EXHIBIT 4.16
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PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED,
as Issuer
$250,000,000
5-3/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2007
__________________
INDENTURE
Dated as of February 24, 2000
__________________
FIRST UNION NATIONAL BANK,
as Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
--------------- ---------------
310 (a)(1)................................................................ 5.11
(a)(2)................................................................ 5.11
(a)(3)................................................................ n/a
(a)(4)................................................................ n/a
(a)(5)................................................................ 5.11
(b)................................................................... 5.3; 5.11
(c)................................................................... n/a
311 (a)................................................................... 5.12
(b)................................................................... 5.12
(c)................................................................... n/a
312 (a)................................................................... 2.10
(b)................................................................... 14.3
(c)................................................................... 14.3
313 (a)................................................................... 5.7
(b)(1)................................................................ n/a
(b)(2)................................................................ 5.7
(c)................................................................... 5.7; 14.2
(d)................................................................... 5.7
314 (a)(1), (2), (3)...................................................... 9.6; 14.6
(a)(4)................................................................ 9.6; 9.7; 14.6
(b)................................................................... n/a
(c)(1)................................................................ 14.5
(c)(2)................................................................ 14.5
(c)(3)................................................................ n/a
(d)................................................................... n/a
(e)................................................................... 14.6
(f)................................................................... n/a
315 (a)................................................................... 5.1(a)
(b)................................................................... 5.6; 14.2
(c)................................................................... 5.1(b)
(d)................................................................... 5.1(c)
(e)................................................................... 4.14
i
3.16(a)(last sentence).................................................... 2.13
(a)(1)(A)............................................................. 4.5
(a)(1)(B)............................................................. 4.4
(a)(2)................................................................ n/a
(b)................................................................... 4.7
(c)................................................................... 7.4
317 (a)(1)................................................................ 4.8
(a)(2)................................................................ 4.9
(b)................................................................... 2.5
318 (a)................................................................... 14.1
(b)................................................................... n/a
(c)................................................................... 14.1
__________________
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
ii
TABLE OF CONTENTS
Page
Article 1 DEFINITIONS AND INCORPORATION BY REFERENCE....................................... 1
Section 1.1 Definitions............................................................... 1
Section 1.2 Incorporation by Reference of Trust Indenture Act......................... 15
Section 1.3 Rules of Construction..................................................... 16
Article 2 THE DEBENTURES................................................................... 16
Section 2.1 Title and Terms........................................................... 16
Section 2.2 Form of Debentures........................................................ 18
Section 2.3 Legends................................................................... 19
Section 2.4 Execution, Authentication, Delivery and Dating............................ 24
Section 2.5 Registrar and Paying Agent................................................ 24
Section 2.6 Paying Agent to Hold Assets in Trust...................................... 25
Section 2.7 General Provisions Relating to Transfer and Exchange...................... 26
Section 2.8 Book-Entry Provisions for the Global Debentures........................... 27
Section 2.9 Special Transfer Provisions............................................... 28
Section 2.10 Holder Lists.............................................................. 36
Section 2.11 Persons Deemed Owners..................................................... 36
Section 2.12 Mutilated, Destroyed, Lost or Stolen Debentures........................... 36
Section 2.13 Treasury Debentures....................................................... 37
Section 2.14 Temporary Debentures...................................................... 38
Section 2.15 Cancellation.............................................................. 38
Section 2.16 CUSIP Numbers............................................................. 38
Section 2.17 Defaulted Interest........................................................ 39
Article 3 SATISFACTION AND DISCHARGE....................................................... 39
Section 3.1 Satisfaction and Discharge of Indenture................................... 39
Section 3.2 Deposited Monies to be Held in Trust...................................... 41
Section 3.3 Return of Unclaimed Monies................................................ 41
Article 4 DEFAULTS AND REMEDIES............................................................ 41
Section 4.1 Events of Default......................................................... 41
Section 4.2 Acceleration of Maturity; Rescission and Annulment........................ 43
Section 4.3 Other Remedies............................................................ 44
Section 4.4 Waiver of Past Defaults................................................... 44
Section 4.5 Control by Majority....................................................... 45
iii
TABLE OF CONTENTS
(continued)
Page
Section 4.6 Limitation on Suit........................................................ 45
Section 4.7 Unconditional Rights of Holders to Receive Payment and to Convert......... 46
Section 4.8 Collection of Indebtedness and Suits for Enforcement by the Trustee....... 46
Section 4.9 Trustee May File Proofs of Claim.......................................... 47
Section 4.10 Restoration of Rights and Remedies........................................ 48
Section 4.11 Rights and Remedies Cumulative............................................ 48
Section 4.12 Delay or Omission Not Waiver.............................................. 48
Section 4.13 Application of Money Collected............................................ 48
Section 4.14 Undertaking for Costs..................................................... 49
Section 4.15 Waiver of Stay or Extension Laws.......................................... 49
Article 5 THE TRUSTEE...................................................................... 50
Section 5.1 Certain Duties and Responsibilities....................................... 50
Section 5.2 Certain Rights of Trustee................................................. 51
Section 5.3 Individual Rights of Trustee.............................................. 52
Section 5.4 Money Held in Trust....................................................... 53
Section 5.5 Trustee's Disclaimer...................................................... 53
Section 5.6 Notice of Defaults........................................................ 53
Section 5.7 Reports by Trustee to Holders............................................. 53
Section 5.8 Compensation and Indemnification.......................................... 53
Section 5.9 Replacement of Trustee.................................................... 54
Section 5.10 Successor Trustee by Merger, Etc.......................................... 55
Section 5.11 Corporate Trustee Required; Eligibility................................... 55
Section 5.12 Collection of Claims Against the Company.................................. 56
Article 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............................. 56
Section 6.1 Company May Consolidate, Etc., Only on Certain Terms...................... 56
Section 6.2 Successor Corporation Substituted......................................... 57
Article 7 AMENDMENTS, SUPPLEMENTS AND WAIVERS.............................................. 57
Section 7.1 Without Consent of Holders of Debentures.................................. 57
Section 7.2 With Consent of Holders of Debentures..................................... 58
iv
TABLE OF CONTENTS
(continued)
Page
Section 7.3 Compliance with Trust Indenture Act....................................... 59
Section 7.4 Revocation of Consents and Effect of Consents or Votes.................... 60
Section 7.5 Notation on or Exchange of Debentures..................................... 60
Section 7.6 Trustee to Sign Amendment, Etc............................................ 60
Article 8 MEETING OF HOLDERS OF DEBENTURES................................................. 61
Section 8.1 Purposes for Which Meetings May Be Called................................. 61
Section 8.2 Call Notice and Place of Meetings......................................... 61
Section 8.3 Persons Entitled to Vote at Meetings...................................... 61
Section 8.4 Quorum; Action............................................................ 62
Section 8.5 Determination of Voting Rights; Conduct and Adjournment of Meetings....... 62
Section 8.6 Counting Votes and Recording Action of Meetings........................... 63
Article 9 COVENANTS........................................................................ 64
Section 9.1 Payment of Principal, Premium and Interest................................ 64
Section 9.2 Maintenance of Offices or Agencies........................................ 64
Section 9.3 Corporate Existence....................................................... 65
Section 9.4 Maintenance of Properties................................................. 65
Section 9.5 Payment of Taxes and Other Claims......................................... 65
Section 9.6 Reports................................................................... 66
Section 9.7 Compliance Certificate; Notice of Registration Default.................... 66
Section 9.8 Resale of Certain Debentures.............................................. 67
Section 9.9 Insurance................................................................. 67
Article 10 REDEMPTION OF DEBENTURES......................................................... 67
Section 10.1 Optional Redemption....................................................... 67
Section 10.2 Notice to Trustee......................................................... 68
Section 10.3 Selection of Debentures to Be Redeemed.................................... 69
Section 10.4 Notice of Redemption...................................................... 69
Section 10.5 Effect of Notice of Redemption............................................ 70
Section 10.6 Deposit of Redemption Price............................................... 71
Section 10.7 Debentures Redeemed in Part............................................... 71
Article 11 REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL.................... 71
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TABLE OF CONTENTS
(continued)
Page
Section 11.1 Repurchase Right.......................................................... 71
Section 11.2 Conditions to the Company's Election to Pay the Repurchase Price in Common
Stock..................................................................... 72
Section 11.3 Notices; Method of Exercising Repurchase Right, Etc....................... 73
Article 12 CONVERSION OF DEBENTURES......................................................... 76
Section 12.1 Conversion Right and Conversion Price..................................... 76
Section 12.2 Exercise of Conversion Right.............................................. 77
Section 12.3 Fractions of Shares....................................................... 78
Section 12.4 Adjustment of Conversion Price............................................ 78
Section 12.5 Notice of Adjustments of Conversion Price................................. 89
Section 12.6 Notice Prior to Certain Actions........................................... 89
Section 12.7 Company to Reserve Common Stock........................................... 90
Section 12.8 Taxes on Conversions...................................................... 91
Section 12.9 Covenant as to Common Stock............................................... 91
Section 12.10 Cancellation of Converted Debentures...................................... 91
Section 12.11 Effect of Reclassification, Consolidation, Merger or Sale................. 91
Section 12.12 Responsibility of Trustee for Conversion Provisions....................... 93
Article 13 SUBORDINATION.................................................................... 93
Section 13.1 Debentures Subordinated to Senior Debt.................................... 93
Section 13.2 Subrogation............................................................... 96
Section 13.3 Obligation of the Company is Absolute and Unconditional................... 96
Section 13.4 Maturity of or Default on Senior Debt..................................... 96
Section 13.5 Payments on Debentures Permitted.......................................... 97
Section 13.6 Effectuation of Subordination by Trustee.................................. 97
Section 13.7 Knowledge of Trustee...................................................... 97
Section 13.8 Trustee's Relation to Senior Debt......................................... 98
Section 13.9 Rights of Holders of Senior Debt Not Impaired............................. 98
Section 13.10 Modification of Terms of Senior Debt...................................... 98
Section 13.11 Certain Conversions Not Deemed Payment.................................... 99
Article 14 OTHER PROVISIONS OF GENERAL APPLICATION.......................................... 99
Section 14.1 Trust Indenture Act Controls.............................................. 99
Section 14.2 Notices................................................................... 100
vi
TABLE OF CONTENTS
(continued)
Page
Section 14.3 Communication by Holders with Other Holders............................... 101
Section 14.4 Acts of Holders of Debentures............................................. 101
Section 14.5 Certificate and Opinion as to Conditions Precedent........................ 102
Section 14.6 Statements Required in Certificate or Opinion............................. 102
Section 14.7 Effect of Headings and Table of Contents.................................. 103
Section 14.8 Successors and Assigns.................................................... 103
Section 14.9 Separability Clause....................................................... 103
Section 14.10 Benefits of Indenture..................................................... 103
Section 14.11 Governing Law............................................................. 103
Section 14.12 Counterparts.............................................................. 104
Section 14.13 Legal Holidays............................................................ 104
Section 14.14 Recourse Against Others................................................... 104
EXHIBITS
EXHIBIT A: Form of Debenture............................................................... A-1
EXHIBIT B: Regulation S Certificate........................................................ B-1
EXHIBIT C: Rule 144A Certificate........................................................... C-1
vii
INDENTURE, dated as of February 24, 2000 between PRIMUS
TELECOMMUNICATIONS GROUP, INCORPORATED, a corporation duly organized and
existing under the laws of the State of Delaware, having its principal office at
0000 Xxx Xxxxxx Xxxx, XxXxxx, XX 00000 (the "Company"), and FIRST UNION NATIONAL
BANK, a national banking association, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 5-3/4% Convertible Subordinated Debentures due 2007 (the "Debentures") 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 Debentures, when the
Debentures 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 Debentures by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Debentures, as
follows.
