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COMVERSE TECHNOLOGY, INC.,
ISSUER
TO
THE CHASE MANHATTAN BANK,
TRUSTEE
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INDENTURE
DATED AS OF JUNE 30, 1998
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U.S. $250,000,000
4-1/2% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2005
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions............................... 1
SECTION 1.2 Form of Documents Delivered to Trustee.... 10
SECTION 1.3 Acts of Holders of Securities............. 11
SECTION 1.4 Notices, Etc., to Trustee and Company..... 12
SECTION 1.5 Notice to Holders of Securities; Waiver... 13
SECTION 1.6 Effect of Headings and Table of Contents.. 13
SECTION 1.7 Successors and Assigns.................... 14
SECTION 1.8 Separability Clause....................... 14
SECTION 1.9 Benefits of Indenture..................... 14
SECTION 1.10 GOVERNING LAW............................. 14
SECTION 1.11 Counterparts.............................. 14
SECTION 1.12 Legal Holidays............................ 14
SECTION 1.13 Recourse Against Others................... 15
ARTICLE 2
THE SECURITIES
SECTION 2.1 Title and Terms................................ 15
SECTION 2.2 Form of Securities............................. 16
SECTION 2.3 Denominations.................................. 16
SECTION 2.4 Execution, Authentication, Delivery and Dating. 17
SECTION 2.5 Registration, Registration of Transfer and Exchange;
Restrictions on Transfer....................... 17
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Securities 27
SECTION 2.7 Payment of Interest, Interest Rights Preserved. 28
SECTION 2.8 Persons Deemed Owners.......................... 29
SECTION 2.9 Cancellation................................... 30
SECTION 2.10 Computation of Interest........................ 30
SECTION 2.11 Temporary Securities........................... 30
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ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.1 Satisfaction and Discharge of Indenture....... 31
SECTION 3.2 Application of Trust Money.................... 32
ARTICLE 4
REMEDIES
SECTION 4.1 Events of Default............................. 33
SECTION 4.2 Acceleration of Maturity; Rescission
and Annulment................................. 34
SECTION 4.3 Collection of Indebtedness and Suits for
Enforcement by the Trustee.................... 36
SECTION 4.4 Trustee May File Proofs of Claim.............. 36
SECTION 4.5 Trustee May Enforce Claims Without Possession
of Securities................................. 37
SECTION 4.6 Application of Money Collected................ 37
SECTION 4.7 Limitation on Suit............................ 38
SECTION 4.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest and To
Convert....................................... 39
SECTION 4.9 Restoration of Rights and Remedies............ 39
SECTION 4.10 Rights and Remedies Cumulative................ 39
SECTION 4.11 Delay or Omission Not Waiver.................. 39
SECTION 4.12 Control by Holders of Securities.............. 40
SECTION 4.13 Waiver of Past Default........................ 40
SECTION 4.14 Undertaking for Costs......................... 40
SECTION 4.15 Waiver of Stay or Extension Laws.............. 41
ARTICLE 5
THE TRUSTEE
SECTION 5.1 Certain Duties and Responsibilities........... 41
SECTION 5.2 Notice of Defaults............................ 42
SECTION 5.3 Certain Rights of Trustee..................... 43
SECTION 5.4 Not Responsible for Recitals or Issuance
of Securities................................. 44
SECTION 5.5 May Hold Securities, Act as Trustee Under
Other Indentures.............................. 44
SECTION 5.6 Money Held in Trust........................... 45
SECTION 5.7 Compensation and Indemnification of
Trustee and Its Prior Claims.................. 45
SECTION 5.8 Corporate Trustee Required; Eligibility....... 46
SECTION 5.9 Resignation and Removal; Appointment
of Successor.................................. 46
SECTION 5.10 Acceptance of Appointment by Successor........ 47
SECTION 5.11 Merger, Conversion, Consolidation or
Succession to Business........................ 48
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SECTION 5.12 Authenticating Agent............................. 48
ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 6.1 Company May Consolidate, Etc., Only on Certain
Terms............................................ 51
SECTION 6.2 Successor Corporation Substituted................ 51
ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of
Holders of Securities............................ 52
SECTION 7.2 Supplemental Indentures With Consent of Holders
of Securities.................................... 53
SECTION 7.3 Execution of Supplemental Indentures............. 54
SECTION 7.4 Effect of Supplemental Indentures................ 54
SECTION 7.5 Reference in Securities to Supplemental
Indentures....................................... 54
SECTION 7.6 Notice of Supplemental Indentures................ 55
ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
SECTION 8.1 Purposes for Which Meetings May Be Called........ 55
SECTION 8.2 Call Notice and Place of Meetings................ 55
SECTION 8.3 Persons Entitled to Vote at Meetings............. 56
SECTION 8.4 Quorum; Action................................... 56
SECTION 8.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings.......................... 57
SECTION 8.6 Counting Votes and Recording Action of Meetings.. 57
ARTICLE 9
COVENANTS
SECTION 9.1 Payment of Principal, Premium and Interest....... 58
SECTION 9.2 Maintenance of Offices or Agencies............... 58
SECTION 9.3 Money for Security Payments To Be Held in Trust.. 59
SECTION 9.4 Corporate Existence.............................. 60
SECTION 9.5 Maintenance of Properties........................ 60
SECTION 9.6 Payment of Taxes and Other Claims................ 61
SECTION 9.7 Statement by Officers as to Default.............. 61
SECTION 9.8 Waiver of Certain Covenants...................... 61
SECTION 9.9 Delivery of Certain Information.................. 62
SECTION 9.10 Resale of Certain Securities..................... 62
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ARTICLE 10
REDEMPTION OF SECURITIES
SECTION 10.1 Right of Redemption............................. 62
SECTION 10.2 Applicability of Article........................ 63
SECTION 10.3 Election to Redeem; Notice to Trustee........... 63
SECTION 10.4 Selection by Trustee of Securities to Be
Redeemed........................................ 63
SECTION 10.5 Notice of Redemption............................ 63
SECTION 10.6 Deposit of Redemption Price..................... 65
SECTION 10.7 Securities Payable on Redemption Date........... 65
SECTION 10.8 Securities Redeemed in Part..................... 65
ARTICLE 11
REPURCHASE UPON A DESIGNATED EVENT
SECTION 11.1 Repurchase Right................................ 66
SECTION 11.2 Conditions to the Company's Election to
Pay the Repurchase Price in Common Stock........ 67
SECTION 11.3 Notices; Method of Exercising Repurchase
Right, Etc...................................... 68
ARTICLE 12
CONVERSION OF SECURITIES
SECTION 12.1 Conversion Privilege and Conversion Price....... 70
SECTION 12.2 Exercise of Conversion Privilege................ 71
SECTION 12.3 Fractions of Shares............................. 72
SECTION 12.4 Adjustment of Conversion Price.................. 73
SECTION 12.5 Notice of Adjustments of Conversion Price....... 81
SECTION 12.6 Notice of Certain Corporate Action.............. 82
SECTION 12.7 Company to Reserve Common Stock................. 83
SECTION 12.8 Taxes on Conversions............................ 83
SECTION 12.9 Covenant as to Common Stock..................... 83
SECTION 12.10 Cancellation of Converted Securities............ 83
SECTION 12.11 Effect of Reclassification, Consolidation,
Merger or Sale.................................. 84
SECTION 12.12 Responsibility of Trustee for Conversion
Provisions...................................... 85
ARTICLE 13
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Debt.......... 85
SECTION 13.2 Subrogation..................................... 87
SECTION 13.3 Obligation of Company Unconditional............. 87
SECTION 13.4 Maturity of or Default on Senior Debt........... 88
SECTION 13.5 Payments on Securities Permitted................ 88
SECTION 13.6 Effectuation of Subordination by Trustee........ 88
SECTION 13.7 Knowledge of Trustee............................ 89
SECTION 13.8 Trustee's Relation to Senior Debt............... 89
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SECTION 13.9 Rights of Holders of Senior Debt Not Impaired... 89
SECTION 13.10 Modification of Terms of Senior Debt............ 90
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Exhibit 4
INDENTURE, dated as of June 30, 1998, between COMVERSE TECHNOLOGY,
INC., a corporation duly organized and existing under the laws of the State of
New York, having its principal office at 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxx
Xxxx 00000 (herein called the "Company"), and THE CHASE MANHATTAN BANK, a New
York banking corporation, as Trustee (herein called the "Trustee"), having its
principal Corporate Trust offices at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 4-1/2%
Convertible Subordinated Debentures Due 2005 (herein called the "Securities") 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 Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
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For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with U.S. generally accepted
accounting principles prevailing at the time of any relevant computation
hereunder; and
(3) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.3.(a).
"Affiliate" of any specified Person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified
Person. For the purposes of this definition, "control", when used with respect
to any specified Person, means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent Members" has the meaning specified in Section 2.5(d)(5).
"Authenticating Agent" means any Person named as Authenticating Agent
pursuant to Section 5.12.
"Board of Directors" means either the board of directors of the
Company or any committee of that board empowered to act for it with respect to
this Indenture.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or
Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment or
Place of Conversion, as the case may be, are authorized or obligated by law to
close.
"Capitalized Lease Obligation" means, as applied to any Person, any
lease of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with U.S. generally accepted accounting principles
prevailing at the time of any relevant determination hereunder, is required to
be accounted for as a capital lease on the balance sheet of that Person.
"Change in Control" means an event or series of events as a result of
which (i) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13d-5 under the Exchange Act) of shares representing more than 50% of the
combined voting power of the then outstanding securities entitled to vote
generally in elections of directors of the Company ("Voting Stock"); (ii) the
Company consolidates with or merges into any other corporation or conveys,
transfers or leases all or substantially all of its assets to any person, or any
other corporation merges into the Company, and in the case of any such
transaction, the outstanding Common Stock of the Company is changed or exchanged
into or for other assets or securities as a result, unless the stockholders of
the Company immediately before such transaction own, directly or indirectly,
immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the corporation resulting
from such transaction in substantially the same proportion as their ownership of
the Voting Stock immediately before such transaction; or (iii) at any time
Continuing Directors do not constitute a majority of the Board of Directors of
the Company (or, if applicable, a successor corporation of the Company);
provided, however, that a Change of Control shall not be deemed to have occurred
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if either (x) the closing price per share of the Common Stock for any five
trading days within the period of ten consecutive trading days ending
immediately before the Change of Control shall equal or exceed 105% of the
conversion price of the Securities in effect on each such trading day, or (y) at
least 90% of the consideration (excluding cash payments for dissenting and
fractional shares) in the transaction or transactions constituting the Change of
Control consists of shares of common stock or securities convertible into common
stock that are, or immediately upon issuance will be, listed on a national
securities exchange or The
2
Nasdaq Stock Market and as a result of the transaction or transactions such
Securities become convertible solely into such common stock.
"Closing Date" means June 30, 1998 or such later date on which the
Securities may be delivered pursuant to the Purchase Agreement.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Section 12.11, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock, par value
$0.10 per share, 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
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resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Notice" has the meaning specified in Section 11.3.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by the Chairman of the Board, the Chief
Executive Officer, Chief Financial Officer, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Continuing Director" means at any date a member of the Company's
Board of Directors (i) who was a member of such board on June 25, 1998 or (ii)
who was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Company's Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election. (Under this definition, if the current Board of
Directors of the Company were to approve a new director or directors and then
resign, no Change of Control would occur even though the current Board of
Directors would thereafter cease to be in office.)
"Conversion Agent" means any Person authorized by the Company pursuant
to Section 9.2 to convert Securities in accordance with Article 12.
"Conversion Price" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee located in
The City of
3
New York at which at any particular time its corporate trust business shall be
administered (which at the date of this Indenture is located at 450 West 33rd
Street, 15th Floor, New York, New York, New York 10001).
"corporation" includes corporations, associations, limited liability
companies, companies and business trusts.
"Custodian" shall mean The Chase Manhattan Bank, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Defaulted Interest" has the meaning specified in Section 2.7.
"Depositary" shall mean, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section
2.5(e) as the Depositary with respect to such Securities, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
"Designated Event" means a Change in Control or a Termination of
Trading.
"Dollar", "U.S. Dollar" or "U.S. $" means a dollar or other equivalent
unit in such coin or currency of the United States as at the time shall be legal
tender for the payment of public and private debts.
"Event of Default" has the meaning specified in Section 4.1.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Rate Contract" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, designed to provide
protection against fluctuations in currency exchange rates.
"Global Security" has the meaning specified in Section 2.2.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of any part
or all of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Hedging Agreement" means any Interest Rate Protection Agreement or
Exchange Rate Contract.
"Holder", when used with respect to any Security, means the Person in
whose name the Security is registered in the Security Register.
4
"Indebtedness", when used with respect to any Person, means (a) any
liability of such Person for borrowed money, or evidenced by an instrument for
the payment of money, or incurred in connection with the acquisition of any
property, services or assets (including securities) or relating to a Capitalized
Lease Obligation; (b) obligations under Hedging Agreements; (c) any obligation
of such Person to reimburse the issuer of a letter of credit, surety bond,
performance bond or other guarantee of contractual performance and (d) any
liability of any other Person of the type referred to in clauses (a), (b) or (c)
which has been assumed or guaranteed by such Person; provided, however, that
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Indebtedness shall not include accounts payable or other obligations of such
Person to trade creditors created or assumed by such Person in the ordinary
course of business in connection with the obtaining of materials or services.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Protection Agreement" means, with respect to any
Person, any interest rate swap agreement, interest rate cap or collar agreement
or other financial agreement or arrangement designed to protect such person
against fluctuations in interest rates, as in effect from time to time.
"Internal Revenue Code" means the U.S. Internal Revenue Code of 1986,
as amended.
"Liquidated Damages" means all liquidated damages, if any, payable
pursuant to Section 3 of the Registration Rights Agreement.
"Maturity" means the date on which the principal of such Security
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by acceleration, conversion, call for redemption, exercise of a
Repurchase Right or otherwise.
"Nasdaq National Market" means the Nasdaq National Market or any
successor national securities exchange or automated over-the-counter trading
market in the United States.
"Non-Electing Share" has the meaning specified in Section 12.11.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President or a Vice President and by
the Chief Financial Officer, the Treasurer or the Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (and may include directors or employees of the Company)
and which opinion is acceptable to the Trustee which acceptance shall not be
unreasonably withheld.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
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(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities, provided that if such Securities are to
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be redeemed, notice of such redemption has been duly given pursuant to this
Indenture; and
(iii) Securities which have been paid pursuant to Section 2.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
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principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only such Securities of which the Trustee has received written notice and are so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, and premium, if any, or interest (including Liquidated Damages, if
any) on any Securities on behalf of the Company.
