificate and Opinion of Counsel complying with Section 14.04 hereof with
respect to satisfaction of all conditions precedent contained in this Indenture
to authentication and delivery of such Convertible Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of a Company Order requesting such
action, authenticate Initial Convertible Notes for original issuance in an
aggregate principal amount at Stated Maturity not to exceed $46,000,000 in the
form of one or more Global Convertible Notes. Such Company Order shall specify
the amount of Convertible Notes to be authenticated and the date on which the
Convertible Notes are to be authenticated and shall further provide instructions
concerning registration, amounts for each Holder and delivery.
Upon the occurrence of any event specified in Section 2.06(b) hereof and
compliance by the Company with the provisions of the paragraph preceding the
immediately preceding paragraph,
29
the Company shall execute and the Trustee shall authenticate and deliver to each
beneficial owner identified by the Depositary, in exchange for such beneficial
owner's interest in a Global Convertible Note, Certificated Convertible Notes
representing Convertible Notes theretofore represented by the Global Convertible
Note.
A Convertible Note shall not be valid or entitled to any benefit under this
Indenture or obligatory for any purpose unless executed by the Company and
authenticated by the manual signature of the Trustee as provided herein. The
signature of an authorized officer of the Trustee shall be conclusive evidence,
and the only evidence, that such Convertible Note has been authenticated and
delivered under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Company to authenticate the Convertible Notes. Unless limited by the status
of such appointment, an authenticating agent may authenticate Convertible Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. Any
authenticating agent of the Trustee shall have the same rights hereunder as any
Registrar or Paying Agent.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain,
--------------------------
pursuant to Section 4.02 hereof, an office or agency where the Convertible Notes
may be presented for registration of transfer or for exchange. The Company shall
cause to be kept at such office a register (the register maintained in such
office being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Convertible Notes and of transfers of
Convertible Notes entitled to be registered or transferred as provided herein.
The Trustee, at its Corporate Trust Office, is initially appointed "Registrar"
for the purpose of registering Convertible Notes and transfers of Convertible
Notes as herein provided and as "Paying Agent" for the payment of principal of
(and premium, if any), and interest (including Special Interest, if any) on, the
Convertible Notes. The Company may, upon written notice to the Trustee, change
the designation of the Trustee as Registrar or Paying Agent and appoint another
Person to act as Registrar or Paying Agent for purposes of this Indenture,
except that for the purposes of Article III, Article XIII and Sections 4.07,
4.08 and 4.14, none of the Company, any Guarantor, any Restricted Subsidiary and
any Affiliate shall act as Paying Agent. If any Person other than the Trustee
acts as Registrar, the Trustee shall have the right at any time, upon reasonable
notice, to inspect or examine the Security Register and to make such inquiries
of the Registrar as the Trustee shall in its discretion deem necessary or
desirable in performing its duties hereunder.
30
The Company shall enter into an appropriate agency agreement with any
Person designated by the Company as Registrar or Paying Agent that is not a
party to this Indenture, which agreement shall incorporate the provisions of the
Trust Indenture Act and shall implement the provisions of this Indenture that
relate to such Registrar or Paying Agent. Prior to the designation of any such
Person, the Company shall, by written notice (which notice shall include the
name and address of such Person), inform the Trustee of such designation. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
Upon surrender for registration of transfer of any Convertible Note at an
office or agency of the Company designated for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Convertible Notes of any
authorized denomination or denominations, of like tenor and aggregate principal
amount at Stated Maturity, all as requested by the transferor.
Every Convertible Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Trustee or
the Registrar) be duly endorsed, or be accompanied by a duly executed instrument
of transfer in form satisfactory to the Company, the Trustee and the Registrar,
by the Holder thereof or such Xxxxxx's attorney duly authorized in writing.
SECTION 2.04. Paying Agent to Hold Money in Trust. On or prior to each due
-----------------------------------
date of the principal, premium, or any payment of interest with respect to any
Convertible Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium or interest (including Special
Interest, if any) when so becoming due.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that such Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by such Paying Agent for the payment of
principal, premium, and interest (including Special Interest, if any) with
respect to the Convertible Notes, shall notify the Trustee of any default by the
Company in making any such payment and at any time during the continuance of any
such default, upon the written request of the Trustee, shall forthwith pay to
the Trustee sums held in trust by such Paying Agent.
The Company at any time may require a Paying Agent to pay all money held by
it to the Trustee and to account for any funds disbursed by such Paying Agent.
Upon complying with this Section 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
31
SECTION 2.05. Global Convertible Notes. (a) So long as a Global Convertible
------------------------
Note is registered in the name of the Depostary or its nominee, members of, or
participants in, the Depositary ("Agent Members") shall have no rights under
this Indenture with respect to the Global Convertible Note held on their behalf
by the Depositary or the Trustee as its custodian, 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 Convertible Note for all purposes.
Notwithstanding the foregoing, nothing herein shall (i) 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 (ii) impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of
Convertible Notes.
(b) The Holder of a Global Convertible Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests in such Global Convertible Note through Agent Members, to take
any action which a Holder of Convertible Notes is entitled to take under this
Indenture or the Convertible Notes.
(c) Whenever, as a result of an optional redemption of Convertible
Notes by the Company, a Change of Control Offer, an Asset Sale Offer, a
repurchase upon a Termination of Trading pursuant to Section 4.14 hereof, or an
exchange pursuant to the second sentence of Section 2.06(b) hereof, a Global
Convertible Note is redeemed, repurchased or exchanged in part, such Global
Convertible Note shall be surrendered by the Holder thereof to the Trustee who
shall cause an adjustment to be made to Schedule A thereof so that the principal
amount of such Global Convertible Note will be equal to the portion of such
Global Convertible Note not redeemed, repurchased or exchanged and shall
thereafter return such Global Convertible Note to such Holder, provided that
--------
each such Global Convertible Note shall be in a principal amount at Stated
Maturity of $1,000 or an integral multiple thereof.
SECTION 2.06. Transfer and Exchange. (a) With respect to the Convertible
---------------------
Notes:
(i) By its acceptance of any Convertible Note represented by a
certificate bearing the Private Placement Legend, each Holder of, and
beneficial owner of an interest in, such Convertible Note acknowledges the
restrictions on transfer of such Convertible Note set forth in the Private
Placement Legend and under the heading "Transfer Restrictions" in the Final
Memorandum and agrees that it will transfer such Convertible Note only in
accordance with the Private Placement Legend and the restrictions set forth
under the heading "Transfer Restrictions" in the Final Memorandum.
32
(ii) In connection with any transfer of a Convertible Note bearing
the Private Placement Legend, each Holder agrees to deliver to the Company,
such satisfactory evidence, which may include an opinion of independent
counsel licensed to practice law in the State of New York, as reasonably
may be requested by the Company to confirm that such transfer is being made
in accordance with the limitations set forth in the Private Placement
Legend. In the event the Company determines that any such transfer is not
in accordance with the Private Placement Legend, the Company shall so
inform the Registrar who shall not register such transfer; provided that
--------
the Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any
such evidence.
(iii) Upon the registration of transfer, exchange or replacement of a
Convertible Note not bearing the Private Placement Legend, the Trustee
shall deliver a Convertible Note or Convertible Notes that do not bear the
Private Placement Legend. Upon the transfer, exchange or replacement of a
Convertible Note bearing the Private Placement Legend, the Trustee shall
deliver a Convertible Note or Convertible Notes bearing the Private
Placement Legend, unless such legend may be removed from such Convertible
Note as provided in the next sentence. The Private Placement Legend may be
removed from a Convertible Note if there is delivered to the Company such
satisfactory evidence, which may include an opinion of independent counsel
licensed to practice law in the State of New York, as reasonably may be
requested by the Company to confirm that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers of such Convertible Note will not violate the registration and
prospectus delivery requirements of the Securities Act; provided that the
--------
Trustee shall not be required to determine (but may rely on a determination
made by the Company with respect to) the sufficiency of any such evidence.
Upon provision of such evidence, the Trustee shall authenticate and deliver
in exchange for such Convertible Note, a Convertible Note or Convertible
Notes (representing the same aggregate principal amount at Stated Maturity
of the Convertible Note being exchanged) without such legend. If the
Private Placement Legend has been removed from Convertible Note, as
provided above, no other Convertible Note issued in exchange for all or any
part of such Convertible Note shall bear such legend unless the Company has
reasonable cause to believe that such other Convertible Note represents a
"restricted security" within the meaning of Rule 144 and instructs the
Trustee in writing to cause a legend to appear thereon.
33
(iv) The Company shall deliver to the Trustee, and the Trustee shall
retain for two years, copies of all documents received pursuant to this
Section 2.06(a). The Company shall have the right to inspect and make
copies of all such documents at any reasonable time upon the giving of
reasonable written notice to the Trustee.
(b) Any Global Convertible Note shall be exchanged by the Company for
one or more Certificated Convertible Notes if (a) the Depositary (i) has
notified the Company that it is unwilling or unable to continue as, or ceases to
be, a clearing agency registered under Section 17A of the Exchange Act and (ii)
a successor to the Depositary registered as a clearing agency under Section 17A
of the Exchange Act is not able to be appointed by the Company within 90 days or
(b) the Depositary is at any time unwilling or unable to continue as Depositary
and a successor to the Depositary is not able to be appointed by the Company
within 90 days. If an Event of Default occurs and is continuing, the Company
shall, at the request of the Holder thereof, exchange all or part of a Global
Convertible Note for one or more Certificated Convertible Notes; provided that
--------
such Global Convertible Note, after such exchange, shall be $1,000 or an
integral multiple thereof. Whenever a Global Convertible Note is exchanged as a
whole for one or more Certificated Convertible Notes, it shall be surrendered by
the Holder thereof to the Trustee for cancellation. Whenever a Global
Convertible Note is exchanged in part for one or more Certificated Convertible
Notes, it shall be surrendered by the Holder thereof to the Trustee and the
Trustee shall make the appropriate notations thereon pursuant to Section 2.05(c)
hereof. All Certificated Convertible Notes issued in exchange for a Global
Convertible Note or any portion thereof shall be registered in such names, and
delivered, as the Depositary shall instruct the Trustee. Any Certificated
Convertible Notes issued pursuant to this Section 2.06(b) shall include the
Private Placement Legend, except as set forth in Section 2.06(a)(iii) hereof.
Interests in a Global Convertible Note may not be exchanged for Certificated
Convertible Notes other than as provided in this Section 2.06(b).
(c) A Holder may transfer a Convertible Note only upon the surrender
of such Convertible Note for registration of transfer. No such transfer shall be
effected until, and the transferee shall succeed to the rights of a Holder only
upon, final acceptance and registration of the transfer in the Security Register
by the Registrar. When Convertible Notes are presented to the Registrar with a
request to register the transfer of, or to exchange, such Convertible Notes, the
Registrar shall register the transfer or make such exchange as requested if its
requirements for such transactions and any applicable requirements hereunder
are satisfied. To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Certificated Convertible Notes
at the Registrar's request.
34
(d) The Company shall not be required to make and the Registrar need
not register transfers or exchanges of Certificated Convertible Notes selected
for redemption (except, in the case of Certificated Convertible Notes to be
redeemed in part, the portion thereof not to be redeemed) for a period of 15
days before a selection of Certificated Convertible Notes to be redeemed.
(e) No service charge shall be made for any registration of transfer
or exchange of Convertible Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer of Convertible Notes (other than in
respect of exchanges and transfers pursuant to Sections 2.09, 3.06, 4.07, 4.08,
4.14 and 9.06 hereof).
(f) All Convertible Notes issued upon any registration of transfer or
exchange pursuant to the terms of this Indenture will evidence the same debt and
will be entitled to the same benefits under this Indenture as the Convertible
Notes surrendered for such registration of transfer or exchange.
(g) Prior to the effectiveness under the Securities Act of a
Convertible Note Shelf Registration Statement, or at any time during the
suspension or following the termination thereof, Holders of Convertible Notes
(or holders of interests therein) and prospective purchasers designated by such
Holders of Convertible Notes (or such holders of interests therein) shall have
the right to obtain from the Company upon request by such Holders (or such
holders of interests) or prospective purchasers, during any period in which the
Company is not subject to Section 13 or Section 15(d) of the Exchange Act, or is
exempt from reporting pursuant to 12g3-2(b) under the Exchange Act, the
information required by paragraph (d)(4)(i) of Rule 144A in connection with any
transfer or proposed transfer of such Convertible Notes or interests.
(h) Any Holder of a Global Convertible Note shall, by acceptance of
such Global Convertible Note, agree that transfers of beneficial interests in
such Global Convertible Note may be effected only through a book entry system
maintained by the Holder of such Global Convertible Note (or its agent), and
that ownership of a beneficial interest in the Convertible Notes represented
thereby shall be required to be reflected in book entry form. Transfers of a
Global Convertible Note shall be limited to transfers in whole and not in part,
to the Depositary, its successors, and their respective nominees. Interests of
beneficial owners in Global Convertible Note may be transferred in accordance
with the rules and procedures of the Depositary (or its successors).
SECTION 2.07. Replacement Convertible Notes. If any mutilated Convertible
-----------------------------
Note is surrendered to the Trustee, the
35
Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Convertible Note, a
new Convertible Note containing identical provisions and of like principal
amount, bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Convertible Note and
(ii) such security or indemnity as may be required by them to save either of
them and any agent of each of them harmless, then, in the absence of notice to
the Company or the Trustee that such Convertible Note has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Convertible Note, a new Convertible Note containing identical provisions and of
like principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Convertible Note has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Convertible Note, pay such Convertible Note.
Upon the issuance of any new Convertible Note under this Section 2.07, the
Company may require the payment by the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Convertible Note issued pursuant to this Section 2.07 in lieu of
any destroyed, lost or stolen Convertible Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Convertible Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Convertible Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed lost or stolen Convertible Notes.
SECTION 2.08. Outstanding Convertible Notes. Convertible Notes outstanding
-----------------------------
at any time are all Convertible Notes authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation and those described
in this Section 2.08 as not outstanding. A Convertible Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds such
Convertible Note.
36
If a Convertible Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that such replaced Convertible Note is held by a bona fide
purchaser.
If the Paying Agent (other than the Company, a Guarantor or an Affiliate of
the Company or Guarantor) accrues interest or segregates and holds in trust, in
accordance with this Indenture, on a Redemption Date or Maturity date money
sufficient to pay all principal, premium, if any, and interest (including
Special Interest, if any) payable on that date with respect to the Convertible
Notes (or portions thereof) to be redeemed or maturing, as the case may be, then
on and after that date such Convertible Notes (or such portions thereof) shall
cease to be outstanding and interest on them shall cease to accrete in value or
accrue interest, as the case may be.
In determining whether the Holders of the required principal amount of
Convertible Notes have concurred in any direction, waiver or consent or any
amendment, modification or other change to this Indenture, Convertible Notes
held or beneficially owned by the Company or a Restricted Subsidiary of the
Company or by an Affiliate of the Company or a Restricted Subsidiary of the
Company or by agents of any of the foregoing shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Convertible Notes which a Trust Officer
has actual knowledge to be so owned shall be so disregarded. Convertible Notes
so owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee such pledgee's right so
to act with respect to the Convertible Notes and that the pledgee is not the
Company or an Affiliate of the Company or any of their agents.
SECTION 2.09. Temporary Convertible Notes. Pending the preparation of
---------------------------
definitive Convertible Notes, the Company may execute, and the Trustee shall
authenticate, temporary notes ("Temporary Convertible Notes") which are printed,
lithographed, or otherwise produced, substantially of the tenor of the
definitive Convertible Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations.
If Temporary Convertible Notes are issued, the Company shall cause
definitive Convertible Notes to be prepared without unreasonable delay. After
the preparation of definitive Convertible Notes, the Temporary Convertible Notes
shall be exchangeable for definitive Convertible Notes upon surrender of the
Temporary Convertible Notes to the Trustee, without charge to the Holder. Until
so exchanged, Temporary Convertible Notes will evidence the same debt and will
be entitled to the same benefits
37
under this Indenture as the definitive Convertible Notes in lieu of which they
have been issued.
SECTION 2.10. Cancellation. The Company at any time may deliver
------------
Convertible Notes to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Convertible Notes surrendered to them for
registration of transfer, exchange, purchase, payment or conversion. The
Trustee shall cancel all Convertible Notes surrendered for registration of
transfer, exchange, purchase, payment, cancellation or conversion and shall
destroy such canceled Convertible Notes unless the Company shall by Company
Order otherwise direct. The Company may not issue new Convertible Notes to
replace Convertible Notes it has redeemed or paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.11. Payment of Interest; Interest Rights Preserved. Interest
-----------------------------------------------
(including Special Interest, if any) on any Convertible Note which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date, which
shall be March 30 or September 30, commencing March 30, 2000 for interest other
than Special Interest, if any, shall be paid to the Person in whose name such
Convertible Note is registered at the close of business on the Record Date for
such interest payment, which shall be the March 15 or September 15 (whether or
not a Business Day) immediately preceding such Interest Payment Date.
Any interest on any Convertible Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Record Date, and, except as hereafter
provided, such Defaulted Interest, and any interest payable on such Defaulted
Interest, may be paid by the Company, at its election, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, to the Persons in whose
names the Convertible Notes are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on the Convertible Notes and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided in this Clause.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not
38
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
sent, first class mail, postage prepaid, to each Holder at such Holder's address
as it appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Convertible
Notes are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest, and any
interest payable on such Defaulted Interest, on the Convertible Notes in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Convertible Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.11, each Convertible
Note delivered under this Indenture upon registration of transfer of, or in
exchange for, or in lieu of, any other Convertible Note, shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such other
Convertible Note.
SECTION 2.12. Authorized Denominations. The Convertible Notes shall be
------------------------
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.13. Computation of Interest, etc. The Convertible Notes that
----------------------------
will be issued on the Issue Date will be issued at a discounted aggregate
principal amount of $27,644,400. If all of the Convertible Notes issuable under
Section 2.02 hereof are so issued, such Convertible Notes will accrete in value
from the date of original issuance thereof, whether on the Issue Date or
otherwise, at a rate of 9% per annum, compounded semi-annually in the manner
specified in the definition of "Accreted Value" contained in Section 1.01
hereof, to an aggregate principal amount of $46,000,000 by September 30, 1999.
Thereafter, interest will accrue at a rate of 9% per annum. Interest on the
Convertible Notes shall be computed on the basis of a 360-day year of twelve 30-
day months. Notwithstanding any other term of this Indenture, the Company shall
not be obliged to pay any interest or other amounts under or in connection with
this
39
Indenture in excess of the amount or rate permitted under or consistent with
applicable law.
SECTION 2.14. Persons Deemed Owners. Prior to the due presentation for
---------------------
registration of transfer of any Convertible Note, the Company, the Trustee, the
Paying Agent, the Registrar or any co-Registrar may deem and treat the person in
whose name a Convertible Note is registered as the absolute owner of such
Convertible Note for the purpose of receiving payment of principal of, premium,
if any, and interest (including Special Interest, if any) on such Convertible
Note and for all other purposes whatsoever, whether or not such Convertible Note
is overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-Registrar shall be affected by notice to the contrary.
SECTION 2.15. CUSIP Numbers. The Company, in issuing the Convertible
-------------
Notes, may use a "CUSIP" number for each series of Convertible Notes and, if so,
the Trustee shall use the relevant CUSIP number in any notices to Holders as a
convenience to such Holders; provided 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 Notes and that reliance may be
placed only on the other identification numbers printed on the Convertible
Notes. The Company shall promptly notify the Trustee of any change in any CUSIP
number used.