ARTICLE 1
DEFINITIONS AND
INCORPORATION BY REFERENCE
Section 1.1 Definitions.
For all purposes of this Indenture and the Debentures, the
following terms are defined as follows:
"Act", when used with respect to any Holder of a Debenture, has
the meaning specified in Section 14.4(a) hereof.
"Adjusted Interest Rate" means, with respect to any Reset
Transaction, the rate per annum that is the arithmetic average of the
rates quoted by two Reference Dealers selected by the Company or its
successor as the rate at which interest on the Debentures should
accrue so that the fair market value, expressed in dollars, of a
Debenture immediately after the later of:
(1) the public announcement of such Reset Transaction; or
(2) the public announcement of a change in dividend policy
in connection with such Reset Transaction,
will equal the average Trading Price of a Debenture for the 20 Trading
Days preceding the date of public announcement of such Reset
Transaction; provided that the Adjusted Interest Rate shall not be less
--------
than 5-3/4% per annum.
"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 Member" has the meaning specified in Section 2.9.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors.
"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 copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Business Day", 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" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in
conformity with GAAP, is required to be capitalized on the balance
sheet of such Person.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) in equity of such Person,
whether now outstanding or issued after the date of this Indenture,
including, without limitation, all common stock and preferred stock.
"Cedel" means Cedel Bank Societe Anonyme.
"Change of Control" means the occurrence of any of the
following after the original issuance of the Debentures:
2
(1) a "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the total voting power of the then
outstanding Voting Stock of the Company on a fully diluted basis;
(2) individuals who at the beginning of any period of two
consecutive calendar years constituted the Board of Directors
(together with any directors who are members of the Board of
Directors on the date hereof and any new directors whose election
by the Board of Directors or whose nomination for election by the
Company's stockholders was approved by a vote of at least two-
thirds of the members of the Board of Directors then still in
office who either were members of the Board of Directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the members of such board of directors
then in office;
(3) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially
all of the assets of the Company and its Subsidiaries taken as a
whole to any such "person" or "group" (other than to the Company
or a Subsidiary);
(4) the merger or consolidation of the Company with or into
another corporation or the merger of another corporation with or
into the Company with the effect that immediately after such
transaction any such "person" or "group" of persons or entities
shall have become the beneficial owner of securities of the
surviving corporation of such merger or consolidation
representing a majority of the total voting power of the then
outstanding Voting Stock of the surviving corporation; or
(5) the adoption of a plan relating to the liquidation or
dissolution of the Company.
provided, however, that a Change of Control shall not be deemed to
-------- -------
have occurred if the closing sales price per share of the Common Stock
for any five Trading Days within the period of 10 consecutive Trading
Days ending immediately after the later of the Change of Control or
the public announcement of the Change of Control, in the case of a
Change of Control under clause (1) above, or the period of 10
consecutive Trading Days ending immediately before the Change of
Control, in the case of a Change of Control under clause (2), (3), (4)
or (5) above, shall equal or exceed 110% of the Conversion Price of
the Debentures in effect on each such Trading Day.
"Closing Date" means February 24, 2000, or such later date on
which the Debentures may be delivered pursuant to the Purchase
Agreement.
3
"Closing Price" of any security on any date of determination
means:
(1) the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of such security on the
New York Stock Exchange on such date;
(2) if such security is not listed for trading on the New
York Stock Exchange on any such date, the closing sale price as
reported in the composite transactions for the principal U.S.
securities exchange on which such security is so listed;
(3) if such security is not so listed on a U.S. national or
regional securities exchange, the closing sale price as reported
by the Nasdaq National Market;
(4) if such security is not so reported, the last quoted
bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar
organization; or
(5) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of such security on such
date from at least three nationally recognized independent
investment banking firms retained for this purpose by the
Company.
"Common Stock" means any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by
the Company. However, subject to the provisions of Section 12.11
hereof, shares issuable on conversion of Debentures shall include only
shares of the class designated as Common Stock, par value $.01 per
share, of the Company at the date of execution of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and
which are not subject to redemption by the Company, provided that if
at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in
the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
"Company" 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.
4
"Company Notice" has the meaning specified in Section 11.3
hereof.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to
the Trustee.
"Conversion Agent" means any Person authorized by the Company to
convert Debentures in accordance with Article 12 hereof.
"Conversion Price" has the meaning specified in Section 12.1
hereof.
"Corporate Trust Office" means for purposes of presentation or
surrender of Debentures for payment, registration, transfer, exchange
or conversion or for service of notices or demands upon the Company,
the office of the Trustee located in The City of New York at which at
any particular time its corporate trust business shall be administered
(which at the date of execution of this Indenture is located at 00
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 10004), and
for all other purposes, the office of the Trustee located in the City
of Richmond, Virginia (which at the date of this Indenture is located
at 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust).
"corporation" means corporations, associations, limited liability
companies, companies and business trusts.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement and any other arrangement and agreement
designed to provide protection against fluctuations in currency
values.
"Current Market Price" has the meaning set forth in Section
12.4(g).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debentures" has the meaning ascribed to it in the first
paragraph under the caption "Recitals of the Company".
"Default" means an event which is, or after notice or lapse of
time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.17
hereof.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Designated Senior Debt" means Senior Debt of the Company which,
at the date of determination, has an aggregate amount outstanding of,
or under which, at the date of determination, the holders thereof are
committed to lend up
5
to, at least $15 million and is specifically designated in the
instrument, agreement or other document evidencing or governing that
Senior Debt as "Designated Senior Debt" for purposes of this Indenture
(provided that such instrument, agreement or other document may place
--------
limitations and conditions on the right of such Senior Debt to
exercise the rights of Designated Senior Debt).
"Dividend Yield" on any security for any period means the
dividends paid or proposed to be paid pursuant to an announced
dividend policy on such security for such period divided by, if with
respect to dividends paid on such security, the average Closing Price
of such security during such period and, if with respect to dividends
proposed to be paid on such security, the Closing Price of such
security on the effective date of the related Reset Transaction.
"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.
"DTC Participants" has the meaning specified in Section 2.8
hereof.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 4.1
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Time" has the meaning specified in Section 12.4(f)
hereof.
"fair market value" has the meaning set forth in Section 12.4(g)
hereof.
"Global Debenture" has the meaning specified in Section 2.2
hereof.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part);
provided that the term "guarantee" shall not include endorsements for
--------
collection or deposit in the ordinary course of business. The term
"guarantee" used as a verb has a corresponding meaning.
6
provided, however, that the term "guarantee" will not include
-------- -------
endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb has a corresponding
meaning.
"Holder", when used with respect to any Debenture, means the
Person in whose name the Debenture is registered in the Register.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication):
(1) all indebtedness of such Person for borrowed money;
(2) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(3) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement
obligations with respect thereto);
(4) all obligations of such Person as lessee under
Capitalized Leases;
(5) all Indebtedness of other Persons secured by a lien on
any asset of such Person, whether or not such Indebtedness is
assumed by such Person; provided that the amount of such
--------
Indebtedness shall be the lesser of (A) the fair market value of
such asset at such date of determination and (B) the amount of
such Indebtedness,
(6) all Indebtedness of other Persons guaranteed by such
Person to the extent such Indebtedness is guaranteed by such
Person; and
(7) to the extent not otherwise included in this
definition, obligations under Currency Agreements and Interest
Rate Protection Agreements.
The amount of Indebtedness of any Person at any date shall
be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, provided (i) that the
--------
amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness
less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in
conformity with GAAP and (ii) that Indebtedness shall not include
any liability for federal, state, local or other taxes.
7
"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.
"Initial Purchasers" mean Xxxxxx Brothers Inc., Xxxxxx Xxxxxxx &
Co. Incorporated and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.
"Interest Payment Date" means each of August 15 and February 15,
beginning August 15, 2000
"Interest Rate" means, (a) if a Reset Transaction has not
occurred, 5-3/4% per annum, or (b) if a Reset Transaction occurs, the
Adjusted Interest Rate related to such Reset Transaction from the
effective date of such Reset Transaction to, but not including, the
effective date of any succeeding Reset Transaction.
"Interest Rate Protection Agreement" means interest rate swap
agreements, interest rate cap agreements, interest rate insurance, and
other arrangements and agreements designed to provide protection
against fluctuations in interest rates.
"Internal Revenue Code" means the 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.
"Make-Whole Amount" means the sum of:
(1) the present value of the aggregate amount of the
interest that would otherwise have accrued from the Redemption
Date through February 15, 2003 (the "interest make-whole
period"); and
(2) Liquidated Damages, if any, to the Redemption Date.
Present value shall be calculated by using the bond equivalent yield
on U.S. Treasury notes or bills having a term nearest in length to
that of the interest make-whole period, as of the date the notice of
the redemption is mailed pursuant to this Indenture.
"Maturity" means the date on which the principal of such
Debentures 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 National Association of
Securities Dealers Automated Quotation National Market or any
successor national
8
securities exchange or automated over-the-counter trading market in
the United States.
"Non-Electing Share" has the meaning specified in Section
12.11 hereof.
"Officer" of the Company means the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer,
the Treasurer, any Vice President or the Secretary of the Company.
"Officer's Certificate" means a certificate signed by the
Chairman, the President, a Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Offshore Global Debenture" has the meaning set forth in Section
2.2.
"Offshore Physical Debenture" has the meaning set forth in
Section 2.2.
"Offshore Restriction Date" has the meaning specified in Section
2.3(a)(iii).
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel to the Company (and may include directors or employees of
the Company) and which opinion is acceptable to the Trustee.
"Outstanding", when used with respect to Debentures, means, as of
the date of determination, all Debentures theretofore authenticated
and delivered under this Indenture, except Debentures:
(1) previously canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) for the payment or redemption of which money in the
necessary amount has been previously 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
Debentures, provided that if such Debentures are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture; and
(3) which have been paid, in exchange for or in lieu of
which other Debentures have been authenticated and delivered
pursuant to this Indenture, other than any such Debentures in
respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Debentures are held by a bona
fide purchaser in whose hands such Debentures are valid
obligations of the Company.
"Paying Agent" has the meaning specified in Section 2.5 hereof.
9
"Payment Blockage Notice" has the meaning specified in Section
13.1(d) hereof.
"Permitted Junior Securities" means securities that are
subordinated to Senior Debt, and any securities issued in exchange for
Senior Debt, at least to the same extent as the Debentures.
"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.
"Physical Debentures" has the meaning specified in Section 2.2
hereof.
"Place of Conversion" means any city in which any Conversion
Agent is located.
"Place of Payment" means any city in which any Paying Agent is
located.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as
that evidenced by such particular Debenture; and, for the purposes of
this definition, any Debenture authenticated and delivered under
Section 2.12 hereof in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Debenture shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Debenture.