"Person" means any individual, corporation, limited liability company
partnership, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Conversion" has the meaning specified in Section 2.1.
"Place of Payment" has the meaning specified in Section 2.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
6
"Purchase Agreement" means the Purchase Agreement, dated June 25,
1998, between the Company and Xxxxxx Brothers Inc.
"QIB" shall mean a "qualified institutional buyer" as defined in Rule
144A.
"Quoted Price" of the Common Stock means the last reported sale price
of the Common Stock on the Nasdaq National Market, or, if the Common Stock is
listed on a national securities exchange, then on such exchange, or if the
Common Stock is not quoted on Nasdaq National Market or listed on an exchange,
the average of the last bid and asked price on the National Association of
Securities Dealers Automated Quotation System, in each case as determined by the
Board of Directors.
"Record Date" means either a Regular Record Date or a Special Record
Date, as the case may be.
"Redemption Date", when used with respect to any Security to be
redeemed or repurchased, means the date fixed for such redemption or repurchase
by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which such Security is to be redeemed pursuant to
this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of June 30, 1998, between the Company and the Xxxxxx Brothers
Inc.
"Regular Record Date" for the interest payable means the December 15
(whether or not a Business Day) next preceding a January 1 Interest Payment Date
and the June 15 (whether or not a Business Day) next preceding a July 1 Interest
Payment Date.
"Repurchase Right" has the meaning specified in Section 11.1.
"Responsible Officer", when used with respect to the Trustee, means
any officer within the Corporate Trust Office of the Trustee, including any vice
president, assistant vice president, secretary, assistant secretary, the
treasurer, any assistant treasurer, the managing director or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Securities" means the Securities defined as such in
Section 2.5(e).
"Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereof), as the same may be amended from time to time.
"Rule 144A" shall mean Rule 144A as promulgated under the Securities
Act (including any successor rule thereof), as the same may be amended from time
to time.
"Rule 144A Information" has the meaning specified in Section 9.9.
"Securities" has the meaning ascribed to it in the first paragraph
under
7
the caption "Recitals of the Company".
"Securities Act" means the U.S. Securities Act of 1933, as amended.
"Securities Register" and "Security Register" have the respective
meanings specified in Section 2.5(a).
"Senior Debt" means all Indebtedness of the Company outstanding at any
time, except (i) Indebtedness of the Company that by its terms is expressly pari
----
passu with or subordinate in right of payment to the Securities; (ii) any
-----
indebtedness or other obligations of the Company in respect of its 5-3/4%
Convertible Subordinated Debentures due 2006; (iii) accounts payable or any
other Indebtedness of the Company to trade creditors created or assumed by the
Company in the ordinary course of business in connection with the obtaining of
materials or services; or (iv) any liability for federal, state, local or other
taxes owed or owing by the Company.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" within the meaning of Rule 405 under the Securities Act.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 2.7.
"Stated Maturity" means the date specified in any Security as the
fixed date for the payment of principal on such Security or on which an
installment of interest on such Security is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition only, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Termination of Trading" means such time as the Common Stock (or other
common stock into which the Securities are then convertible) is neither listed
for trading on a U.S. national securities exchange nor approved for trading on
an established automated over-the-counter trading market in the United States.
"Transfer Agent" means any Person, which may be the Company,
authorized by the Company to exchange or register the transfer of Securities.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Vice President", when used with respect to the Company, means any
vice president, whether or not designated by a number or a word or words added
before or after the title "vice president".
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SECTION 1.2 Form of Documents Delivered to Trustee.
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In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion 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 may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
Opinion of Counsel with respect to the matters upon which such certificate or
opinion is based is erroneous. Any such Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or representations
by, an officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate 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.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
Counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion on behalf of the Company has read such covenant or condition and
the definitions herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
9
SECTION 1.3 Acts of Holders of Securities.
-----------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities may be embodied in and evidenced by (1) one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent or proxy duly appointed in writing, (2) the record of Holders of
Securities voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities duly called and
held in accordance with the provisions of Article 8 or (3) a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders of Securities signing such instrument or instruments and so
voting at such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 5.1) conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 8.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be provided in any manner which the Trustee reasonably
deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of such Person holding the same, shall be proved by the
Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holders of any Security shall bind every
future Holder of the same Security and the Holder of every Security 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 in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 1.4 Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee by any Holder of Securities or by the Company shall be
sufficient for every purpose hereunder if in writing, mailed, first-class
postage prepaid or telecopied at (000) 000-0000 and confirmed by mail,
first-class postage prepaid, addressed to it at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, to the attention of Global Trust Services, or in the
case of notice by telecopy confirmed at (000) 000-0000, or at any other
address or telecopy number otherwise furnished in writing to the Company by
the Trustee; or
(2) the Company by the Trustee or by any Holder of Securities shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if
10
in writing, mailed, first-class postage prepaid or telecopied at (516) 677-
7323 and confirmed by mail, first-class postage prepaid, addressed to it at
000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, to the attention of its
President, with a copy to its Chief Financial Officer, or at any other
address or telecopy number otherwise furnished in writing to the Trustee by
the Company.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language.
SECTION 1.5 Notice to Holders of Securities; Waiver.
---------------------------------------
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given to Holders of Securities if mailed, first-class postage
prepaid, to each Holder of a Security affected by such event, at the address of
such Holder as it appears in the Security Register, not earlier than the
earliest date and not later than the latest date prescribed for the giving of
such notice.
Neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Security shall affect the sufficiency
of such notice with respect to other Holders of Securities. In case by reason
of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification to
Holders of Securities as shall be made with the approval of the Trustee shall
constitute a sufficient notification to such Holders for every purpose
hereunder.
Such notices shall be deemed to have been given on the date of such
mailing.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.6 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.7 Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.8 Separability Clause.
-------------------
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.9 Benefits of Indenture.
---------------------
11
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt and the Holders of Securities, any benefit
or legal or equitable right, remedy or claim under this Indenture.
SECTION 1.10 GOVERNING LAW.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO SUCH
STATE'S CONFLICT OF LAWS PRINCIPLES.
SECTION 1.11 Counterparts.
------------
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.12 Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last day on which a Holder of a Security has a
right to convert such Security shall not be a Business Day at any Place of
Payment or Place of Conversion, then (notwithstanding any other provision of
this Indenture or of the Securities) payment of interest (including Liquidated
Damages, if any) or principal or premium, if any, or conversion of the
Securities, need not be made at such Place of Payment or Place of Conversion on
such day, but may be made on the next succeeding Business Day at such Place of
Payment or Place of Conversion with the same force and effect as if made on the
Interest Payment Date or Redemption Date or at the Stated Maturity or on such
last day for conversion, provided, that in the case that payment is made on such
--------
succeeding Business Day, no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
SECTION 1.13 Recourse Against Others.
-----------------------
No recourse for the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any) on any Security, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance thereof and as
part of the consideration for the issue thereof, expressly waived and released.
12
ARTICLE 2
THE SECURITIES
SECTION 2.1 Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to U.S. $250,000,000
(or $300,000,000 if the over-allotment option set forth in Section 2(b) of the
Purchase Agreement is exercised in full), except for securities authenticated
------------------
and delivered upon registration of, transfer of, or in exchange for, or in lieu
of other Securities pursuant to Section 2.5, 2.6, 7.5, 10.8, 11.3 or 12.2.
The Securities shall be known and designated as the "4-1/2%
Convertible Subordinated Debentures Due 2005" of the Company. Their Stated
Maturity shall be July 1, 2005 and they shall bear interest from June 30, 1998,
payable semiannually in arrears on January 1 and July 1 in each year, commencing
January 1, 1999, at the rate of 4-1/2% per annum until the principal thereof is
paid or made available for payment.
The principal of and premium, if any, and interest (including
Liquidated Damages, if any) on the Securities shall be payable as provided in
the form of Security set forth in Exhibit A hereto (any city in which any Paying
Agent is located being herein called a "Place of Payment").
The Securities shall be redeemable at the option of the Company, and
shall have a Repurchase Right exercisable at the option of Holders, as provided
in the form of Security set forth in Exhibit A hereto and in Articles 10 and 11.
The Securities shall be convertible as provided in Article 12 (any
city in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subordinated in right of payment to Senior
Debt of the Company as provided in Article 13.
SECTION 2.2 Form of Securities.
------------------
The Securities and the Trustee's certificate of authentication to be
borne by such Securities shall be substantially in the form set forth in Exhibit
A, which is incorporated in and made a part of this Indenture.
Any of the Securities may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Securities may be
listed or designated for issuance, or to conform to usage.
Securities offered and sold in their initial distribution in reliance
on Rule 144A
13
shall be issued in the form of one or more Global Securities (collectively, the
"Global Security") in fully registered form without interest coupons,
substantially in the form of Security set forth in Exhibit A, with such
applicable legends as are provided for in Section 2.5 and Exhibit A. Such Global
Security shall be registered in the name of the Depositary or its nominee and
deposited with the Custodian, duly executed by the Company and authenticated by
the Trustee as hereinafter provided.
The terms and provisions contained in the form of Security attached as
Exhibit A hereto shall constitute, and is hereby expressly made, a part of this
Indenture and to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
SECTION 2.3 Denominations.
-------------
The definitive Securities shall be issuable in fully registered form,
without coupons, in denominations of U.S. $1,000 or integral multiples of U.S.
$1,000 in excess thereof.
SECTION 2.4 Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President or one of its
Vice Presidents, under a facsimile of its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. Any such
signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture, or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
14
SECTION 2.5 Registration, Registration of Transfer and Exchange;
----------------------------------------------------
Restrictions on Transfer.
------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at any
office or agency of the Company designated pursuant to Section 9.2 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 Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
Subject to the other provisions of this Section 2.5(a), Securities may
be exchanged for other Securities of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive, bearing registration numbers not contemporaneously outstanding.
All Securities issued upon any registration of transfer or exchange of
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
None of the Company, the Trustee nor the Security Registrar shall be
required to exchange or register a transfer of (i) any Securities for a period
of fifteen (15) days next preceding any selection of Securities to be redeemed
or (ii) any Securities called for redemption or, if a portion of any Security is
selected or called for redemption, such portion thereof selected or called for
redemption or (iii) any Securities surrendered for conversion or, if a portion
of any Security is surrendered for conversion, such portion thereof surrendered
for conversion.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar and duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, together
with any documentation required to be delivered pursuant to Section 2.5(b).
No service charge shall be made to any Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
(b) Notwithstanding any other provisions of this Indenture or the
Securities
15
(but subject to Section 2.2), transfers of a Global Security, in whole or in
part, transfers and exchanges of interests therein of the kinds described in
clauses (2) and (3) below shall be made only in accordance with this Section
2.5(b). Transfers and exchanges subject to this Section 2.5 shall also be
subject to the other provisions of this Indenture that are not inconsistent with
this Section 2.5.
(1) Limitation on Transfers of a Global Security. A Global Security
--------------------------------------------
may not be transferred, in whole or in part, to any Person other than the
Depositary or a nominee thereof, and no such transfer to any such other
Person may be registered; provided that this clause (1) shall not prohibit
any transfer of a Security that is issued in exchange for a Global Security
but is not itself a Global Security. No transfer of a Security to any
Person shall be effective under this Indenture or the Securities unless and
until such Security has been registered in the name of such Person. Nothing
in this Section 2.5(b)(1) shall prohibit or render ineffective any transfer
of a beneficial interest in a Global Security effected in accordance with
the other provisions of this Section 2.5(b).
(2) Global Security to Global Security. If the holder of a
----------------------------------
beneficial interest in the Global Security wishes at any time to transfer
such interest to a Person who wishes to take delivery thereof in such form,
such transfer may be effected only in accordance with the applicable
procedures of the Depositary.
(3) Exchanges. In the event that a Global Security or any portion
---------
thereof is exchanged for Securities other than Global Securities, such
Securities may in turn be exchanged (on transfer or otherwise) for
Securities that are not Global Securities or for beneficial interests in a
Global Security (if any is then outstanding) only in accordance with such
procedures, which shall be substantially consistent with the provisions of
clauses (1) and (2) above (including the certification requirements
intended to insure that the transfers and exchanges of beneficial interests
in a Global Security comply with Rule 144A or Rule 144, as the case may be)
and any applicable procedures, as may be from time to time adopted by the
Company and the Trustee.
(c) Each Restricted Security and Global Security issued hereunder
shall, upon issuance, bear the legends required by Section 2.5(e) to be applied
and such required legends shall not be removed except as provided in the next
sentence or paragraph (d) of this Section 2.5. The legend required for a
Restricted Security may be removed 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 may be reasonably required
by the Company that neither such legend nor the restrictions on transfer set
forth therein are required to ensure that transfers of such Security will not
violate the registration requirements of the Securities Act. Upon provision of
such satisfactory evidence, the Trustee, at the written direction of the
Company, shall authenticate and deliver in exchange for such Securities another
Security or Securities having an equal aggregate principal amount that does not
bear such legend. If such a legend required for a Restricted Security has been
removed from a Security as provided above, no other Security issued in exchange
for all or any part of such Security shall bear such legend, unless the Company
has reasonable cause to believe that such other Security is a "restricted
security" within the meaning of Rule 144 and instructs the Trustee in writing to
cause a legend to appear thereon.
(d) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to
16
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary or a nominee thereof and delivered
to such Depositary or a nominee thereof or custodian therefor, and each
such Global Security shall constitute a single Security for all purposes of
this Indenture.
(2) Notwithstanding any other provision in this Indenture or the
Securities, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary
or a nominee thereof unless (A) the Depositary (i) has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or (ii) has ceased to be a clearing agency registered under the
Exchange Act, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security or (C) a request for
certificates has been made upon the Trustee in accordance with the
Depositary's customary procedures and a copy of such notice has been
received by the Company from the Trustee. Any Global Security exchanged
pursuant to clause (A) above shall be so exchanged in whole or in part and
any Global Security exchanged pursuant to clause (B) or (C) above may be
exchanged in whole or from time to time in part as directed by the
Depositary. Any Security issued in exchange for a Global Security or any
portion thereof shall be a Global Security, provided that any Security so
issued that is registered in the name of a Person other than the Depositary
or a nominee thereof shall not be a Global Security.