ARTICLE III
REDEMPTION
SECTION 3.01. Notice to Trustee. If the Company elects to redeem
-----------------
Convertible Notes pursuant to the optional redemption provisions of Section 3.07
and the Convertible Notes, it shall furnish an Officers' Certificate to the
Trustee setting forth the Redemption Date, the principal amount of Convertible
Notes to be redeemed and the Redemption Price. The Company shall give each such
notice to the Trustee at least 60 days prior to the Redemption Date unless the
Trustee consents to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company to the effect
that such redemption will comply with any conditions to such redemption set
forth herein and in the Convertible Notes.
SECTION 3.02. Selection of Convertible Notes to be Redeemed. If less than
---------------------------------------------
all the Convertible Notes are to be redeemed at any time, the Trustee shall
select the Convertible Notes to be redeemed on a pro rata basis, or by any other
--- ----
method which the Trustee deems to be fair and appropriate and which complies
with any securities exchange or other applicable requirements, provided that
---------
the Trustee may select for redemption in part only
40
Convertible Notes in denominations larger than $1,000. In selecting Convertible
Notes to be redeemed pursuant to this Section 3.02, the Trustee shall make such
adjustments, reallocations and eliminations as it shall deem proper so that the
principal amount of each Convertible Note to be redeemed shall be $1,000 or an
integral multiple thereof, by increasing, decreasing or eliminating any amount
less than $1,000 which would be allocable to any Holder. If the Convertible
Notes to be redeemed are Certificated Convertible Notes, the Certificated
Convertible Notes to be redeemed shall be selected by the Trustee by prorating,
as nearly as may be, or by any other method which the Trustee deems to be fair
and appropriate and which complies with any securities exchange or other
applicable requirements the principal amount of Certificated Convertible Notes
to be redeemed among the Holders of Certificated Convertible Notes registered in
their respective names. The Trustee in its discretion may determine the
particular Convertible Notes (if there are more than one) registered in the name
of any Holder which are to be redeemed, in whole or in part. Provisions of this
Indenture that apply to Convertible Notes called for redemption also apply to
portions of Convertible Notes called for redemption. The Trustee shall notify
the Company promptly of the Convertible Notes or portions of Convertible Notes
to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60
--------------------
days before a Redemption Date, the Company shall send a notice of redemption,
first class mail, postage prepaid, to Holders of Convertible Notes to be
redeemed at the addresses of such Holders as they appear in the Security
Register.
The notice shall identify the Convertible Notes to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price (and shall specify the portion of such
Redemption Price that constitutes the amount of accrued and unpaid interest to
be paid, if any);
(c) the name and address of the Paying Agent;
(d) that the Convertible Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(e) if any Global Convertible Note is being redeemed in part, the
portion of the principal amount of such Convertible Note to be redeemed and
that, after the Redemption Date, the Global Convertible Note, with a notation on
Schedule A thereof adjusting the principal amount thereof to be equal to the
unredeemed portion, will be returned to the Holder thereof;
41
(f) if any Certificated Convertible Note is being redeemed in part,
the portion of the principal amount of such Convertible Note to be redeemed and
that, after the Redemption Date, a new Certificated Convertible Note or
Certificated Convertible Notes in principal amount at Stated Maturity equal to
the unredeemed portion will be issued;
(g) if fewer than all the outstanding Convertible Notes are to be
redeemed, the identification and principal amounts of the particular Convertible
Notes to be redeemed;
(h) the conversion price, the date on which the right to convert the
Convertible Notes will terminate and the place or places where such Convertible
Notes may be surrendered for conversion;
(i) that, unless the Company defaults in making the redemption
payment, payment of interest (including Special Interest, if any) on, or the
accretion of the value of, the Convertible Notes (or portions thereof) called
for redemption shall cease and such Convertible Notes (or portions thereof)
shall cease to accrete in value or cease to accrue interest, as the case may be,
on and after the Redemption Date;
(j) the paragraph of the Convertible Notes and the Section of this
Indenture pursuant to which the Convertible Notes are being called for
redemption; and
(k) any other information necessary to enable Holders to comply with
the notice of redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03 in a timely manner; provided that the Company shall give the
--------
Trustee not less than 60 days' notice unless the Trustee consents to a shorter
period.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is
------------------------------
mailed, Convertible Notes called for redemption shall become due and payable on
the Redemption Date and at the Redemption Price stated in such notice, plus
interest and Special Interest, if any, accrued and unpaid on the Redemption
Date; provided that if the Redemption Date is after a regular Record Date and on
--------
or prior to the Interest Payment Date, the accrued interest (including Special
Interest, if any) shall be payable to the Holder of the redeemed Note on the
relevant Record Date; and provided, further, that if a Redemption Date is not a
-------- -------
Business Day, payment shall be made on that next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day. Upon surrender to the Paying Agent, such Convertible
Notes shall be paid at the
42
Redemption Price stated in such notice. Failure to give notice or any defect in
the notice to any Holder shall not affect the validity of the notice to any
other Holder.
SECTION 3.05. Deposit of Redemption Price. On or prior to 10:00 a.m., New
---------------------------
York City time, on each Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company, one of its Subsidiaries or any of their
Affiliates is the Paying Agent, the Paying Agent shall segregate and hold in
trust for the benefit of the Holders) money, in federal or other immediately
available funds, sufficient to pay the Redemption Price on all Convertible Notes
to be redeemed on that date other than Convertible Notes or portions of
Convertible Notes called for redemption on such date which have been delivered
by the Company to the Trustee for cancellation and other than any Convertible
Notes or portions of Convertible Notes called for redemption on such date which
have been converted prior to such date.
So long as the Company complies with the preceding paragraph and the other
provisions of this Article III, interest (and Special Interest, if any) on the
Convertible Notes to be redeemed on the applicable Redemption Date shall cease
to accrue, or such Convertible Notes shall cease to accrete in value, as the
case may be, from and after such date and such Convertible Notes or portions
thereof shall be deemed not to be entitled to any benefit under this Indenture
except to receive payment on the Redemption Date of the Redemption Price plus
interest and Special Interest, if any, accrued and unpaid on the Redemption
Date. If any Convertible Note called for redemption shall not be so paid upon
surrender for redemption, then, from the Redemption Date until such principal is
paid, interest shall be paid on the unpaid principal and, to the extent
permitted by law, on any accrued but unpaid interest thereon, in each case at
the rate prescribed therefor by such Convertible Notes.
SECTION 3.06. Convertible Notes Redeemed in Part. Upon surrender and
----------------------------------
cancellation of a Certificated Convertible Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate and deliver to the
surrendering Holder (at the Company's expense) a new Certificated Convertible
Note equal in principal amount to the unredeemed portion of the Certificated
Convertible Note surrendered and canceled, provided that each such Certificated
--------
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Convertible Note that is redeemed in part, the
Paying Agent shall forward such Global Convertible Note to the Trustee who shall
make a notation on Schedule A thereof to reduce the principal amount of such
Global Convertible Note to an amount equal to the unredeemed portion of such
Global Convertible Note, as provided in Section 2.05(c) hereof.
43
SECTION 3.07. Optional Redemption. The Convertible Notes will not be
-------------------
redeemable at the option of the Company prior to September 30, 2000. During the
period from September 30, 2000 to September 30, 2002, the Convertible Notes will
be subject to redemption at the option of the Company, in whole but not in part,
upon not less than 30 nor more than 60 days' notice, if the Closing Price of the
Common Stock is at least 150 percent of the Conversion Price for thirty
consecutive days, at a Redemption Price equal to 100 percent of the principal
amount at Stated Maturity thereof plus accrued and unpaid interest (if any) and
Special Interest (if any) to the date of redemption; provided, that if the
--------
Common Stock is not traded on a U.S. national securities exchange or approved
for trading on an established automated over-the-counter trading market in the
United States and not quoted on a consolidated transaction reporting tape, the
Convertible Notes will not be redeemable during such period. On or after
September 30, 2002, the Convertible Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice at a Redemption Price equal to 100 percent of the principal
amount at Stated Maturity thereof, plus accrued and unpaid interest, if any, and
Special Interest, if any, to the Redemption Date.
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Convertible Notes. The Company shall promptly pay
----------------------------
the principal of, premium, if any, and interest (including Special Interest, if
any), on, the Convertible Notes on the dates and in the manner provided in the
Convertible Notes and in this Indenture. Principal, premium and interest shall
be considered paid on the date due if, on such date, the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal, premium and interest (including Special Interest, if any) then due.
To the extent lawful, the Company shall pay interest on (i) any overdue
principal of (and premium, if any, on) the Convertible Notes, at the interest
rate borne on the Convertible Notes, plus 1% per annum, and (ii) Defaulted
--- -----
Interest (without regard to any applicable grace period), and (iii) any Reset
Penalty that has not been paid when due, at the same rate. The Company's
obligation pursuant to the previous sentence shall apply whether such overdue
amount is due at its Stated Maturity, as a result of the Company's obligations
pursuant to Section 3.05, Section 4.07, Section 4.08 or Section 4.14 hereof, or
otherwise.
SECTION 4.02. Maintenance of Office or Agency. The Company shall maintain
-------------------------------
in the Borough of Manhattan, The City of New York, an office or agency where
Convertible Notes may be presented or surrendered for payment or conversion,
where Convertible Notes
44
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Convertible Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. As of the date hereof, the address of such agency is: Xxxxxx Trust and
Savings Bank, c/x Xxxxxx Trust Company of New York, 00 Xxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee its agent to receive all presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Convertible Notes
may be presented or surrendered for any or all of such purposes, and may from
time to time rescind such designations; provided that no such designation or
--------
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation and any
change in the location of any such other office or agency.
SECTION 4.03. Money for the Convertible Note Payments to be Held in Trust.
-----------------------------------------------------------
If the Company, any Restricted Subsidiary of the Company or any of their
respective Affiliates shall at any time act as Paying Agent with respect to the
Convertible Notes, such Paying Agent shall, on or before each due date of the
principal of (and premium, if any) or interest on any of the Convertible Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the principal (and premium, if any) and interest
(including Special Interest, if any), so becoming due until such money shall be
paid to such Persons or otherwise disposed of as herein provided, and shall
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect to
the Convertible Notes, it shall, prior to or on each due date of the principal
of (and premium, if any) or interest (including Special Interest, if any) on any
of the Convertible Notes, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) and interest (including Special Interest, if
any), so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium and interest (including Special
Interest, if any), and (unless such Paying Agent is the Trustee) the Paying
Agent shall promptly notify the Trustee of the Company's action or failure so to
act.
45
SECTION 4.04. Corporate Existence. Subject to the provisions of Article V
-------------------
hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence, rights
(charter and statutory) and franchises of the Company and each of its Restricted
Subsidiaries; provided that the Company and any such Restricted Subsidiary
--------
shall not be required to preserve the corporate existence of any such Restricted
Subsidiary or any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders of Convertible Notes.
SECTION 4.05. Maintenance of Property. The Company shall cause all
-----------------------
Property used or useful in the conduct of its business or the business of any of
its Restricted Subsidiaries to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as, in the judgment of the Company, may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section
--------
4.05 shall prevent the Company from discontinuing the operation or maintenance
of any of such Property if such discontinuance is, in the judgment of the
Company, desirable in the conduct of its business or the business of any of its
Restricted Subsidiaries and not disadvantageous in any material respect to the
Holders of Convertible Notes.
SECTION 4.06. Payment of Taxes and Other Claims. The Company shall pay or
---------------------------------
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Restricted Subsidiaries or upon the
income, profits or Property of the Company or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, material and supplies which, if unpaid,
might by law become a Lien upon the Property of the Company or any of its
Restricted Subsidiaries; provided that the Company shall not be required to pay
--------
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings upon stay of execution or the enforcement
thereof and for which adequate reserves in accordance with GAAP or other
appropriate provision has been made.
SECTION 4.07. Repurchase at the Option of Holders upon a Change of Control.
------------------------------------------------------------
(a) Upon the occurrence of a Change of Control, each Holder of Convertible Notes
shall have the right to require the Company to purchase such Holder's
Convertible Notes, in whole or in part in a principal amount that is an integral
46
multiple of $1,000, pursuant to an irrevocable and unconditional offer described
in Section 4.07(b) hereof (the "Change of Control Offer"), at a purchase price
(the "Change of Control Purchase Price") in cash equal to 101 percent of the
Accreted Value of such Convertible Notes (or portions thereof) on any Change of
Control Payment Date occurring prior to September 30, 1999, plus accrued and
unpaid interest, if any, and Special Interest, if any, thereon to such Change of
Control Payment Date, or 101 percent of the principal amount at Stated Maturity
of such Convertible Notes (or portions thereof) on any Change of Control Payment
Date occurring on or after September 30, 1999, plus accrued and unpaid interest,
if any, and Special Interest, if any, to such Change of Control Payment Date.
(b) Within 30 days of the date of any Change of Control, the Company,
or the Trustee at the request and expense of the Company, shall send to each
Holder by first class mail, postage prepaid, a notice prepared by the Company
stating:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made pursuant to this Section 4.07, and that all Convertible
Notes that are properly tendered will be accepted for payment;
(ii) the Change of Control Purchase Price, and the date Convertible
Notes are to be purchased pursuant to the Change of Control Offer (the
"Change of Control Payment Date"), which date shall be a date occurring no
earlier than 30 days nor later than 60 days subsequent to the date such
notice is mailed;
(iii) that any Convertible Notes or portions thereof not properly
tendered will continue to accrete in value or accrue interest, as
applicable, and accrue Special Interest, if applicable and will continue to
have conversion rights;
(iv) that, unless the Company defaults in the payment of the Change of
Control Purchase Price with respect there to, all Convertible Notes or
portions thereof accepted for payment pursuant to the Change of Control
Offer shall cease to accrete in value or accrue interest, as the case may
be, and accrue Special Interest, if applicable, from and after the Change
of Control Payment Date and will cease to have conversion rights;
(v) that Holders electing to have any Convertible Notes or portions
thereof purchased pursuant to a Change of Control Offer will be required to
surrender such Convertible Notes, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of such Convertible Notes completed, to
the Paying Agent at the address specified in the notice, prior to the close
of business on the third Business Day preceding the Change of Control
Payment Date;
47
(vi) that Holders shall be entitled to withdraw such election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Convertible Notes delivered for purchase,
and a statement that such Holder is withdrawing such Xxxxxx's election to
have such Convertible Notes or portions thereof purchased pursuant to the
Change of Control Offer;
(vii) that Holders electing to have Convertible Notes purchased
pursuant to the Change of Control Offer must specify the principal amount
that is being tendered for purchase, which principal amount must be $1,000
or an integral multiple thereof;
(viii) if Certificated Convertible Notes have been issued pursuant to
Section 2.06(b), that any Holder of Certificated Convertible Notes whose
Certificated Convertible Notes are being purchased only in part will be
issued new Certificated Convertible Notes equal in principal amount to the
unpurchased portion of the Certificated Convertible Note or Convertible
Notes surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global
Convertible Note that is being purchased in part, such Global Convertible
Note with a notation on Schedule A thereof adjusting the principal amount
thereof to be equal to the unpurchased portion of such Global Convertible
Note; and
(x) the instructions and any other information necessary to enable
any Holder to accept a Change of Control Offer or effect withdrawal of such
acceptance.
(c) On the Change of Control Payment Date, the Company shall (i)
accept for payment any Convertible Notes or portions thereof properly tendered
pursuant to the Change of Control Offer; (ii) irrevocably deposit with the
Paying Agent, by 10:00 a.m., New York City time, on such date, in immediately
available funds, an amount equal to the Change of Control Purchase Price in
respect of all Convertible Notes or portions thereof so tendered, including
accrued and unpaid interest and Special Interest, if applicable, to such Change
of Control Payment Date; and (iii) deliver, or cause to be delivered, to the
Trustee the Convertible Notes so tendered together with an Officers' Certificate
listing the Convertible Notes or portions thereof tendered to the Company and
accepted for payment. The Paying Agent shall promptly send by first class mail,
postage prepaid, to each Holder of Convertible Notes or portions thereof so
accepted for payment, payment in an
48
amount equal to the Change of Control Purchase Price for such Convertible Notes
or portions thereof, including accrued and unpaid interest and Special Interest,
if applicable, to such Change of Control Payment Date. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. For purposes of this
Section 4.07, the Trustee shall act as the Paying Agent.
(d) Upon surrender and cancellation of a Certificated Convertible
Note that is purchased in part pursuant to the Change of Control Offer, the
Company shall promptly issue and the Trustee shall authenticate and deliver to
the surrendering Holder of such Certificated Convertible Note, a new
Certificated Convertible Note equal in principal amount to the unpurchased
portion of such surrendered Certificated Convertible Note; provided that each
--------
such new Certificated Convertible Note shall be in a principal amount of $1,000
or an integral multiple thereof.
Upon surrender of a Global Convertible Note that is purchased in part
pursuant to a Change of Control Offer, the Paying Agent shall forward such
Global Convertible Note to the Trustee who shall make a notation on Schedule A
thereof to reduce the principal amount of such Global Convertible Note to an
amount equal to the unpurchased portion of such Global Convertible Note, as
provided in Section 2.05(c) hereof.
(e) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the
repurchase of Convertible Notes pursuant to a Change of Control Offer.
SECTION 4.08. Limitation on Asset Sales. (a) The Company shall not, and
-------------------------
shall not permit any of its Restricted Subsidiaries, directly or indirectly, to,
consummate an Asset Sale, unless:
(i) no Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof;
(ii) the Company or such Restricted Subsidiary, as the case may be,
receives net consideration at the time of such Asset Sale at least equal to
the Fair Market Value (as evidenced by a Board Resolution of the Company
delivered to the Trustee) of the Property or assets sold or otherwise
disposed of;
(iii) at least 75 percent of the consideration received in respect of
such Asset Sale by the Company or such Restricted Subsidiary, as the case
may be, for such Property or assets consists of Cash Proceeds; provided,
--------
however, that
-------
49
in connection with an Asset Sale of receivables, 100 percent of the
consideration received in respect of such Asset Sale by the Company or such
Restricted Subsidiary, as the case may be, for such receivables shall
consist of Cash Proceeds; and
(iv) the Company or such Restricted Subsidiary, as the case may be,
uses the Net Cash Proceeds from such Asset Sale in the manner set forth in
Section 4.08(b) hereof.
(b) Within 270 days after the closing of any Asset Sale, the Company
or such Restricted Subsidiary, as the case may be, may, at its option:
(i) reinvest an amount equal to the Net Cash Proceeds, or any portion
thereof, from such Asset Sale in Telecommunications Assets; and/or
(ii) apply an amount equal to such Net Cash Proceeds, or remaining Net
Cash Proceeds, (A) to the permanent reduction of Indebtedness of the
Company (other than Indebtedness to a Restricted Subsidiary of the Company)
that is pari passu in right of payment with the Senior Notes and the
---- -----
Convertible Notes; provided, however, that in connection with any such
-------- -------
permanent reduction of Indebtedness of the Company, the Company shall
apply, pro rata, a portion of such Net Cash Proceeds or remaining Net Cash
--- ----
Proceeds to the permanent reduction of the aggregate amount of Senior Notes
and Convertible Notes outstanding, or (B) to the permanent reduction of
Indebtedness of any Restricted Subsidiary of the Company that is pari passu
---- -----
in right of payment with such Restricted Subsidiary's Senior Note Guarantee
and its Convertible Note Guarantee, if applicable (other than Indebtedness
to the Company or another Restricted Subsidiary of the Company).