"Provisional Redemption Price" means 102.88% of the principal
amount of the Debentures to be redeemed plus the Make-Whole Amount.
"Purchase Agreement" means the Purchase Agreement, dated February
17, 2000, among the Company, Primus Telecommunications Inc., Primus
Telecommunications (Australia) Pty. Ltd., Primus Telecommunications
Pty. Ltd. and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Record Date" means either a Regular Record Date or a Special
Record Date, as the case may be, provided that, for purposes of
Section 12.4 hereof, Record Date has the meaning specified in 12.4(g)
hereof.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Debenture to be
redeemed pursuant to Section 10.1(a) or 10.1(b), means the price at
which such Debenture is to be redeemed pursuant to this Indenture.
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"Reference Dealer" means a dealer engaged in the trading of
convertible securities.
"Reference Period" has the meaning set forth in Section 12.4(d)
hereof.
"Register" has the meaning specified in Section 2.5 hereof.
"Registrar" has the meaning specified in Section 2.5 hereof.
"Registration Rights Agreement" means the Resale Registration
Rights Agreement dated as of February 24, 2000 between the Company and
the Initial Purchasers.
"Regular Record Date" for the interest on the Debentures
(including Liquidated Damages, if any) payable means the August 1 or
February 1 (whether or not a Business Day), as the case may be, next
preceding an Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 11.1
hereof.
"Repurchase Price" has the meaning specified in Section 11.1
hereof.
"Repurchase Right" has the meaning specified in Section 11.1
hereof.
"Reset Transaction" means a merger, consolidation or statutory
share exchange to which the entity that is the issuer of the shares of
common stock into which the Debentures are then convertible into is a
party, a sale of all or substantially all the assets of that entity, a
recapitalization of those shares of common stock or a distribution
described in Section 12.4(d) hereof, after the effective date of which
transaction or distribution the Debentures would be convertible into:
(1) shares of an entity the common stock of which had a
Dividend Yield for the four fiscal quarters of such entity
immediately preceding the public announcement of such transaction
or distribution that was more than 2.5% higher then the Dividend
Yield on the Common Stock (or other common stock then issuable
upon conversion of the Debentures) for the four fiscal quarters
preceding the public announcement of such transaction or
distribution, or
(2) shares of an entity that announces a dividend policy
prior to the effective date of such transaction or distribution
which policy, if implemented, would result in a Dividend Yield on
such entity's common stock for the next four fiscal quarters that
would result in such a 2.5% basis point increase.
11
"Responsible Officer", when used with respect to the Trustee,
means any officer 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 Debentures defined as such in
Section 2.3 hereof.
"Restricted Securities Legend" has the meaning set forth in
Section 2.3(a) hereof.
"Restricted Subsidiary" means a Subsidiary of the Company that
is a "Restricted Subsidiary" as defined in any of the indentures
governing the 11-3/4% Senior Notes due 2004, the 9-7/8% Senior Notes
due 2008, the 11-1/4% Senior Notes due 2009 or the 12-3/4% Senior
Notes due 2009 of the Company.
"Rule 144" means Rule 144 as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended
from time to time.
"Rule 144A" means Rule 144A as promulgated under the Securities
Act (including any successor rule thereof), as the same may be amended
from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means the principal of, and the premium, if any,
interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a
claim for post-petition interest is allowable as a claim in any such
proceeding) and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether
outstanding on the date of execution of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the
Company (including all deferrals, renewals, extensions or refundings
of, or amendments, modifications or supplements to, the foregoing),
unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or the assumption or guarantee thereof
expressly provides that such Indebtedness shall not be senior in right
of payment to the Debentures or expressly provides that such
Indebtedness is pari passu or junior to the Debentures.
Notwithstanding the foregoing, the term "Senior Debt" shall include,
without limitation, all
12
Designated Senior Debt and shall not include Indebtedness of the
Company to any Subsidiary.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Subsidiary of the Company that, together with its Subsidiaries, (i)
for the most recent fiscal year of the Company, accounted for more
than 10% of the consolidated revenues of the Company or (ii) as of the
end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company, all as set forth on the most
recently available consolidated financial statements of the Company
for such fiscal year.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 2.17 hereof.
"Stated Maturity" means, (i) with respect to any debt security,
the date specified in such debt security as the fixed date on which
the final installment of principal of such debt security is due and
payable and (ii) with respect to any scheduled installment of
principal of or interest on any debt security, the date specified in
such debt security as the fixed date on which such installment 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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
77aaa-77bbbb), as in effect on the date of execution of this
Indenture; provided, however, that in the event the TIA is amended
-------- -------
after such date, "TIA" means, to the extent required by such
amendment, the Trust Indenture Act of 1939, as so amended, or any
successor statute.
"Trading Day" means:
(1) 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
such other national security is open for business;
(2) if the applicable security is quoted on the Nasdaq
National Market, a day on which trades may be made thereon; or
13
(3) 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.
"Trading Price" of a security on any date of determination
means:
(1) the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of such security (regular
way) on the New York Stock Exchange on such date;
(2) if such security is not listed for trading on the New
York Stock Exchange on any such date, the closing sale price as
reported in the composite transactions for the principal U.S.
securities exchange on which such security is so listed;
(3) if such security is not so listed on a U.S. national or
regional securities exchange, the closing sale price as reported
by the Nasdaq National Market;
(4) if such security is not so reported, the last price
quoted by Interactive Data Corporation for such security or, if
Interactive Data Corporation is not quoting such price, a similar
quotation service selected by the Company;
(5) if such security is not so quoted, the average of the
mid-point of the last bid and ask prices for such security from
at least two dealers recognized as market-makers for such
security; or
(6) if such security is not so quoted, the average of the
last bid and ask prices for such security from a Reference
Dealer.
"Transfer Agent" means any Person, which may be the Company,
authorized by the Company to exchange or register the transfer of
Debentures.
"Trigger Event" has the meaning specified in Section 12.4(d)
hereof.
"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.
"U.S. Global Debenture" has the meaning specified in Section 2.2.
"U.S. Government Obligations" means: (1) direct obligations of
the United States of America for the payment of which the full faith
and credit of the United States of America is pledged or (2)
obligations of a person controlled or
14
supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America
and which in either case, are non-callable at the option of the issuer
thereof.
"U.S. Physical Debenture" has the meaning specified in Section
2.2.
"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".
"Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election
of directors, managers or other voting members of the governing body
of such Person.
Section 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Debentures;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the Debentures means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
Section 1.3 Rules of Construction.
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;
15
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with accounting principles
generally accepted in the United States 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.
ARTICLE 2
THE DEBENTURES
Section 2.1 Title and Terms.
The Debentures shall be known and designated as the "5-3/4%
Convertible Subordinated Debentures due 2007" of the Company. The aggregate
principal amount of Debentures which may be authenticated and delivered under
this Indenture is limited to $250,000,000 ($300,000,000 if the over-allotment
option set forth in Section 2(c) of the Purchase Agreement is exercised in
full), except for Debentures authenticated and delivered upon registration of,
transfer of, or in exchange for, or in lieu of other Debentures pursuant to
Section 2.7, 2.8, 2.9, 2.12, 7.5, 10.7, 11.1 or 12.2 hereof. The Debentures
shall be issuable in denominations of $1,000 or integral multiples thereof.
The Debentures shall mature on February 15, 2007.
Interest shall accrue from February 24, 2000 at the Interest Rate
until the principal thereof is paid or made available for payment. Interest
shall be payable semiannually in arrears on August 15 and February 15 in each
year, commencing August 15, 2000.
Interest on the Debentures shall be computed (i) for any full
semiannual period for which a particular Interest Rate is applicable on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month. For purposes of determining the Interest Rate, the Trustee may
assume that a Reset Transaction has not occurred unless the Trustee has received
an Officers' Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.
A Holder of any Debenture at the close of business on a Regular
Record Date shall be entitled to receive interest (including Liquidated Damages,
if any) on such Debenture on the corresponding Interest Payment Date. A Holder
of any Debenture which is converted after the close of business on a Regular
Record Date and prior to the corresponding Interest Payment Date shall be
entitled to receive interest (including
16
Liquidated Damages, if any) on the principal amount of such Debenture,
notwithstanding the conversion of such Debenture prior to such Interest Payment
Date. However, any such Holder which surrenders any such Debenture for
conversion (other than any Debenture whose Maturity is prior to such Interest
Payment Date) during the period between the close of business on such Regular
Record Date and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an amount equal to
the interest (including Liquidated Damages, if any) on the principal amount of
such Debenture so converted, which is payable by the Company to such Holder on
such Interest Payment Date, at the time such Holder surrenders such Debenture
for conversion. Notwithstanding the foregoing, any such Holder which surrenders
for conversion any Debenture which has been called for redemption by the Company
in a notice of redemption given by the Company pursuant to Section 10.4 hereof
shall be entitled to receive (and retain) such interest (including Liquidated
Damages, if any) and need not pay the Company an amount equal to the interest
(including Liquidated Damages, if any) on the principal amount of such Debenture
so converted at the time such Holder surrenders such Debenture for conversion.
Principal of, and premium, if any, and interest on, Global
Debentures shall be payable to the Depositary in immediately available funds.
Principal and premium, if any, and interest on Maturity, on
Physical Debentures shall be payable at the office or agency of the Company
maintained for such purpose, initially the Corporate Trust Office of the
Trustee. Interest on Physical Debentures (other than at Maturity) will be
payable by (i) 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 Register, or (ii) upon application to the Registrar not later than the
relevant Record Date by a Holder of an aggregate principal amount in excess of
$5,000,000, wire transfer in immediately available funds.
The Debentures shall be redeemable at the option of the Company
as provided in Article 10 hereof.
The Debentures shall have a Repurchase Right exercisable at the
option of Holders as provided in Article 11 hereof.
The Debentures shall be convertible as provided in Article 12
hereof.
The Debentures shall be subordinated in right of payment to
Senior Debt of the Company as provided in Article 13 hereof.
Section 2.2 Form of Debentures.
The Debentures and the Trustee's certificate of authentication
to be borne by such Debentures shall be substantially in the form annexed hereto
as Exhibit A, which is incorporated in and made a part of this Indenture. The
terms and provisions contained in the form of Debenture shall constitute, and
are hereby expressly made, a part of this
17
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.
Any of the Debentures 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 Debentures may be
listed or designated for issuance, or to conform to usage.
Debentures offered and sold to QIBs in reliance on Rule 144A
shall be issued initially only in the form of one or more permanent global
Debentures (each, a "U.S. Global Debenture") in registered form without interest
coupons, in substantially the form set forth in Exhibit A and, except as
otherwise provided in Section 2.3(a)(iii), shall contain the Restrictive
Securities Legend as set forth in Section 2.3(a)(i).
Debentures offered and sold in offshore transactions in reliance
on Regulation S shall be issued initially only in the form of one or more
permanent global Debentures (each, an "Offshore Global Debenture" and, together
with the U.S. Global Debenture, the "Global Debentures") in registered form
without interest coupons in substantially the form set forth in Exhibit A and,
except as otherwise provided in Section 2.3(a)(iii), shall contain the
Restrictive Securities Legend as set forth in Section 2.3(a)(i). Debentures
issued pursuant to Section 2.8(d) in exchange for or upon transfer of beneficial
interests in the U.S. Global Debenture shall be in the form of permanent
certificated Debentures substantially in the form set forth in Exhibit A (the
"U.S. Physical Debentures"), and Debentures issued pursuant to Section 2.8(d) in
exchange for or upon transfer of beneficial interests in the Offshore Global
Debenture shall be in the form of permanent certificated Debentures
substantially in the form set forth in Exhibit A (the "Offshore Physical
Debentures").