(3) Securities issued in exchange for a Global Security or any portion
thereof pursuant to clause (2) above shall be issued in definitive, fully
registered form, without interest coupons, shall have an aggregate
principal amount equal to that of such Global Security or portion thereof
to be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear
any legends required hereunder. Any Global Security to be exchanged in
whole shall be surrendered by the Depositary to the Trustee, as Security
Registrar. With regard to any Global Security to be exchanged in part,
either such Global Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its nominee with
respect to such Global Security, the principal amount thereof shall be
reduced, by an amount equal to the portion thereof to be so exchanged, by
means of an appropriate adjustment made on the records of the Trustee.
Upon any such surrender or adjustment, the Trustee shall authenticate and
make available for delivery the Security issuable on such exchange to or
upon the written order of the Depositary or an authorized representative
thereof.
(4) In the event of the occurrence of any of the events specified in
clause (2) above, the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully
registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary ("Agent
Members") nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture with respect to any Global Security,
or under any Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner and holder of such Global
Security for all purposes whatsoever.
17
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any agent of the Company or Trustee from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other person on whose behalf an Agent
Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Security.
(e) Every Security that bears or is required under this Section 2.5(e)
to bear the legend set forth in this Section 2.5(e) (together with any Common
Stock issued upon conversion of the Securities and required to bear the legend
set forth in Section 2.5(f), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.5(e)
(including the legend set forth below), unless such restrictions on transfer
shall be waived by written consent of the Company, and the Holder of each such
Restricted Security, by such Holder's acceptance thereof, agreed to be bound by
all such restrictions on transfer. As used in Sections 2.5(e) and 2.5(f), the
term "transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.
Until two (2) years after the original issuance date of any Security,
any certificate evidencing such Security (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof which shall bear the legend set forth in Section 2.5(f), if
applicable) shall bear a legend in substantially the following form (unless such
Securities have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or unless otherwise agreed by the
Company in writing, with notice thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT
WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY
EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
18
2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE CHASE MANHATTAN
BANK, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE CHASE MANHATTAN BANK, AS
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED
HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY. AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Security (or security issued in exchange or substitution thereof)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the foregoing legend as
set forth therein have been satisfied may, upon surrender of such Security for
exchange to the Security Registrar in accordance with the provisions of this
Section 2.5, be exchanged for a new Security or Securities, of like tenor and
aggregate principal amount, which shall not bear the restrictive legend required
by this Section 2.5(e).
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Securities. Initially, the Global
Securities shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Trustee as
Custodian for Cede & Co.
If at any time the Depositary for a Global Security notifies the
Company that it is unwilling or unable to continue as Depositary for a Global
Security, the Company may appoint a successor Depositary with respect to such
Global Security. If a successor Depositary for a Global Security is not
appointed by the Company within ninety (90) days after the Company receives such
notice, the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate for the authentication and delivery of Securities, will authenticate
and deliver, Securities in certificated form, in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security and upon delivery of such Global Security to the Trustee such Global
Security shall be canceled.
Securities in certificated form issued in exchange for all or a part
of a Global
19
Security pursuant to this Section 2.5 shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
Upon execution and authentication, the Trustee shall deliver such Securities in
certificated form to the persons in whose names such Securities in certificated
form are so registered.
At such time as all interests in a Global Security have been redeemed,
converted, canceled, repurchased or transferred, such Security in global form
shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a Global
Security is exchanged for Securities in certificated form, redeemed, converted,
canceled, repurchased or transferred to a transferee who receives Securities in
certificated form therefor or any Security in certificated form is exchanged or
transferred for part of a Global Security, the principal amount of such Global
Security shall, in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be appropriately reduced or
increased, as the case may be, and a notation shall be made on the records of
Trustee, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.
(f) Until two (2) years after the original issuance date of any
Security, any stock certificate representing Common Stock issued upon conversion
of such Security shall bear a legend in substantially the following form (unless
such Common Stock has been sold pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or such Common Stock has been issued
upon conversion of Securities that have been transferred pursuant to a
registration statement that has been declared effective under the Securities Act
or unless otherwise agreed by the Company with written notice thereof to the
Trustee and any transfer agent for the Common Stock):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF
AGREES THAT UNTIL THE EXPIRATION OF TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THE SECURITY UPON THE CONVERSION OF WHICH THE COMMON STOCK
EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO ANY SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(C) ABOVE), IT
WILL FURNISH TO AMERICAN STOCK TRANSFER & TRUST COMPANY, AS TRANSFER
AGENT (OR ANY SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS
20
OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE
COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO A CLAUSE 1(C) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(C)
ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE
SECURITY UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED
HEREBY WAS ISSUED. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend as set forth therein have been satisfied may,
upon surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like aggregate
number of shares of Common Stock, which shall not bear the restrictive legend
required by this Section 2.5(f).
(g) Any certificate evidencing a Security that has been transferred to
an Affiliate of the Company within two years after the original issuance date of
the Security, as evidenced by a notation on the Assignment Form for such
transfer or in the representation letter delivered in respect thereof, for so
long as such Security is held by such Affiliate, shall, until two years after
the last date on which the Company or any Affiliate of the Company was an owner
of such Security, in each case, bear a legend in substantially the following
form, unless otherwise agreed by the Company (with written notice thereof to the
Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR THE ACCOUNT TO BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES
(1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) IN A
TRANSACTION REGISTERED UNDER THE SECURITIES ACT OR (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND SHALL BE REMOVED UPON THE
TRANSFER OF THE SECURITY EVIDENCED
21
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY
PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE. IF THE PROPOSED
TRANSFER IS PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Any stock certificate representing Common Stock issued upon conversion of such
Security shall also bear a legend in substantially the form indicated above,
unless otherwise agreed by the Company (with written notice thereof to the
Trustee).
(h) Notwithstanding any provision of Section 2.5 to the contrary, in
the event Rule 144(k) as promulgated under the Securities Act (or any successor
rule) is amended to shorten the two-year period under Rule 144(k) (or the
corresponding period under any successor rule), from and after receipt by the
Trustee of the Officers' Certificate and Opinion of Counsel provided for this
Section 2.5(h), (i) the references in the first sentence of the second paragraph
of Section 2.5(e) to "two (2) years" and in the restrictive legend set forth in
such paragraph to "TWO YEARS" shall be deemed for all purposes hereof to be
references to such shorter period, (ii) the references in the first paragraph of
Section 2.5(f) to "two (2) years" and in the restrictive legend set forth in
such paragraph to "TWO YEARS" shall be deemed for all purposes hereof to be
references to such shorter period and (iii) all corresponding references in the
Securities and the restrictive legends on the Restricted Securities shall be
deemed for all purposes hereof to be references to such shorter period, provided
that such changes shall not become effective if they are otherwise prohibited
by, or would otherwise cause a violation of, the then-applicable federal
securities laws. As soon as practicable after the Company has knowledge of the
effectiveness of any such amendment to shorten the two-year period under Rule
144(k) (or the corresponding period under any successor rule), unless such
changes would otherwise be prohibited by, or would otherwise cause a violation
of, the then-applicable securities law, the Company shall provide to the Trustee
an Officers' Certificate and Opinion of Counsel informing the Trustee of the
effectiveness of such amendment and the effectiveness of the foregoing changes
to Sections 2.5(e) and 2.5(f) and the restrictive legends on the Restricted
Securities. The provisions of this Section 2.5(h) will not be effective until
such time as the Opinion of Counsel and Officer's Certificate have been received
by the Trustee hereunder. This Section 2.5(h) shall apply to successive
amendments to Rule 144(k) (or any successor rule) shortening the holding period
thereunder.
22
SECTION 2.6 Mutilated, Destroyed, Lost or Stolen Securities.
-----------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there be delivered to the Company and the Trustee
(1) evidence to their satisfaction of the destruction, loss or theft
of any Security, and
(2) such security or indemnity as may be required by them to save each
of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and upon
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the condition set forth in the preceding
paragraph.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and such new
Security shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.7 Payment of Interest, Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith
23
cease to be payable to the Holder on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security 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 in this
clause provided. Thereupon the Trustee shall fix a Special Record Date of
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment 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 mailed, first-class postage prepaid
(by airmail in the case of any notice sent to an address outside the United
States), to each Holder of Securities at the address of such Holder 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 so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed reasonable and practicable
by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
The person in whose name any Security (or its Predecessor Security) is
registered at the close of business on any Record Date (including any Security
that is converted after the Record Date and on or before the relevant Interest
Payment Date) shall be entitled to receive the interest payable on such Interest
Payment Date notwithstanding the cancellation of such Security upon any
transfer, exchange or conversion subsequent to the Record Date and on or prior
to such Interest Payment Date; provided that in the case of any Security, or
portion thereof, called for redemption pursuant to Article 10 on a Redemption
Date or repurchased by the Company pursuant to Article 11 on a repurchase date
during the period from the close of
24
business on the Record Date to the close of business on the Business Day next
preceding the following Interest Payment Date, interest shall not be paid to the
person in whose name the Security, or portion thereof, is registered on the
close of business of such Record Date, and the Company shall have no obligation
to pay interest on such Security or portion thereof except to the extent
required to be paid upon such redemption or repurchase in accordance with
Article 10 or Article 11.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date), the
Holder of such Security shall be required to make a payment to the Company in an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of the Security so converted. Interest on the principal amount
of such Security 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 Security (or one or
more Predecessor Securities) is registered at the close of business on such
Regular Record Date.
SECTION 2.8 Persons Deemed Owners.
---------------------
The Company, the Trustee and any agent of the Company or the Trustee
may treat the registered Holder of the Global Security as the absolute owner of
such Security for the purpose of receiving payment thereof or on account thereof
and for all other purposes whatsoever, whether or not such Security be overdue,
and notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein. The Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and premium, if any, and (subject to Section
2.7) interest (including Liquidated Damages, if any) on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein.
SECTION 2.9 Cancellation.
------------
All securities surrendered for payment, redemption, repurchase,
conversion, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered shall be canceled promptly by the Trustee, and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Indenture. Upon written instructions of the Company, the Trustee shall
destroy canceled Securities and, after such destruction, shall deliver a
certificate of such destruction to the Company. If the Company shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee for cancellation.
SECTION 2.10 Computation of Interest.
-----------------------
Interest shall be calculated on the basis of a 360-day year. Whenever
it is necessary to compute an amount of interest in respect of any Security for
a period of less than a full year, such interest shall be calculated on the
basis of a 360-day year consisting of 12 months of 30 days each and, in the case
of an incomplete month, the number of days elapsed out of 30 days.
25
SECTION 2.11 Temporary Securities. Pending the preparation of
--------------------
Securities in certificated form, the Company may execute and the Trustee or an
Authenticating Agent shall, upon written request of the Company, authenticate
and deliver temporary Securities (printed or lithographed). Temporary
Securities shall be issuable in any authorized denomination, and substantially
in the form of the Securities in certified form but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as
may be determined by the Company. Every such temporary Security shall be
executed by the Company and authenticated by the Trustee or the Authenticating
Agent upon the same conditions and in substantially the same manner, and with
the same effect, as the Securities in certificated form. Without unreasonable
delay the Company will execute and deliver to the Trustee or the Authenticating
Agent Securities in certified form (other than in the case of Securities in
global form) and thereupon any or all temporary Securities (other than any such
Securities in global form) may be surrendered in exchange therefor, at each
office or agency maintained by the Company pursuant to Section 9.2 and the
Trustee or the Authenticating Agent shall authenticate and deliver in exchange
for such temporary Securities an equal aggregate principal amount of Securities
in certified form. Such exchange shall be made by the Company at its own expense
and without any charge therefor. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits and subject to the same
limitations under this Indenture as Securities in certificated form
authenticated and delivered hereunder.
ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.1 Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange or
replacement of Securities herein expressly provided for), and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.6 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3), have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation (other than Securities referred to in clauses (i) and
(ii) of clause (1)(A) above)
26
(i) have become due and payable, or
(ii) will have become due and payable at their Stated
Maturity within one year, or
(iii) 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 (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
(immediately available to the Holders in the case of clause (i)) in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and premium, if any, and
interest (including Liquidated Damages, if any) to the date of such
deposit (in the case of Securities which have become due and payable)
or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) 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
obligations of the Company to the Trustee under Section 5.7 shall survive and,
if money shall have been deposited with the Trustee pursuant to clause (1)(B) of
this Section, the obligations of the Trustee under Section 3.2 and the last
paragraph of Section 9.3 shall survive. Funds held in trust pursuant to this
Section are not subject to the provisions of Article 13.
SECTION 3.2 Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 9.3, all
money deposited with the Trustee pursuant to Section 3.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and premium, if
any, and interest (including Liquidated Damages, if any) for whose payment such
money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 3.1 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
27
ARTICLE 4
REMEDIES
SECTION 4.1 Events of Default.
-----------------
"Event of Default", where used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article 13 or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) there shall be a failure by the Company to pay when due the
principal of or premium, if any, on any of the Securities at the Stated
Maturity, upon redemption or exercise of a Repurchase Right or otherwise,
whether or not such payment is prohibited by Article 13 of this Indenture;
or
(2) there shall be a failure by the Company to pay an installment of
interest (including Liquidated Damages, if any) on any of the Securities
for 30 days after the date when due, whether or not such payment is
prohibited by Article 13 of this Indenture; or
(3) the Company shall fail to perform or observe any other term,
covenant or agreement contained in the Securities or this Indenture for a
period of 60 days after written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities; or
(4) if any default shall have occurred under any agreements,
indentures or instruments under which the Company has outstanding
Indebtedness in excess of U.S. $25,000,000 in the aggregate (but excluding
for purposes of this clause (4) any amounts owing under reimbursement or
similar obligations to banks, sureties or other entities which have issued
letters of credit, surety bonds, performance bonds or other guarantees
relating to the performance by the Company or its subsidiaries of
contractual obligations to customers, to the extent any demands made under
any such reimbursement or similar obligation relates to a draw under the
related letter of credit or other instrument which draw is being contested
in good faith through appropriate proceedings) and, if not already matured
in accordance with its terms, such Indebtedness (as set forth in this
clause (4)) shall have been accelerated, and such acceleration shall not
have been rescinded or annulled within 30 days after notice thereof shall
have been given to the Company by the Trustee or to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount of
Outstanding Securities, provided, that if, prior to the entry of judgment
in favor of the Trustee, such default under such indenture or instrument
shall be remedied or cured by the Company, or waived by the holders of such
Indebtedness, then the Event of Default under this Indenture shall be
deemed likewise to have been remedied, cured or waived; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under
28
any applicable United States federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging 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 under any applicable United States federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the 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
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable United States federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable United States federal
or state bankruptcy, insolvency, reorganization or other similar law or to
the commencement of any bankruptcy or insolvency case or proceeding against
the Company, or the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any applicable United States
federal or state law, or the consent by the Company to the filing of such
petition or to the appointment of or the taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or the
making by the Company of an assignment for the benefit of creditors, or the
admission by the Company in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Company expressly in furtherance of any such action.