Net Cash Proceeds from any Asset Sale that are not applied pursuant to
clause (i) or (ii) above shall constitute "Excess Proceeds."
(c) If at any time the aggregate amount of Excess Proceeds calculated
as of such date exceeds $5,000,000, the Company shall, within 30 days of the
date on which such Excess Proceeds exceed $5,000,000, use such Excess Proceeds
to make an offer, as described in Section 4.08(d) hereof (an "Asset Sale
Offer"), to purchase on a pro rata basis from all Holders of the Convertible
--- ----
Notes in an aggregate principal amount equal to the maximum principal amount
that may be purchased out of the then-existing Excess Proceeds, at a purchase
price (the "Asset Sale Purchase Price") in cash equal to 100 percent of the
Accreted Value of such Convertible Notes on any Asset Sale Payment Date
occurring prior to September 30, 1999, plus accrued and unpaid interest, if any,
and Special Interest, if any, to such Asset
50
Sale Payment Date, or 100 percent of the principal amount at Stated Maturity of
such Senior Notes on any Asset Sale Payment Date occurring on or after September
30, 1999, plus accrued and unpaid interest, if any, and Special interest, if
any, to such Asset Sale Payment Date; provided that, if any Senior Notes are
--------
outstanding and the Senior Note Indenture has not been satisfied or discharged,
the Company shall be required to apply the Excess Proceeds first to a Senior
Note Asset Sale Offer (as described in the Senior Note Indenture) and to the
substantially concurrent repayment or redemption of Pari Passu Indebtedness (if
any) if required by the instruments relating to such Pari Passu Indebtedness
(which repayment or redemption, in the case of a revolving credit arrangement or
multiple advance arrangement, reduces the commitment thereunder) in the manner
permitted by the Senior Note Indenture and to the extent that the aggregate
amount paid pursuant to the Senior Note Asset Sale Offer and, if applicable, the
repayment of Indebtedness as permitted by the Senior Note Indenture is less than
such Excess Proceeds, the Company shall then make an Asset Sale Offer for such
remaining portion of such Excess Proceeds within 100 days of the date on which
such Excess Proceeds exceeded $5,000,000.
(d) Within 30 days (or 100 days if any Senior Notes are outstanding
and the Senior Note Indenture has not been satisfied or discharged) of the date
on which the amount of Excess Proceeds exceeds $5,000,000 (but subject to the
proviso of clause (c) of this Section 4.08), the Company, or the Trustee at the
request and expense of the Company, shall send to each Holder by first class
mail, postage prepaid, a notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made pursuant to this Section
4.08, and that all Convertible Notes that are properly tendered will be
accepted for payment, subject to proration in the event the amount of
Excess Proceeds is less than the aggregate Asset Sale Purchase Price of all
Convertible Notes promptly tendered pursuant to the Asset Sale Offer;
(ii) the Asset Sale Purchase Price, the amount of Excess Proceeds that
are available to be applied to purchase tendered Convertible Notes, and the
date Convertible Notes are to be purchased pursuant to the Asset Sale Offer
(the "Asset Sale Payment Date"), which date shall be a date no earlier than
30 days nor later than 40 days subsequent to the date such notice is
mailed;
(iii) that any Convertible Notes or portions thereof not properly
tendered will continue to accrete in value or accrue interest, as the case
may be, and accrue Special Interest, if applicable and will continue to
have conversion rights;
51
(iv) that, unless the Company defaults in the payment of the Asset
Sale Purchase Price with respect thereto, all Convertible Notes or portions
thereof accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete in value or accrue interest, as the case may be, and accrue
Special Interest, if applicable, from and after the Asset Sale Payment Date
and will cease to have conversion rights;
(v) that any Holder electing to have any Convertible Notes or portions
thereof purchased pursuant to the Asset Sale Offer will be required to
surrender such Convertible Notes, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of such Convertible Notes completed, to
the Paying Agent at the address specified in the notice, prior to the close
of business on the third Business Day preceding the Asset Sale Payment
Date;
(vi) that any Holder shall be entitled to withdraw such election if
the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Asset Sale Payment Date, a telegram,
telex, facsimile transmission or letter, setting forth the name of the
Holder, the principal amount of Convertible Notes delivered for purchase,
and a statement that such Xxxxxx is withdrawing such Holder's election to
have such Convertible Notes or portions thereof purchased pursuant to the
Asset Sale Offer;
(vii) that any Holder electing to have Convertible Notes purchased
pursuant to the Asset Sale Offer must specify the principal amount that is
being tendered for purchase, which principal amount must be $1,000 or an
integral multiple thereof;
(viii) if Certificated Convertible Notes have been issued pursuant to
Section 2.06(b), that any Holder of Certificated Convertible Notes whose
Certificated Convertible Notes are being purchased only in part will be
issued new Certificated Convertible Notes equal in principal amount to the
unpurchased portion of the Certificated Convertible Note or Convertible
Notes surrendered, which unpurchased portion will be equal in principal
amount to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the Holder of a Global
Convertible Note that is being purchased in part, such Global Convertible
Note with a notation on Schedule A thereof adjusting the principal amount
thereof to be equal to the unpurchased portion of such Global Convertible
Note; and
(x) the instructions and any other information necessary to enable
any Holder to accept an Asset Sale
52
Offer, to tender Convertible Notes and to have such Convertible Notes
purchased, or to effect withdrawal of such acceptance, pursuant to this
Section 4.08.
(e) If the aggregate Asset Sale Purchase Price of the Convertible
Notes surrendered by Holders exceeds the amount of Excess Proceeds as indicated
in the notice required by Section 4.08(d) hereof, the Trustee shall select the
Convertible Notes to be purchased on a pro rata basis based on the Accreted
--- ----
Value, as of the Asset Sale Payment Date if such Asset Sale Payment Date is
prior to September 30, 1999, or the principal amount at Stated Maturity, if such
Asset Sale Payment Date is on or after September 30, 1999, of the Convertible
Notes tendered, with such adjustments as may be deemed appropriate by the
Trustee and may be needed to comply with any securities exchange and other
applicable requirements, so that only Convertible Notes in denominations of
$1,000 or integral multiples thereof shall be purchased.
(f) On or before the Asset Sale Payment Date, the Company shall (i)
accept for payment any Convertible Notes or portions thereof properly tendered
and selected for purchase pursuant to the Asset Sale Offer and Section 4.08(e)
hereof; (ii) irrevocably deposit with the Paying Agent, by 10:00 a.m., New York
City time, on such date, in immediately available funds, an amount equal to the
Asset Sale Purchase Price in respect of all Convertible Notes or portions
thereof so accepted; and (iii) deliver, or cause to be delivered, to the Trustee
the Convertible Notes so accepted together with an Officers' Certificate listing
the Convertible Notes or portions thereof tendered to the Company and accepted
for payment. The Paying Agent shall promptly send by first class mail, postage
prepaid, to each Holder of Convertible Notes or portions thereof so accepted for
payment, payment in an amount equal to the Asset Sale Purchase Price for such
Convertible Notes or portions thereof. The Company shall publicly announce the
results of the Asset Sale Offer on or as soon as practicable after the Asset
Sale Payment Date. For purposes of this Section 4.08, the Trustee shall act as
the Paying Agent.
(g) Upon surrender and cancellation of a Certificated Convertible
Note that is purchased in part, the Company shall promptly issue and the Trustee
shall authenticate and deliver to the surrendering Holder of such Certificated
Convertible Note a new Certificated Convertible Note equal in principal amount
to the unpurchased portion of such surrendered Certificated Convertible Note;
provided that each such new Certificated Convertible Note shall be in a
--------
principal amount of $1,000 or an integral multiple thereof.
Upon surrender of a Global Convertible Note that is purchased in part
pursuant to an Asset Sale Offer, the Paying Agent shall forward such Global
Convertible Note to the Trustee who shall make a notation on Schedule A thereof
to reduce the
53
principal amount of such Global Convertible Note to an amount equal to the
unpurchased portion of such Global Convertible Note, as provided in Section
2.05(c) hereof.
(h) Upon completion of an Asset Sale Offer (including payment of the
Asset Sale Purchase Price for accepted Convertible Notes), any surplus Excess
Proceeds that were the subject of such offer shall cease to be Excess Proceeds,
and the Company may then use such amounts for general corporate purposes.
(i) The Company shall comply with the requirements of Section 14(e)
under the Exchange Act and any other securities laws or regulations, to the
extent such laws and regulations are applicable, in connection with the
repurchase of Convertible Notes pursuant to an Asset Sale Offer.
SECTION 4.09. Limitation on Issuance of Guarantees by Restricted
--------------------------------------------------
Subsidiaries. (a) The Company shall not permit any of its Restricted
------------
Subsidiaries, directly or indirectly, to guarantee any Indebtedness of the
Company ("Guaranteed Indebtedness") other than the Convertible Notes, unless (i)
such Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Convertible Note Guarantee (a
"Convertible Note Guarantee") of payment of the Convertible Notes by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary of the Company as a result of any payment by
such Restricted Subsidiary under its Convertible Note Guarantee, provided that
--------
any Restricted Subsidiary may guarantee any Credit Facility so long as such
Restricted Subsidiary enters into a Convertible Note Guarantee ranking pari
----
passu with its guarantee under such Credit Facility. If the Guaranteed
-----
Indebtedness is pari passu with the Convertible Notes, then the guarantee of
---- -----
such Guaranteed Indebtedness shall be pari passu with or subordinated to the
---- -----
Convertible Note Guarantee; and if the Guaranteed Indebtedness is subordinated
to the Convertible Notes, then the guarantee of such Guaranteed Indebtedness
shall be subordinated to the Convertible Note Guarantee at least to the extent
that the Guaranteed Indebtedness is subordinated to the Convertible Notes.
(b) Notwithstanding the provisions of Section 4.10(a) hereof, any
Convertible Note Guarantee by a Restricted Subsidiary shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
the release or discharge of the guarantee which resulted in the creation of such
Restricted Subsidiary's Convertible Note Guarantee, except a discharge or
release by, or as a result of, payment under such guarantee.
54
SECTION 4.10. Restricted and Unrestricted Subsidiaries. (a) The Company
----------------------------------------
may designate a Subsidiary (including a newly formed or newly acquired
Subsidiary) of the Company or any of its Restricted Subsidiaries as an
Unrestricted Subsidiary, provided that so long as the Senior Notes remain
outstanding and the Senior Note Indenture has not been satisfied or discharged,
(i) immediately after giving effect to the transaction, the Company could incur
$1.00 of additional Indebtedness pursuant to Section 4.09(a) of the Senior Note
Indenture and (ii) such designation is at the time permitted under Section
4.13(a) of the Senior Note Indenture. Notwithstanding any provision of this
Section 4.10(a), all Subsidiaries of an Unrestricted Subsidiary will be
Unrestricted Subsidiaries.
(b) An Unrestricted Subsidiary may be redesignated as a Restricted
Subsidiary. The designation of a Subsidiary of the Company as an Unrestricted
Subsidiary or the designation of an Unrestricted Subsidiary of the Company as a
Restricted Subsidiary shall be made by the Board of Directors as evidenced by a
Board Resolution delivered to the Trustee and shall be effective as of the date
specified in such Board Resolution, which shall not be prior to the date such
Board Resolution is delivered to the Trustee.
SECTION 4.11. Reports. Whether or not the Company is subject to Section
-------
13(a) or Section 15(d) of the Exchange Act, or any successor provision thereto,
the Company shall file with the Commission the annual reports, quarterly reports
and other documents which the Company would have been required to file with the
Commission pursuant to Section 13(a) or Section 15(d) of the Exchange Act or any
successor provision thereto if the Company were subject thereto, such documents
to be filed with the Commission on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required to file
them. The Company shall also (whether or not it is required to file reports with
the Commission), within 30 days of each Required Filing Date, (i) transmit by
mail to all Holders of Convertible Notes, as their names and addresses appear in
the Security Register without cost to such Holders or Persons, and (ii) file
with the Trustee, copies of the annual reports, quarterly reports and other
documents (without exhibits) which the Company has filed or would have filed
with the Commission pursuant to Section 13(a) or Section 15(d) of the Exchange
Act, any successor provisions thereto or this Section 4.11. The Company shall
not be required to file any report with the Commission if the Commission does
not permit such filing.
SECTION 4.12. Compliance Certificate; Notice of Default or Event of
-----------------------------------------------------
Default (a) The Company shall deliver to the Trustee within 120 calendar days
-------
after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate (which shall be signed by Officers satisfying the
requirements of Section 314 of the Trust Indenture Act), stating whether or not,
55
to the best knowledge of such Officers the Company has complied with all
conditions and covenants under this Indenture, and, if the Company shall be in
Default, specifying all such Defaults and the nature thereof of which such
Officer may have knowledge.
(b) So long as (and to the extent) not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.11 above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention which would lead them to believe that the
Company has violated any provision of Article IV or Article V of this Indenture
(or if any violation has occurred, specifying the nature and existence thereof),
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of such violation.
(c) The Company shall deliver written notice to the Trustee within 5
Business Days after becoming aware of (i) any Default or Event of Default, (ii)
any event of default under the Senior Note Indenture or (iii) any event of
default or any default under any other mortgage, indenture or instrument
referred to in Section 6.01(e) hereof, describing such Default, Event of
Default or other event of default or default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 4.13. Issuance of Convertible Note Contingent Warrants. In the
------------------------------------------------
event that the Company has not, on or prior to September 30, 1999, (i)
consummated a Qualified Public Offering or (ii) been sold pursuant to a
Qualified Sale of the Company, the Company will be obligated to issue to the
Holders of the Convertible Notes Convertible Note Contingent Warrants
exercisable for Class A Common Stock representing up to 2.5% of the Common
Stock of the Company on a fully diluted basis (as used herein, the term "fully
diluted" does not include any securities, including Common Stock, issued in any
transaction described in clauses (i) through (xi) of Section 15(d)(ii) of the
Warrant Agreement), after giving effect to the issuance of such Convertible Note
Contingent Warrants. Such Convertible Note Contingent Warrants will be issued
pursuant to the Warrant Agreement, and Holders will have the benefits of the
Registration Rights Agreement, as holders of Convertible Note Contingent
Warrants.
Any Convertible Note Contingent Warrants issued shall be issued to the
Holders of the outstanding Convertible Notes as of September 30, 1999 pro rata,
based upon the aggregate principal amount of the Convertible Notes held by such
Holder as of September 30, 1999.
56
SECTION 4.14 Repurchase at the Option of Holders upon a Termination of
---------------------------------------------------------
Trading. (a) In the event of any Termination of Trading occurring after the
-------
Issue Date and on or prior to Maturity, each Holder of Convertible Notes will
have the right, at such Holder's option, to require the Company to repurchase
all or any part of such Holder's Convertible Notes on the date (the "Repurchase
Date") that is 30 days after the date the Company gives notice of the
Termination of Trading at a price (the "Repurchase Price") equal to 100 percent
of the Accreted Value of such Convertible Notes on any Repurchase Date occurring
prior to September 30, 1999, together with accrued and unpaid interest, if any,
and Special Interest, if any, thereon to the Repurchase Date or 100 percent of
the principal amount at Stated Maturity of such Convertible Notes on any
Repurchase Date occurring on or after September 30, 1999, plus accrued and
unpaid interest, if any, and Special Interest, if any, thereon to the Repurchase
Date. On or prior to 10:00 a.m., New York City time on the Repurchase Date, the
Company shall irrevocably deposit with the Trustee or a Paying Agent an amount
of money sufficient to pay the Repurchase Price of the Convertible Notes which
are to be repurchased on or promptly following the Repurchase Date.
(b) On or before the 15th day after the occurrence of a Termination
of Trading, the Company, or the Trustee at the request and expense of the
Company, shall send to each Holder by first class mail, postage prepaid, a
notice prepared by the Company stating:
(i) that a Termination of Trading has occurred and that each
Holder has the right to require a repurchase of such Holder's Convertible
Notes, which repurchase right is made pursuant to this Section 4.14, and
that all Convertible Notes properly tendered will be repurchased;
(ii) the Repurchase Price, and the date Convertible Notes are
to be repurchased, which date shall be a date occurring no earlier than 30
days nor later than 40 days subsequent to the date such notice is mailed;
(iii) that any Convertible Notes or portions thereof not properly
tendered will continue to accrete in value or accrue interest, as the case
may be, and accrue Special Interest, if applicable, and will continue to
have conversion rights;
(iv) that, unless the Company defaults in the payment of the
Repurchase Price with respect thereto, all Convertible Notes or portions
thereof accepted for payment pursuant to the exercise of such repurchase
right shall cease to accrete in value or accrue interest, as the case may
be, and accrue Special Interest, if applicable, from and after the
Repurchase Date and will cease to have any conversion rights;
57
(v) that any Holder electing to have any Convertible Notes or
portions thereof repurchased pursuant to the exercise of such repurchase
right will be required to surrender such Convertible Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of such
Convertible Notes completed, to the Paying Agent at the address specified
in the notice, prior to the close of business on the Repurchase Date;
(vi) that any Holder electing to have Convertible Notes
purchased pursuant to such repurchase right must specify the principal
amount that is being tendered for purchase, which principal amount must be
$1,000 or an integral multiple thereof;
(vii) if Certificated Convertible Notes have been issued
pursuant to Section 2.06(b), that any Holder of Certificated Convertible
Notes whose Certificated Convertible Notes are being purchased only in part
will be issued a new Certificated Convertible Note or Certificated
Convertible Notes equal in principal amount to the unpurchased portion of
the Certificated Convertible Note or Certificated Convertible Notes
surrendered, which unpurchased portion will be equal in principal amount to
$1,000 or an integral multiple thereof;
(viii) that the Trustee will return to the Holder of a Global
Convertible Note that is being purchased in part, such Global Convertible
Note with a notation on Schedule A thereof adjusting the principal amount
thereof to be equal to the unpurchased portion of such Global Convertible
Note; and
(ix) the instructions and any other information necessary to
enable any Holder to exercise such repurchase right or effect withdrawal of
such exercise.
(c) To exercise the repurchase right, the Holder of a Convertible
Note must deliver, on or before the close of business on the Repurchase Date,
irrevocable written notice to the Paying Agent (or an agent designated by the
Paying Agent for such purpose) and to the Trustee of the Holder's exercise of
such right, together with the certificates evidencing the Convertible Notes with
respect to which the right is being exercised, duly endorsed for transfer. Such
written notice is irrevocable. The Company or the Trustee shall promptly send by
first class mail, postage prepaid, to each Holder of Convertible Notes or
portions thereof so accepted for payment, payment in an amount equal to the
Repurchase Price for such Convertible Notes or portions thereof. The Company
shall publicly announce the results of the exercises of repurchase rights upon a
Termination of Trading on or as soon as practicable after the Repurchase Date.
For
58
purposes of this Section 4.14, the Trustee shall act as the Paying Agent.