The Offshore Physical Debentures and U.S. Physical Debentures are
sometimes collectively herein referred to as the "Physical Debentures".
The Global Debentures shall be:
(1) duly executed by the Company and authenticated by the
Trustee as hereinafter provided;
(2) registered in the name of the Depositary (or its nominee)
for credit to the respective accounts of the Holders at the
Depositary; and
(3) deposited with the Trustee, as custodian for the Depositary.
18
The Global Debentures shall be substantially in the form of
Debenture set forth in Exhibit A annexed hereto (including the text and schedule
called for by footnote 1 and 2 thereto). The aggregate principal amount of the
Global Debentures may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depositary (or its
nominee), in accordance with the instructions given by the Holder thereof, as
hereinafter provided.
The Debentures shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Debentures
may be listed, all as determined by the Officers executing such Debentures, as
evidenced by their execution of such Debentures.
Section 2.3 Legends.
(a) Restricted Securities Legends.
Each Debenture issued hereunder shall, upon issuance, bear the
legend set forth in Section 2.3(a)(i) or Section 2.3(a)(ii) (each, a "Restricted
Securities Legend"), as the case may be, and such legend shall not be removed
except as provided in Section 2.3(a)(iii). Each Debenture that bears or is
required to bear the Restricted Securities Legend set forth in Section 2.3(a)(i)
(together with any Common Stock issued upon conversion of the Debentures and
required to bear the Restricted Securities Legend set forth in Section
2.3(a)(ii), collectively, the "Restricted Securities") shall be subject to the
restrictions on transfer set forth in this Section 2.3(a) (including the
Restricted Securities Legend set forth below), and the Holder of each such
Restricted Security, by such Holder's acceptance thereof, shall be deemed to
have agreed to be bound by all such restrictions on transfer.
As used in Section 2.3(a), the term "transfer" encompasses any
sale, pledge, transfer or other disposition whatsoever of any Restricted
Security.
(i) Restricted Securities Legend for Debentures.
Except as provided in Section 2.3(a)(iii), until two years
after the original issuance date of any Debenture, any certificate evidencing
such Debenture (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 2.3(a)(ii), if applicable) shall bear
a Restricted Securities Legend in substantially the following form:
The Debenture evidenced by this certificate has not been registered
under the 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 (a) it is a "qualified
19
institutional buyer" as defined in Rule 144A under the Securities Act
or (b) it is a non-U.S. Person outside the United States acquiring the
Debenture in compliance with Regulation S under the Securities Act;
(2) agrees that it will not within two years after the original
issuance of this Debenture resell or otherwise transfer the Debenture
evidenced hereby or the common stock issuable upon conversion of such
Debenture except (a) to Primus Telecommunications Group, Incorporated
or any subsidiary of Primus Telecommunications Group, Incorporated,
(b) to a qualified institutional buyer in compliance with Rule 144A
under the Securities Act, (c) to a non-U.S. Person outside the United
States in compliance with Regulation S under the Securities Act, (d)
pursuant to the exemption from registration provided by Rule 144 under
the Securities Act (if available) or (e) 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 Debenture
evidenced hereby is transferred (other than a transfer pursuant to
clause 2(e) above) a notice substantially to the effect of this
legend. In connection with any transfer of the Debenture evidenced
hereby within two years after the original issuance of such Debenture
(other than a transfer pursuant to clause (2)(e) 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 Trustee (or any successor Trustee, as applicable). If the proposed
transfer is pursuant to clause 2(d) above, the holder must, prior to
such transfer, furnish to the Trustee (or any successor Trustee, as
applicable), such certifications, legal opinions or other information
as Primus Telecommunications Group, Incorporated 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 Debenture evidenced hereby pursuant
to clause (2)(e) above or the expiration of two years from the
original issuance of the Debenture 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.
(ii) Restricted Securities Legend for Common Stock Issued Upon
Conversion of Debentures.
Except as provided in Section 2(a)(iii), until two years after
the original issuance date of any Debenture any stock certificate representing
Common Stock issued upon conversion of such Debenture shall bear a Restricted
Securities Legend in substantially the following form:
The security evidenced hereby has not been registered under the
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
20
or otherwise transfer the security except (a) to Primus Telecommunications
Group, Incorporated or any subsidiary of Primus Telecommunications Group,
Incorporated, (b) to a non-U.S. Person outside the United States in compliance
with Regulation S 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;
(2) prior to any such transfer other than a transfer pursuant to clause 1(d)
above, it will furnish to StockTrans, Inc. (or any successor transfer agent, 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; 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)(d) 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)(d) 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.
(iii) Removal of the Restricted Securities Legends.
Each Debenture or share of Common Stock issued upon conversion of
such Debenture shall bear the Restricted Securities Legend set forth in Section
2.3(a)(i) or 2.3(a)(ii), as the case may be, until the earlier of:
(A) two years after the original issuance date of such
Debenture, in the case of each U.S. Global Debenture and each U.S.
Physical Debenture, and one year after the original issue date of each
Debenture, in the case of each Offshore Global Debenture and each
Offshore Physical Debenture (such date being referred to as the
"Offshore Restriction Date");
(B) such Debenture or 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 sale); or
(C) such Common Stock has been issued upon conversion of
Debentures that have 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 sale).
The Holder must give notice thereof to the Trustee and any transfer agent for
the Common Stock, as applicable.
Notwithstanding the foregoing, the Restricted Securities
Legend may be removed if there is delivered to the Company such satisfactory
evidence, which may
21
include an opinion of independent counsel, 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 Debenture or Common Stock
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 Debentures
another Debenture or Debentures having an equal aggregate principal amount that
does not bear such legend. If the Restricted Securities Legend has been removed
from a Debenture as provided above, no other Debenture issued in exchange for
all or any part of such Debenture shall bear such legend, unless the Company has
reasonable cause to believe that such other Debenture is a "restricted security"
within the meaning of Rule 144 and instructs the Trustee in writing to cause a
Restricted Securities Legend to appear thereon.
Any Debenture (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
Restricted Securities Legend set forth in Section 2.3(a)(i) as set forth therein
have been satisfied may, upon surrender of such Debenture for exchange to the
Registrar in accordance with the provisions of Section 2.7 hereof, be exchanged
for a new Debenture or Debentures, of like tenor and aggregate principal amount,
which shall not bear the Restricted Securities Legend required by Section
2.3(a)(i).
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 Restricted Securities Legend set forth in Section 2.3(a)(ii)
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 Restricted Securities Legend required by Section
2.3(a)(ii).
(b) Global Debenture Legend.
Each Global Debenture shall also bear the following legend on the
face thereof:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company ("DTC") to Primus Telecommunications
Group, Incorporated (or its successor) or its agent for registration
of transfer, exchange, conversion or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other entity
as is requested by an authorized representative of DTC (and any
payment hereon 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 since the registered owner hereof, Cede & Co., has an
interest herein.
22
Section 2.4 Execution, Authentication, Delivery and Dating.
Two Officers shall execute the Debentures on behalf of the
Company by manual or facsimile signature. If an Officer whose signature is on a
Debenture no longer holds that office at the time the Debenture is
authenticated, the Debenture shall be valid nevertheless.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Debentures, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Debentures as in
this Indenture provided and not otherwise.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this
Indenture, or be valid or obligatory for any purpose, unless there appears on
such Debenture 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 Debenture shall be conclusive evidence, and the
only evidence, that such Debenture has been duly authenticated and delivered
hereunder.
The Trustee may appoint an authenticating agent or agents
reasonably acceptable to the Company with respect to the Debentures. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate Debentures whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.
Section 2.5 Registrar and Paying Agent.
The Company shall maintain an office or agency where Debentures
may be presented for registration of transfer or for exchange (the "Registrar")
and an office or agency where Debentures may be presented for payment (the
"Paying Agent"). The Registrar shall keep a register of the Debentures (the
"Register") and of their transfer and exchange. The Company may appoint one or
more co-Registrars and one or more additional Paying Agents for the Debentures.
The term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any additional registrar. The Company may change any Paying
Agent or Registrar without prior notice to any Holder.
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:
(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 Debentures
23
in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as
provided in this Indenture;
(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 shall give prompt written notice to the Trustee of
the name and address of any Agent who is not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any Affiliate of the
Company may act as Paying Agent or Registrar; provided, however, that none of
the Company, its subsidiaries or the Affiliates of the foregoing shall act:
(i) as Paying Agent in connection with redemptions, offers to
purchase and discharges, as otherwise specified in this Indenture, and
(ii) as Paying Agent or Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby initially appoints the Trustee as Registrar
and Paying Agent for the Debentures.
Section 2.6 Paying Agent to Hold Assets in Trust.
Not later than 11:00 a.m. (New York City time) on each due date
of the principal, premium, if any, and interest (including Liquidated Damages,
if any) on any Debentures, the Company shall deposit with one or more Paying
Agents money in immediately available funds sufficient to pay such principal,
premium, if any, and interest (including Liquidated Damages, if any) so becoming
due. The Company at any time may require a Paying Agent to pay all money held by
it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company) shall have no further liability for the money so paid over to
the Trustee.
If the Company shall act as a Paying Agent, it shall, prior to
or on each due date of the principal of and premium, if any, or interest
(including Liquidated Damages, if any) on any of the Debentures, segregate and
hold in trust for the benefit of the Holders a sum sufficient with monies held
by all other Paying Agents, 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 provided in this
Indenture, and shall promptly notify the Trustee of its action or failure to
act.
24
Section 2.7 General Provisions Relating to Transfer and
Exchange.
The Debentures are issuable only in registered form. A Holder
may transfer a Debenture only by written application to the Registrar stating
the name of the proposed transferee and otherwise complying with the terms of
this Indenture. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Registrar in the Register. Furthermore, any
Holder of a Global Debenture shall, by acceptance of such Global Debenture,
agree that transfers of beneficial interests in such Global Debenture may be
effected only through a book-entry system maintained by the Holder of such
Global Debenture (or its agent) and that ownership of a beneficial interest in
the Debenture shall be required to be reflected in a book-entry.
When Debentures are presented to the Registrar with a request to
register the transfer or to exchange them for an equal aggregate principal
amount of Debentures of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met (including that such Debentures are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). Subject to Section 2.4 hereof, to permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Debentures at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange or redemption of the Debentures, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.14, 7.5 or 10.7 hereof).
Neither the Company nor the Registrar shall be required to
exchange or register a transfer of any Debentures:
(1) for a period of 15 Business Days prior to the day of any
selection of Debentures for redemption under Article 10 hereof;
(2) so selected for redemption or, if a portion of any Debenture
is selected for redemption, such portion thereof selected for
redemption; or
(3) surrendered for conversion or, if a portion of any Debenture
is surrendered for conversion, such portion thereof surrendered for
conversion.
Section 2.8 Book-Entry Provisions for the Global Debentures.