SECTION 4.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default specified in Section 4.1(5) or 4.1(6) occurs
and is continuing, then automatically the principal of all the Securities and
the interest thereon shall become immediately due and payable. If any other
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities may declare the Securities to be due and payable
immediately at their principal amount together with accrued interest, by a
notice in writing to the Company (and to the Trustee if given by the Holders),
and upon any such declaration such principal amount and accrued interest shall
become immediately due and payable.
At any time after an acceleration and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities (or such lesser amount as shall have acted at a meeting
pursuant to the provisions of this Indenture), by written notice to the Company
and the Trustee, may rescind and annul such acceleration and its consequences
if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including Liquidated Damages, if any)
on
29
all Securities,
(B) the principal of and premium, if any, on any Securities which
has become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest (including Liquidated Damages, if any)
at the rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and
(2) all Events of Default, other than the non-payment of the principal
of Securities which have become due solely by such acceleration, have been
cured or waived as provided in Section 4.13;
provided, however, that in the event such declaration of acceleration has been
made based on the existence of an Event of Default under Section 4.1(4) and such
Event of Default has, pursuant to the proviso to such Section 4.1(4), been
remedied, cured or waived, then without any further action by the Holders such
declaration of acceleration shall be rescinded automatically and the
consequences of such declaration shall be annulled.
No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
SECTION 4.3 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
the Trustee.
-----------
The Company covenants that if
(1) default is made in the payment of any interest (including
Liquidated Damages, if any) on any Security when such interest (including
Liquidated Damages, if any) becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable (as expressed
therein or as a result of any acceleration effected pursuant to Section 4.2) on
such Securities for principal and premium, if any, and interest (including
Liquidated Damages, if any) and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal and premium, if
any, and on any overdue interest (including Liquidated Damages, if any), at the
rate borne by the Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the
30
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 4.4 Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or the property of the Company or
its creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and
premium, if any, and interest (including Liquidated Damages, if any) owing
and unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Securities allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceedings is hereby authorized by
each Holder of Securities 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 of Securities, to pay to the Trustee any amount due to 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 5.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept, or adopt on behalf of any Holder of a
Security, any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder of a Security in any such
proceeding.
SECTION 4.5 Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
----------
All rights of action and claims under this Indenture or the Securities
may be
31
prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which judgment
has been recovered.
SECTION 4.6 Application of Money Collected.
------------------------------
Subject to Article 13, any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates fixed
by the Trustee and, in case of the distribution of such money on account of
principal or premium, if any, or interest (including Liquidated Damages, if
any), upon presentation of the Securities 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;
SECOND: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest (including Liquidated Damages, if
any) on the Securities and coupons in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities for
principal and premium, if any, and interest (including Liquidated Damages, if
any), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 4.7 Limitation on Suit.
------------------
No Holder of any Security 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:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities 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;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
32
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities (or such amount as
shall have acted at a meeting pursuant to the provisions of this
Indenture);
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 4.8 Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest and To Convert.
-----------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security (other than the Temporary Global Security) shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
premium, if any, and (subject to Section 2.7) interest (including Liquidated
Damages, if any) on such Security on the Stated Maturity expressed in such
Security (or, in the case of redemption or exercise of a Repurchase Right, on
the Redemption Date) and to convert such Security in accordance with Article 12,
and to institute suit for the enforcement of any such payment and right to
convert, and such rights shall not be impaired without the consent of such
Holder.
SECTION 4.9 Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder of a Security 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, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 4.10 Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 2.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 4.11 Delay or Omission Not Waiver.
----------------------------
33
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
any acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders of Securities may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders
of Securities, as the case may be.
SECTION 4.12 Control by Holders of Securities.
--------------------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have acted as a meeting
pursuant to the provisions of this Indenture) 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
----
(1) such direction shall not be conflict with any rule of law or with
this Indenture or expose the Trustee to personal liability, or be unduly
prejudicial to the Holders not joining therein,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 4.13 Waiver of Past Default.
----------------------
The Holders, either (a) through the written consent of not less than a
majority in principal amount of the Outstanding Securities, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least a majority in principal
amount of the Outstanding Securities represented at such meeting, may on behalf
of the Holders of all the Securities waive any past default hereunder and its
consequences, except a default (1) in the payment of the principal of or
premium, if any, or interest (including Liquidated Damages, if any) on any
Security or (2) in respect of a covenant or provision hereof which under Article
7 cannot be modified or amended without the consent of the Holders of each
Outstanding Security affected.
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 4.14 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
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, 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 litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not
34
apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities, or to any suit instituted by any Holder or any Security for the
enforcement of the payment of the principal of or premium, if any, or interest
(including Liquidated Damages, if any) on any Security on or after the Stated
Maturity expressed in such Security (or, in the case of redemption or exercise
of a Repurchase Right, on or after the Redemption Date) or for the enforcement
of the right to convert any Security in accordance with Article 12.
SECTION 4.15 Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
to take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 5
THE TRUSTEE
SECTION 5.1 Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default,
(1) 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
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements to this Indenture.
(b) In case an Event of Default actually known to a Responsible
Officer of the Trustee has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
------
35
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities (or such lesser amount as shall have acted at a meeting pursuant
to the provisions of this Indenture) relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) 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 or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 5.2 Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder of which
the Trustee has received written notice, the Trustee shall give notice to
Holders pursuant to Section 1.5 hereof, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
-------- -------
payment of the principal of or premium, if any, or interest (including
Liquidated Damages, if any), or in the payment of any redemption or repurchase
obligation on any Security, the Trustee shall be protected in withholding such
notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders;
and provided further, that in the case of any default of the character specified
-------- -------
in Section 4.1(3), no such notice to Holders shall be given until at least 30
days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default.
SECTION 5.3 Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 5.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, Company
Request, Company Order, other certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
coupon, other evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed or presented by
36
the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the 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 hereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be deemed to have notice or actual knowledge
of any Event of Default (other than an Event of Default described in
Section 4.1(1) or (2)) unless written notice thereof is received by a
Responsible Officer of the Trustee at its Corporate Trust Office,
including, from Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities;
(9) the Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture; and
(10) the rights, protections and immunities afforded to the Trustee
hereunder shall apply with equal force and effect to any Paying Agent,
Authenticating Agent, Conversion Agent or Security Registrar acting
hereunder.
37
SECTION 5.4 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities (except the
Trustee's and Authenticating Agent's certificates of authentication) shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee shall not be accountable for the use or application by the Company of
Securities or the proceeds thereof.
SECTION 5.5 May Hold Securities, Act as Trustee Under Other
-----------------------------------------------
Indentures.
----------
The Trustee, any Paying Agent, any Transfer Agent, any Conversion
Agent, the Security Registrar or any other agent of the Company or the Trustee,
in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Transfer Agent, Conversion Agent,
Security Registrar or such other agent.
The Trustee may become and act as trustee under other indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding in the same manner as if it were not
Trustee.
SECTION 5.6 Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise expressly agreed with the Company.
SECTION 5.7 Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claims.
------
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Company covenants and agrees to pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ), except to the extent that any
such expense, disbursement or advance is due to its negligence or bad faith.
When the Trustee incurs expenses or renders services in connection with an Event
of Default specified in Section 4.1, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy law. The
Company also covenants to indemnify the Trustee and its officers, directors,
employees and agents for, and to hold such Persons harmless against, any loss,
liability or expense incurred by them, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder or the
performance of their duties hereunder, including the costs and expenses of
defending themselves against or investigating any claim of liability in the
premises, except to the extent that any such loss, liability or expense was due
to the negligence or bad faith of
38
such Persons. The obligations of the Company under this Section 5.7 to
compensate and indemnify the Trustee and its officers, directors, employees and
agents and to pay or reimburse such Persons for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture or the earlier resignation or
removal of the Trustee. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Securities, and the Securities are hereby subordinated to such senior
claim. "Trustee" for purposes of this Section 5.7 shall include any predecessor
Trustee, but the negligence or bad faith of any Trustee shall not affect the
indemnification of any other Trustee.
SECTION 5.8 Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (together with any Person
directly or indirectly controlling the Trustee) a combined capital and surplus
of at least U.S. $50,000,000, subject to supervision or examination by federal
or state authority. If such corporation publishes reports of conditions at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, 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 in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 5.9 Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 5.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 5.10 shall not have been delivered to the Trustee within 30
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 principal amount of the Outstanding Securities (or such lesser
amount as shall have acted at a meeting pursuant to the provisions of this
Indenture), delivered to the Trustee and the Company.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 5.8 and shall
fail to resign after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
39
(2) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 4.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(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 a Board Resolution, shall promptly appoint a successor Trustee and
shall comply with the applicable requirements of Section 5.10. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities (or such lesser
amount as shall have acted at a meeting pursuant to the provisions of this
Indenture) delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 5.10, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders of Securities and accepted appointment in the manner required by Section
5.10, any Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, 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 to the Holders of
Securities in the manner provided in Section 1.5. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 5.10 Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and 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 retiring
Trustee hereunder. 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.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be eligible under this Article.
40
The fees, charges and expenses of the retiring Trustee shall be paid
upon the appointment of a successor Trustee hereunder. The retiring Trustee
shall not be liable for any acts or omissions of a successor hereunder.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
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 such corporation shall be otherwise eligible under this Article,
--------
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities 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 Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 5.12 Authenticating Agent.
--------------------
The Company may appoint an authenticating agent or agents reasonably
acceptable to the Trustee with respect to the Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities issued
upon exchange, registration of transfer, partial redemption thereof or
substitution pursuant to this Indenture. Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder and every reference
herein to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an authenticating agent
and a certificate of authentication executed on behalf of the Trustee by an
authenticating agent. Each authenticating agent shall at all times be a bank or
trust company authorized by law to act as an authenticating agent, having a
combined capital and surplus of not less than U.S. $50,000,000 and subject to
supervision or examination by a duly constituted banking authority. If such
authenticating agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 5.12, the combined capital and surplus of such
authenticating agent 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 an
authenticating agent shall cease to be eligible in accordance with the
provisions of this Section 5.12, such authenticating agent shall resign
immediately in the manner and with the effect specified in this Section 5.12.
The Company hereby appoints The Chase Manhattan Bank as Authenticating
Agent.
Any corporation into which an authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such authenticating agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an authenticating agent, shall continue to be an
authenticating agent, provided such corporation shall be otherwise eligible
under this Section 5.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the authenticating agent.
41
An authenticating agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Company may at any time
terminate the agency of an authenticating agent by giving written notice thereof
to such authenticating agent and to the Trustee. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
authenticating agent shall cease to be eligible in accordance with the
provisions of this Section 5.12, the Company may appoint a successor
authenticating agent which shall be acceptable to the Trustee. Any successor
authenticating agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless eligible under the provisions of
this Section 5.12.
The Company agrees to pay to each authorizing agent from time to time
reasonable compensation for its services under this Section 5.12.
If an authenticating agent is appointed with respect to the Securities
pursuant to this Section 5.12, the Securities may have been endorsed thereon, in
addition to or in lieu of the Trustee's certification of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture:
THE CHASE MANHATTAN BANK
as Trustee
By [Authenticating Agent], as
Authenticating Agent
By ______________________________________
Authorized Signatory
42
ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 6.1 Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in the event that the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a corporation
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and, if the entity
surviving such transaction or transferee entity is not the Company, then
such surviving or transferee entity shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of and premium, if any and interest (including Liquidated Damages, if any),
on all the Securities and the performance of every covenant of this
Indenture on the party of the Company to be performed or observed and shall
have provided for conversion rights in accordance with Section 12.11;
(2) at the time of consummation of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 6.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger by the Company with or into any other
corporation or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety to any Person, in accordance with
Section 6.1, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein, and thereafter,
except in the case of a lease to another Person, the predecessor corporation
shall be relieved of all obligations and covenants under this Indenture and the
Securities.
43
ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of Holders of
-----------------------------------------------------
Securities.
----------
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, for any of the
following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of Securities, or to surrender any right or power herein conferred
upon the Company; or
(3) to modify the restrictive legend set forth on the face of the form
of Security set forth in Exhibit A hereto or modify the form of
certificates set forth in Exhibit A hereto; provided, however, that any
-------- -------
such modification shall not adversely affect the interest of the Holders of
the Securities in any material respect; or
(4) to make provision with respect to the conversion rights of Holders
of Securities pursuant to Section 12.11; or
(5) to make provision for the establishment of a book-entry system, in
which Holders would have the option to participate, for the clearance and
settlement of transactions in Securities originally issued in certificated
form; or
(6) to reduce the Conversion Price; provided, that such reduction in
--------
the Conversion Price shall not adversely affect the interest of the Holders
of Securities (after taking into account tax and other consequences of such
reduction) in any material respect; or
(7) to qualify this Indenture under the Trust Indenture Act of 1939,
as amended; or
(8) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which
is otherwise defective, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture, provided, such action
--------
pursuant to this clause (8) shall not adversely affect the interest of the
Holders of Securities in any material respect.
44
SECTION 7.2 Supplemental Indentures With Consent of Holders of
--------------------------------------------------
Securities.
----------
With either (a) the consent of the Holders of not less than a majority
in principal amount of the Outstanding Securities, by the Act of said Holders
delivered to the Company and the Trustee, or (b) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of a majority in principal amount of the
Outstanding Securities represented at such meeting, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of the Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without
-------- -------
the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest (including Liquidated Damages, if any) on, any Security, or
reduce the principal amount thereof or the rate of interest thereon or any
premium, if any, payable upon the redemption thereof or the amount payable
upon the exercise of a Repurchase Right with respect thereto, or change the
coin or currency in which any Security or premium, if any, or the interest
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,
except as permitted by Section 12.11, adversely affect the Repurchase Right
or the right to convert any Security as provided in Article 12, or change
the subordination provisions of the Securities in a manner adverse to the
Holders of Securities, or
(2) reduce the requirements of Section 8.4 for quorum or voting, or
reduce the percentage in principal amount of the Outstanding Securities the
consent of whose Holders is required for any such supplemental indenture or
the consent of whose Holders is required for any waiver provided for in
this Indenture, or
(3) change the obligation of the Company to maintain an office or
agency in The City of New York pursuant to Section 9.2, or
(4) modify any of the provisions of this Section, Section 4.13 or
Section 1.10, except to increase any percentage contained herein or therein
or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposal supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
45
SECTION 7.3 Execution of Supplemental Indentures.