SECTION 4.15 Additional Invested Equity. If the Company does not achieve
--------------------------
consolidated total revenues (calculated in accordance with GAAP) of at least
$8,500,000 for the period from June 1, 1997 through June 30, 1997 and if, by
September 30, 1997, the Company has not either (i) consummated a Qualified
Public Offering or (ii) been sold pursuant to a Qualified Sale of the Company,
the Company shall by such date be required to either (A) obtain $10,000,000 of
Additional Invested Equity or (B) (i) grant to the Holders of the Convertible
Notes the right to purchase for $10,000,000 additional convertible securities of
the Company convertible into 16 2/3 percent of the Common Stock on a fully
diluted basis (as used herein, the term "fully diluted" does not include any
securities, including Common Stock, issued in any transaction described in
clauses (i) through (xi) of Section 15(d)(ii) of the Warrant Agreement) after
giving effect to the issuance of such additional convertible securities and (ii)
grant to the holders of the Convertible Notes the right to purchase warrants
(the "Additional Warrants") exercisable for Common Stock representing up to 5%
of the Common Stock of the Company at a purchase price of $.01 per share
(subject to certain adjustments to be specified in the Additional Warrants, if
required) on a fully diluted basis (as used herein, the term "fully diluted"
does not include any securities, including Common Stock, issued in any
transaction described in clauses (i) through (xi) of Section 15(d)(ii) of the
Warrant Agreement) after giving effect to the issuance of such Additional
Warrants.
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.01. Merger, Consolidation or Sale of Assets. The Company shall
---------------------------------------
not in any transaction or series of related transactions, consolidate with, or
merge with or into, any other Person or permit any other Person to merge with or
into the Company (other than a merger of a Restricted Subsidiary of the Company
into the Company in which the Company is the continuing corporation), or sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
of the Property and assets of the Company and its Restricted Subsidiaries taken
as a whole to any other Person, unless:
(a) either (i) the Company shall be the continuing corporation or
(ii) the corporation (if other than the Company) formed by such consolidation or
into which the Company is merged, or the Person which acquires, by sale,
assignment, conveyance, transfer, lease or disposition, all or substantially all
of the Property and assets of the Company and its Restricted Subsidiaries taken
as a whole (any such corporation or Person
59
being the "Surviving Entity") shall be a corporation organized and validly
existing under the laws of the United States of America, any political
subdivision thereof, any state thereof or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest and
Special Interest, if any, on all the Convertible Notes and the performance of
every covenant and obligation in this Indenture on the part of the Company to be
performed or observed;
(b) immediately after giving effect to such transaction or series of
related transactions on a pro forma basis (including, without limitation, any
--- -----
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of related transactions), no Default or
Event of Default shall have occurred and be continuing or would result
therefrom; and
(c) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Company (or the Surviving Entity, if the
--- -----
Company is not continuing) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately prior to such
transaction.
In connection with any consolidation, merger, sale, assignment, conveyance,
lease, transfer of assets or other transactions contemplated by this Section
5.01, the Company shall deliver, or cause to be delivered, to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, conveyance, lease, transfer or other transaction and
any supplemental indenture in respect thereto comply with this Article V and
that all conditions precedent herein provided for relating to such transactions
have been complied with (all of the foregoing, a "Permitted Merger").
SECTION 5.02. Successor Corporation Substituted. Upon any Permitted
---------------------------------
Merger, the Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company hereunder and the Convertible
Notes with the same effect as if such Surviving Entity had been named as the
Company herein; and when a Surviving Person duly assumes all of the obligations
and covenants of the Company pursuant hereto and the Convertible Notes, except
in the case of a lease, the predecessor Person shall be relieved of all such
obligations.
If such Surviving Entity shall have succeeded to and been substituted for
the Company, such surviving Entity may cause to be signed, and may issue either
in its own name or in the name of
60
the Company prior to such succession any or all of the Convertible Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and upon the order of such Surviving Entity,
instead of the Company, and subject to all of the terms, conditions and
limitations in this Indenture, the Trustee shall act thereafter and shall
deliver any Convertible Notes which previously shall have been signed and
delivered by two Officers of the Company to the Trustee for authentication. All
of the Convertible Notes so issued, and any Convertible Notes which such
Surviving Entity thereafter shall cause to be signed and delivered to the
Trustee, shall have the same legal rights and benefits under this Indenture as
the Convertible Notes theretofore or thereafter issued in accordance with the
terms of this Indenture and the Convertible Note Guarantees, if any, as though
all of such Convertible Notes had been issued on the date of execution hereof.
In the case of any such substitution, merger, sale, transfer, conveyance
or other disposal, such changes in phraseology and form (and in substance) may
be made in the Convertible Notes to be issued as may be appropriate.
For all purposes of this Indenture and the Convertible Notes, Subsidiaries
of any Surviving Entity will, upon such transaction or series of transactions,
become Restricted Subsidiaries or Unrestricted Subsidiaries as provided
pursuant to this Indenture.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. "Event of Default," wherever used herein
-----------------
with respect to the Convertible Notes, means any one of the following events
(whatever the reason for such event, and whether it shall be voluntary or
involuntary, or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of interest (or Special Interest, if any)
on any Convertible Note when the same becomes due and payable, and the
continuance of such Default for a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) any Convertible Note when the same becomes due and payable whether upon
Maturity, optional redemption, required repurchase (including pursuant to a
Change of Control Offer, an Asset Sale Offer or a repurchase offer upon a
61
Termination of Trading) or otherwise, or the failure to make an offer to
purchase any Convertible Note as herein required; or
(c) default in the performance, or breach, of any covenant or
agreement contained in Section 4.07, Section 4.08, Section 4.13, Section 4.14,
Section 4.15 or Article V hereof; or
(d) default in the performance, or breach, of any covenant or
warranty of the Company contained in this Indenture or the Convertible Notes
(other than a covenant or warranty addressed in Section 6.01(a), Section 6.01(b)
or Section 6.01(c) hereof), and the continuance of such Default or breach for a
period of 45 days after written notice thereof has been given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25
percent of the aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes; or
(e) Indebtedness of the Company or any Restricted Subsidiary is not
paid when due and payable within the applicable grace period, if any, or is
accelerated by the holders thereof and, in either case, the principal amount of
such accelerated or unpaid Indebtedness exceeds $5,000,000; or
(f) the entry by a court of competent jurisdiction of one or more
final nonappealable judgments uninsured or unindemnified for the payment of
money against the Company or any Restricted Subsidiary of the Company in an
aggregate uninsured or unindemnified amount in excess of $5,000,000, which is
not discharged, waived, stayed, bonded or satisfied for a period of 60
consecutive days; or
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Restricted Subsidiary of the Company in an involuntary case or proceeding under
United States bankrupcty laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Restricted Subsidiary of the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of, or in respect of, the Company or any Significant Restricted
Subsidiary of the Company under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Significant Restricted Subsidiary of the Company or of any
substantial part of the Property or assets of the Company or any Significant
Restricted Subsidiary of the Company, or ordering the winding-up or liquidation
of the affairs of the Company or any Significant Restricted Subsidiary of the
Company, and the
62
continuance of any such decree or order for relief or any such other decree or
order unstayed and in effect for a period of 60 consecutive days; or
(h) (i) the commencement by the Company or any Significant
Restricted Subsidiary of the Company of a voluntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent; or (ii) the consent by the Company or any Significant Restricted
Subsidiary of the Company to the entry of a decree or order for relief in
respect of the Company or any Significant Restricted Subsidiary of the Company
in an involuntary case or proceeding under United States bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Significant Restricted Subsidiary of the Company; or (iii) the filing by the
Company or any Significant Restricted Subsidiary of the Company of a
petition or answer or consent seeking reorganization or relief under United
States bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal, state or foreign bankruptcy, insolvency or other similar law; or (iv)
the consent by the Company or any Significant Restricted Subsidiary of the
Company to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or any Significant Restricted Subsidiary of
the Company or of any substantial part of the Property or assets of the Company
or any Significant Restricted Subsidiary, or the making by the Company or any
Significant Restricted Subsidiary of the Company of an assignment for the
benefit of creditors; or (v) the admission by the Company or any Significant
Restricted Subsidiary of the Company in writing of its inability to pay its
debts generally as they become due; or (vi) the taking of corporate action by
the Company or any Significant Restricted Subsidiary of the Company in
furtherance of any such action; or
(i) the occurrence and continuation of an "event of default" under
the Senior Note Indenture for a period of 30 consecutive days, after written
notice of the occurrence of such "event of default" has been given to the
Company by the Trustee or a Holder or Holders of Convertible Notes, which notice
states that such an event constitutes a Default hereunder.
SECTION 6.02. Acceleration. If any Event of Default (other than an Event
------------
of Default specified in Section 6.01(g) or Section 6.01(h) hereof) occurs and is
continuing, then and in every such case, the Trustee by a notice in writing to
the Company, or the Holders of not less than 25 percent of the outstanding
aggregate principal amount at Stated Maturity of Convertible Notes by a
63
notice in writing to the Company and the Trustee, may declare the Default
Amount, premium, if any, and any accrued and unpaid interest (and Special
Interest, if any) on all Convertible Notes then outstanding to be immediately
due and payable. Upon any such declaration, such Default Amount, premium, if
any, and any accrued and unpaid interest (and Special Interest, if any) on all
Convertible Notes then outstanding will become and be immediately due and
payable. If an Event of Default specified in Section 6.01(g) or Section 6.01(h)
hereof occurs, the Default Amount, premium, if any, and any accrued and unpaid
interest (and Special Interest, if any) on all Convertible Notes then
outstanding shall ipso facto become and be immediately due and payable without
---- -----
any declaration or other act on the part of the Trustee or any Holder of
Convertible Notes.
In the event of a declaration of acceleration because an Event of Default
set forth in Section 6.01(e) hereof has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.01(e)
hereof shall be remedied, or cured or waived by the holders of the relevant
Indebtedness within 60 days after such event of default; provided that no
--------
judgment or decree for the payment of the money due on the Convertible Notes has
been obtained by the Trustee as hereinafter in this Article VI provided. In the
event of a declaration of acceleration because an Event of Default set forth in
Section 6.01(i) hereof has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled (A) if the Senior
Notes have been repaid, (B) if the event of default under the Senior Note
Indenture triggering such Event of Default pursuant to Section 6.01(i) hereof
shall be remedied or cured, or waived by the holders of the Senior Notes, or (C)
if the Senior Notes have been accelerated, then the acceleration of the Senior
Notes shall have been rescinded within 60 days of the occurrence of such event
of default under the Senior Note Indenture, and, in the case of clauses (A), (B)
or (C) above, the Senior Note Trustee so certifies to the Trustee, provided that
any such event described in clause (A), (B) or (C) above must occur prior to the
commencement of an enforcement proceeding with respect to this Indenture.
Until September 30, 1999, the "Default Amount" shall equal the Accreted
Value of the Convertible Notes, as of the date of determination. Thereafter, the
Default Amount of each Convertible Note shall equal 100 percent of the principal
amount at Stated Maturity thereof.
At any time after a declaration of acceleration with respect to Convertible
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter in this Article VI provided, the
Holders of a majority in aggregate principal amount at Stated Maturity of the
outstanding Convertible Notes, by written notice to the
64
Company and the Trustee, may rescind and annul such declaration and its
consequences if,
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue installments of interest and Special Interest,
if any, on all Convertible Notes,
(ii) the principal of (and premium, if any, on) any Convertible
Notes which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed therefor
in the Convertible Notes and this Indenture,
(iii) to the extent that payment of such interest or Special
Interest, if any, is lawful, interest on the Defaulted Interest at the rate
prescribed therefor in the Convertible Notes and this Indenture, and
(iv) all moneys paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.07 hereof; and
(b) all Events of Default with respect to the Convertible Notes,
other than the non-payment of the principal of Convertible Notes which have
become due solely by such declaration of acceleration, have been cured or
waived by the Holders as provided herein.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
SECTION 6.03. Other Remedies. The Company covenants that if an Event of
--------------
Default specified in Section 6.01(a) or Section 6.01(b) occurs the Company
shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the
Holders, the whole amount then due and payable on the Convertible Notes for
principal (and premium, if any), accrued and unpaid interest and Special
Interest, if any, and, to the extent that payment of such interest shall be
legally enforceable, interest upon the overdue principal (and premium, if any)
and upon Defaulted Interest, at the rate or rates prescribed therefor in such
Convertible Notes; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due to the Trustee pursuant to
Section 7.07 hereof.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express
65
trust, may institute a judicial proceeding for the collection of, or pursue any
available remedy under this Indenture or otherwise to collect, the sums so due
and unpaid, and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Company or any other obligor upon such
Convertible Notes and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the Property and assets of the Company or any
other obligor upon such Convertible Notes, wherever situated.
If an Event of Default with respect to the Convertible Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 6.04. Waiver of Existing Defaults. The Holders of a majority in
---------------------------
aggregate principal amount at Stated Maturity of the Convertible Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all the
Convertible Notes waive any existing Default or Event of Default and its
consequences under this Indenture except (a) a continuing Default or Event of
Default in the payment of interest (and Special Interest, if any) on, premium,
if any, on or the principal of, the Convertible Notes, (b) in respect of a
covenant or provision hereof which under Section 9.02 hereof cannot be modified
or amended without the consent of the Holder of each outstanding Note affected
or (c) in respect of the right to require the Company to issue Convertible Note
Contingent Warrants pursuant to Section 4.13 hereof or the issuance of
Additional Warrants pursuant to Section 4.15 hereof, which rights under Section
9.02 hereof cannot be waived without the consent of Holders of not less than 75
percent in aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes. Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority. The Holders of not less than a
-------------------
majority in aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that
--------
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or unduly prejudicial to the rights of other Holders and
would not subject the Trustee to personal liability, it being understood that
(subject to Section
66
7.01 hereof) the Trustee shall have no duty to ascertain whether or not such
directions are unduly prejudicial to such Holders, and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits. No Holder of Convertible Notes shall
-------------------
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Convertible Notes;
(b) the Holders of not less than 25 percent in aggregate principal
amount at Stated Maturity of the outstanding Convertible Notes shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee security or
indemnity satisfactory to the Trustee in its reasonable discretion against the
costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Holders of a majority in
aggregate principal amount at Stated Maturity of the outstanding Convertible
Notes;
in any event, it being understood and intended that no one or more Holders of
Convertible Notes shall have any right in any manner whatever by virtue of, or
by availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Convertible Notes, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all Holders of Convertible Notes.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
principal of (premium, if any) and interest (and Special Interest, if any) on
the Convertible Notes held by such Holder, on or after the respective
67
due dates expressed in the Convertible Notes or the Redemption Dates or purchase
dates provided for herein or therein, or to bring suit for the enforcement of
any such payment on or after such respective dates, shall be absolute and
unconditional and shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. Trustee May File Proofs of Claim. In case of the pendency
--------------------------------
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under United States bankruptcy laws, as now or
hereafter constituted, relative to the Company or any other obligor upon the
Convertible Notes or the Property and assets of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of such Convertible Notes shall then be due and payable as therein expressed or
by declaration or otherwise or irrespective of whether the Trustee or any Holder
shall have made any demand on the Company for the payment of overdue principal
or interest or performed any other act pursuant to the provisions of this
Article) shall be entitled and empowered, by intervention in such proceeding or
otherwise, (i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest (and Special Interest, if any) owing and unpaid in
respect of the Convertible Notes, to file such other papers or documents and to
take such other actions, including participating as a member or otherwise in any
official committee of creditors appointed in the matter, as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due to the Trustee
pursuant to Section 7.07 hereof) and of the Holders allowed in such judicial
proceeding, (ii) unless prohibited by applicable law and regulations to vote on
behalf of the Holders of the Convertible Notes in any election of a trustee or
standby trustee in an arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or Person performing similar actions in
comparable proceedings, and (iii) to collect and receive any moneys or other
Property payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. Nothing contained herein
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Convertible Notes or the rights of any
Holder thereof, or to
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authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
In any proceedings brought by the Trustee (and any proceedings involving
the interpretation of this Indenture to which the Trustee shall be a party), the
Trustee shall be held to represent all the Holders of the Convertible Notes, and
it shall not be necessary to make any Holders of the Convertible Notes parties
to any such proceedings.
SECTION 6.09. Priorities. Any money collected by the Trustee pursuant to
----------
this Article VI shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (premium, if any), interest or Special Interest, if any, upon
presentation of the Convertible Notes and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 7.07
hereof;
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) or interest and Special Interest, if any, on the
Convertible Notes, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Convertible Notes for principal
(and premium, if any) and interest or Special Interest, if any, respectively;
and
THIRD: To the Company, the Guarantors, if any, or as a court of
competent jurisdiction shall decide.
The Trustee may fix a record date and payment date from any payment to
Holders pursuant to this Section 6.09. At least 15 days before such record
date, the Company shall mail to each Holder and the Trustee a notice that states
such record date, the payment date and amount to be paid. The Trustee may mail
such notice in the name and at the expense of the Company.
SECTION 6.10. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Convertible Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture and the
Convertible Note Guarantees, if any, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigation in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this
69
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10 percent in principal amount at Stated Maturity of the outstanding
Convertible Notes, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or interest or Special
Interest, if any, on any Convertible Note on or after its Stated Maturity.
SECTION 6.11. Waiver of Usury, Stay or Extension Laws. The Company and
---------------------------------------
each Guarantor, if any, (to the extent it may lawfully do so) shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture or the Convertible Note Guarantees, if any; and
the Company and each Guarantor, if any, (to the extent that it may lawfully do
so) hereby expressly waive all benefit or advantage of any such law, and shall
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 6.12. Trustee May Enforce Claims Without Possession of the
----------------------------------------------------
Convertible Notes. All rights of action and claims under this Indenture, the
-----------------
Convertible Note Guarantees, if any, or the Convertible Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Convertible
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgement shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Convertible Notes.
SECTION 6.13. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder of Convertible Notes has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 6.14. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided in Section 2.07 hereof, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law,
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be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.15. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Convertible Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article VI, by the Convertible Note
Guarantees, if any, or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred
-----------------
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and shall use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default: (i) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and (ii) in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided that in the case of any such
--------
certificates or opinions that by any provision of this Indenture are
specifically required to be furnished to the Trustee, the Trustee shall examine
such certificates and opinions to determine whether or not they conform to the
requirements of 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, provided that: (i) this paragraph (c) shall not limit the effect of
--------
paragraph (b) of this Section 7.01; (ii) 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 (iii) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.05 hereof.
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(d) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, 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.
(g) 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 and to the provisions of the Trust
Indenture Act.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
-----------------
document believed by it to be genuine and to have been signed or presented by
the proper Person. Except as provided in Section 7.01(b) hereof, the Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on any
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any such agent; provided that such agent was
--------
appointed with due care by the Trustee.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided that the Trustee's conduct does not constitute willful
--------
misconduct or negligence.
(e) The Trustee shall not be charged with knowledge of any Default or
Event of Default under Sections 6.01(c), 6.01(d), 6.01(e), 6.01(f), 6.01(g),
6.01(h) or 6.01(i) hereof (provided that the Trustee shall comply with the
automatic stay provisions of United States bankruptcy laws), of the identity of
any Restricted Subsidiary or of the existence of any Change of Control, Asset
Sale or Termination of Trading unless either (i) a Trust Officer shall have
actual knowledge thereof, or (ii) the Trustee shall have received notice thereof
in accordance with
72
Sections 4.12 and 14.02 hereof from the Company or in accordance with Section
14.02 hereof from any Holder of Convertible Notes.