(a) The Global Debentures initially shall:
(i) be registered in the name of the Depositary (or a
nominee thereof);
25
(ii) be delivered to the Trustee as custodian for such
Depositary; and
(iii) bear the Restricted Securities Legend as set forth in
Section 2.3(a)(i) hereof.
Members of, or participants in, the Depositary ("DTC
Participants") shall have no rights under this Indenture with respect to any
Global Debenture held on their behalf by the Depositary, or the Trustee as its
custodian, or under such Global Debenture, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Debenture for all purposes whatsoever.
Notwithstanding the foregoing, nothing contained 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 impair, as between the Depositary and the DTC Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Debenture.
(b) The registered Holder of a Global Debenture may grant
proxies and otherwise authorize any Person, including DTC Participants and
Persons that may hold interests through DTC Participants, to take any action
which a Holder is entitled to take under this Indenture or the Debentures.
(c) A Global Debenture 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. Beneficial interests
in a Global Debenture may be transferred in accordance with the rules and
procedures of the Depositary and the provisions of Section 2.9 hereof.
(d) If at any time:
(i) the Depositary notifies the Company in writing that
it is no longer willing or able to continue to act as Depositary
for the Global Debentures, or the Depositary ceases to be a
"clearing agency" registered under the Exchange Act and a
successor depositary for the Global Debentures is not appointed
by the Company within 90 days of such notice or cessation;
(ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Debentures in
definitive form under this Indenture in exchange for all or any
part of the Debentures represented by a Global Debenture or
Global Debentures; or
(iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary for
the issuance of Physical Debentures in exchange for such Global
Debenture or Global Debentures,
26
the Depositary shall surrender such Global Debenture or Global Debentures to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate and Company Order for the authentication and
delivery of Debentures, shall authenticate and deliver in exchange for such
Global Debenture or Global Debentures, Physical Debentures in an aggregate
principal amount equal to the aggregate principal amount of such Global
Debenture or Global Debentures. Such Physical Debentures shall be registered in
such names as the Depositary (or any nominee thereof) shall identify in writing
as the beneficial owners of the Debentures represented by such Global Debenture
or Global Debentures.
(e) Notwithstanding the foregoing, in connection with any
transfer of beneficial interests in a Global Debenture to beneficial owners
pursuant to Section 2.8(d) hereof, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Global Debenture
in an amount equal to the principal amount of the beneficial interest in such
Global Debenture to be transferred.
Section 2.9 Special Transfer Provisions.
(a) General. The provisions of this Section 2.9 shall apply to
-------
all transfers involving any Physical Debenture and any beneficial interest in
any Global Debenture.
(b) Certain Definitions. As used in this Section 2.9 only,
-------------------
"delivery" of a certificate by a transferee or transferor means the delivery to
the Registrar by such transferee or transferor of the applicable certificate
duly completed; "holding" includes both possession of a Physical Debenture and
ownership of a beneficial interest in a Global Debenture, as the context
requires; "transferring" a Global Debenture means transferring that portion of
the principal amount of the transferor's beneficial interest therein that the
transferor has notified the Registrar that it has agreed to transfer; and
"transferring" a Physical Debenture means transferring that portion of the
principal amount thereof that the transferor has notified the Registrar that it
has agreed to transfer.
As used in this Indenture, "Regulation S Certificate" means a
certificate substantially in the form set forth in Exhibit B; "Rule 144A
Certificate" means a certificate substantially in the form set forth in Exhibit
C; and "Rule 144 Non-Registration and Supporting Evidence" means a written
opinion of counsel reasonably acceptable to the Company to the effect that, and
such other certification or information as the Company may reasonably require to
confirm that, the proposed transfer is being made pursuant to the exemption from
the registration requirements of the Securities Act provided by Rule 144.
(c) [Intentionally Omitted]
(d) Deemed Delivery of a Rule 144A Certificate in Certain
-----------------------------------------------------
Circumstances. A Rule 144A Certificate, if not actually delivered, will be
-------------
deemed delivered if (A) (i) the transferor advises the Company and the Trustee
in writing that the
27
relevant offer and sale were made in accordance with the provisions of Rule 144A
(or, in the case of a transfer of a Physical Debenture, the transferor checks
the box provided on the Physical Debenture to that effect) and (ii) the
transferee advises the Company and the Trustee in writing that (x) it and, if
applicable, each account for which it is acting in connection with the relevant
transfer, is a qualified institutional buyer within the meaning of Rule 144A,
(y) it is aware that the transfer of Debentures to it is being made in reliance
on the exemption from the provisions of Section 5 of the Securities Act provided
by Rule 144A, and (z) if at any time the Company is not subject to Section 13 or
15(d) of the Exchange Act, prior to the proposed date of transfer the transferee
has been given the opportunity to obtain from the Company the information
referred to in Rule 144A(d)(4), and has either declined such opportunity or has
received such information (or, in the case of a transfer of a Physical
Debenture, the transferee signs the certification provided on the Physical
Debenture to that effect); or (B) the transferor holds the U.S. Global Debenture
and is transferring to a transferee that will take delivery in the form of the
U.S. Global Debenture.
(e) Procedures and Requirements.
---------------------------
(1) if the proposed transfer occurs prior to the Offshore
Restriction Date, and the proposed transferor holds:
(A) a U.S. Physical Debenture which is surrendered to the
Registrar, and the proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in the form of a U.S. Physical
Debenture, then the Registrar shall (x) register such transfer in
the name of such transferee and record the date thereof in its
books and records, (y) cancel such surrendered U.S. Physical
Debenture and (z) deliver a new U.S. Physical Debenture to such
transferee duly registered in the name of such transferee in
principal amount equal to the principal amount being transferred
of such surrendered U.S. Physical Debenture;
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through a member of, or participant
in, the Depository (an "Agent Member") and requests that the
proposed transferee receive a beneficial interest in the U.S.
Global Debenture, then the Registrar shall (x) cancel such
surrendered U.S. Physical Debenture, (y) record an increase in
the principal amount of the U.S. Global Debenture equal to the
principal amount being transferred of such surrendered U.S.
Physical Debenture and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of such
transfer; or
28
(iii) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
Offshore Global Debenture, then the Registrar shall (x) cancel
such surrendered U.S. Physical Debenture, (y) record an increase
in the principal amount of the Offshore Global Debenture equal to
the principal amount being transferred of such surrendered U.S.
Physical Debenture and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of such
transfer.
In any of the cases described in this Section 2.9(e)(1)(A), the
Registrar shall deliver to the transferor a new U.S. Physical
Debenture in principal amount equal to the principal amount not being
transferred of such surrendered U.S. Physical Debenture, as
applicable.
(B) an interest in the U.S. Global Debenture, and the
proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
U.S. Global Debenture, then the transfer shall be effected in
accordance with the procedures of the Depositary therefor; or
(ii) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
Offshore Global Debenture, then the Registrar shall (w) register
such transfer in the name of such transferee and record the date
thereof in its books and records, (x) record a decrease in the
principal amount of the U.S. Global Debenture in an amount equal
to the beneficial interest therein being transferred, (y) record
an increase in the principal amount of the Offshore Global
Debenture equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the Depositary
that it approves of such transfer.
(C) an interest in the Offshore Global Debenture, and the
proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
U.S. Global Debenture, then the Registrar shall (x) record a
decrease in the principal amount of the Offshore Global Debenture
in an amount equal to the beneficial interest
29
therein being transferred, (y) record an increase in the
principal amount of the U.S. Global Debenture equal to the amount
of such decrease and (z) notify the Depositary in accordance with
the procedures of the Depositary that it approves of such
transfer; or
(ii) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
Offshore Global Debenture, then the transfer shall be effected in
accordance with the procedures of the Depositary therefor;
provided, however, that until one year after the original
-------- -------
issuance of any Debenture, beneficial interests in the Offshore
Global Debenture may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or by Agent
Members acting for the account thereof), and no person shall be
entitled to effect any transfer or exchange that would result in
any such interest being held otherwise than in or through such an
account.
(2) If the proposed transfer occurs on or after the Offshore
Restriction Date, and the proposed transferor holds:
(A) a U.S. Physical Debenture which is surrendered to the
Registrar, and the proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee requests delivery in the form of a U.S. Physical
Debenture, then the procedures set forth in Section
2.9(e)(1)(A)(i) shall apply.
(ii) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
Offshore Global Debenture, then the procedures set forth in
Section 2.9(e)(1)(A)(ii) shall apply; or
(iii) delivers a Regulation S Certificate, then the
Registrar shall cancel such surrendered U.S. Physical Debenture
and at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and
records and deliver a new Offshore Physical Debenture
to such transferee in principal amount equal to the
principal amount being transferred of such surrendered
U.S. Physical Debenture, or
(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the
principal
30
amount of the Offshore Global Debenture equal to the
principal amount being transferred of such surrendered
U.S. Physical Debenture and notify the Depositary in
accordance with the procedures of the Depositary that
it approves of such transfer.
In any of the cases described in this Section 2.9(e)(2)(A)(i),
(ii) or (iii)(x), the Registrar shall deliver to the transferor a new
U.S. Physical Debenture in principal amount equal to the principal
amount not being transferred of such surrendered U.S. Physical
Debenture, as applicable.
(B) an interest in the U.S. Global Debenture, and the
proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
U.S. Global Debenture, then the procedures set forth in Section
2.9(e)(1)(B)(i) shall apply; or
(ii) delivers a Regulation S Certificate, then the
Registrar shall (x) record a decrease in the principal amount of
the U.S. Global Debenture in an amount equal to the beneficial
interest therein being transferred, (y) notify the Depositary in
accordance with the procedures of the Depositary that it approves
of such transfer and (z) at the direction of the transferee, if
the proposed transferee is or is acting through an Agent Member,
record an increase in the principal amount of the Offshore Global
Debenture equal to the amount of such decrease.
(C) an Offshore Physical Debenture which is surrendered to
the Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
delivery in the form of the U.S. Global Debenture, then the
Registrar shall (x) cancel such surrendered Offshore Physical
Debenture, (y) record an increase in the principal amount of the
U.S. Global Debenture equal to the principal amount being
transferred of such surrendered Offshore Physical Debenture and
(z) notify the Depositary in accordance with the procedures of
the Depositary that it approves of such transfer;
(ii) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Debenture, then the
Registrar shall (x) cancel such surrendered Offshore Physical
Debenture, (y) record an
31
increase in the principal amount of the Offshore Global Debenture
equal to the principal amount being transferred of such
surrendered Offshore Physical Debenture and (z) notify the
Depositary in accordance with the procedures of the Depositary
that it approves of such transfer; or
(iii) does not make a request covered by Section
2.9(e)(2)(C)(i) or Section 2.9(e)(2)(C)(ii), then the Registrar
shall (x) register such transfer in the name of such transferee
and record the date thereof in its books and records, (y) cancel
such surrendered Offshore Physical Debenture and (z) deliver a
new Offshore Physical Debenture to such transferee duly
registered in the name of such transferee in principal amount
equal to the principal amount being transferred of such
surrendered Offshore Physical Debenture.
In any of the cases described in this Section 2.9(e)(2)(C), the
Registrar shall deliver to the transferor a new U.S. Physical
Debenture in principal amount equal to the principal amount not being
transferred of such surrendered U.S. Physical Debenture, as
applicable.