------------------------------------
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 5.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and an Officer's Certificate stating
that all conditions precedent to the execution of such supplemental indenture
have been fulfilled. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 7.4 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 7.5 Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 7.6 Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 7.1 or 7.2, the
Company shall give notice, setting forth in general terms the substance of such
supplemental indenture, in the manner provided in Section 1.5. Any failure of
the Company to give such notice, or any defect therein, shall not in any way
impair or affect the validity of any such supplemental indenture.
ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
SECTION 8.1 Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Holders of Securities may be called at any time and from
time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.
46
SECTION 8.2 Call Notice and Place of Meetings.
---------------------------------
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 8.1, to be held at such time and
at such place in The City of New York. Notice of every meeting of Holders of
Securities, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 1.5, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the Outstanding Securities
shall have requested the Trustee to call a meeting of the Holders of Securities
for any purpose specified in Section 8.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the Holders
of Securities in the amount specified, as the case may be, may determine the
time and the place in The City of New York for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in paragraph (a)
of this Section.
SECTION 8.3 Persons Entitled to Vote at Meetings.
------------------------------------
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities by such Holder or Holders. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 8.4 Quorum; Action.
--------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 8.2(a), except that such notice need be given only
once and not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage of the principal amount of the Outstanding
Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in principal amount of
the Outstanding Securities at the time shall constitute a quorum for the taking
of any action set forth in the
47
notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso to Section 7.2) shall be effectively passed and decided
if passed or decided by the Persons entitled to vote not less than a majority in
principal amount of Outstanding Securities represented and voting at such
meeting.
Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities, whether or not present or represented at the meeting.
SECTION 8.5 Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings.
-----------
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities in regard to proof of the holding of Securities
and of the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of Securities shall
be proved in the manner specified in Section 1.3 and the appointment of any
proxy shall be proved in the manner specified in Section 1.3. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 1.3 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 8.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall
be elected by vote of the Persons entitled to vote a majority in principal
amount of the Outstanding Securities represented at the meeting.
(c) At any meeting each Holder of a Security or proxy shall be
entitled to one vote for each U.S. $1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
-------- -------
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.
48
(d) Any meeting of Holders of Securities duly called pursuant to
Section 8.2 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 8.6 Counting Votes and Recording Action of Meetings.
-----------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 8.2 and, if
applicable, Section 8.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE 9
COVENANTS
SECTION 9.1 Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay the principal of and premium,
if any, and interest (including Liquidated Damages, if any) in respect of the
Securities in accordance with the terms of the Securities and this Indenture.
The Company will deposit or cause to be deposited with the Trustee as directed
by the Trustee, on the day of the Stated Maturity of any Security or installment
of interest, all payments so due.
49
SECTION 9.2 Maintenance of Offices or Agencies.
----------------------------------
The Company hereby appoints the Corporate Trust Office of the Trustee
as its agent in The City of New York, where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange, where Securities may be surrendered for conversion, and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served.
The Company may at any time and from time to time vary or terminate
the appointment of any such agent or appoint any additional agents for any or
all of such purposes; provided, however, that until all of the Securities have
-------- -------
been delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of and premium, if any, and interest (including Liquidated Damages, if
any) on the Securities have been made available for payment and either paid or
returned to the Company pursuant to the provisions of Section 9.3, the Company
will maintain in The City of New York, an office or agency where Securities may
be presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee, and notice to the Holders in accordance with
Section 1.5, of the appointment or termination of any such agents and of the
location and any change in the location of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency in The City of New York, or shall fail to furnish the Trustee
with the address thereof, presentations and surrenders may be made and notices
and demands may be served on and Securities may be surrendered for conversion to
the Corporate Trust Office of the Trustee.
SECTION 9.3 Money for Security Payments To Be Held in Trust.
-----------------------------------------------
If the Company shall act as a Paying Agent, it will, on or before each
due date of the principal of and premium, if any, or interest (including
Liquidated Damages, if any) on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and premium, if any, or interest (including Liquidated Damages, if
any) so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and the Company will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
one Business Day prior to each due date of the principal of and premium, if any,
or interest (including Liquidated Damages, if any) on any Securities (or, if
applicable, cash in lieu of conversion of any Security), deposit with a Paying
Agent a sum sufficient to pay the principal and premium, if any, or interest
(including Liquidated Damages, if any) so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium, if
any, or interest (including Liquidated Damages, if any), and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of any
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
50
(1) hold all sums held by it for the payment of the principal of and
premium, if any, or interest (including Liquidated Damages, if any) on
Securities in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company in the
making of any payment of principal and premium, if any, or interest
(including Liquidated Damages, if any); and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal and premium, if any, or interest (including Liquidated Damages,
if any) and redemption or repurchase payments have become due and payable shall
be paid to the Company on Company Request, subject to applicable abandoned
property and escheat laws, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that (i) the Trustee or such Paying Agent, before
-------- -------
being required to make any such repayment, may at the expense of the Company
cause to be published or mailed notice as provided in Section 1.5, except that
such notice need be given only once, (ii) such money remains unclaimed and (iii)
after a date specified in such notice, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 9.4 Corporate Existence.
-------------------
Subject to Article 6, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or franchise
if the Company determines 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.
51
SECTION 9.5 Maintenance of Properties.
-------------------------
The Company will, and will cause each Significant Subsidiary to,
maintain and keep its properties and every part thereof in such repair, working
order and condition, and make or cause to be made all such needful and proper
repairs, renewals and replacements thereto, as in the judgment of the Company
are necessary in the interests of the Company; provided, however, that nothing
-------- -------
in this Section shall prevent the Company or any Significant Subsidiary from
selling, abandoning or otherwise disposing of any of their respective properties
or discontinuing a part of their respective businesses from time to time if, in
the judgment of the Company, such sale, abandonment, disposition or
discontinuance is advisable and does not materially adversely affect the
interests or business of the Company or any of its Subsidiaries.
SECTION 9.6 Payment of Taxes and Other Claims.
---------------------------------
The Company will, and will cause each Significant Subsidiary to,
promptly pay and discharge or cause to be paid and discharged all taxes,
assessments and governmental charges or levies lawfully imposed upon it or upon
its income or profits or upon any of its property, real or personal, or upon any
part thereof, as well as all claims for labor, materials and supplies which, if
unpaid, might by law become a lien or charge upon its property; provided,
--------
however, that neither the Company nor any Significant Subsidiary shall be
-------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge, levy, or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings
and if the Company or such Significant Subsidiary, as the case may be, shall
have set aside on its books reserves deemed by it adequate with respect thereto.
SECTION 9.7 Statement by Officers as to Default.
-----------------------------------
The Company will deliver to the Trustee, on or before October 1 in
each year ending after the date hereof, an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture, without regard to any period of grace or
requirement of notice provided hereunder and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge. In the event an officer of the Company comes to actually know
of such a default, regardless of the date the Company will deliver an Officers'
Certificate to the Trustee specifying such default and the nature and status
thereof.
52
SECTION 9.8 Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 9.3 to 9.5, inclusive, if
before the time for such compliance the Holders of at least a majority in
aggregate principal amount of the Outstanding Securities (or such lesser amount
as shall have acted at a meeting pursuant to the provisions of this Indenture)
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
SECTION 9.9 Delivery of Certain Information.
-------------------------------
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a Holder of a Security, the Company will
promptly furnish or cause to be furnished Rule 144A Information to such Holder
or to a prospective purchaser of such Security designated by such Holder, as the
case may be, in order to permit compliance by such Holder with Rule 144A under
the Securities Act in connection with the resale of such Security by such
Holder; provided, however, that the Company shall not be required to furnish
-------- -------
such information in connection with any request made on or after the date which
is two years from the date such Security (or any predecessor Security) was
acquired from the Company. "Rule 144A Information" shall be such information as
is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto).
SECTION 9.10 Resale of Certain Securities.
----------------------------
During the period of two years after the Closing Date, the Company
shall not, and shall not permit any of its "affiliates" (as defined under Rule
144 under the Securities Act) to, resell any Securities, or shares of Common
Stock issuable upon conversion of the Securities, which constitute "restricted
securities" under Rule 144, that are acquired by any of them within the United
States or to U.S. persons (as defined in Regulation S) except pursuant to an
effective registration statement under the Securities Act or an applicable
exemption therefrom. The Trustee shall have no responsibility or liability in
respect of the Company's performance of its agreement in the preceding sentence.
ARTICLE 10
REDEMPTION OF SECURITIES
SECTION 10.1 Right of Redemption.
--------------------
The Company may, at its option, redeem all, or from time to time, any
part of the Securities on any date prior to maturity, upon notice as set forth
in Section 10.3, at the Redemption Prices specified in the form of Security set
forth in Exhibit A hereto, together with accrued interest to the Redemption
Date; provided, however, that prior to July 10, 2001, the Company may not redeem
-------- -------
the Securities.
53
SECTION 10.2 Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise
as permitted or required by any provision of the Securities or this Indenture,
shall be made in accordance with such provision and this Article.
SECTION 10.3 Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. The Company shall, at least 45 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed.
SECTION 10.4 Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee may deem fair and
appropriate. Such method of selection may provide for the selection for
redemption of portions (equal to U.S. $1,000 or any integral multiple thereof)
of the principal amount of Securities of a denomination larger than U.S. $1,000.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed to
be the portion selected for redemption (provided, however, that the Holder of
-------- -------
such Security so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Security). Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as Outstanding for the
purpose of such selection.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities in registered form selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 10.5 Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section
1.5 to the Holders of Securities to be redeemed. Such notice shall be given not
less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
54
(2) the Redemption Price, and accrued interest, if any,
(3) if less than all the Outstanding Securities are to be redeemed,
the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities which will be outstanding after
such partial redemption,
(4) that on the Redemption Date the Redemption Price, and accrued
interest, if any, will become due and payable upon each such Security to be
redeemed, and that interest thereon shall cease to accrue on and after said
date,
(5) the Conversion Price, the date on which the right to convert the
principal of the Securities to be redeemed will terminate and the places
where such Securities may be surrendered for conversation,
(6) the place or places that the certificate required by Section 10.7
and Section 2.2 shall be delivered, and the form of such certificate,
(7) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, and
(8) the CUSIP number of the Securities.
In case of a partial redemption, the first notice given shall specify
the last date on which exchanges or transfers of Securities may be made pursuant
to Section 2.5, and the second notice shall specify the serial numbers of
Securities and the portions thereof called for redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company.
SECTION 10.6 Deposit of Redemption Price.
---------------------------
On any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 9.3) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
55
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 2.7) be paid to the Company on Company
Request or, if then held by the Company, shall be discharged from such trust.
SECTION 10.7 Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price together with accrued interest to
the Redemption Date; provided, however, the installments of interest on
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Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 2.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Upon presentation and surrender of any Security which is to be
purchased in part only, upon its purchase, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder thereof, at the expense of
the Company, a new Security or Securities in authorized denominations in
aggregate principal amount equal to the portion of the Security not purchased.
SECTION 10.8 Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 9.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or the Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE 11
REPURCHASE UPON A DESIGNATED EVENT
SECTION 11.1 Repurchase Right.
----------------
(a) If, at any time prior to July 1, 2005 there shall occur a
Designated
56
Event, then each Holder shall have the right (the "Repurchase Right"), at such
Holder's option, but subject to the provisions of Section 11.2, to require the
Company to repurchase all of such Holder's Securities, or any portion thereof
(in principal amounts of $1,000 or integral multiples thereof), on the
repurchase date fixed by the Company that is not less than 30 days nor more than
45 days after the date of the Company Notice (as defined in Section 11.3 below)
of such Designated Event (or, if such 45th day is not a Business Day, the next
succeeding Business Day). The repurchase price shall be equal to 100% of the
principal amount of Securities, together with accrued interest, if any, to, but
excluding, the repurchase date (the "Repurchase Price"); provided that if such
repurchase date is January 1 or July 1, then the interest payable on such date
shall be paid to the holder of record of the Securities on the next preceding
December 15 or June 15, respectively. At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the fulfillment by the
Company of the conditions set forth in Section 11.2, by delivery of shares of
Common Stock having a fair market value equal to the Repurchase Price as
described in Section 11.2(a). Whenever in this Indenture there is a reference in
any context, to the principal of any Security as of any time, such reference
shall be deemed to include reference to the Repurchase Price payable in respect
of such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that for the purposes of Article 13, such reference
-------- -------
shall be deemed to include reference to the Repurchase Price only if the
Repurchase Price is payable in cash.
SECTION 11.2 Conditions to the Company's Election to Pay the
-----------------------------------------------
Repurchase Price in Common Stock. The Company may elect to pay the Repurchase
--------------------------------
Price by delivery of shares of Common Stock pursuant to Section 11.1 if and only
if the following conditions have been satisfied:
(a) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the repurchase date of not
less than the Repurchase Price. For purposes of this Section 11.2, the fair
market value of shares of Common Stock shall be determined by the Company and
shall be equal to 95% of the average of the Closing Prices of the Common Stock
for the five consecutive trading days ending on and including the third trading
day immediately preceding the repurchase dates;
(b) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act upon repurchase,
such registration shall have been completed and shall have become effective
prior to the repurchase date;
(c) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder require registration with or approval of any
governmental authority under any State law or any other Federal law before such
shares may be validly issued or delivered upon repurchase, such registration
shall have been completed, have become effective and such approval shall have
been obtained, in each case, prior to the repurchase date;
(d) The shares of Common Stock deliverable in payment of the
Repurchase Price shall be listed for trading on a U.S. national securities
exchange or approved for trading on an established automated over-the-counter
trading market in the United States, in either
57
case, immediately prior to the repurchase date; and
(e) All shares of Common Stock deliverable in payment of the
Repurchase Price shall be issued out of the Company's authorized but unissued
Common Stock and will, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 11.2 are not
satisfied in accordance with the terms thereof, the Repurchase Price shall be
paid by the Company only in cash.
SECTION 11.3 Notices; Method of Exercising Repurchase Right, Etc.