(f) 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 in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
(h) The Trustee shall be under no obligation to exercise any of the
rights or powers vested by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
(i) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
As used throughout this Indenture, the term "actual knowledge" means the
actual fact or statement of knowing, without any duty to make any investigation
with regard thereto.
SECTION 7.03. Individual Rights of Trustee. The Trustee, any Paying Agent
----------------------------
or Registrar, in its individual or any other capacity, may become the owner or
pledgee of Convertible Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, Paying
Agent or Registrar hereunder, as the case may be; provided that the Trustee must
--------
in any event comply with Section 7.10 and Section 7.11 hereof.
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, the Convertible Note Guarantees, if any, or the Convertible Notes, it
shall not be accountable for the Company's use of the proceeds from the
Convertible Notes, and it shall not be responsible (a) for any statement of the
Company in this Indenture, including the recitals contained herein, or in any
document issued in connection with the sale of the
73
Convertible Notes or in the Convertible Notes other than the Trustee's
certificate of authentication or (b) for compliance by the Company with the
Registration Rights Agreement.
SECTION 7.05. Notice of Defaults. Within 90 days after the occurrence of
------------------
any Default hereunder with respect to the Convertible Notes, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided that, except in the case
--------
of a Default in the payment of the principal of (or premium, if any) or interest
or Special Interest, if any, on any Convertible Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Trust Officers
of the Trustee in good faith determine that the with holding of such notice is
in the interest of Holders.
SECTION 7.06. Preservation of Information; Reports by Trustee to Holders.
----------------------------------------------------------
(a) The Company shall furnish or cause to be furnished to the Trustee:
(i) semiannually, not less than 10 days prior to each Interest
Payment Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of the Record Date immediately
preceding such Interest Payment Date, and
(ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided that if and so long as the Trustee shall be the Registrar for the
--------
Convertible Notes, no such list need be furnished with respect to the
Convertible Notes.
(b) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.06(a) hereof and the
names and addresses of Holders received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.06(a) hereof upon receipt of a new list so furnished.
(c) Holders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Holders with respect to their rights under this
Indenture, the Convertible Note Guarantees, if any, or the Convertible Notes.
74
(d) Each Holder of Convertible Notes, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with this
Section 7.06, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under this Section 7.06.
(e) Within 60 days after May 15 of each year commencing with the year
1997, the Trustee shall transmit by mail to all Holders of Convertible Notes, a
brief report dated as of such May 15 if and to the extent required under Section
313(a) of the Trust Indenture Act.
(f) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(g) A copy of each report described in Section 7.06(e) hereof shall,
at the time of its transmission to Holders, be filed by the Trustee with each
securities exchange, if any, upon which the Convertible Notes are then listed,
with the Commission and also with the Company. The Company shall promptly
notify the Trustee of any securities exchange upon which the Convertible Notes
are listed.
SECTION 7.07 Compensation and Indemnity. The Company shall pay to the
--------------------------
Trustee from time to time reasonable compensation for its services. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents
and counsel. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust.
The Company shall indemnify the Trustee for, and hold it harmless against,
any and all loss, liability or expense (including reasonable attorneys' fees)
arising out of or incurred by it in connection with the acceptance or
administration of the trust created by this Indenture and the performance of its
duties hereunder, 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 any such claim and the
Trustee shall cooperate in the defense of such claim. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
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The Company need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own willful
misconduct or negligence.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Convertible Notes on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of, premium, if any, and interest (including Special
Interest, if any) on, particular Convertible Notes.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture and any Convertible Note Guarantees. Subject to any other rights
available to the Trustee under applicable bankruptcy law, when the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.01(g)
or Section 6.01(h) hereof, the expenses are intended to constitute expenses of
administration under bankruptcy law.
SECTION 7.08. Replacement of Trustee. (a) No resignation or removal of
----------------------
the Trustee and no appointment of a successor Trustee pursuant to this Article
VII shall become effective until the acceptance of appointment by the successor
Trustee under this Section 7.08.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 calendar days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in aggregate principal amount at Stated Maturity of the outstanding
Convertible Notes, delivered to the Trustee and to the Company.
(d) If at any time:
(i) The Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Convertible Note for at
least six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of Section 310(b) of the Trust Indenture
Act; or
(ii) The Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any such Holder; or
76
(iii) The Trustee shall become incapable of acting or a decree
or order for relief by a court having jurisdiction in the premises shall
have been entered in respect of the Trustee in an involuntary case under
the United States bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or similar law; or
a decree or order by a court having jurisdiction in the premises shall have
been entered for the appointment of a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trustee
or of its Property and assets or affairs, or any public officer shall take
charge or control of the Trustee or of its Property and assets or affairs
for the purpose of rehabilitation, conservation, winding up or liquidation;
or
(iv) The Trustee shall commence a voluntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or similar law or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or its Property and assets or affairs, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Convertible Notes, or (ii) subject to Section 6.10
hereof, any Holder who has been a bona fide Holder of a Convertible Note for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee for the Convertible Notes.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by the Holders of a majority in aggregate principal amount at Stated
Maturity of the outstanding Convertible Notes delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with this Section 7.08, become the
successor Trustee and to that extent replace any successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the
Company or the Holders and shall have accepted appointment in the manner
hereinafter provided, any
77
Holder that has been a bona fide Holder of a Convertible Note for at least six
months may, subject to Section 6.10 hereof, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such resignation, removal and appointment by first
class mail, postage prepaid, to the Holders as their names and addresses appear
in the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Convertible Notes and the address of its Corporate
Trust Office.
(g) In the event of an appointment hereunder of a successor Trustee,
each such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts, and
duties of the retiring Trustee but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all Property and money held by such former
Trustee hereunder, subject to its Lien, if any, provided for in Section 7.07
hereof.
(h) 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 Section 7.08(g) hereof.
(i) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article VII and under the Trust Indenture Act.
SECTION 7.09. Successor Trustee by Xxxxxx. Any corporation into which the
---------------------------
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder; provided that such corporation shall be otherwise
--------
qualified and eligible under this Article VII and under the Trust Indenture Act,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Convertible Notes
78
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Convertible Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Convertible Notes. In the event that any Convertible Notes
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Convertible Notes, in either
its own name or that of its predecessor Trustee, with the full force and effect
which this Indenture provides for the certificate of authentication of the
Trustee.
SECTION 7.10. Eligibility; Disqualification. There shall at all times be
-----------------------------
a Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws
of the United States of America, any State or Territory thereof or the
District of Columbia, authorized under such laws to exercise corporate
trust powers, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority, or
(ii) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized under
such laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees, in either case having a
combined capital and surplus of at least $100,000,000.
If such Person publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 7.10, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible to serve as Trustee hereunder
pursuant to the provisions of this Section 7.10, it shall resign immediately in
the manner and with the effect specified in this Article VII.
The Indenture shall always have a Trustee which satisfies the requirements
of Section 310(a)(1), (2), and (5) of the Trust Indenture Act. If the Trustee
has or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act. Nothing herein shall prevent the Trustee from filing with the Commission
the application referred to in
79
the penultimate paragraph of Section 310(b) of the Trust Indenture Act.
Neither the Company, any Guarantor, any Subsidiary nor any Affiliate of the
Company shall serve as Trustee hereunder.
SECTION 7.11. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act.
A Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
ARTICLE VIII
DEFEASANCE
SECTION 8.01. Company's Option to Effect Legal Defeasance or Covenant
-------------------------------------------------------
Defeasance. The Company may elect, at its option, at any time, to have Section
----------
8.02 or Section 8.03 hereof applied to the outstanding Convertible Notes (in
whole and not in part) upon compliance with the conditions set forth below in
this Article VIII, such election shall be evidenced by a Board Resolution
delivered to the Trustee.
SECTION 8.02. Legal Defeasance and Discharge. Upon the Company's exercise
------------------------------
of its option to have this Section 8.02 applied to the outstanding Convertible
Notes (in whole and not in part), the Company shall be deemed to have been
discharged from its obligations with respect to such Convertible Notes as
provided in this Section 8.02 on and after the date the conditions set forth in
Section 8.04 hereof are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Convertible Notes and the
Company and the Guarantors, if any, shall be deemed to have satisfied all their
other obligations under such Convertible Notes, the Convertible Note Guarantees,
if any, and this Indenture (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder:
(a) the rights of Holders of such Convertible Notes to receive,
solely from the trust fund described in Section 8.04 hereof and as more fully
set forth in such Section 8.04 payments in respect of the principal of and any
premium and interest (and Special Interest, if any) on such Convertible Notes
when payments are due,
(b) the Company's obligations with respect to such Convertible Notes
under Sections 2.06, 2.07, 2.09, 4.02, 4.03, 4.04 and 11.03 hereof,
80
(c) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture,
(d) Article III hereof,
(e) this Article VIII, and
(f) Article XII hereof.
Subject to compliance with this Article VIII, the Company may exercise
its option to have this Section 8.02 applied to the outstanding Convertible
Notes (in whole and not in part) notwithstanding the prior exercise of its
option to have Section 8.03 hereof applied to such Convertible Notes.
SECTION 8.03. Covenant Defeasance. Upon the Company's exercise of its
-------------------
option to have this Section 8.03 applied to the outstanding Convertible Notes
(in whole and not in part), (i) the Company shall be released from its
obligations under Sections 4.05 through 4.11, inclusive, Sections 4.13 through
4.15, inclusive, and any covenant added to this Indenture subsequent to the
Issue Date pursuant to Section 9.01 hereof, (ii) the occurrence of any event
specified in Section 6.01(c) or Section 6.01(d) hereof, with respect to any of
Sections 4.05 through 4.11, inclusive, Sections 4.13 through 4.15, inclusive,
and any covenant added to this Indenture subsequent to the Issue Date pursuant
to Section 9.01 hereof, shall be deemed not to be or result in an Event of
Default, in each case with respect to such Convertible Notes as provided in this
Section 8.03 on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that, with respect to such Convertible
Notes, the Company and the Guarantors, if any, may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified Section (to extent so specified in the case of Sections
6.01(c) and 6.01(d) hereof), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document; but the
remainder of this Indenture, the Convertible Note Guarantees, if any, and such
Convertible Notes shall be unaffected thereby.
SECTION 8.04. Conditions to Defeasance Covenant Defeasance. The
--------------------------------------------
following shall be the conditions to the application of Section 8.02 or Section
8.03 hereof to the outstanding Convertible Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to the benefits of the Holders of such Convertible Notes, (i) money in an
amount, or
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(ii) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an
amount, or (iii) a combination thereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal of and any installment of interest
(including Special Interest, if any) on, such Convertible Notes at the Stated
Maturity thereof, in accordance with the terms of this Indenture and such
Convertible Notes.
(b) In the event of an election to have Section 8.02 hereof apply to
the outstanding Convertible Notes, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii)
since the date of this Indenture, there has been a change in the applicable
Federal income tax law, in either case (i) or (ii) to the effect that, and based
thereon such opinion shall confirm that, the Holders of such Convertible Notes
will not recognize gain or loss for Federal income tax purposes as a result of
the deposit, Defeasance and discharge to be effected with respect to such
Convertible Notes and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.
(c) In the event of an election to have Section 8.03 hereof apply to
the outstanding Convertible Notes, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such Convertible
Notes will not recognize gain or loss for Federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect to
such Convertible Notes and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur.
(d) No Default or Event of Default with respect to the outstanding
Convertible Notes shall have occurred and be continuing at the time of such
deposit after giving effect thereto and no Default or Event of Default under
Section 6.01(g) or 6.01(h) shall have occurred and be continuing on or prior to
the 91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 91st day).
(e) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming for the purpose of
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this clause (e) that all Convertible Notes are in default within the meaning of
such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company or any Guarantor, if any, is a party or by which
it is bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 8.05. Deposited Money and U.S. Government Obligations to be Held
-----------------------------------------------------------
in Trust; Miscellaneous Provisions. All money and U.S. Government Obligations
----------------------------------
(including the proceeds thereof) deposited with the Trustee pursuant to Section
8.04 hereof in respect of the outstanding Convertible Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Convertible Notes and this Indenture, to the payment, either directly or through
any such Paying Agent as the Trustee may determine, to the Holders of such
Convertible Notes, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law. The Company
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 8.04 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of outstanding Convertible Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Order any
money or U.S. Government Obligations held by it as provided in Section 8.04
hereof which, in the opinion of a nationally recognized firm of independent
public accounts expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Convertible Notes.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any money in accordance with this Article VIII with respect to any
Convertible Notes by reason of any order or judgment of any court or
governmental authority
83
enjoining, restraining or otherwise prohibiting such application then the
obligations under this Indenture, the Convertible Note Guarantees, if any, and
such Convertible Notes from which the Company and any Guarantor has been
discharged or released pursuant to Section 8.02 or 8.03 hereof shall be
revived and reinstated as though no deposit has occurred pursuant to this
Article VIII with respect to such Convertible Notes, until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant
to Section 8.05 hereof with respect to such Convertible Notes in accordance with
this Article VIII; provided that if the Company or any Guarantor makes any
payment of principal of or any premium, interest or Special Interest, if
any, on any such Convertible Note following such reinstatement of its
obligations, the Company or such Guarantor, as the case may be, shall be
subrogated to the rights (if any) of the Holders of such Convertible Notes to
receive such payment from the money so held in trust.
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders. The Company, the Guarantors, if
--------------------------
any, and the Trustee may, at any time, and from time to time, without notice to
or consent of any Holders of Convertible Notes, enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the Company or a
Guarantor, as applicable, and the assumption by such successor of the covenants
and obligations of the Company in this Indenture and the Convertible Notes or
such Guarantor contained in its Convertible Note Guarantee and this Indenture;
or
(b) to add to the covenants of the Company, for the benefit of the
Holders of all of the Convertible Notes, or to surrender any right or power
herein conferred upon the Company or the Guarantors, if any, by this Indenture;
or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Convertible Notes in addition to or
in place of Certificated Convertible Notes; or
(e) to evidence and provide for the acceptance of appointment
hereunder of a successor Xxxxxxx; or
(f) to cure any ambiguity herein, or to correct or supplement any
provision hereof which may be inconsistent with any other provision hereof or to
add any other provisions with
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respect to matters or questions arising under this Indenture; provided that such
--------
actions shall not adversely affect the interests of the Holders of Convertible
Notes in any material respect; or
(g) to provide for Restricted Subsidiaries to become Guarantors
pursuant to Section 4.09 hereof and Article X hereof; or
(h) to secure the Convertible Notes; or
(i) to make provisions with respect to the conversion rights of
Holders pursuant to the requirements of Section 12.04 or Section 12.11 hereof;
or
(j) to comply with the requirements of the Commission in order to
effect or maintain qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.02. With Consent of Holders. With the consent of the Holders of
-----------------------
not less than a majority in aggregate principal amount of the outstanding
Convertible Notes, by Act of said Holders delivered to the Company, the
Guarantors, if any, and the Trustee, the Company, the Guarantors, if any, and
the Trustee may enter into one or more indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modify modifying in any manner the
rights of the Holders; provided that no such supplemental indenture shall,
--------
without the consent of the Holder of each outstanding Convertible Note:
(a) change the Stated Maturity of the principal of, or any
installment of interest or Special Interest, if any, on, any Convertible Note,
or reduce the Accreted Value or principal amount at Stated Maturity thereof (or
any premium, if any), or the interest (including Special Interest, if any)
thereon, that would be due and payable upon Stated Maturity thereof, or reduce
the Default Amount that would be due and payable upon Stated Maturity thereof,
or change the place of payment where, or the coin or currency in which, any
Convertible Note or any premium or interest (including Special Interest, if any)
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof; or
(b) reduce the percentage in principal amount, of the outstanding
Convertible Notes, the consent of whose Holders is necessary for any such
supplemental indenture or required for any waiver of compliance with certain
provisions of this Indenture or the Convertible Note Guarantees, if any, or
Defaults hereunder; or
(c) modify any of the provisions of Section 6.04 hereof, except to
increase any percentage set forth therein or to provide that certain other
provisions of this Indenture cannot be
85
modified or waived without the consent of the Holder of each outstanding
Convertible Note affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate, the
Convertible Notes or any Convertible Note Guarantees to any other Indebtedness
other than Senior Indebtedness; or
(e) modify any of the provisions of this Section 9.02, except to
increase any percentage set forth herein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each outstanding Convertible Note affected thereby; or
(f) make any change in the provisions of Article XI, which would
adversely affect the Holders of the Convertible Notes; or
(g) adversely affect the rights of the Holders of the Convertible
Notes to convert such Convertible Notes; or
(h) modify the obligations of the Company to make offers to purchase
Convertible Notes upon a Change of Control or from the proceeds of Asset Sales
or upon a Termination of Trading;
provided that the Holders of not less than 75 percent in aggregate principal
amount at Stated Maturity of the outstanding Convertible Notes may, on behalf of
the Holders of all such Convertible Notes, waive any right to require the
Company to issue to the Holders of the Convertible Notes either Convertible Note
Contingent Warrants or Additional Warrants.
It shall not be necessary for any Act of Holders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Effect of Supplemental Indentures. Upon the execution of
---------------------------------
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Convertible Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 9.04. Compliance with Trust Indenture Act. Every amendment or
-----------------------------------
supplement to this Indenture or the Convertible Notes shall comply with the
Trust Indenture Act as then in effect.
SECTION 9.05. Revocation and Effect of Consents and Waivers. A consent
---------------------------------------------
to an amendment, supplement or a waiver by a
86
Holder of a Convertible Note shall bind the Holder and every subsequent Holder
of such Convertible Note or portion of such Convertible Note that evidences the
same debt as the consenting Holder's Convertible Note, even if notation of the
consent or waiver is not made on such Convertible Note; provided that any such
--------
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Convertible Note or portion of such Convertible Note if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
become effective. After an amendment, supplement or waiver becomes effective
pursuant to this Article IX, it shall bind every Holder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
SECTION 9.06. Notation on or Exchange of Convertible Notes. If a
--------------------------------------------
supplemental indenture changes the terms of a Convertible Note, the Trustee may
require the Holder thereof to deliver such Convertible Note to the Trustee. The
Trustee may place an appropriate notation on such Convertible Note regarding the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for such Convertible Note shall
issue and the Trustee shall authenticate a new Convertible Note that reflects
the changed terms. Failure to make the appropriate notation or to issue a new
Convertible Note shall not affect the validity of such amendment of supplement.
SECTION 9.07. Trustee to Execute Supplemental Indentures. The Trustee
------------------------------------------
shall execute any supplemental indenture authorized pursuant to this Article IX
if such supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but shall
not be required to, execute such supplemental indenture. In executing any
supplemental indenture, the Trustee shall be entitled to received indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01
hereof) shall be fully protected in relying upon, an Officers' Certificate
(which need only cover the matters set forth in clause (a) below) and an Opinion
of Counsel provided by the Company stating that:
87
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company and the Guarantors, if any, have all necessary
corporate power and authority to execute and deliver the supplemental indenture
and that the execution, delivery and performance of such supplemental indenture
has been duly authorized by all necessary corporate action of the Company and
the Guarantors, if any;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or (iii)
any material agreement or instrument to which the Company or any Guarantor is
subject;
(d) to the best knowledge and belief of legal counsel writing such
Opinion of Counsel, the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of any of the terms,
conditions or provisions of (i) any law or regulation applicable to the Company
or any Guarantor, or (ii) any material order, writ, injunction or decree of any
court or governmental instrumentality applicable to the Company or any
Guarantor;
(e) such supplemental indenture has been duly and validly executed and
delivered by the Company and the Guarantors, if any, and this Indenture
together with such supplemental indenture constitutes a legal, valid and binding
obligation of the Company and the Guarantors, if any, enforceable against the
Company and the Guarantors, as applicable, in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles; and
(f) this Indenture together with such amendment or supplement complies
with the Trust Indenture Act.