(D) an interest in the Offshore Global Debenture, and the
proposed transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
delivery in the form of the U.S. Global Debenture, then the
Registrar shall (x) record a decrease in the principal amount of
the Offshore Global Debenture in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Debenture
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the Depositary
that it approves of such transfer; or
(ii) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Debenture, then the
transfer shall be effected in accordance with the procedures of
the Depositary therefor.
(f) Execution, Authentication and Delivery of Physical
--------------------------------------------------
Debentures. In any case in which the Registrar is required to deliver a Physical
----------
Debenture to a transferee or transferor, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, such Physical
Debenture.
(g) Certain Additional Terms Applicable to Physical Debentures.
----------------------------------------------------------
Any transferee entitled to receive a Physical Debenture may request that the
principal amount thereof be evidenced by one or more Physical Debentures in any
authorized denomination
32
or denominations the Registrar shall comply with such request if all other
transfer restrictions are satisfied.
(h) Transfers Not Covered by Section 2.9(e). The Registrar shall
---------------------------------------
effect and record, upon receipt of a written request from the Company so to do,
a transfer not otherwise permitted by Section 2.9(e), such recording to be done
in accordance with the otherwise applicable provisions of Section 2.9(e), upon
the furnishing by the proposed transferor or transferee of a Rule 144 Non-
Registration Opinion and Supporting Evidence.
(i) General. By its acceptance of any Debenture or shares of
-------
Common Stock issuable upon conversion of the Debentures bearing the Restricted
Securities Legend, each Holder of such Debenture or shares of Common Stock
issuable upon conversion of the Debentures acknowledges the restrictions on
transfer of such Debenture and such Common Stock set forth in this Indenture and
in the Restricted Securities Legend and agrees that it will transfer such
Debenture and such Common Stock only as provided in the Indenture. The Registrar
shall not register a transfer of any Debenture unless such transfer complies
with the restrictions with respect thereto set forth in this Indenture. The
Registrar shall not be required to determine (but may rely upon a determination
made by the Company) the sufficiency or accuracy of any such certifications,
legal opinions, other information or document.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.8 hereof or this
Section 2.9. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
Section 2.10 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders relating to such
Interest Payment Date or request, as the case may be.
Section 2.11 Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the registered Holder of a Global Debenture as the absolute
owner of such Global Debenture for the purpose of receiving payment thereof or
on account thereof and for all other purposes whatsoever, whether or not such
Debenture 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
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Company or the Trustee may treat the Person in whose name any Debenture is
registered as the owner of such Debenture for the purpose of receiving payment
of principal of and premium, if any, and interest (including Liquidated Damages,
if any) on such Debenture and for all other purposes whatsoever, whether or not
such Debenture be overdue, and notwithstanding any notice of ownership or
writing thereon, or any notice of previous loss or theft or other interest
therein.
Section 2.12 Mutilated, Destroyed, Lost or Stolen Debentures.
If any mutilated Debenture is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Debenture of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there is delivered to the Company and the Trustee
(1) evidence to their satisfaction of the destruction, loss or
theft of any Debenture, and
(2) such Debenture 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
Debenture 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 Debenture, a
new Debenture of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture
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 Debenture,
pay such Debenture, upon satisfaction of the condition set forth in the
preceding paragraph.
Upon the issuance of any new Debenture 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 Debenture issued pursuant to this Section in lieu of
any destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and such new
Debenture shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder.
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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 Debentures.
Section 2.13 Treasury Debentures.
In determining whether the Holders of the requisite principal
amount of Outstanding Debentures are present at a meeting of Holders for quorum
purposes or have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Debentures owned by the Company or any Affiliate of
the Company 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 Debentures of
which the Trustee has received written notice and are so owned shall be so
disregarded.
Section 2.14 Temporary Debentures.
Pending the preparation of Debentures in definitive form, the
Company may execute and the Trustee shall, upon written request of the Company,
authenticate and deliver temporary Debentures (printed or lithographed).
Temporary Debentures shall be issuable in any authorized denomination, and
substantially in the form of the Debentures in definitive form but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every such temporary
Debenture shall be executed by the Company and authenticated by the Trustee upon
the same conditions and in substantially the same manner, and with the same
effect, as the Debentures in definitive form. Without unreasonable delay, the
Company will execute and deliver to the Trustee Debentures in definitive form
(other than in the case of Debentures in global form) and thereupon any or all
temporary Debentures (other than any such Debentures 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 shall authenticate and deliver
in exchange for such temporary Debentures an equal aggregate principal amount of
Debentures in definitive form. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the temporary
Debentures shall in all respects be entitled to the same benefits and subject to
the same limitations under this Indenture as Debentures in definitive form
authenticated and delivered hereunder.
Section 2.15 Cancellation.
All Debentures 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 Debentures so delivered shall be canceled promptly by the Trustee, and no
Debentures 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 Debentures and, after
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such destruction, shall deliver a certificate of such destruction to the
Company. If the Company shall acquire any of the Debentures, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless the same are delivered to the Trustee for
cancellation.
Section 2.16 CUSIP Numbers.
The Company in issuing the Debentures may use "CUSIP" numbers
(if then generally in use), and the Trustee shall use CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any such notice
and that reliance may be placed only on the other identification numbers printed
on the Debentures, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company shall promptly notify the Trustee of
any change in the CUSIP numbers.
Section 2.17 Defaulted Interest.
If the Company fails to make a payment of interest (including
Liquidated Damages, if any) on any Debenture when due and payable ("Defaulted
Interest"), it shall pay such Defaulted Interest plus (to the extent lawful) any
interest payable on the Defaulted Interest (calculated using the Interest Rate),
in any lawful manner. It may elect to pay such Defaulted Interest, plus any such
interest payable on it, to the Persons who are Holders of such Debentures on
which the interest is due on a subsequent Special Record Date. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each such Debenture. The Company shall fix any such Special Record Date
and payment date for such payment. At least 15 days before any such Special
Record Date, the Company shall mail to Holders affected thereby a notice that
states the Special Record Date, the Interest Payment Date, and amount of such
interest (and such Liquidated Damages, if any) to be paid.
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.1 Satisfaction and Discharge of Indenture.
When:
(1) the Company shall deliver to the Trustee for cancellation
all Debentures previously authenticated (other than any Debentures
which have been destroyed, lost or stolen and in lieu of, or in
substitution for which, other Debentures shall have been authenticated
and delivered) and not previously canceled, or
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(2) (A) all the Debentures not previously canceled or delivered
to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption,
(B) the Company shall deposit with the Trustee, in trust,
cash in U.S. dollars and/or U.S. Government Obligations which through
the payment of interest and principal in respect thereof, in accordance
with their terms, will provide (and without reinvestment and assuming
no tax liability will be imposed on such Trustee), not later than one
day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay principal of, premium, if any,
or interest (including Liquidated Damages, if any) on all of the
Debentures (other than any Debentures which shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which
other Debentures shall have been authenticated and delivered) not
previously canceled or delivered to the Trustee for cancellation, on
the dates such payments of principal, premium, if any, or interest
(including Liquidated Damages, if any) are due to such date of maturity
or redemption, as the case may be, and
(C) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that (x)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date of execution of
this Indenture, there has been a change in the applicable federal
income tax law, in the case of either clause (x) or (y) to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject
to federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and
discharge had not occurred, and
if, in the case of either clause (1) or (2), the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to:
(i) remaining rights of registration of transfer,
substitution and exchange and conversion of Debentures,
(ii) rights hereunder of Holders to receive payments of
principal of and premium, if any, and interest (including Liquidated
Damages, if any) on, the Debentures and the other rights, duties and
obligations of Holders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee, and
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(iii) the rights, obligations and immunities of the
Trustee hereunder),
and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel (each stating that all conditions
precedent herein relating to the satisfaction and discharge of this Indenture
have been complied with) and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; provided, however, the Company shall reimburse the Trustee for all
amounts due the Trustee under Section 5.8 hereof and for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Debentures.
Section 3.2 Deposited Monies to be Held in Trust.
Subject to Section 3.3 hereof, all monies deposited with the
Trustee pursuant to Section 3.1 hereof shall be held in trust and applied by it
to the payment, notwithstanding the provisions of Article 13 hereof, either
directly or through any Paying Agent (including the Company if acting as its own
Paying Agent), to the Holders of the particular Debentures for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal, premium, if any, and interest
(including Liquidated Damages, if any). All monies deposited with the Trustee
pursuant to Section 3.1 hereof (and held by it or any Paying Agent) for the
payment of Debentures subsequently converted shall be returned to the Company
upon request of the Company.
Section 3.3 Return of Unclaimed Monies.
The Trustee and the Paying Agent shall pay to the Company any
money held by them for the payment of principal or premium, if any, or interest
(including Liquidated Damages, if any) that remains unclaimed for two years
after the date upon which such payment shall have become due. After payment to
the Company, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
ARTICLE 4
DEFAULTS AND REMEDIES
Section 4.1 Events of Default.
An "Event of Default", wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment,
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decree or order of any court or any order, rule or regulation of any or
governmental body):
(a) default in the payment of interest or Liquidated Damages,
if any, on any Debenture when due and payable and continuance of such
default for a period of 30 days;
(b) default in the payment of principal of (or premium, if any,
on) any Debenture at its Stated Maturity, upon acceleration,
redemption or otherwise;
(c) default in the payment of principal, interest or Liquidated
Damages, if any, on any Debenture required to be purchased pursuant
to a Repurchase Right as set forth in Section 11.1;
(d) default in the performance or breach of any covenant or
agreement of the Company in this Indenture or under the Debentures
(other than a default in the performance, or breach, of a covenant or
agreement specified in clause (a), (b) or (c) of this Section 4.1),
and continuance of such default or breach for a period of 30
consecutive days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Debentures a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Restricted Subsidiary having an
outstanding principal amount of $10.0 million or more in the
aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and
such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled by the earlier of (x)
the expiration of any applicable grace period or (y) the thirtieth
day after such default; and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or extended by the
earlier of (x) the expiration of any applicable grace period or (y)
the thirtieth day after such default;
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10.0 million in the aggregate for
all such final judgments or orders (treating any deductibles, self-
insurance or retention as not so covered) shall be rendered against
the Company or any Restricted Subsidiary and shall not be paid or
discharged, and there shall be any period of 30 consecutive days
following entry of the final judgment or order that causes the
aggregate amount for all such final judgments or orders outstanding
and not paid or discharged against all such Persons to exceed $10.0
million during which a stay of
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enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree
or order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets
of the Company or of any Significant Subsidiary or (C) the winding up
or liquidation of the affairs of the Company or any Significant
Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 30 consecutive days; or
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consents to the entry of
an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors.
Section 4.2 Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default with respect to Outstanding
Debentures (other than an Event of Default specified in Section 4.1(g) or 4.1(h)
hereof) occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Debentures, by written notice to
the Company, may declare due and payable 100% of the principal amount of all
Outstanding Debentures plus any accrued and unpaid interest to the date of
payment. Upon a declaration of acceleration, such principal and accrued and
unpaid interest to the date of payment shall be immediately due and payable.
(b) If an Event of Default specified in Section 4.1(g) or 4.1(h)
hereof occurs, all unpaid principal and accrued and unpaid interest (including
Liquidated Damages, if any) on the Outstanding Debentures shall become and be
immediately due and payable, without any declaration or other act on the part of
the Trustee or any Holder.