----------------------------------------------------
(a) Unless the Company shall have theretofore called for redemption
all of the outstanding Securities, on or before the thirtieth (30th) calendar
day after the Company becomes aware of the occurrence of a Designated Event, the
Company or, at the request and expense of the Company, the Trustee, shall mail
to all Holders a notice (the "Company Notice") of the occurrence of the
Designated Event and of the Repurchase Right set forth herein arising as a
result thereof. The Company shall also deliver a copy of such notice of a
Repurchase Right to the Trustee and cause of such notice of a Repurchase Right,
or a summary of the information contained therein, to be published in a
newspaper of general circulation in The City of New York. The Company Notice
shall contain the following information:
(1) the repurchase date,
(2) the date by which the Repurchase Right must be exercised,
(3) the last date by which the election to require repurchase, if
submitted, may be revoked,
(4) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock,
(5) a description of the procedure which a Holder must follow to
exercise a Repurchase Right, and
(6) the Conversion Price then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where Securities may be surrendered for
conversion.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a Repurchase Right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions are inconsistent with applicable
law, such law shall govern.
(b) To exercise a Repurchase Right, a Holder shall deliver to the
Trustee on or before the close of business on the repurchase date (i) written
notice to the Company (or agent designated by the Company for such purpose) of
the Holder's exercise of such right,
58
which notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased, a statement that an election to exercise the
Repurchase Right is being made thereby, and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the Repurchase
Right is being exercised, duly endorsed for transfer to the Company. Election of
repurchase by a Holder shall be revocable at any time prior to, but excluding,
the repurchase date, by delivering written notice to that effect to the Trustee
prior to the close of business on the Business Day prior to the repurchase date.
(c) In the event the Repurchase Right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
the Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the repurchase date or, if shares of Common Stock are
to be issued, as promptly after the repurchase date as practicable.
(d) If the Company fails to repurchase on the repurchase date any
Securities (or portions thereof) as to which the Repurchase Right has been
properly exercised, then the principal of such Securities shall, until paid,
bear interest to the extent permitted by applicable law from the repurchase date
at the rate borne by the Securities and each such Security shall be convertible
into Common Stock in accordance with this Indenture (without giving effect to
Section 11.2(b)) until the principal of such Security shall have been paid or
duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or its attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge a new Security or Securities, containing identical terms and conditions,
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) On the repurchase date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 9.3) an amount of money
sufficient to pay the Repurchase Price of the Securities that are to be repaid
on the repurchase date.
(g) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the repurchase date and the person or persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the repurchase
date the holder or holders of record of the shares represented thereby;
provided, however, that any surrender for repurchase on a date when the stock
-------- -------
transfer books of the Company shall be closed shall constitute the person or
persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Security
declared prior to the repurchase date.
59
(h) No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon repurchase of Securities. If more than
one Security shall be repurchased from the same holder and the Repurchase Price
shall be payable in shares of Common Stock, the number of full shares which
shall be issued upon repurchase shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so repurchased. If any fractional share of stock otherwise
would be issuable upon repurchase of any Security or Securities, the Company
shall make an adjustment therefor in cash at the current market value thereof to
the Holder of Securities. For these purposes, the current market value of a
share of Common Stock shall be the Quoted Price on the first trading day
immediately preceding the repurchase date.
(i) The issue of stock certificates on repurchase of Securities shall
be made without charge to the Holder of Securities being repurchased for any tax
in respect of the issue thereof. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the Holder of any
Security repurchased, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
ARTICLE 12
CONVERSION OF SECURITIES
SECTION 12.1 Conversion Privilege and Conversion Price.
-----------------------------------------
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any definitive Security or any portion of the
principal amount thereof which is U.S. $1,000 or an integral multiple of U.S.
$1,000 may be converted at the principal amount thereof, or of such portion
thereof, into duly authorized, fully paid and nonassessable shares of Common
Stock, at the Conversion Price, determined as hereinafter provided, in effect at
the time of conversion. Such conversion right shall, with respect to all
Securities, commence on the 60th day following the latest date of original
issuance thereof and expire at the close of business July 1, 2005. In case a
Security or portion thereof is called for redemption, such conversion right in
respect of the Security or the portion so called, shall expire at the close of
business on the second Business Day preceding the Redemption Date, unless the
Company defaults in making the payment due upon redemption. In the case of a
Designated Event for which the Holder exercises its Repurchase Right with
respect to a Security or portion thereof, such conversion right in respect of
the Security or portion thereof shall expire upon receipt of the written notice
of exercise of such Repurchase Right, provided that the expiration of a Holder's
--------
conversion right hereunder is subject to such Holder's right to revoke the
exercise of its Repurchase Right.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be initially U.S. $64.50
per share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in paragraphs (a), (b), (c), (d), (e), (f) and (h) of
Section 12.4.
60
SECTION 12.2 Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
definitive Security to be converted shall surrender such Security duly endorsed
or assigned to the Company or in blank, at the office of any Conversion Agent
(as specified and subject to the terms and limitations set forth in Section
9.2), accompanied by a duly signed conversion notice substantially in the form
attached to the Security to the Company at such Conversion Agent stating that
the Holder elects to convert such Security or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted.
Securities surrendered for conversion during the period from the close of
business on any Regular Record Date to the opening of business on the next
succeeding Interest Payment Date (except in the case of any Security whose
Maturity is prior to such Interest Payment Date) shall be accompanied by payment
in New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest to be received on such Interest Payment Date on the
principal amount of Securities being surrendered for conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall cause to be issued and delivered to such Conversion Agent a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share as provided
in Section 12.3.
In the event that the Company shall have failed to register the Common
Stock into which the Restricted Securities may be converted pursuant to an
effective registration statement under the Securities Act, all shares of Common
Stock delivered upon such conversion shall bear a restrictive legend
substantially in the form of the legend required to be set forth on the
Restricted Securities pursuant to Sections 2.5 and as set forth in the form of
Security in Exhibit A hereto and shall be subject to the restrictions on
transfer provided in such legend. Neither the Trustee nor the Conversion Agent
shall have any responsibility for the inclusion or content of any such
restrictive legend on such Common Stock; provided, however, that the Trustee or
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such Conversion Agent, as the case may be, shall have provided, to the Company
or to the Company's transfer agent for such Common Stock, prior to or
concurrently with a request to the Company to deliver to the Conversion Agent
certificates of such Common Stock, written notice that the Securities delivered
for conversion are Restricted Securities.
In the case of any Security 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 Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Securities.
61
If shares of Common Stock to be issued upon conversion of a Restricted
Security, or Securities to be issued upon conversion of a Restricted Security in
part only, are to be registered in a name other than that of the Holder of such
Restricted Security, then such Holder must deliver to the Conversion Agent a
certificate in substantially the form set forth in the form of Security set
forth in Exhibit A hereto, dated the date of surrender of such Restricted
Security and signed by such Holder, as to compliance with the restrictions on
transfer applicable to such Restricted Security. Neither the Trustee nor any
Conversion Agent, Registrar or Transfer Agent shall be required to register in a
name other than that of the Holder shares of Common Stock or Securities issued
upon conversion of any such Restricted Security not so accompanied by a properly
completed certificate.
SECTION 12.3 Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon any
conversion of any Security or Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction (calculated to the nearest one-100th of a share) in an amount
equal to the same fraction of the Quoted Price of the Common Stock as of the
trading day before the date of conversion.
SECTION 12.4 Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustments, calculated by
the Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the Record Date
(as defined in Section 12.4(g)) fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
Record Date. If any dividend or distribution of the type described in this
Section 12.4(a) is declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for the determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined in Section 12.4(g)) on the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the
62
Conversion Price in effect at the opening of business on the date after such
Record Date by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding at the close of business on the Record Date plus the
number of shares which the aggregate offering price of the total number of
shares so offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
close of business on the Record Date plus the total number of additional shares
of Common Stock so offered for subscription or purchase. Such adjustment shall
become effective immediately after the opening of business on the day following
the Record Date fixed for determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not delivered
pursuant to such rights or warrants, upon the expiration or termination of such
rights or warrants the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of the delivery of only the
number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of such
consideration if other than cash, to be determined by the Board of Directors.
(c) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12.4(a)
applies) or evidences of its indebtedness, cash or other assets (including
securities, but excluding (1) any rights or warrants referred to in Section
12.4(b), (2) dividends and distributions paid exclusively in cash and (3) any
capital stock, evidences of indebtedness, cash or assets distributed upon a
merger or consolidation to which Section 12.11 applies) (the foregoing
hereinafter in this Section 12.4(d) called the "securities")) (unless the
Company elects to reserve such securities for distribution to the Holders upon
conversion of the Securities so that any such Holder converting Securities will
receive upon such conversion, in addition to the shares of Common Stock to which
such Holder is entitled, the amount and kind of such securities which such
Holder would have received if such Holder had converted its Securities into
Common Stock immediately prior to the Record Date (as defined in Section
12.4(g)) for such distribution of the securities)), then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Record Date (as defined in Section 12.4(g)) with
respect to such distribution by a fraction of which the numerator shall be the
Current
63
Market Price (determined as provided in Section 12.4(g)) on such date
less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on such
date of the portion of the securities so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price, such
reduction to become effective immediately prior to the opening of business on
the day following the Record Date; provided, however, that in the event the then
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fair market value (as so determined) of the portion of the securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a Security (or any portion thereof) the
amount of securities such Holder would have received had such Holder converted
such Security (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price would then be in effect
if such dividend or distribution had not been declared. If the Board of
Directors determines the fair market value of any distribution for purposes of
this Section 12.4(d) by reference to the actual or when issued trading market
for any securities comprising all or part of such distribution, it must in doing
so consider the prices in such market over the same period (the "Reference
Period") used in computing the Current Market Price pursuant to Section 12.4(g)
to the extent possible, unless the Board of Directors in a Board Resolution
determines in good faith that determining the fair market value during the
Reference Period would not be in the best interest of the Holder.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"); (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 12.4(d) (and no adjustment to the Conversion Price
under this Section 12.4(d) will be required) until the occurrence of the
earliest Trigger Event. If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different securities, evidences of indebtedness or other
assets or entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 12.4(d), (1) in the
case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrant (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
such rights or warrants all of which shall have expired or been terminated
without exercise, the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.
For purposes of this Section 12.4(d) and Sections 12.4(a) and (b), any
dividend
64
or distribution to which this Section 12.4(d) is applicable that also includes
shares of Common Stock, or rights or warrants to subscribe for or purchase
shares of Common Stock to which Section 12.4(b) applies (or both), shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 12.4(b)
applies (and any Conversion Price reduction required by this Section 12.4(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 12.4(a) and (b) with respect to such dividend or distribution shall
then be made), except (A) the Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "Record Date fixed for such
determinations" and "Record Date" within the meaning of Section 12.4(a) and as
"the date fixed for the determination of stockholders entitled to receive such
rights or warrants", "the Record Date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and such "Record Date"
within the meaning of Section 12.4(b) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of Section 12.4(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 12.11 applies or as part of a
distribution referred to in Section 12.4(d)), in an aggregate amount that,
combined together with (1) the aggregate amount of any other such distributions
to all holders of Common Stock made exclusively in cash within the twelve (12)
months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to this Section 12.4(e) has been made, and (2) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its Subsidiaries for all or any portion of the Common Stock
concluded within the twelve (12) months preceding the date of such distribution,
and in respect of which no adjustment pursuant to Section 12.4(f) has been made,
exceeds 10.0% of the product of the Current Market Price (determined as provided
in Section 12.4(g)) on the Record Date with respect to such distribution times
the number of shares of Common Stock outstanding on such date, then and in each
such case, immediately after the close of business on such date, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such Record Date by a fraction (i) the numerator of which shall be
equal to the Current Market Price on the Record Date less an amount equal to the
quotient of (x) the excess of such combined amount over such 10.0% and (y) the
number of shares of Common Stock outstanding on the Record Date and (ii) the
denominator of which shall be equal to the Current Market Price on such date,
provided, however, that in the event the portion of the cash so distributed
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applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a Security (or any portion thereof) the
amount of cash such Holder would have received had such Holder converted such
Security (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared. Any cash
distribution to all holders of Common Stock as to which the Company makes the
election
65
permitted by Section 12.4(l) and as to which the Company has complied
with the requirements of such Section shall be treated as not having been made
for all purposes of this Section 12.4(e).
(f) In case a tender offer made by the Company or any of its
Subsidiaries for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to stockholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (1) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offers, by the Company or any of its Subsidiaries for all or any portion of the
Common Stock expiring within the twelve (12) months preceding the expiration of
such tender offer and in respect of which no adjustment pursuant to this Section
12.4(f) has been made and (2) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash within twelve
(12) months preceding the expiration of such tender offer and in respect of
which no adjustment pursuant to Section 12.4(e) has been made, exceeds 10.0% of
the product of the Current Market Price (determined as provided in Section
12.4(g)) as of the last time (the "Expiration Time") tenders could have been
made pursuant to such tender offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to close of
business on the date of the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time multiplied by the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) on the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. In the event that the Company
is obligated to purchase shares pursuant to any such tender offer, but the
Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 12.4(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 12.4(f). Any
cash distribution to all holders of Common Stock as to which the Company has
made the election permitted by Section 12.4(m) and as to which the Company has
complied with the requirements of such Section shall be treated as not having
been made for all purposes of this Section 12.4(f).
(g) For purposes of this Section 12.4, the following terms shall have
the
66
meaning indicated:
(1) "Closing Price" with respect to any securities on any day shall
mean the closing sale price regular way on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices, regular way, in each case on the Nasdaq National Market, or,
if such security is not listed or admitted to trading on the Nasdaq
National Market, on the principal national security exchange or quotation
system on which such security is quoted or listed or admitted to trading,
or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution.
(2) "Current Market Price" shall mean the average of the daily Closing
Prices per share of Common Stock for the ten (10) consecutive Trading Days
immediately prior to the date in question; provided, however, that (1) if
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the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c),
(d), (e) or (f) occurs during such ten (10) consecutive Trading Days, the
Closing Price for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a
result of such other event, (2) if the "ex" date for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c),
(d), (e) or (f) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in question,
the Closing Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event, and (3) if the "ex" date for
the issuance or distribution requiring such computation is prior to the day
in question, after taking into account any adjustment required pursuant to
clause (1) or (2) of this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 12.4(d) or (f), whose determination shall be conclusive
and described in a Board Resolution) of the evidences of indebtedness,
shares of capital stock or assets being distributed applicable to one share
of Common Stock as of the close of business on the day before such "ex"
date. For purposes of any computation under Section 12.4(f), the Current
Market Price of the Common Stock on any date shall be deemed to be the
average of the daily Closing Prices per share of Common Stock for such day
and the next two succeeding Trading Days; provided, however, that if the
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"ex" date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant
to Section 12.4(a), (b), (c), (d), (e) or (f) occurs on or after the
Expiration Time for the tender or exchange offer requiring such computation
and prior to the day in question, the Closing Price for each Trading Day on
and after the "ex" date for such
67
other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to
be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, (1) when used with respect to any issuance
or distribution, means the first date on which the Common Stock trades
regular way on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance
or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after
the time at which such subdivision or combination becomes effective, and
(3) when used with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such exchange or in
such market after the Expiration Time of such offer. Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are
called for pursuant to this Section 12.4, such adjustments shall be made to
the Current Market Price as may be necessary or appropriate to effectuate
the intent of this Section 12.4 and to avoid unjust or inequitable results
as determined in good faith by the Board of Directors.