SECTION 9.08 Solicitation of Consents. Neither the Company nor any of
------------------------
its Subsidiaries nor any of their Affiliates shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fees or
otherwise, to any Holders of any Convertible Notes for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of this
Indenture, the Convertible Note Guarantees, if any, or the Convertible Notes,
unless such consideration is offered to be paid or agreed to be paid to all
Holders of the Convertible Notes that consent, waive or agree to amend in the
88
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
CONVERTIBLE NOTE GUARANTEES
SECTION 10.01 Convertible Note Guarantees (a) Subject to the provisions
---------------------------
of this Article X, each Restricted Subsidiary of the Company, if any, which in
accordance with Section 4.09 hereof is required in the future to become a
Guarantor and to guarantee the obligations of the Company and the Guarantors
under the Convertible Notes and the Convertible Note Guarantees, upon execution
of a supplemental indenture, hereby jointly and severally, irrevocably and
unconditionally guarantees to the Trustee and to each Holder of a Convertible
Note authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture, the Convertible Notes, or the obligations of
the Company and any other Guarantors, under this Indenture that: (i) the
principal of, premium, if any, and any interest, and Special Interest, if any,
on the Convertible Notes (including, without limitation, any interest that
accrues after the filing of a proceeding of the type described in Sections
6.1(g) and (h)) and any fees, expenses and other amounts owing under this
Indenture will be duly and punctually paid in full when due, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, exercise of a repurchase right upon a Termination of Trading,
purchase or otherwise, and interest on the overdue principal and (to the extent
permitted by law) interest, if any, and Special Interest, if any, on the
Convertible Notes and any other amounts due in respect of the Convertible Notes,
if lawful, and all other obligations of the Company and the Guarantors, if any,
to the Holders of the Convertible Notes under this Indenture and the Convertible
Notes, whether now or hereafter existing, will be promptly paid in full or
performed, all strictly in accordance with the terms hereof, of the Convertible
Notes and of the Convertible Note Guarantees, if any; and (ii) in case of any
extension of time of payment or renewal of any Convertible Notes or any of such
other obligations the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, exercise of a repurchase right upon a Termination of Trading,
purchase or otherwise. If payment is not made when due of any amount so
guaranteed for whatever reason, each Guarantor shall be jointly and severally
obligated to pay the same individually whether or not such failure to pay has
become an Event of Default which could cause acceleration pursuant to Section
6.02. Each Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection. An Event of Default under this Indenture or the
Convertible Notes shall
89
constitute an Event of Default under this Convertible Note Guarantee, and shall
entitle the Holders to accelerate the obligations of each Guarantor hereunder in
the same manner and to the same extent as the obligations of the Company. This
Convertible Note Guarantee is intended to be superior to or pari passu in right
---- -----
of payment with all Indebtedness of the Guarantors, other than the Senior Note
Guarantees, if any, of such Guarantors, and each Guarantor's obligations are
independent of any obligation of the Company or any other Guarantor.
(b) Each Guarantor hereby agrees that its obligations hereunder shall
be joint and several, absolute, irrevocable and unconditional, irrespective of
the validity, regularity or enforceability of the Convertible Notes, this
Indenture, or any other document relating thereto, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, any release of any other Guarantor, the recovery
of any judgment against the Company or any other Person, any action to enforce
the same or any other circumstance (including, without limitation, any statute
of limitations) which might otherwise constitute a legal or equitable discharge
or defense of a Guarantor. Each Guarantor hereby waives promptness, diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company or any other Person, any right to
require a proceeding first against the Company or any other Person, protest
notice and all demands whatsoever and covenants that its Convertible Note
Guarantee will not be discharged except by complete performance of the
obligations contained in the Convertible Notes, this Indenture and this
Convertible Note Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or to any Guarantor, or any
receiver, trustee, assignee, liquidator or similar official under any
applicable bankruptcy or insolvency or other similar law any amount paid by the
Company or such Guarantor to the Trustee or such Holder, this Convertible Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
(c) Until such time as the Convertible Notes and the other obligations
of the Company guaranteed hereby have been satisfied in full, each Guarantor
hereby irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Convertible Note Guarantee, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Holders or the Trustee
against the Company or any other Guarantor, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from the Company or any other
90
Guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or right.
If any amount shall be paid to such Guarantor in violation of the preceding
sentence at any time prior to the later of the payments in full of the
Convertible Notes and all other amounts payable under this Indenture, this
Convertible Note Guarantee and the Stated Maturity of the Convertible Notes,
such amount shall be held in trust for the benefit of the Holders and the
Trustee and shall forthwith be paid to the Trustee to be credited and applied to
the Convertible Notes and all other amounts payable under this Convertible Note
Guarantee, whether matured or unmatured, in accordance with the terms of this
Indenture, or to be held as collateral for any obligations or other amounts
payable under this Convertible Note Guarantee thereafter arising. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 10.01(c) is knowingly made in contemplation of such
benefits. Each Guarantor further agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) subject to this Article
X, the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article VI for the purposes of this Convertible Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations guaranteed hereby as provided in
Article VI, such obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of this Convertible
Note Guarantee.
(d) A Guarantor that makes a distribution or payment under a
Convertible Note Guarantee shall be entitled to contribution from each other
Guarantor in a pro rata amount based on the Adjusted Net Assets of each such
other Guarantor for all payments, damages and expenses incurred by that
Guarantor in discharging the Company's obligations with respect to the
Convertible Notes and this Indenture, or any other Guarantor with respect to its
Convertible Note Guarantee, so long as the exercise of such right does not
impair the rights of the Holders of the Convertible Notes under the Convertible
Note Guarantees.
(e) The Company shall cause each Restricted Subsidiary which, after
the date of this Indenture, is required pursuant to Section 4.10(a) hereof to
become a Guarantor to (a) execute and deliver to the Trustee a supplemental
indenture in form and substance reasonably satisfactory to the Trustee which
subjects such Restricted Subsidiary to the provisions of this Indenture as a
Guarantor, and (b) deliver to the Trustee an Opinion of Counsel to the effect
that such supplemental indenture has been duly authorized and executed by such
Person and constitutes the legal, valid, binding and enforceable obligation of
such Person (subject to such customary exceptions concerning debtor's rights
91
and equitable principles as may be acceptable to the Trustee in its reasonable
discretion) and containing such other matters as the Trustee may reasonably
request.
SECTION 10.02 Limitation of Guarantor's Liability. Each Guarantor and, by
-----------------------------------
its acceptance hereof, each beneficiary hereof, hereby confirms that it is its
intention that the Convertible Note Guarantee by such Guarantor not constitute a
fraudulent transfer or conveyance for purposes of the United States Bankruptcy
Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act, or any other bankruptcy, receivership, insolvency, liquidation or other
similar legislation or legal principles under any applicable foreign law to the
extent applicable to any Convertible Note Guarantees. To effectuate the
foregoing intention, each such Guarantor hereby irrevocably agrees that the
obligation of such Guarantor under its Convertible Note Guarantee under this
Article X shall be limited to the lesser of (a) an amount equal to such
Guarantor's Adjusted Net Assets as of the date such Guarantee is executed and
delivered or (b) the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws and after giving effect to any collections from, rights
to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this
Article X result in the obligations of such Guarantor in respect of such maximum
amount not constituting a fraudulent conveyance or fraudulent transfer or not
otherwise being void, voidable or unenforceable under any bankruptcy,
reorganization, receivership, insolvency, liquidation or other similar
legislation or legal principles under any applicable foreign law.
SECTION 10.03 Execution and Delivery of Convertible Note Guarantees. To
-----------------------------------------------------
further evidence its Convertible Note Guarantee set forth in Section 10.01
hereof, each Guarantor hereby agrees that a notation of such Convertible Note
Guarantee may be, but is not required to be, endorsed on each Convertible Note
authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of an authorized officer of such Guarantor. Each Guarantor
hereby agrees that its Convertible Note Guarantee set forth in Section 10.01
hereof shall remain in full force and effect notwithstanding any failure to
endorse on each Convertible Note a notation of such Convertible Note Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Convertible Note no longer holds that office at the time the Trustee
authenticates such Convertible Note or at any time thereafter, such Guarantor's
Convertible Note Guarantee of such Convertible Note shall be valid nevertheless.
The delivery of any Convertible Note by the Trustee, after the authentication
thereof hereunder, whether or not endorsed with a notation of the Convertible
Note Guarantee, shall constitute due
92
delivery of any Convertible Note Guarantee set forth in this Indenture on behalf
of such Guarantor.
SECTION 10.04 When a Guarantor May Merge, etc. No Guarantor shall
-------------------------------
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person) another corporation, Person or entity whether or not
affiliated with such Guarantor (but excluding any consolidation or merger if the
surviving corporation is no longer a Subsidiary) unless (i) subject to the
provisions of Section 10.05 hereof, the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee under the Convertible Notes and this
Indenture and (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists. In connection with any such consolidation or
merger, the Trustee shall be entitled to receive an Officers' Certificate and an
Opinion of Counsel stating that such consolidation or merger is permitted by
this Section 10.04.
SECTION 10.05 Release of a Guarantor. (a) Upon the sale or other transfer
----------------------
of all of the Capital Stock of a Guarantor to any Person that is not an
Affiliate of the Company in compliance with the terms of this Indenture
(including, without limitation, Section 4.08 hereof), such Guarantor shall be
deemed automatically and unconditionally released and discharged from all
obligations under this Indenture without any further action required on the
part of the Trustee or any Holder; provided that the Net Cash Proceeds of such
--------
sale or other disposition are applied in accordance with Section 4.08 of this
Indenture as if such sale or disposition were an Asset Sale and in accordance
with the applicable provisions of this Indenture. The Trustee shall deliver an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to the compliance with this Section 10.05(a) and the other
applicable provisions of this Indenture.
(b) Notwithstanding the foregoing, any Convertible Note Guarantee by a
Restricted Subsidiary shall be automatically and unconditionally released and
discharged upon the release or discharge of the guarantee of Guaranteed
Indebtedness which resulted in the creation of such Convertible Note Guarantee
pursuant to Section 4.09 hereof, except a discharge or release by, or as a
result of, payment under such guarantee. The Trustee shall deliver an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to compliance with this Section 10.05(b) and the other
applicable provisions of this Indenture.
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ARTICLE XI
SUBORDINATION OF CONVERTIBLE NOTES
AND CONVERTIBLE NOTE GUARANTEES
SECTION 11.01 Convertible Notes and Convertible Note Guarantees
-------------------------------------------------
Subordinated to Senior Indebtedness. The Company and the Guarantors covenant
-----------------------------------
and agree, and each Holder of a Convertible Note, by acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth and except as otherwise set forth in this Article, the Indebtedness
represented by the Convertible Notes and this Indenture (including the
Convertible Note Guarantees) and the payment of the principal of and premium, if
any, and interest (including Special Interest, if any) on each and all of the
Convertible Notes and of any amounts due in respect of any Convertible Notes and
this Indenture (including the Convertible Note Guarantees and any payments
thereon made or to be made by a Guarantor under its Convertible Note Guarantee),
are hereby expressly made subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness.
SECTION 11.02 Payment Over of Proceeds Upon Dissolution, etc. In the
----------------------------------------------
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding,
relative to the Company or other Obligor or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company or any other Obligor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Company or any other Obligor, then and in any such
event the holders of Senior Indebtedness shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior
Indebtedness, or provision shall be made for such payment in money or money's
worth, before the Holders of the Convertible Notes are entitled to receive any
payment or distribution of any kind or character, whether in cash, property or
securities, on account of principal of or premium, if any, or interest
(including Special Interest, if any) on the Convertible Notes and on account of
any amounts due in respect of any Convertible Notes and any payment thereon made
or to be made by a Guarantor under its Convertible Note Guarantee, and to that
end until the Senior Indebtedness is paid in full the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company or any other Obligor being
94
subordinated to the payment of the Convertible Notes or the Convertible Note
Guarantees, as applicable, which may be payable or deliverable in respect of
the Convertible Notes or the Convertible Note Guarantees, as applicable, in any
such case, proceeding, dissolution, liquidation or other winding up, assignment
for the benefit of creditors or other marshalling of assets and liabilities of
the Company or any other Obligor.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Convertible Note shall have received
any payment or distribution of assets of the Company or any other Obligor of any
kind or character, whether in cash, property or securities, prohibited by the
foregoing, including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of the Company or
of a Guarantor being subordinated to the payment of the Convertible Notes or a
Convertible Note Guarantee, as applicable, before all Senior Indebtedness is
paid in full or payment thereof provided for, and if such fact shall, at or
prior to the time of such payment or distribution, have been made known to a
Trust Officer of the Trustee in writing or such Holder, as the case may be, then
and in such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of the Company or any other Guarantor for application to the payment of
all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include securities of the Company or any other Guarantor
or other Person as reorganized or readjusted, or securities of the Company or
any other Guarantor or any other Person which are Capital Stock or subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Convertible Notes or the Convertible Note Guarantees are so subordinated as
provided in this Article. The consolidation of the Company with, or the merger
of the Company into, another Person or the liquidation or dissolution of the
Company following the conveyance or transfer of its Properties and assets
substantially as an entirety to another person upon the terms and conditions set
forth in Article V shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section if the Person
formed by such consolidation or into which the Company is merged or which
acquires by conveyance or transfer such properties and assets substantially as
an entirety, as the case may be, shall, as part of such consolidation, merger,
conveyance or transfer, comply
95
with the conditions set forth in Article V. Similarly, the consolidation of a
Guarantor with, or the merger of a Guarantor into, another Person or the
liquidation or dissolution of a Guarantor to the extent permitted by this
Indenture shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of a Guarantor for the purposes of this Section.
SECTION 11.03 Prior Payment to Senior Indebtedness upon Acceleration of
---------------------------------------------------------
Convertible Notes. In the event that any Convertible Notes are declared due
-----------------
and payable before their Stated Maturity, then and in such event the holders of
Senior Indebtedness outstanding at the time such Convertible Notes so become
due and payable shall be entitled to receive payment in full in cash of all
amounts due on or in respect of such Senior Indebtedness before the Holders of
the Convertible Notes are entitled to receive any payment (including any payment
which may be payable by reason of the payment of any other indebtedness of the
Company or any other Obligor being subordinated to the payment of the
Convertible Notes or the Convertible Note Guarantees, as applicable) by the
Company or any other Obligor on account of the principal of or premium, if any,
or interest (including Special Interest, if any), on or other amounts due in
respect of, the Convertible Notes or the Convertible Note Guarantees, as
applicable, or on account of the purchase or other acquisition of Convertible
Notes, except for payments in Capital Stock or securities which are subordinated
in right of payment to all Senior Indebtedness, which may at the time be
outstanding, to substantially the same extent as, or to a greater extent than,
the Convertible Notes or the Convertible Note Guarantees are so subordinated, as
provided in this Article.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Convertible Note prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to a Trust Officer of the Trustee
in writing, or such Holder, as the case may be, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 11.02 would be applicable.
SECTION 11.04 No Payment When Senior Indebtedness in Default. (a) In the
----------------------------------------------
event (i) and during the continuation of any default in the payment of principal
of, premium, if any, on, interest, if any, (including Special Interest, if any)
on, or other amounts due in respect of, any Senior Indebtedness, whether at the
date of a required payment, maturity, upon mandatory prepayment, redemption or
otherwise, or (ii) that any event of default with respect to any Senior
Indebtedness shall have occurred and be continuing and shall have resulted in
such Senior
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Indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable unless and until such event
of default shall have been cured or waived in writing or shall have ceased to
exist and such acceleration shall have been rescinded or annulled or if any
judicial proceeding is pending with respect to such event of default with
respect to the Senior Indebtedness, then no payment (including any payment which
may be payable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Convertible Notes) shall be made by the
Company on account of the principal of, premium, if any, interest (including
Special Interest, if any) on, or other amounts due in respect of, the
Convertible Notes or on account of the purchase, redemption or other acquisition
of Convertible Notes, except for payments in Capital Stock or securities which
are subordinated in right of payment to all Senior Indebtedness, which may at
the time be outstanding, to substantially the same extent as, or to a greater
extent than, the Convertible Notes or the Convertible Note Guarantees are so
subordinated, as provided in this Article.
(b) In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Convertible Note
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to a Trust Officer
of the Trustee in writing or to such Holder, as the case may be, then and in
such event such payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 11.02 would be applicable.
SECTION 11.05 Payment Permitted If No Default. Nothing contained in this
-------------------------------
Article or elsewhere in this Indenture or in any of the Convertible Notes shall
prevent (a) the Company or the Guarantors, at any time except during the
pendency of any case, proceeding, dissolution, liquidation, or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 11.02 or under the conditions
described in Section 11.03 or 11.04, from making payments at any time of
principal of and premium, if any, or interest (including Special Interest, if
any) on the Convertible Notes, or other amounts due in respect of the
Convertible Notes, or the Convertible Note Guarantees, as applicable, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of, premium, if any, or interest
(including Special Interest, if any) on, or other amounts due in respect of, the
Convertible Notes or retention of such payment by the Holders, if, at the time
of such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
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SECTION 11.06 Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the prior payment in full of all amounts due on or in respect of
Senior Indebtedness, the Holders of the Convertible Notes shall be subrogated to
the extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of, premium, if any, on, interest (including Special Interest, if any)
on, and any other amounts due in respect of, the Convertible Notes shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Convertible Notes or the Trustee would be entitled except for
the provisions of this Article, and no payments over pursuant to the provisions
of this Article to the holders of Senior Indebtedness by Holders of the
Convertible Notes or the Trustee, shall, as among the Company and any Guarantor,
as the case may be, its respective creditors other than holders of Senior
Indebtedness and the Holders of the Convertible Notes, be deemed to be a
payment or distribution by the Company or any Guarantor, as applicable, to or on
account of the Senior Indebtedness.
SECTION 11.07 Provisions Solely to Define Relative Rights. The provisions
-------------------------------------------
of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of the Convertible Notes on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Convertible Notes is intended
to or shall (a) impair, as among the Company or any Guarantor, its respective
creditors other than holders of Senior Indebtedness and the Holders of the
Convertible Notes, the obligation of the Company or such Guarantor, which is
absolute and unconditional, to pay to the Holders of the Convertible Notes, the
principal of, premium, if any, on, interest (including Special Interest, if any)
on, and any other amounts due in respect of, the Convertible Notes or in respect
of the Convertible Note Guarantees, as applicable, as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company or the Guarantors, if any, of the Holders of
the Convertible Notes and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Convertible
Notes from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 11.08 Trustee to Effectuate Subordination. Each Holder of a
-----------------------------------
Convertible Note by his acceptance thereof authorizes
98
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided for in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 11.09 No Waiver of Subordination Provisions. No right of any
-------------------------------------
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company or any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with. No provision of the subordination provisions contained
in this Article may be amended without the consent of a majority in principal
amount at Stated Maturity of Senior Indebtedness in the manner provided for in
the Senior Note Indenture.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Convertible Notes,
without incurring responsibility to the Holders of the Convertible Notes and
without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Convertible Notes to be holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment, of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company or any Guarantor and any other Person.