(c) The Holders of a majority in aggregate principal amount of
the Outstanding Debentures by written notice to the Trustee may rescind and
annul an acceleration and its consequences if:
(1) all existing Events of Default, other than the nonpayment of
principal of or interest on the Debentures which have become due solely
because of the acceleration, have been remedied, cured or waived, and
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(2) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction;
provided, however, that in the event of a declaration of acceleration in respect
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of the Debentures because of an Event of Default specified in Section 4.1(e)
shall have occurred and be continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the Indebtedness that is the subject of
such Event of Default has been discharged or the holders thereof have rescinded
their declaration of acceleration in respect of such Indebtedness, and written
notice of such discharge or rescission, as the case may be, shall have been
given to the Trustee by the Company and countersigned by the holders of such
Indebtedness or a trustee, fiduciary or agent for such holders, within 60 days
after such declaration of acceleration in respect of the Debentures and no other
Event of Default has occurred during such 60-day period which has not been cured
or waived during such period.
Section 4.3 Other Remedies.
If an Event of Default with respect to Outstanding Debentures
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of or
interest on the Debentures or to enforce the performance of any provision of the
Debentures.
The Trustee may maintain a proceeding in which it may
prosecute and enforce all rights of action and claims under this Indenture or
the Debentures, even if it does not possess any of the Debentures or does not
produce any of them in the proceeding.
Section 4.4 Waiver of Past Defaults.
The Holders, either (a) through the written consent of not
less than a majority in aggregate principal amount of the Outstanding
Debentures, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Debentures at which a quorum (as prescribed in Section 8.4) is
present, by the Holders of at least a majority in aggregate principal amount of
the Outstanding Debentures represented at such meeting, may, on behalf of the
Holders of all of the Debentures, waive an existing Default or Event of Default,
except a Default or Event of Default:
(1) in the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any) on any Debenture
(provided, however, that subject to Section 4.7 hereof, the Holders of
a majority in aggregate principal amount of the Outstanding Debentures
may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration); or
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(2) in respect of a covenant or provision hereof which, under
Section 7.2 hereof, cannot be modified or amended without the consent
of the Holders of each Outstanding Debenture 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; provided, however, that no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 4.5 Control by Majority.
The Holders of a majority in aggregate principal amount of the
Outstanding Debentures (or such lesser amount as shall have acted at 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. However,
the Trustee may refuse to follow any direction that:
(1) conflicts with any law or with this Indenture;
(2) the Trustee determines may be unduly prejudicial to the
rights of the Holders not joining therein, or
(3) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 4.6 Limitation on Suit.
No Holder of any Debenture shall have any right to pursue any
remedy with respect to this Indenture or the Debentures (including, instituting
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver or trustee) unless:
(1) such Holder has previously given written notice to the
Trustee of an Event of Default that is continuing;
(2) the Holders of at least 25% in aggregate principal
amount of the Outstanding Debentures shall have made written request
to the Trustee to pursue the remedy;
(3) such Holder or Holders have offered to the Trustee
indemnity satisfactory to it against any costs, expenses and
liabilities incurred in complying with such request;
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(4) the Trustee has failed to comply with the request for 60
days after its receipt of such notice, request and offer of indemnity;
and
(5) during such 60-day period, no direction inconsistent
with such written request has been given to the Trustee by the Holders
of a majority in aggregate principal amount of the Outstanding
Debentures (or such amount as shall have acted at a meeting pursuant
to the provisions of this Indenture);
provided, however, that no one or more of such Holders may use this Indenture to
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prejudice the rights of another Holder or to obtain preference or priority over
another Holder.
Section 4.7 Unconditional Rights of Holders to Receive
Payment and to Convert.
Notwithstanding any other provision in this Indenture, the
Holder of any Debenture shall have the right, which is absolute and
unconditional, to receive payment of the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on such Debenture on the Stated
Maturity expressed in such Debenture (or, in the case of redemption, on the
Redemption Date, or in the case of the exercise of a Repurchase Right, on the
Repurchase Date) and to convert such Debenture in accordance with Article 12,
and to bring suit for the enforcement of any such payment on or after such
respective dates and right to convert, and such rights shall not be impaired or
affected without the consent of such Holder.
Section 4.8 Collection of Indebtedness and Suits for
Enforcement by the Trustee.
The Company covenants that if:
(1) a Default or Event of Default is made in the payment of
any interest (including Liquidated Damages, if any) on any Debenture
when such interest (including Liquidated Damages, if any) becomes due
and payable and such Default or Event of Default continues for a
period of 30 days, or
(2) a Default or Event of Default is made in the payment of
the principal of or premium, if any, on any Debenture at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable (as expressed
therein or as a result of any acceleration effected pursuant to Section 4.2
hereof) on such Debentures 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), calculated using the Interest Rate, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the
43
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, 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 Debentures 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 4.9 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
Debentures 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 (including
Liquidated Damages, if any)) 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 Debentures 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 Debentures
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 Debentures 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 Debentures, 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 5.8.
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Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept, or adopt on behalf of any Holder
of a Debenture, any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Debenture in any such proceeding.
Section 4.10 Restoration of Rights and Remedies.
If the Trustee or any Holder of a Debenture 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 Debentures 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 4.11 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debentures in the last
paragraph of Section 2.12, no right or remedy conferred in this Indenture upon
or reserved to the Trustee or to the Holders of Debentures 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 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 4.12 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Debenture 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 Debentures may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Debentures, as the case may be.
Section 4.13 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 Debentures and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
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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 Debentures 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 Debentures 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 4.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Debenture 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 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 Debentures, or to any suit instituted by any
Holder of any Debenture for the enforcement of the payment of the principal of
or premium, if any, or interest (including Liquidated Damages, if any) on any
Debenture on or after the Stated Maturity expressed in such Debenture (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 Debenture 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.
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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 or the TIA,
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; provided, however, that 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 examine the
certificates or opinions to determine whether or not, on their face,
they conform to the requirements to this Indenture (but need not
investigate or confirm the accuracy of any facts stated therein).
(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 willful misconduct, except that:
(1) This paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section 5.1;
(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; and
(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 a direction received by it of the Holders of a majority in
principal amount of the Outstanding Debentures (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.
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(d) Whether or not herein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 5.1.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers. The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability, cost or expense (including, without limitation, reasonable fees of
counsel).
(f) The Trustee shall not be obligated to pay interest on any
money or other assets received by it unless otherwise agreed in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, 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 at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.
(h) The Trustee shall not be deemed to have notice or actual
knowledge of any Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact a Default is received by the Trustee pursuant to Section 14.2 hereof, and
such notice references the Debentures and this Indenture.
(i) The rights, privileges, protections, immunities and
benefits given to the Trustee hereunder, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each Paying Agent,
authenticating agent, Conversion Agent or Registrar acting hereunder.
Section 5.2 Certain Rights of Trustee.
Subject to the provisions of Section 5.1 hereof and subject to
Section 315(a) through (d) of the TIA:
(1) The Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the
document.
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(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on the Officers' Certificate or Opinion of
Counsel
(3) The Trustee may act through attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care.
(4) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith which it believed to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture, unless the Trustee's conduct constitutes
negligence.
(5) The Trustee may consult with counsel of its selection
and the advice of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(6) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company
shall be sufficient if signed by an Officer of the Company.
(7) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty unless so
specified herein.
Section 5.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Debentures and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in Section 310(b) of the TIA), it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (to the extent permitted under Section 310(b) of the TIA) or
resign. Any agent may do the same with like rights and duties. The Trustee is
also subject to Sections 5.11 and 5.12 hereof.
Section 5.4 Money Held in Trust.
Money held by the Trustee in trust hereunder shall be
segregated from other funds. 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 5.5 Trustee's Disclaimer.
The recitals contained herein and in the Debentures (except
for those in the certificate of authentication) shall be taken as the statements
of the Company, and the
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Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity, sufficiency or priority of this Indenture or
of the Debentures. The Trustee shall not be accountable for the use or
application by the Company of Debentures or the proceeds thereof.
Section 5.6 Notice of Defaults.
Within 90 days after the occurrence of any Default or Event of
Default hereunder of which the Trustee has received written notice, the Trustee
shall give notice to Holders pursuant to Section 14.2 hereof, unless such
Default or Event of Default shall have been cured or waived; provided, however,
that, except in the case of a Default or Event of 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
Debenture, 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.
Section 5.7 Reports by Trustee to Holders.
The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required by Section
313 of the TIA at the times and in the manner provided by the TIA.
A copy of each report at the time of its mailing to Holders
shall be filed with the SEC, if required, and each stock exchange, if any, on
which the Debentures are listed. The Company shall promptly notify the Trustee
when the Debentures become listed on any stock exchange.
Section 5.8 Compensation and Indemnification.
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 hereof, 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
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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 willful misconduct of such Persons. The obligations of the
Company under this Section 5.8 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 Debentures 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 Debentures, and the Debentures are
hereby subordinated to such senior claim. "Trustee" for purposes of this Section
5.8 shall include any predecessor Trustee, but the negligence or willful
misconduct of any Trustee shall not affect the indemnification of any other
Trustee.
Section 5.9 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 5.9.
The Trustee may resign and be discharged from the trust hereby
created by so notifying the Company in writing. The Holders of at least a
majority in aggregate principal amount of Outstanding Debentures may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company must
remove the Trustee if:
(i) the Trustee fails to comply with Section 5.11 hereof
or Section 310 of the TIA;
(ii) the Trustee becomes incapable of acting.
(iii) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law; or
(iv) a Custodian or public officer takes charge of the
Trustee or its property.
If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The Trustee shall be entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee. Within one year after the
successor Trustee takes office, the Holders of at least a majority in aggregate
principal amount of Outstanding Debentures may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
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Any Holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee if the
Trustee fails to comply with Section 5.11 hereof.
If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation or removal, the resigning or removed Trustee, as the case
may be, may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of the successor Trustee's
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee. Notwithstanding
replacement of the Trustee pursuant to this Section 5.9, the Company's
obligations under Section 5.8 hereof shall continue for the benefit of the
retiring Trustee with respect to expenses, losses and liabilities incurred by it
prior to such replacement.
Section 5.10 Successor Trustee by Merger, Etc.
Subject to Section 5.11 hereof, if the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation or national banking
association, the successor entity without any further act shall be the successor
Trustee as to the Debentures.
Section 5.11 Corporate Trustee Required; Eligibility.
The Trustee shall at all times satisfy the requirements of
Section 310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have
(or, in the case of a corporation included in a bank holding company system, the
related bank holding company shall at all times have), a combined capital and
surplus of at least $100 million as set forth in its (or its related bank
holding company's) most recent published annual report of condition. The Trustee
is subject to Section 310(b) of the TIA.
Section 5.12 Collection of Claims Against the Company.
The Trustee is subject to Section 311(a) of the TIA, excluding
any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the TIA to the
extent indicated therein.