(3) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is listed
or admitted for trading on the New York Stock Exchange or another national
security exchange, a day on which the New York Stock Exchange or another
national security exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may
be made thereon or (z) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday or Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 12.4(a), (b), (c), (d), (e) or (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days and the reduction is irrevocable during the
period. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to each Holder at the address of such Holder as
it appears in the Security appearing on the Register a notice of the reduction
at least fifteen (15) days prior to the date the reduced Conversion Price takes
68
effect, and such notice shall state the reduced Conversion Price and the period
during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this Section
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12.4(i) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article 12
shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be. No adjustment need be
made for a change in the par value or no par value of the Common Stock.
(j) In any case in which this Section 12.4 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such Record Date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 12.3.
(k) For purposes of this Section 12.4, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(l) In lieu of making any adjustment to the Conversion Price pursuant
to Section 12.4(d) or (e), the Company may elect to reserve an amount of cash
for distribution to the Holders of the Securities upon the conversion of the
Securities so that any such Holder converting Securities will receive upon such
conversion, in addition to the shares of Common Stock and other items to which
such Holder is entitled, the full amount of cash which such holder would have
received if such Holder had, immediately prior to the Record Date for such
distribution of cash, converted its Securities into Common Stock, together with
any interest accrued with respect to such amount, in accordance with this
Section 12.4(l). The Company may make such election by providing an Officers'
Certificate to the Trustee to such effect on or prior to the payment date for
any such distribution and depositing with the Trustee on or prior to such date
an amount of cash equal to the aggregate amount the Holders of the Securities
would have received if such Holders had, immediately prior to the Record Date
for such distribution, converted all of the Securities into Common Stock. Any
such funds so deposited by the Company with the Trustee shall be invested by the
Trustee in marketable obligations issued or fully guaranteed by the United
States government with a maturity not more than three (3) months from the date
of issuance. Upon conversion of Securities by a Holder, the Holder will be
entitled to receive, in addition to the Common Stock issuable upon conversion,
an amount of cash equal to the amount such Holder would have received if such
Holder had, immediately prior to the Record Date for such distribution,
converted its Security into Common Stock, along with such Holder's pro rata
share of any accrued interest earned as a consequence of the investment of such
funds. Promptly after making an election pursuant to this Section 12.4(l), the
Company shall give or shall cause to be given notice to all Holders of such
election, which notice shall state the amount of cash per $1,000 principal
amount of Securities such Holders shall be entitled to receive (excluding
interest) upon conversion of the
69
Securities as a consequence of the Company having made such election.
SECTION 12.5 Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.4 and shall prepare an Officers' Certificate
signed by the 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 Officers' Certificate shall
forthwith promptly be filed with the Trustee and with each Conversion
Agent; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price and the date on which each
adjustment becomes effective shall forthwith be required, and such notice
shall be provided by the Company to all Holders in accordance with Section
1.5.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to the validity, accuracy or sufficiency of any such
Officers' Certificate, except to exhibit the same to any Holder of Securities
desiring inspection thereof at its office during normal business hours.
SECTION 12.6 Notice of Certain Corporate Action.
----------------------------------
In case at any time after the date hereof:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its capital
surplus or the consolidated retained earnings of the Company and its
Subsidiaries; or
(2) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any other rights; or
(3) there shall occur any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding shares
of Common Stock), or any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is
required, or the conveyance, transfer or lease of all or substantially all
of the assets of the Company; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company.
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of securities pursuant to Section 9.2, and shall cause
to be provided to all Holders in accordance with Section 1.5, at least 20 days
(or 10 days in any case specified in clause (1) or (2) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the
70
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (B) the date on which such
reclassification, consolidation, merger, conveyance, transfer, lease,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, lease, dissolution, liquidation or winding up.
SECTION 12.7 Company to Reserve Common Stock.
-------------------------------
The Company shall at all times use its best efforts to reserve and
keep available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of Securities, the
full number of shares of fully paid and nonassessable Common Stock then issuable
upon the conversion of all Outstanding Securities.
SECTION 12.8 Taxes on Conversions.
--------------------
Except as provided in the next sentence, the Company will pay any and
all taxes (other than taxes on income) and duties that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. A Holder delivering a Security for conversion shall be liable
for and will be required to pay any tax or duty which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that of the Holder of the Security or Securities 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 duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 12.9 Covenant as to Common Stock.
---------------------------
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 12.8, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 12.10 Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.9.
SECTION 12.11 Effect of Reclassification, Consolidation, Merger or
----------------------------------------------------
Sale.
----
If any of following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be
71
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company or
the successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply)
providing that such Security shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
which such Holder would have been entitled to receive upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
had such Securities been converted into Common Stock immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
assuming such holder of Common Stock did not exercise its rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("Non-Electing Share"),
then for the purposes of this Section 12.11 the kind and amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance for each Non-Electing Share shall be deemed to be
the kind and amount so receivable per share by a plurality of the Non-Electing
Shares). Such supplemental indenture shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Article. If, in the case of any such reclassification, change,
consolidation, merger, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock
includes shares of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be, in such
reclassification, change, consolidation, merger, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the Repurchase Rights set forth
in Article 11 herein.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Security Register, within twenty (20) days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 12.11 applies to any event or occurrence, Section 12.4
shall not apply.
SECTION 12.12 Responsibility of Trustee for Conversion Provisions.
---------------------------------------------------
The Trustee, subject to the provisions of Section 5.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or intent
of any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee, subject to the provisions of Section 5.1, nor any
72
Conversion Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock, or of any other securities or property,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 5.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion; and the Trustee, subject to the provisions of
Section 5.1, and any Conversion Agent shall not be responsible or liable for any
failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE 13
SUBORDINATION
SECTION 13.1 Securities Subordinated to Senior Debt.
--------------------------------------
The Company covenants and agrees, and each Holder of Securities, by
such Holder's acceptance thereof, likewise covenants and agrees, that the
indebtedness represented by the Securities and the payment of the principal of
and premium, if any, and interest (including Liquidated Damages, if any) on each
and all of the Securities is hereby expressly subordinate and junior, to the
extent and in the manner hereinafter set forth and as set forth in Section 3.1,
in right of payment to the prior payment in full of all Senior Debt.
(a) In the event of any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of the Company or otherwise, then the holders of all Senior Debt
shall first be entitled to receive payment of the full amount due thereon in
respect of principal and premium, if any, and interest (including interest
accruing after the commencement of any bankruptcy proceeding, regarding of
whether such interests is an allowed claim in such proceeding) and all other
amounts due or provision shall be made for such amount in cash before the
Holders of any of the Securities are entitled to receive any payment or
distribution of any character, whether in cash, securities or other property, on
account of the principal of or premium, if any, or interest on the indebtedness
evidenced by the Securities.
(b) In the event of any default in payment of the principal of or
premium, if any, or interest on any Senior Debt, then, unless and until all such
payments due in respect of such Senior Debt have been paid in full or such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Company with respect to the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Securities or
to acquire any of the Securities (including any redemption, cash conversion or
repurchase pursuant to the exercise of the Repurchase Right).
(c) During the continuance of any event of default with respect to any
Senior Debt, as such event of default is defined under any such Senior Debt or
in any agreement pursuant to which any Senior Debt has been issued (other than a
default in payment of the principal of or premium, if any, or interest on any
Senior Debt), permitting the holder or
73
holders of such Senior Debt to accelerate the maturity thereof, no payment shall
be made by the Company, directly or indirectly, with respect to principal of,
premium, if any, or interest (including Liquidated Damages, if any) on the
Securities (including any redemption, cash conversion or repurchase pursuant to
the exercise of the Repurchase Right) for 180 days following notice in writing
to the Company, from any holder or holders of such Senior Debt or their
representative or representatives or the trustee or trustees under any indenture
or under which any instrument evidencing any such Senior Debt may have been
issued, that such an event of default has occurred and is continuing, unless
such event of default has been cured or waived or such Senior Debt has been paid
in full; provided, however, if the maturity of such Senior Debt is
-------- -------
accelerated, no payment may be made on the Securities until such Senior
Debt has been paid or such acceleration has been cured or waived. For purposes
of this Section 13.1(c), such notice shall be deemed to include notice of all
other events of default under such indenture or instrument, which are continuing
at the time of the event of default specified in such notice. The provisions of
this Section 13.1(c) shall apply only to one such notice given in any period of
nine consecutive months with respect to any issue of Senior Debt and no more
than one such notice under this Section 13.1(c) only be given with respect to
any such continuing event of default under any issue of Senior Debt for such
nine-month period.
(d) In the event that, notwithstanding the foregoing provisions of
Sections 13.1(a), (b) and (c), any payment on account of principal, premium, if
any, or interest (including Liquidated Damages, if any) on the Securities shall
be made by or on behalf of the Company and received by the Trustee, by any
Holder or by any Paying Agent (or, if the Company is acting as its own Paying
Agent, money for any such payment shall be segregated and held in trust), (i)
after the occurrence of an event specified in Section 13.1(a), then, unless and
until all Senior Debt is paid in full in cash, or provision shall he made
therefor, (ii) after the happening of an event of default under any Senior Debt
of the type specified in Section 13.1(b) above, then, unless and until the
amount of such Senior Debt then due shall have been paid in full, or provision
made therefor or such event of default shall have been cured or waived, or (iii)
after the happening of an event of default of the type specified in Section
13.1(c) above, unless and until such event of default shall have been cured or
waived or the 180-day period specified in Section 13.1(c) shall have expired,
such payment (subject, in each case, to the provisions of Section 13.7) shall he
held in trust for the benefit of, and shall be immediately paid over to, the
holders of Senior Debt or their representative or representatives or the trustee
or trustees under any indenture under which any instruments evidencing any of
the Senior Debt may have been issued, as their interests my appear. The Company
shall give prompt written notice to the Trustee of any default under any Senior
Debt or under any agreement pursuant to which Senior Debt may have been issued.
SECTION 13.2 Subrogation.
-----------
Subject to the payment in full of all Senior Debt to which the
indebtedness evidenced by the Securities is in the circumstances subordinated as
provided in Section 13.1, the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to such
Senior Debt until all amounts owing on the Securities shall be paid in full,
and, as between the Company, its creditors other than holders of such Senior
Debt, and the Holders of the Securities, no such payment or distribution made to
the holders of Senior Debt by virtue of this Article which otherwise would have
been made to the holders of the Securities shall be deemed to be a payment by
the Company on account of such Senior Debt, it being understood that the
provisions of this Article are and are intended solely for the purpose of
74
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Debt, on the other hand.
SECTION 13.3 Obligation of Company Unconditional.
-----------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of and premium, if any,
and interest (including Liquidated Damages, if any) on the Securities as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of Senior Debt, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
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 Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
SECTION 13.4 Maturity of or Default on Senior Debt.
-------------------------------------
Upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, then all principal of and interest on all such matured Senior Debt
shall first be paid in full, or such payment shall have been duly provided for,
before any payment on account of principal, or premium, if any, or interest
(including Liquidated Damages, if any) is made upon the Securities.
SECTION 13.5 Payments on Securities Permitted.
--------------------------------
Except as expressly provided in this Article, nothing contained in
this Article shall affect the obligation of the Company to make, or prevent the
Company from making, payments of the principal of, or premium, if any, or
interest (including Liquidated Damages, if any) on the Securities in accordance
with the provisions hereof and thereof, or shall prevent the Trustee or any
Paying Agent from applying any moneys deposited with it hereunder to the payment
of the principal of, or premium, if any, or interest (including Liquidated
Damages, if any) on the Securities.
SECTION 13.6 Effectuation of Subordination by Trustee.
----------------------------------------
Each Holder of Securities, by such Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee or agent or other Person making any payment or distribution,
delivered to the Trustee or to the Holders of the Securities, for the purpose of
ascertaining the Persons
75
entitled to participate in such payment or distribution, and as to other facts
pertinent to the right of such Persons under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Persons pending
judicial determination as to the right of such Persons to receive such payment.
SECTION 13.7 Knowledge of Trustee.
--------------------
Notwithstanding the provision of this Article or any other provisions
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any Senior Debt, of any default in payment of principal of,
premium, if any, or interest on any Senior Debt, or of any facts which would
prohibit the making of any payment of moneys to or by the Trustee, or the taking
of any other action by the Trustee, unless and until a Responsible Officer of
the Trustee having responsibility for the administration of the trust
established by this Indenture shall have received written notice thereof from
the Company, any Holder of Securities, any Paying or Conversion Agent of the
Company or the holder or representative of any class of Senior Debt, and, prior
to the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such default or facts exist; provided, however, that
--------
unless on the third Business Day prior to the date upon which by the terms
hereof any such moneys may become payable for any purpose the Trustee shall have
received the notice provided for in this Section 13.7, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such moneys and apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such date.
SECTION 13.8 Trustee's Relation to Senior Debt.
---------------------------------
The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt at the time held by it, to the same
extent as any other holder of Senior Debt 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 payments to the
Trustee under or pursuant to Section 5.7.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt and the Trustee shall not be liable to any holder
of Senior Debt if it shall pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 13.9 Rights of Holders of Senior Debt Not Impaired.
---------------------------------------------
No right of any present or future holder of any Senior Debt to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
76
SECTION 13.10 Modification of Terms of Senior Debt.
------------------------------------
Any renewal or extension of the time of payment of any Senior Debt or
the exercise by the holders of Senior Debt of any of their rights under any
instrument creating or evidencing Senior Debt, including without limitation the
waiver of default thereunder, may be made or done all without notice to or
assent from the Holders of the Securities or the Trustee.
No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Debt is outstanding or of such Senior Debt, whether or not such release
is in accordance with the provisions or any applicable document, shall in any
way alter or affect any of the provisions of this Article or of the Securities
relating to the subordination thereof.
77
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
COMVERSE TECHNOLOGY, INC.