SECTION 11.10 Notice to Trustee. The Company and each Guarantor shall
-----------------
give prompt written notice to the Trustee of any fact known to the Company or
such Guarantor which would prohibit the making of any payment to or by the
Trustee in respect of the Convertible Notes or the Convertible Note Guarantees,
as applicable. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Convertible Notes or the Convertible Note
Guarantees unless and until a Trust Officer of the Trustee shall have received
written notice thereof from the Company, any Guarantor or a holder of Senior
Indebtedness or from any trustee
99
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 7.01, shall be entitled in all respects to
assume that no such facts exist; provided that if a Trust Officer of the Trustee
--------
shall not have received the notice provided for in this Section at least three
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of, premium, if any, or interest (including Special Interest, if
any) on, and any other amounts due in respect of any Convertible Note), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.
Subject to the provisions of Section 7.01, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee therefor) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee
therefor). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 11.11 Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets of the Company referred to in
-----
this Article, the Trustee, subject to the provisions of Section 7.01, and the
Holders of the Convertible Notes shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered in writing to the Trustee or to the Holders of Convertible Notes, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article.
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SECTION 11.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of Convertible Notes or
to the Company or to any other Person cash, property or securities to which
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 11.13 Rights of Trustee as Holder of Senior Indebtedness;
---------------------------------------------------
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
--------------------------------
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payment to, the
Trustee under or pursuant to Section 7.07.
SECTION 11.14 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 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 in addition to
or in place of the Trustee; provided that Section 11.13 shall not apply to the
--------
Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.
SECTION 11.15 Certain Conversions Deemed Payment. For the purposes of
----------------------------------
this Article only, (a) the issuance and delivery of junior securities upon
conversion of Convertible Notes in accordance with Article XII shall not be
deemed to constitute a payment or distribution on account of the principal of,
premium, if any, on, interest (including Special Interest, if any) on, or other
amounts due in respect of, Convertible Notes or on account of the purchase or
other acquisition of Convertible Notes and (b) the payment, issuance or delivery
of cash, property or securities (other than junior securities) upon conversion
of a Convertible Note shall be deemed to constitute payment on account of the
principal of such Convertible Note. For the purposes of this Section, the term
"junior securities" means (i) shares of any class of Capital Stock of the
Company and (ii) securities of the Company or a Guarantor which are subordinated
in right of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same extent
as, or to a greater extent than, the Convertible Notes are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Convertible Notes or the respective Convertible Note
101
Guarantees is intended to or shall impair, as among the Company, its respective
creditors other than holders of Senior Indebtedness and the Holders of the
Convertible Notes, the right, which is absolute and unconditional, of the Holder
of any Convertible Note to convert such Convertible Notes in accordance with and
subject to the provisions of Article XII.
ARTICLE XII
CONVERSION OF CONVERTIBLE NOTES
SECTION 12.01 Conversion Privilege and Conversion Price. Subject to and
-----------------------------------------
upon compliance with the provisions of this Article, at the option of the Holder
thereof, any Convertible Note or any portion of the principal amount thereof
which equals $1,000 or any integral multiple thereof may be converted at any
time on or after 9:00 a.m. New York City time on November 27, 1996 at the
Accreted Value thereof (or of such portion thereof) as of the date of conversion
thereof, if such date of conversion is prior to September 30, 1999, or the
principal amount at Stated Maturity thereof (or of such portion thereof) if the
date of conversion thereof is on or after September 30, 1999, into fully paid
and nonassessable shares (calculated as to each conversion to the nearest 1/100
of a share) of Common Stock, at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
expire at the close of business on the Business Day next preceding the Stated
Maturity of principal. In case a Convertible Note or portion thereof is called
for redemption, such conversion right in respect of the Convertible Note or
portion so called shall expire at the close of business on the Business Day next
preceding the Redemption Date, unless the Company defaults in making the payment
due upon redemption.
The price at which Common Stock of the Company shall be delivered upon
conversion (herein called the "Conversion Price") shall be equal to $134.08 per
share.
In the event that the Company consummates a sale or sales of any class of
Capital Stock for an amount, individually or in the aggregate, in excess of
$5,000,000 (each, a "Reset Event") and at the time of such sale or sales, the
equity valuation of the Company based upon such sale or sales (as evidenced by a
Board Resolution delivered to the Trustee) is less than $122,500,000, then on
the date of the consummation of any such Reset Event (the "Reset Date"), the
Conversion Price shall be adjusted (the "Conversion Reset") to equal 115 percent
of the price (the "Conversion Reset Price") at which such sale or sales were
consummated, provided, that if such sale or sales are consummated more than nine
months after a Qualified Public Offering at a total equity valuation of the
Company of at least $122,500,000, then no Conversion Reset will be required. In
the event that the
Conversion Price before such calculation shall be equal to or
less than the
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Conversion Reset Price, then no additional adjustment to the Conversion Price
shall be made. In addition, if the Company does not achieve consolidated total
revenues (calculated in accordance with GAAP) of at least $8,500,000 for the
period from June 1, 1997 through June 30, 1997 and if, by September 30, 1997,
the Company has not either (i) consummated a Qualified Public Offering or (ii)
been sold pursuant to a Qualified Sale of the Company, the Company shall by such
date be required to either (A) obtain $10,000,000 of Additional Invested Equity
or (B) (i) grant to the Holders of the Convertible Notes the right to purchase
for $10,000,000 additional convertible securities of the Company convertible
into 16 2/3 percent of the Common Stock on a fully diluted basis (as used herein
"fully diluted" does not include any securities, including Common Stock, issued
in any transaction described in clauses (i) through (xi) of Section 15(d)(ii) of
the Warrant Agreement) after giving effect to the issuance of such additional
convertible securities, (ii) grant to the Holders of the Convertible Notes (the
Additional Warrants) on a fully diluted basis (as used herein, the term "fully
diluted" does not include any securities, including Common Stock, issued in any
transaction described in clauses (i) through (xi) of Section 15(d)(ii) of the
Warrant Agreement) after giving effect to issuance of such Additional Warrants,
and (iii) adjust the Conversion Price for the Convertible Notes by dividing the
Conversion Price in effect immediately prior to the issuance of such convertible
securities and warrants by 1.15.
Notwithstanding anything to the contrary contained herein, no Holder shall
be entitled to convert any of its Convertible Notes into Common Stock of the
Company to the extent that any such conversion would constitute a violation of
any applicable securities laws of the United States, or any other applicable
jurisdiction. Any certificates evidencing Common Stock of the Company issued
upon the conversion of Convertible Notes shall bear such legends, including
legends reflecting restrictions on transfer required in order to maintain
compliance with the provisions of the Securities Act, as the Company shall deem
to be necessary or appropriate.
SECTION 12.02 Exercise of Conversion Privileges. In order to exercise the
---------------------------------
conversion privilege, the Holder of any Convertible Note shall surrender such
Convertible Note, duly endorsed or assigned to the Company or in blank, at any
office or agency of the Company maintained pursuant to Section 4.02, accompanied
by written notice to the Company in the form provided in the Convertible Note
(or such other notice as is acceptable to the Company) at such office or agency
that the Holder elects to convert such Convertible Note or, if less than the
entire principal amount thereof is to be converted, the portion thereof to be
converted. In the case of any Convertible Note which is surrendered for
conversion during the period from the close of
103
business on any Record Date through and including the next succeeding
Interest Payment Date (other than any Convertible Note whose Maturity is prior
to such Interest Payment Date), interest that is payable on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion, and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Convertible Note is
registered at the close of business on such Record Date; provided that
--------
Convertible Notes surrendered for conversion subsequent to any such Record Date
shall (except in the case of Convertible Notes or portions thereof which have
been called for redemption on a Redemption Date within such period) be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount being surrendered for conversion.
Except as provided in the immediately preceding sentence, in the case of any
Convertible Note which is converted (a) interest whose Stated Maturity is after
the date of conversion of such Convertible Note shall not be payable, and (b) no
payment or adjustment shall be made upon conversion on account of any dividends
on the Common Stock of the Company issued upon conversion.
Convertible Notes shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Convertible Notes for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Convertible Notes as Holders shall cease, and the
Person or Persons entitled to receive the Common Stock of the Company issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as and after such time. As promptly as practicable
on or after the conversion date, the Company shall issue and shall deliver at
any office or agency of the Company maintained pursuant to Section 4.02 a
certificate or certificates for the number of full shares of Common Stock of the
Company issuable upon conversion, together with payment in lieu of any fraction
of a share, as provided in Section 12.03.
In the case of any Convertible Note which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Convertible
Note or Convertible Notes of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Convertible Note.
SECTION 12.03 Fractions of Shares. No fractional share of Common Stock of
-------------------
the Company shall be issued upon conversion of Convertible Notes. If more than
one Convertible Note shall be surrendered for conversion at one time by the same
Holder, the number of full shares of Common Stock which shall be issuable upon
conversion thereof shall be computed on the basis of the
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aggregate principal amount of the Convertible Notes (or specified portions
thereof) so surrendered. Instead of any fractional share of such Common Stock
which would otherwise be issuable upon conversion of any Convertible Note or
Convertible Notes (or specified portions thereof), the Company shall pay a cash
adjustment in respect of such fractional share in an amount equal to such
fraction multiplied by the Closing Price at the close of business on the day of
conversion (or, if such day is not a Trading Day, on the Trading Day
immediately preceding such day).
SECTION 12.04 Adjustment of Conversion Price.
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(a) In case the Company shall make a dividend or other distribution
on any class or series of Capital Stock of the Company exclusively in Common
Stock of the Company (other than a distribution referred to in paragraph (c) of
this Section), the Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
the date fixed for such determination and the denominator shall be the sum of
such number of shares of Common Stock and the total number of shares of Common
Stock constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination. In case the Company shall make a dividend
or other distribution on its Common Stock in shares of its Capital Stock other
than Common Stock, and such dividend or distribution would not otherwise require
reduction of the Conversion Price pursuant to paragraph (d), then the
Conversion Price and the number and kind of shares of Capital Stock of the
Company issuable upon the conversion of a Convertible Note (as in effect
immediately prior to such dividend or distribution) shall be proportionately
adjusted, so that the Holder of any Convertible Note thereafter converted may
receive the aggregate number and kind of shares of Capital Stock of the Company
that such Holder would have owned immediately following such dividend or
distribution if such Convertible Note had been converted immediately prior
thereto. For the purpose of this paragraph (a), the amount of Common Stock of
the Company 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 such 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.
(b) Subject to the last sentence of paragraph (e) of this Section, in
case the Company shall make a dividend or other distribution on its Common Stock
consisting exclusively of, or shall otherwise issue to all holders of its Common
Stock, rights,
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options or warrants entitling the holders thereof to subscribe for or purchase
Common Stock or securities convertible into or exchangeable for Common Stock at
a price per share (determined on an as-converted or as-exercised basis if the
rights, options or warrants pertain to securities convertible into or
exchangeable for Common Stock) which is less than the Current Market Price
(determined as provided in paragraph (h) of this Section) on the date fixed for
the determination of stockholders entitled to receive such rights, options or
warrants, the Conversion Price in effect at the opening of business on the day
following the date fixed for such determination 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 date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price (including the minimum consideration payable
upon conversion or exchange of securities convertible into or exchangeable for
Common Stock) of the total number of shares of such Common Stock so offered for
subscription or purchase would purchase at such Current Market Price and the
denominator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (b), 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 such Common Stock. The Company shall not issue any rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
(c) In case outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares of such Common Stock, the Conversion
Price in effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of such 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 subdivision or
combination becomes effective.
(d)(i) Subject to the last sentence of this paragraph (d)(i) and the
last sentence of paragraph (e) of this Section, in case the Company shall,
by dividend or otherwise, distribute to all holders of its Common Stock
evidences of its Indebtedness, shares of any class of its Capital Stock,
cash or other assets (including securities,
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but excluding any rights, options or warrants referred to in paragraph (b)
of this Section, excluding any dividend or distribution paid exclusively in
cash out of consolidated current or retained earnings as shown on the books
of the Company prepared in accordance with GAAP (other than any
Extraordinary Cash Dividend (as hereinafter defined)) and excluding any
dividend or distribution referred to in paragraph (a) or (c) of this
Section), the Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the close of business on
the date fixed for the determination of stockholders entitled to such
distribution by a fraction of which the numerator shall be the Current
Market Price (determined as provided in paragraph (h) of this Section) on
such date less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) on such date of the portion of the evidences of Indebtedness,
shares of Capital Stock, cash and other assets to be 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 such date. If the Board of
Directors determines the fair market value of any distribution for purposes
of this paragraph (d)(i) by reference to the actual or when-issued trading
market for any securities comprising part or all of such distribution, it
must in doing so consider those prices in such market over the same period
used in computing the Current Market Price pursuant to paragraph (h) of
this Section, to the extent possible. For purposes of this paragraph (d),
an "Extraordinary Cash Dividend" shall be that portion, if any, of the
aggregate amount of all cash dividends paid in any fiscal year which
exceeds $25,000,000. For purposes of this paragraph (d), any dividend or
distribution that includes shares of Common Stock of the Company, rights,
options or warrants to subscribe for or purchase shares of such Common
Stock or securities convertible into or exchangeable for shares of Common
Stock shall be deemed to be (x) a dividend or distribution of the evidences
of Indebtedness, cash, assets or shares of Capital Stock other than shares
of Common Stock, such rights, options or warrants or such convertible or
exchangeable securities (making any conversion price reduction required by
this paragraph (d)(i)) immediately followed by (y) in the case of shares of
Common Stock or such rights, options or warrants, a dividend or
distribution thereof (making any further conversion price reduction
required by paragraph (a) and (b) of this Section, except 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 paragraph (a) of this Section), or (z)
in the case of such convertible or exchangeable securities, a dividend or
distribution of the number of shares of Common
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Stock as would then be issuable upon the conversion or exchange thereof,
whether or not the conversion or exchange of such securities is subject to
any conditions (making any further conversion price reduction required by
paragraph (a) of this Section, except that the shares deemed to constitute
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
paragraph (a) of this Section).
(ii) In case the Company shall issue its Common Stock for a
consideration per share less than the Current Market Price (determined as
provided in paragraph (h) of this Section), the Conversion Price shall be
reduced by multiplying the Conversion Price in effect immediately prior to
the close of business on the date on which the Company fixes the offering
price of such additional Common Stock by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus a fraction equal to
the aggregate consideration received by the Company from the issuance of
such additional shares of Common Stock over the Current Market Price on the
date on which the Company fixes the offering price of such additional
shares of Common Stock (determined as provided in paragraph (h) of this
Section), and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after giving effect to such issuance.
The reduction in the Conversion Price provided for in the preceding
sentence shall not apply to issuances of securities in transactions
described in clauses (i) through (xi) of Section 15(d)(ii) of the Warrant
Agreement;
(iii) In case the Company shall issue any securities convertible
into or exchangeable for its Common Stock for a consideration per share
(including the minimum consideration per share payable upon conversion or
exchange of any securities convertible into or exchangeable for Common
Stock) of Common Stock initially deliverable upon conversion or exchange of
such securities less than the Current Market Price (determined as provided
in paragraph (h) of this Section), the Conversion Price shall be reduced by
multiplying the Conversion Price in effect immediately prior to the close
of business on the date on which the Company fixes the offering price of
such additional shares by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior to the
issuance of such securities plus a fraction equal to the aggregate
consideration received for the issuance of such securities (including the
minimum consideration per share payable upon conversion or exchange of any
securities convertible into or exchangeable for such Common Stock) over the
Current Market Price on the date on which the Company
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fixes the offering price of such additional shares (determined as provided
in paragraph (h) of this Section), and the denominator of which shall be
the number of shares outstanding immediately prior to the issuance of such
securities plus the maximum number of shares deliverable upon conversion of
or in exchange for such securities at the initial conversion or exchange
rate. The reduction in the Conversion Price provided for in the preceding
sentence shall not apply to issuances of securities in transactions
described in clauses (i) through (ix) of Section 15(d)(iii) of the Warrant
Agreement.
(e) The reclassification of Common Stock of the Company into
securities which include securities other than such Common Stock (other than any
reclassification upon a consolidation or merger to which Section 12.11 applies)
shall be deemed to involve (i) a distribution of such securities other than such
Common Stock to all holders of such Common Stock (and the effective date of
such reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to such distribution" within the meaning
of paragraph (d)(i) of this Section), and (ii) a subdivision or combination, as
the case may be, of the number of shares of Common Stock of the Company
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (c) of this Section). Rights,
options or warrants issued by the Company to all holders of the Common Stock
entitling the holders thereof to subscribe for or purchase shares of such Common
Stock (either initially or under certain circumstances), which rights, options
or warrants (i) are deemed to be transferred with such Common Stock, (ii) are
not exercisable and (iii) are also issued in respect of future issuances of such
Common Stock, in each case in clauses (i) through (iii) until or upon the
occurrence of a specified event or events ("Trigger Event"), shall for purposes
of this Section 12.04 not be deemed issued until the occurrence of the earliest
Trigger Event.
(f) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Stock of the Company cash (excluding any
cash that is distributed as part of a distribution referred to in paragraph
(d)(i) of this Section in an aggregate amount that, together with (i) the
aggregate amount of any other distributions to all holders of such Common Stock
made exclusively in cash within the 12 months preceding the date fixed for the
determination of shareholders entitled to such distribution and in respect of
which no Conversion Price adjustment pursuant to paragraph (d)(i) or this
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paragraph (f) has been made previously and (ii) the aggregate of any cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) as of such date of determination of consideration payable in respect
of any tender offer by the Company or a Restricted Subsidiary for all or any
portion of its Common Stock, and any purchase by the Company of its Common Stock
in the open market, consummated within the 12 months preceding such date of
determination and in respect of which no Conversion Price adjustment pursuant to
paragraph (f) of this Section has been made previously, exceeds 12.5% of the
product of the Current Market Price (determined as provided in paragraph (h) of
this Section) on such date of determination times the number of shares of Common
Stock of the Company outstanding on such date, the Conversion Price shall be
reduced by multiplying the Conversion Price in effect immediately prior to the
close of business on such date of determination by a fraction of which the
numerator shall be the Current Market Price (determined as provided in
paragraph (h) of this Section) on such date less the amount of cash to be
distributed at such time applicable to one share of such 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 after such
date.
(g) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock of the Company shall be
consummated, or in case the Company shall purchase shares of Common Stock in the
open market, the Conversion Price shall be reduced by multiplying the Conversion
Price in effect immediately prior to the Expiration Time by a fraction of which
(x) the numerator shall be the product of the Current Market Price (determined
as provided in paragraph (h) of this Section) times the number of shares of such
Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time and (y) the denominator shall be the sum of (A) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
shareholders upon consummation of such tender or exchange offer, or upon such
purchase, and (B) the product of such Current Market Price times such number of
outstanding shares at the Expiration Time minus the number of shares accepted
for payment in such tender or exchange offer, or so purchased (the "Purchased
Shares"). For the purpose of this paragraph, "Expiration Time" means either the
last time that tenders may be made pursuant to a tender offer or exchanges may
be made pursuant to an exchange offer, or the time of an agreement to purchase
shares in the open market, as the case may be. Any reduction in the Conversion
Price pursuant to this paragraph shall be made immediately following the close
of business on the last Trading Day used to compute Current Market Price;
provided that such reduction shall be deemed to have become effective
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immediately prior to the opening of business on the day following the Expiration
Time. To the extent that a
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Holder converts Convertible Notes prior to the conclusion of the period for
which Current Market Price is to be calculated, any adjustment in the amount of
Common Stock of the Company issuable upon exercise of such Convertible Note
shall inure to the benefit of the Holder of such Convertible Note at the close
of business on the first Trading Day following the Expiration Time. In no event
shall the Exercise Price be increased as a result of the consummation of any of
the transactions contemplated by this paragraph (g).
(h) For the purpose of any computation under this paragraph and
paragraphs (b) and (d), of this Section, the current market price per share of
Common Stock (the "Current Market Price") on any date shall be deemed to be the
average of the daily Closing Prices for the 30 consecutive Trading Days
commencing 45 Trading Days before the date in question. Notwithstanding
anything to the contrary contained in this paragraph, (i) if the "ex" date for
any event (other than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Price pursuant to paragraph (a),
(b), (c) or (d) above occurs on or after the 15th Trading Day prior to the date
in question and prior to the "ex" date for the issuance or distribution
requiring such computation, the Closing Price for each Trading Day prior to the
"ex" date for such other event shall be adjusted by multiplying such Closing
Price by the same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (ii) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to paragraph (a), (b),
(c) or (d), above occurs on or after the "ex" date for the issuance or
distribution requiring such computation and on or prior to the date in question,
the Closing Price for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, and (iii) if the "ex" date for the issuance or
distribution requiring such computation is on or prior to the date in question,
after taking into account any adjustment required pursuant to clause (ii) of
this proviso, the Closing Price for each Trading Day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the fair market
value on the date in question (as determined by the Board of Directors in a
manner consistent with any determination of such value for purposes of paragraph
(d) of this Section, whose determination shall be conclusive and described in a
Board Resolution) of the evidences of Indebtedness, shares of Capital Stock or
assets being distributed applicable to one share of Common Stock of the Company
as of the close of business on the day before such "ex" date. If on any date
there has not been a Public Equity Offering of if there is no Closing Price
available for the Common Stock of the Company on any date, the Current Market
Price shall be determined (a) in good faith by the Board
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of Directors of the Company and certified in a board resolution, based on the
most recently completed arm's-length transaction between the Company and a
person other than an Affiliate (as defined in Rule 405 of the Securities Act of
1933, as amended) of the Company and the closing of which occurs on such date or
within such a six-month period of (b) if no transaction shall have occured with
the six-month period preceding such date or if such transaction is in excess of
$1 million, by an Independent Financial Expert appointed in the manner provided
for in paragraph (g)(i) of this Section 12.04.
(i) (i) If any event shall occur as to which the other provisions of
this Section 12.04 are not strictly applicable but the failure to make any
adjustment would have the effect of depriving Holders of the benefit of all
or a portion of the conversion rights in respect of any Convertible Note in
accordance with the essential intent and principles of this Section 12.04,
then, in each such case, the Company shall appoint an Independent Financial
Expert, which shall give its opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in
this Section 12.04 necessary to preserve, without dilution, such conversion
rights. Upon receipt of such opinion, the Company will promptly mail a
copy thereof to the Holders and shall make the adjustments described
therein. As used herein, an "Independent Financial Expert" is a firm (A)
which does not, and whose directors, officers and employees or Affiliates
do not, have a direct or indirect financial interest in the Company and (B)
which, in the judgment of the Board of Directors, is otherwise independent
and qualified to perform the task for which it is to be engaged.
(ii) The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of the Convertible Notes, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the
rights of the Holders thereof against dilution or other impairment.
Without limiting the generality of the foregoing, the Company (i) will take
all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares
of its Common Stock on the conversion of the Convertible Notes from time to
time outstanding and (ii) will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of its
Common Stock issuable after the action upon the conversion of all of the
Convertible Notes would exceed the total number of shares of such Common
Stock
112
then authorized by the Company's certificate of incorporation and available
for the purposes of issue upon such exercise.
(j) The Company may, but shall not be obligated to, make such
reductions in the Conversion Price, in addition to those required by paragraphs
(a), (b), (c), (d) and (e) of this Section, as it considers to be advisable in
order that any event treated for United States federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to the recipients or, if
that is not possible, to diminish any income taxes that are otherwise payable
because of such event.
(k) No adjustment in the Conversion Price shall be required unless
such adjustment (plus any other adjustments not previously made by reason of
this paragraph (k) would require an increase or decrease of at least 1 percent
in the Conversion Price; provided that any adjustments which by reason of this
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paragraph (k) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment.
(l) Notwithstanding any other provision of this Section 12.04, no
adjustment to the Conversion Price shall reduce the Conversion Price below the
then par value per share of the Common Stock of the Company, and any such
purported adjustment shall instead reduce the Conversion Price to such par
value. The Company hereby covenants not to take any action to increase the par
value per share of its Common Stock.
(m) In any case in which this Section 12.04 shall require that an
adjustment in the Conversion Price be made effective as of or immediately after
a record date for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the Holder of any Convertible Note
exercised after such record date the shares of Common Stock and other Capital
Stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock and other Capital Stock of the Company, if any, issuable
upon such exercise on the basis of the Conversion Price prior to such adjustment
and (ii) paying to such Holder any amount in cash in lieu of a fractional share
pursuant to Section 12.03 hereof; provided that the Company shall deliver to
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such Holder a due bill or other appropriate instrument evidencing such Holder's
right to receive such additional shares of Common Stock, other Capital Stock and
cash upon the occurrence of the event requiring such adjustment.
(n) When No Adjustment Required.
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(i) No adjustment need be made for a transaction referred to in
subsections (a), (b), (c) or (d) of this Section 12.04 if Holders are to
participate in the transaction on a basis and with notice that the Board
of
113
Directors determines to be fair and appropriate in light of the basis and
notice on which holders of Common Stock of the Company participate in the
transaction.
(ii) No adjustment need be made for a change in the par value,
or from par value to no par value, or from no par value to par value, of
the Common Stock of the Company.
(iii) No adjustment need to be made in respect of (x) the
issuance of any Warrants pursuant to the terms of the Warrant Agreement
including Initial Warrants, Senior Note Contingent Warrants and Convertible
Note Contingent Warrants or the exercise of any such Warrants.
(iv) No adjustment need to be made in respect of (x) the
issuance of any Additional Warrants or convertible securities pursuant to
Section 4.15 hereof or the exercise of such Additional Warrants or the
conversion of such convertible securities.
(v) No adjustment need be made in respect of (x) any adjustment
in the warrant exercise price of the Warrants being issued pursuant to the
Warrant Agreement as contemplated by such Warrant Agreement, (y) any
adjustment in the warrant exercise price of the Additional Warrants as
contemplated thereby or (z) any adjustment in the conversion price of the
convertible securities as contemplated thereby to be issued pursuant to
Section 4.15 hereof.
SECTION 12.05 Notice of Adjustments of Conversion Price. Whenever the
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Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.04 and shall prepare a certificate signed by the
Treasurer or Chief Financial Officer of the Company setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed (with a copy
to the Trustee) at each office or agency maintained for the purpose of
conversion of Convertible Notes pursuant to Section 4.02; and
(b) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice shall be furnished by the
Company to the Trustee and mailed by the Company at its expense to all Holders
at their last addresses as they shall appear in the Security Register.
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SECTION 12.06 Notice of Certain Corporate Action. In case:
----------------------------------
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require a Conversion Price
adjustment pursuant to paragraph (d) (i) of Section 13.04; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of Capital Stock of any class or of any other rights (excluding shares of
Capital Stock or options for Capital Stock issued pursuant to a benefit plan for
employees, officers or directors of the Company); or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of the outstanding shares of such Common
Stock), or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender or exchange
offer (other than an exchange offer contemplated by clause (c) above) for all
or a portion of the outstanding shares of Common Stock (or shall amend any such
tender or exchange offer to change the maximum number of shares being sought or
the amount or type of consideration being offered (including by exchange)
therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 4.02, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Note Register, at least 21 days (or
11 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of its Common Stock
of record who will be entitled to such dividend, distribution, rights, options
or warrants are to be determined, (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of its Common Stock of record shall be entitled to
exchange their Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
transfer,
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dissolution, liquidation or winding up, or (z) the date on which such tender or
exchange offer (other than an exchange offer contemplated by clause (y) above)
commenced, the date on which such tender or exchange offer is scheduled to
expire unless extended, the consideration offered and the other material terms
thereof (or the material terms of any amendment thereto). Neither the failure to
give any such notice nor any defect therein shall affect the legality or
validity of any action described in clauses (a) through (e) of this Section
12.06.
SECTION 12.07 Company to Reserve Common Stock. The Company shall at all
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times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock or out of its Common Stock held in
treasury, for the purpose of effecting the conversion of Convertible Notes, the
full number of shares of its Common Stock then issuable upon the conversion of
all outstanding Convertible Notes.
SECTION 12.08 Taxes on Conversions. The Company will pay any and all
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original issuance, transfer, stamp and other similar taxes that may be payable
in respect of the issue or delivery of shares of its Common Stock on conversion
of Convertible Notes pursuant hereto. 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 shares of its Common Stock in a name other than
that of the Holder of the Convertible Note or Convertible Notes to be converted,
and no such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
SECTION 12.09 Covenant as to Common Stock.
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(a) The Company covenants that all shares of its Common Stock which
may be issued upon conversion of Convertible Notes will upon issue be validly
issued, fully paid and nonassessable.
(b) The Company shall from time to time take all action necessary so
that the Common Stock which may be issued upon conversion of Convertible Notes,
immediately upon their issuance (or, if such Common Stock is subject to
restrictions on transfer under the Securities Act, upon their resale pursuant to
an effective Convertible Note Shares Shelf Registration Statement), will be
listed on the principal securities exchanges, interdealer quotation systems and
markets, if any, on which other shares of Common Stock of the Company are then
listed or quoted.
SECTION 12.10 Cancellation of Converted Convertible Notes. All
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Convertible Notes delivered for conversion shall be delivered to the Trustee to
be canceled by or at the direction of the
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Trustee, which shall dispose of the same as provided in Section 2.10.
SECTION 12.11 Provisions as to Consolidation, Merger or Sale of Assets.
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In case of any consolidation of the Company with, or merger of the Company into,
any other person, any merger of another person into the Company (other than a
merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any sale
or transfer of all or substantially all of the assets of the Company, the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Convertible Note then
outstanding shall have the right thereafter, during the period such Convertible
Note shall be convertible as specified in Section 12.01, but subject to Section
12.12 hereof, to convert such Convertible Note only into the kind and amount of
securities, cash and other Property, if any, receivable upon such
consolidation, merger, sale or transfer by a holder of the amount of Common
Stock of the Company into which such Convertible Note might have been converted
immediately prior to such consolidation, merger, sale or transfer, assuming
such holder of Common Stock (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other Property
--------
receivable upon such consolidation, merger, sale or transfer is not the same for
each share of Common Stock held immediately prior to such consolidation, merger,
sale or transfer by other than a Constituent Person or an Affiliate thereof and
in respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer by each nonelecting share shall be deemed to be the
kind and amount so receivable per share by a plurality of the nonelecting
shares). Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales or transfers.
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ARTICLE XIII
SATISFACTION AND DISCHARGE
SECTION 13.01 Satisfaction and Discharge. This Indenture shall upon the
--------------------------
request of the Company cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Convertible Notes herein
expressly provided for, the Company's obligations under Sections 7.07 and 13.04
hereof, and the Company's, the Trustee's and the Paying Agent's obligations
under Section 13.03 hereof) and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture when
(a) either
(i) all Convertible Notes theretofore authenticated and
delivered (other than (A) Convertible Notes which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 2.07
and (B) Convertible Notes for whose payment money has been deposited in
trust with the Trustee or any Paying Agent and thereafter paid to the
Company or discharged from such trust) have been delivered to the Trustee
for cancellation; or
(ii) all such Convertible Notes not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust for such purpose money or U.S. Government Obligations in an
amount sufficient (as certified by an independent public accountant
designated by the Company) to pay and discharge the entire indebtedness on
such Convertible Notes not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest and Special
Interest, if any, to the date of such deposit (in the case of Convertible
Notes which have become due and payable) or the Stated Maturity or
Redemption Date, as the case may be;
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(b) the Company has paid or caused to be paid all other sums then due
and payable hereunder by the Company;
(c) no Default or Event of Default with respect to the Convertible
Notes shall have occurred and be continuing on the date of such deposit and
after giving effect to such deposit; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
Company's obligations in Sections 2.03, 2.04, 2.06, 2.07, 2.11, 7.07, 7.08,
13.02, 13.03 and 13.04 and the conversion provisions contained in Article XII
and the Trustee's and Paying Agent's obligations in Section 13.03 shall survive
until the Convertible Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07, 13.03 and 13.04 and the Trustee's and
Paying Agent's obligations in Section 13.03 shall survive.
In order to have money available on a payment date to pay principal or
interest on the Convertible Notes, the U.S. Government Obligations shall be
payable as to principal or interest at least one Business Day 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.
SECTION 13.02 Application of Trust Money. All money deposited with the
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Trustee pursuant to Section 13.01 shall be held in trust and, at the written
direction of the Company, be invested prior to maturity in U.S. Government
Obligations, and applied by the Trustee in accordance with the provisions of the
Convertible Notes and this Indenture, to the payment, either directly or through
any Paying Agent as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium if any) and interest (including Special Interest,
if any) for the payment of which money has been deposited with the Trustee; but
such money need not be segregated from other funds except to the extent required
by law.
SECTION 13.03 Repayment to the Company. The Trustee and the Paying Agent
------------------------
shall promptly pay to the Company upon written request any excess money or
securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, that the Company shall have either caused notice of
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such payment
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to be mailed to each Holder of the Convertible Notes entitled thereto no less
than 30 days prior to such repayment or within such period shall have published
such notice in a financial newspaper of widespread circulation published in The
City of New York, including, without limitation, The Wall Street Journal. After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 13.04 Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any money or U.S. Government Obligations in accordance with Section 13.01
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and Guarantors' obligations under this
Indenture, the Convertible Notes and the Convertible Note Guarantees, if any,
shall be revived and reinstated as though no deposit has occurred pursuant to
Section 13.01 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
13.02; provided that if the Company or the Guarantors have made any payment of
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interest on or principal of any Convertible Notes because of the reinstatement
of their obligations, the Company or such Guarantors shall be subrogated to the
rights of the Holders of such Convertible Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Trust Indenture Act Controls. If and to the extent that
----------------------------
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control. If
any provisions of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or excluded, as the case may
be.
SECTION 14.02. Notices. Any notice or communication shall be in writing
-------
and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows: if to the Company: United USN, Inc., 00 Xxxxx Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxx X. Xxxxxxxx,
with a copy to Skadden, Arps, Slate, Meager & Xxxx, 000 Xxxx Xxxxxx Xxxxx,
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Chicago, Illinois 60606, Attention: Xxxx X. Xxxxxx; if to the Trustee: Xxxxxx
Trust and Savings Bank, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Indenture Trustee Administration.
The Company or the Trustee, by notice to the other, many designate
additional or different addresses for subsequent notices or communications. Any
notice or communication mailed to a Holder shall be sent to the Holder by first
class mail, postage prepaid, at the Holder's address as it appears in the
Security Register and shall be duly given if so sent within the time prescribed.
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 is mailed to the Company, the Trustee or a Holder in the manner
provided above, it is duly given, whether or not the addressee receives it, but
shall not be effective in the case of the Trustee unless it is actually
received. In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give notice by mail to
Holders, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 14.03. Certificate and Opinion as to Conditions Precedent. Upon
--------------------------------------------------
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee: (a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 14.04. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture (other than pursuant to Section 4.12 hereof)
shall include: (a) a statement that the individual 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 individual, such person has made such examination
or investigation as is necessary to enable such person 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 individual,
such covenant or condition has been complied with.
SECTION 14.05. Communications by Holders with Other Holders. Holders may
---------------------------------------------
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Holders with respect to their
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rights under this Indenture or the Convertible Notes. The Company, the
Guarantors, the Trustee, the Registrar and anyone else shall have the protection
of Section 312(c) of the Trust Indenture Act.
SECTION 14.06. Rules by Trustee, Paying Agent and Registrar. The Trustee
---------------------------------------------
may make reasonable rules for action by or a meeting of Holders, and any
Registrar and Paying Agent may make reasonable rules for their functions;
provided that no such rule shall conflict with terms of this Indenture or the
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Trust Indenture Act.
SECTION 14.07. Payments on Business Days. If a payment hereunder is
-------------------------
scheduled to be made on a date that is not a Business Day, payment shall be
made on the next succeeding date that is a Business Day, and no interest shall
accrue with respect to that payment during the intervening period. If a regular
record date is a date that is not a Business Day, such record date shall not be
affected.
SECTION 14.08. Governing Law. THIS INDENTURE AND THE CONVERTIBLE NOTES
-------------
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, EXCEPT WITH REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
SECTION 14.09. No Recourse Against Others. No director, officer,
--------------------------
employer, incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Convertible Notes or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation, solely by reason of its status as a director,
officer, employee, incorporator or stockholder of the Company. By accepting a
Convertible Note, each Holder waives and releases all such liability (but only
such liability) as part of the consideration for issuance of such Convertible
Note to such Holder.
SECTION 14.10. Successors. All agreements of the Company in this
----------
Indenture and the Convertible Notes shall bind its successors and assigns
whether so expressed or not. All agreements of the Trustee in this Indenture
shall bind its successors and assigns whether so expressed or not.
SECTION 14.11. Counterparts. This Indenture may be executed in any
------------
number of counterparts and by the parties thereto 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 14.12. Table of Contents; Headings. The table of contents, cross-
---------------------------
reference table and headings of the Articles and Sections of this Indenture have
been inserted for convenience of
122
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms of provisions hereof.
SECTION 14.13. Severability. In case any provision in this Indenture or
------------
in the Convertible 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 14.14. Further Instruments and Acts. Upon request of the Trustee,
----------------------------
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 14.15. Independent Covenants. Each covenant contained in this
---------------------
Indenture is intended by the parties to be a separate and independent covenant,
the compliance or noncompliance with such to be determined independently and
without regard to whether the Company or a Restricted Subsidiary is in
compliance with another covenant contained in this Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
UNITED USN, INC.
By______________________________
Name: X. Xxxxxx Xxxxxxx
Title: President,
Chief Executive Officer
and Chief Operating Officer
[Corporate Seal]
Attest
----------------------
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
By________________________________
Name:
Title:
[Corporate Seal]
Attest
----------------------
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STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the ___ day of September, 1996, before me personally came X. Xxxxxx
Xxxxxxx, to me known, who being by me duly sworn, did depose and say that he is
President, Chief Executive Officer and Chief Operating Officer of United USN,
Inc., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed his name thereto
by like authority.
_________________________________
Notary Public
State of New York
My commission expires
[Seal]
125
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the ___ day of September, 1996, before me personally came Xxxxxx
XxXxxxxxx, to me known, who being by me duly sworn, did depose and say that he
is Vice President of Xxxxxx Trust and Savings Bank, the Trustee described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
_________________________________
Notary Public
State of New York
My commission expires
[Seal]
126