By_______________________________________
Name: Xxxxx Xxxxxxxxx
Title: Vice President of Finance
and Treasurer
Attest:
By____________________________________
Name: Xxxxxxx X. Xxxxx
Title: Secretary
THE CHASE MANHATTAN BANK,
as Trustee
By_______________________________________
Name:
Title: Second Vice President
78
EXHIBIT A - FORM OF SECURITY
[FORM OF FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THE SECURITY EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE CHASE MANHATTAN BANK,
AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER
IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM
A-1
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY. AS USED HEREIN, THE
TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
COMVERSE TECHNOLOGY, INC.
4-1/2% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2005
No. $_
A-2
COMVERSE TECHNOLOGY, INC., a corporation duly organized and existing
under the laws of the State of New York (herein called the "Company," which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to , or
registered assigns, the principal sum of U.S. Dollars on July 1,
2005 and to pay interest (including Liquidated Damages, if any) thereon, from
June 30, 1998 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semiannually in arrears on January 1 and
July 1 in each year (each an "Interest Payment Date"), commencing January 1,
1999, at the rate of 4-1/2% per annum, until the principal hereof is paid or
made available for payment. The interest (including Liquidated Damages, if any)
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be
December 15 (whether or not a Business Day) next preceding a January 1 Interest
Payment Date and June 15 (whether or not a Business Day) next preceding a July 1
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest (including Liquidated Damages, if any) not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payments of principal and premium, if any, shall be made upon the surrender of
this Security at the option of the Holder at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company as may be designated
by it for such purpose in The City of New York, in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts. Payment of interest (including Liquidated
Damages, if any) on this Security may be made by U.S. Dollar check drawn on a
bank in The City of New York mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register, or upon
application by the Holder to the Security Registrar not later than the relevant
Record Date, by wire transfer to a U.S. Dollar account (to Holders of an
aggregate principal amount in excess of U.S. $5,000,000).
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by the manual signature of an authorized signatory,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
Dated: June 30, 1998
A-3
COMVERSE TECHNOLOGY, INC.
[Corporate Seal] By:______________________________________
Attest:
__________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
---------------------------------------
This is one of the Securities described in the within-named Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:__________________________________
Authorized Signatory
A-4
REVERSE OF SECURITY
COMVERSE TECHNOLOGY, INC.
4-1/2% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2005
This Security is one of a duly authorized issue of Securities of the
Company designated as its "4-1/2% Convertible Subordinated Debentures Due 2005"
(herein called the "Securities"), limited in aggregate principal amount to U.S.
$250,000,000 (subject to increase as provided in the Indenture (as hereinafter
defined) of up to an additional $50,000,000 aggregate principal amount), issued
and to be issued under an Indenture, dated as of June 30, 1998 (herein called
the "Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Debt, and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. The
Securities are issuable in registered form, without coupons, in denominations of
U.S. $1,000 and integral multiples thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities are exchangeable
for a like aggregate principal amount of Securities of any authorized
denominations as requested by the Holder surrendering the same upon surrender of
the Security or Securities to be exchanged, except as provided below, at the
office or agency of the Company in The City of New York, or at such other
offices or agencies as the Company may designate.
The Securities are subject to redemption any time on or after July 10,
2001, in whole or in part, at the election of the Company, at Redemption Prices
(expressed as percentages of the principal amount) set forth below if redeemed
during the twelve-month period beginning July 1 of the years indicated (July 10
in the case of 2001) and ending June 30 of the following year:
2001............................101.8%
2002............................100.9%
2003 and thereafter.............100.0%
Notice of redemption will be given as provided in the Indenture.
Upon the occurrence of a "Designated Event" prior to July 1, 2005, the
Holder has the right (the "Repurchase Right"), at such Holder's option, to
require the Company to repurchase all or any portion of such Holder's Securities
on the repurchase date established by the Company at a price equal to 100% of
the principal amount of the Securities, together in each case with accrued
interest to, but excluding, the date fixed for redemption; provided that if such
repurchase date is January 1 or July 1, then the interest payable on such date
shall be paid to the Holder on the next preceding December 15 or June 15,
respectively. The Company shall mail to all Holders a notice of the occurrence
of a Designated Event, of the repurchase date (which shall be not less than 30
nor more than 60 days after the notice) and of the Repurchase Right arising as a
result thereof on or before 30 calendar days after the Company becomes aware of
the occurrence of such Designated Event. At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the conditions provided in
the Indenture, upon a Designated Event which constitutes a "Change in Control,"
by delivery of
A-5
shares of Common Stock having a fair market value equal to the Repurchase Price.
For purposes of this paragraph, the fair market value of shares of Common Stock
shall be determined by the Company and shall be equal to 95% of the average of
the Quoted Prices of the Common Stock for the five consecutive trading days
ending on and including the third trading day immediately preceding the
repurchase date. Whenever in this Security there is a reference, in any context,
to the principal of any Security as of any time, such reference shall be deemed
to include reference to the Repurchase Price payable in respect of such Security
to the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Security shall not be construed as excluding the Repurchase Price so payable in
those provisions of this Security when such express mention is not made;
provided, however, that for the purposes of the eighth succeeding paragraph,
-------- -------
such reference shall be deemed to include reference to the Repurchase Price only
if the Repurchase Price is payable in cash.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at such Holder's option, at any time on
or after the 60th day following the latest date of original issuance of the
Securities and on or before the close of business on July 1, 2005, or in case
this Security or a portion hereof is called for redemption, then in respect of
this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the second Business Day preceding the Redemption Date, or in the
case of a Designated Event for which the Holder exercises its Repurchase Right
with respect to this Security or a portion hereof, then in respect of this
Security or such portion hereof, until, but not after, receipt of the written
notice of exercise of such Repurchase Right, to convert this Security (or any
portion of the principal amount hereof which is U.S. $1,000 or an integral
multiple thereof), at the principal amount hereof, or of such portion, into
newly issued, fully paid and nonassessable shares of Common Stock of the Company
at a Conversion Price equal to U.S. $64.50 aggregate principal amount of
Securities for each share of Common Stock (or at the current adjusted Conversion
Price if an adjustment has been made as provided in the Indenture), by surrender
of this Security, duly endorsed or assigned to the Company or in blank and, in
case such surrender shall be made during the period from the close of business
on any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest (including
Liquidated Damages, if any) payable on such Interest Payment Date on the
principal amount of this Security then being converted, and also the conversion
notice hereon duly executed to the Company at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company as may be designated
by it for such purpose in The City of New York. No payment or adjustment will
be made on conversion of this Security for interest (including Liquidated
Damages, if any) accrued hereon to the date of conversion or for dividends on
the Common Stock issued on conversion. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture. The
Conversion Price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations, mergers
or conveyances to which the Company is a party or certain transfers of all or
substantially all of the assets of the Company, the Indenture shall be amended,
without the consent of any
A-6
Holders of Securities, so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or transfer by a
holder of the number of shares of Common Stock of the Company into which this
Security might have been converted immediately prior to such consolidation,
merger, conveyance or transfer (assuming such holder of Common Stock failed to
exercise any rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon consolidation, merger, conveyance or
transfer and received per share the kind and amount received per share by a
plurality of nonelecting shares), assuming further, if such consolidation,
merger, conveyance or transfer is consummated before the 60th day following the
latest date of original issuance of the Securities, that this Security was
convertible at the time of such consolidation, merger, conveyance or transfer at
the initial Conversion Price specified above as adjusted from June 30, 1998 to
the time of such consolidation, merger, conveyance or transfer pursuant to the
Indenture and the Company must ensure that appropriate securities, cash or other
property are placed in escrow or otherwise reserved through the 60th day
following the latest date of original issuance of the Securities, for the
benefit of Holders of Securities upon conversion of such Securities. Adjustments
in the Conversion Price of less than one percent of such price will not be
required, but any adjustment that would otherwise be required to be made will be
carried forward and taken into account in the computation of any subsequent
adjustment.
In the event of a redemption in part, the Company will not be required
(a) to register the transfer of, or exchange, Securities for a period of 15 days
immediately preceding the date notice is given identifying the serial numbers of
the Securities called for such redemption, or (b) to register the transfer of,
or exchange, any such Securities, or portion thereof, called for redemption.
In the event of redemption of the Securities or conversion or
repurchase of this Security in part only, a new Security or Securities for the
unredeemed or unconverted portion thereof will be issued in the name of the
Holder hereof.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the U.S. Securities Exchange
Act of 1934, upon the request of a Holder of a Security, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or to a purchaser of such Security designated by such
Holder, as the case may be, in order to permit compliance by such Holder with
Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities
Act"). "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto).
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all amounts then due on all Senior Debt
of the Company, and this Security is issued subject to such provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
A-7
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding (or such
lesser amount as shall have acted at a meeting pursuant to the provisions of the
Indenture). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security or
such other Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on this Security at the times,
places and rate, and in the coin or currency, herein prescribed or to convert
this Security (or pay cash in lieu of conversion) as provided in the Indenture.
Pursuant to the Registration Rights Agreement, upon the effectiveness
of the Shelf Registration Statement, each Holder must notify the Company not
later than three Business Days prior to any proposed sale by such Holder of
Securities pursuant to the Shelf Registration Statement (a "Sale Notice"), which
notice shall be effective for five Business Days. The Company may, upon written
notice to such Holder, suspend such Holder's use of the prospectus (which is
part of the Shelf Registration Statement) for a reasonable period not to exceed
60 days if the Company in it reasonable judgment believes it may possess
material non-public information the disclosure of which would have a material
adverse effect on the Company and its subsidiaries taken as a whole. Each
Holder of this Security, by accepting the same, agrees to hold any communication
by the Company in response to a Sale Notice in confidence.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Securities is registrable on the Security
Register upon surrender of a Security for registration of transfer at the office
or agency of the Company in The City of New York or, subject to any laws or
regulations applicable thereto and to the right of the Company to terminate the
appointment of any such Transfer Agent, at the Corporate Trust Office of the
Trustee in The City of New York or at the offices of the Transfer Agents
described herein or at such other offices or agencies as the Company may
designate, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder thereof or the Holder's attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations
A-8
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to recover
any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security may be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO SUCH
STATE'S CONFLICT OF LAWS PRINCIPLES.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ASSIGNMENT
----------
For value received ____________________ hereby sell(s), assign(s) and
transfer(s) unto ____________________ (Please insert social security or Taxpayer
Identification Number of assignee) the within Security, and hereby irrevocably
constitutes and appoints
___________________________________________________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution
in the premises.
In connection with any transfer of the within Security occurring
within two years of the original issuance of such Security (unless such Security
is being transferred pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such Security
is being transferred:
/ / To the Company or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
A-9
Dated:
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution
(banks, stock brokers, savings and loan associations and credit unions)
with membership in an approved signature guarantee medallion program
pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or Securities to be delivered, other than
to and in the name of the required holder.
Signature Guarantee
NOTICE: The signature must correspond with the name as written upon the
face of the Security in every particular without alternation or
enlargement or any change whatever.
A-10
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
TO: COMVERSE TECHNOLOGY, INC.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Security not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required
to be paid to the undersigned on account of interest (including Liquidated
Damages, if any) accompanies this Security.
Dated:
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor Institution
(banks, stock brokers, savings and loan associations and credit unions)
with membership in an approved signature guarantee medallion program
pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or Securities to be delivered, other than
to and in the name of the required holder.
Signature Guarantee
NOTICE: The signature must correspond with the name as written upon the
face of the Security in every particular without alternation or
enlargement or any change whatever.
A-11
Fill in for registration of shares if to be issued, and Securities if to be
delivered, other than to and in the name of the registered holder:
(Name)
(Street Address)
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less than all):
$_______,000
Social Security or Other Taxpayer Identification Number
A-12
[FORM OF OPTION TO ELECT REPAYMENT
UPON A DESIGNATED EVENT]
TO: COMVERSE TECHNOLOGY, INC.
The undersigned registered owner of this Security hereby acknowledges
receipt of a notice from Comverse Technology, Inc. (the "Company") as to the
occurrence of a Designated Event with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Security, or
the portion thereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Security, together with accrued interest (including
Liquidated Damages, if any) to, but excluding, such date, to the registered
holder hereof, in cash or, at the Company's election upon a Designated Event
which constitutes a Change in Control and subject to certain conditions
contained in the Indenture, in Common Stock.
Dated:______________________ ______________________________
Signature(s)
Social Security or Other Taxpayer Identification
Number
Principal amount to be repaid (if less than all):
$_______,000
NOTICE: The above signatures of the holder(s)
hereof must correspond with the name as written
upon the face of the Security in every particular
without alternation or enlargement or any change
whatever.
A-13
EXHIBIT B
---------
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM GLOBAL SECURITY
TO SECURITY IN CERTIFICATED FORM OR
FROM CERTIFICATED FORM TO CERTIFICATED FORM
(Pursuant to Section 2.5(b)(3), (5) or (8) of the Indenture)
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: (Comverse Technology, Inc. 4-1/2% Convertible Subordinated
Securities due 2005)
Dear Ladies and Gentlemen:
Reference is hereby made to the Indenture, dated as of June 30, 1998
(the "Indenture"), between Comverse Technology, Inc., as issuer (the "Company")
and The Chase Manhattan Bank, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to U.S. $____________________ principal amount of
securities which are evidenced by one or more Global Securities and held with
the Depositary through the Depository Trust Company (the "Securities") in the
name of ______________________________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Securities to a Person
who will take delivery thereof in the form of an equal principal amount of
Securities evidenced by one or more Securities in certificated form, to be held
with the Depositary.
In connection with such request and in respect of such Securities, the
Transferor hereby certifies that:
[CHECK ONE]
[_] such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Securities are being transferred to a Person that the
Transferor reasonably believes is purchasing the Securities for its own
account, or for one or more accounts with respect to which such person
exercises sole investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A;
or
B-1
[_] such transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;
or
[_] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Securities
are being transferred in compliance with the transfer restrictions
applicable to the Securities and in accordance with the requirements of the
exemption claimed, which certification is supported by such legal opinions
or other information provided by the Transferor or the transferee (a copy
of which the Transferor has attached to this certification) in form
reasonably acceptable to the Company, to the effect that such transfer is
in compliance with the Securities Act;
and such Securities are being transferred in compliance with any applicable blue
sky securities laws of any state of the United States.
Upon giving effect to this request (i) to exchange a beneficial
interest in Global Securities for a beneficial interest in Securities in
certificated form or (ii) to exchange a beneficial interest in Securities in
certificated form for a beneficial interest in Securities in certificated form,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Global Securities pursuant to the Indenture and the
Securities Act.
B-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchaser, and you and
each of them is entitled to rely on the contents of this certificate. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: , ____
B-3