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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, merge with or into, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or permit any
Person to merge with or into the Company, unless:
(1) either (A) the Company shall be the continuing Person, or
(B) the Person (if other than the Company) 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 (i) shall be a corporation,
and validly existing under the laws of the United States of America or
any jurisdiction thereof and (ii) shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the Company's obligation for the due
and punctual payment of the principal of (and premium and Liquidated
Damages, if any) and interest on all Debentures and the performance and
observance of every covenant of the Indenture on the part of the
Company to be performed or observed and shall have provided for
conversion rights in accordance with section 12.11 hereof;
(2) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(3) the Company or such Person shall have delivered to the
Trustee an Officer's 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 complies with this Article and
that all conditions precedent provided for herein relating to such
transaction have been complied with.
Section 6.2 Successor Corporation Substituted.
Upon any consolidation of the Company with or merger of 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 Person 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 Person had been named as the Company herein,
and in the event of any such conveyance or transfer, the Company
53
(which term shall for this purpose mean the Person named as the "Company" in the
first paragraph of this Indenture or any successor Person which shall
theretofore become such in the manner described in Section 6.1), except in the
case of a lease to another Person, shall be discharged of all obligations and
covenants under this Indenture and the Debentures and may be dissolved and
liquidated.
ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 7.1 Without Consent of Holders of Debentures.
Without the consent of any Holders of Debentures, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may amend this Indenture and the Debentures to:
(a) add to the covenants of the Company for the benefit of
the Holders of Debentures;
(b) surrender any right or power herein conferred upon the
Company;
(c) make provision with respect to the conversion rights of
Holders of Debentures pursuant to Section 12.11 hereof;
(d) provide for the assumption of the Company's obligations
to the Holders of Debentures in the case of a merger, consolidation,
conveyance, transfer or lease pursuant to Article 6 hereof;
(e) reduce the Conversion Price; provided, that such
reduction in the Conversion Price shall not adversely affect the
interest of the Holders of Debentures in any material respect;
(f) comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(g) make any changes or modifications to this Indenture
necessary in connection with the registration of any Debentures under
the Securities Act as contemplated in the Registration Rights
Agreement, provided, that such action pursuant to this clause (g) does
not, in the good faith opinion of the Board of Directors and the
Trustee, adversely affect the interests of the Holders of Debentures in
any material respect;
(h) 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
the Company and the Trustee may deem necessary or desirable and which
shall not be inconsistent with the provisions of
54
this Indenture, provided, that such action pursuant to this clause (h)
does not, in the good faith opinion of the Board of Directors and the
Trustee, adversely affect the interests of the Holders of Debentures in
any material respect; or
(i) add or modify any other provisions with respect to
matters or questions arising under this Indenture which the Company and
the Trustee may deem necessary or desirable and which shall not be
inconsistent with the provisions of this Indenture, provided, that such
action pursuant to this clause (i) does not adversely affect the
interests of the Holders of Debentures in any material respect.
Section 7.2 With Consent of Holders of Debentures.
Except as provided below in this Section 7.2, this Indenture
or the Debentures may be amended, modified or supplemented, and noncompliance in
any particular instance with any provision of this Indenture or the Debentures
may be waived, in each case (i) with the written consent of the Holders of at
least a majority in aggregate principal amount of the Outstanding Debentures or
(ii) by the adoption of a resolution, at a meeting of Holders of the Outstanding
Debentures at which a quorum is present, by the Holders of a majority in
aggregate principal amount of the Outstanding Debentures represented at such
meeting.
Without the written consent or the affirmative vote of each
Holder of Debentures so affected, an amendment, modification or waiver under
this Section 7.2 may not:
(a) change the Stated Maturity of the principal of, or any
installment of interest (including Liquidated Damages, if any) on, any
Debenture;
(b) reduce the principal amount of, or premium, if any, on
any Debenture;
(c) reduce the interest (including Liquidated Damages, if
any) on any Debenture;
(d) change the currency of payment of principal of,
premium, if any, or interest (including Liquidated Damages, if any) on
any Debenture;
(e) impair the right of any Holder to institute suit for
the enforcement of any payment in or with respect to any Debenture;
(f) modify the obligation of the Company to maintain an
office or agency in The City of New York pursuant to Section 9.2
hereof;
(g) except as permitted by Section 12.11 hereof, adversely
affect the Repurchase Right or the right to convert any Debenture as
provided in Article 12 hereof;
55
(h) modify the subordination provisions of the Debentures
in a manner adverse to the Holders of Debentures,
(i) modify the redemption payment provisions of the
Indenture in a manner adverse to the Holders of the Debentures;
(j) modify any of the provisions of this Section, or reduce
the percentage of voting interests required to waive a default, except
to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Debenture affected thereby; or
(k) reduce the requirements of Section 8.4 hereof for
quorum or voting, or reduce the percentage in aggregate principal
amount of the Outstanding Debentures 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.
It shall not be necessary for any Act of Holders of Debentures
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.
Section 7.3 Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Debentures shall be
set forth in a supplemental indenture that complies with the TIA as then in
effect.
Section 7.4 Revocation of Consents and Effect of Consents or
Votes.
Until an amendment, supplement or waiver becomes effective, a
written consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder of a Debenture or portion of a Debenture that evidences
the same debt as the consenting Holder's Debenture, even if notation of the
consent is not made on any Debenture; provided, however, that unless a record
date shall have been established, any such Holder or subsequent Holder may
revoke the consent as to its Debenture or portion of a Debenture if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective.
An amendment, supplement or waiver becomes effective on
receipt by the Trustee of written consents from or affirmative votes by, as the
case may be, the Holders of the requisite percentage of aggregate principal
amount of the Outstanding Debentures, and thereafter shall bind every Holder of
Debentures; provided, however, if the amendment, supplement or waiver makes a
change described in any of the clauses (a) through (j) of Section 7.2 hereof,
the amendment, supplement or waiver shall bind only each Holder of a Debenture
which has consented to it or voted for it, as the case may be, and every
subsequent Holder of a Debenture or portion of a Debenture that evidences the
56
same indebtedness as the Debenture of the consenting or affirmatively voting, as
the case may be, Holder.
Section 7.5 Notation on or Exchange of Debentures.
If an amendment, supplement or waiver changes the terms of a
Debenture:
(a) the Trustee may require the Holder of a Debenture to
deliver such Debentures to the Trustee, the Trustee may place an
appropriate notation on the Debenture about the changed terms and
return it to the Holder and the Trustee may place an appropriate
notation on any Debenture thereafter authenticated; or
(b) if the Company or the Trustee so determines, the Company
in exchange for the Debenture shall issue and the Trustee shall
authenticate a new Debenture that reflects the changed terms.
Failure to make the appropriate notation or issue a new
Debenture shall not affect the validity and effect of such amendment, supplement
or waiver.
Section 7.6 Trustee to Sign Amendment, Etc.
The Trustee shall sign any amendment authorized pursuant to
this Article 7 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If the amendment does adversely affect
the rights, duties, liabilities or immunities of the Trustee, the Trustee may
but need not sign it. In signing or refusing to sign such amendment, the Trustee
shall be entitled to receive and shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment is authorized or permitted by this Indenture.
ARTICLE 8
MEETING OF HOLDERS OF DEBENTURES
Section 8.1 Purposes for Which Meetings May Be Called.
A meeting of Holders of Debentures 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
Debentures.
Section 8.2 Call Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Debentures for any purpose specified in Section 8.1 hereof, to be held at such
time and at such place in The City of New York as the Trustee may determine.
Notice of every meeting of Holders of Debentures, 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
57
the manner provided in Section 14.2 hereof, 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 Debentures shall have requested the Trustee to call a meeting of the
Holders of Debentures for any purpose specified in Section 8.1 hereof, 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 Debentures 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
Debentures, a Person shall be (a) a Holder of one or more Outstanding
Debentures, or (b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Debentures 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 Debentures 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 Debentures, 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) hereof, 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 Debentures 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 Debentures at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
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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 hereof) 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 Debentures represented and voting at
such meeting.
Any resolution passed or decisions taken at any meeting of
Holders of Debentures duly held in accordance with this Section shall be binding
on all the Holders of Debentures, 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 Debentures in regard to proof of the holding of
Debentures 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
Debentures shall be proved in the manner specified in Section 1.3 hereof and the
appointment of any proxy shall be proved in the manner specified in Section 1.3
hereof. 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 hereof 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 Debentures as provided in
Section 8.2(b) hereof, in which case the Company or the Holders of Debentures
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 Debentures represented at the meeting.
(c) At any meeting each Holder of a Debenture or proxy shall
be entitled to one vote for each $1,000 principal amount of Debentures held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Debenture 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 Debenture or proxy.
(d) Any meeting of Holders of Debentures duly called pursuant
to Section 8.2 hereof 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 Debentures represented at the meeting, and the meeting may be held
as so adjourned without further notice.
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Section 8.6 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of
Holders of Debentures shall be by written ballots on which shall be subscribed
the signatures of the Holders of Debentures or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Debentures 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
Debentures 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 hereof and, if
applicable, Section 8.4 hereof. 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 Debentures in accordance with the terms of the Debentures and this
Indenture. The Company will deposit or cause to be deposited with the Trustee as
directed by the Trustee, no later than the day prior to the Stated Maturity of
any Debenture or installment of interest (including Liquidated Damages, if any),
all payments so due.
Section 9.2 Maintenance of Offices or Agencies.
The Company hereby appoints the Trustee's Corporate Trust
Office as its office in The City of New York, where Debentures may be:
(i) presented or surrendered for payment;
(ii) surrendered for registration of transfer or exchange;
(iii) surrendered for conversion;
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and where notices and demands to or upon the Company in respect of the
Debentures and this Indenture maybe served.
The Company may at any time and from time to time vary or
terminate the appointment of any such office or appoint any additional offices
for any or all of such purposes; provided, however, that until all of the
Debentures 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 Debentures have been made available for
payment and either paid or returned to the Company pursuant to the provisions of
Section 4.13 hereof, the Company will maintain in The City of New York, an
office or agency where Debentures may be presented or surrendered for payment,
where Debentures may be surrendered for registration of transfer or exchange,
where Debentures may be surrendered for conversion and where notices and demands
to or upon the Company in respect of the Debentures 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 14.2 hereof, 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 at,
and notices and demands may be served on, the Corporate Trust Office of the
Trustee.
Section 9.3 Corporate Existence.
Subject to Article 6 hereof, 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 of the
Company and each Subsidiary; provided, however, that the Company shall not be
-------- -------
required to preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Section 9.4 Maintenance of Properties.
The Company will cause all properties owned by the Company or
any Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
-------- -------
prevent the Company from discontinuing the maintenance of any of such properties
if such discontinuance is, in the judgment of the Company,
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desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 9.5 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
--------
however, that the Company shall not be required to pay or discharge or cause to
-------
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 9.6 Reports.
(a) The Company shall deliver to the Trustee within 15 days
after it files them with the SEC copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act; provided, however, the Company shall not be required to deliver to
the Trustee any materials for which the Company has sought and received
confidential treatment by the SEC. The Company also shall comply with the other
provisions of Section 314(a) of the TIA.
(b) If at any time the Company is not subject to Section 13
or 15(d) of the Exchange Act, upon the request of a Holder of a Debenture, the
Company will promptly furnish or cause to be furnished to such Holder or to a
prospective purchaser of such Debenture designated by such Holder, as the case
may be, the information, if any, required to be delivered by it pursuant to Rule
144A(d)(4) under the Securities Act to permit compliance with Rule 144A in
connection with the resale of such Debenture; 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 later of the date
such Debenture was last acquired from the Company or an "affiliate" of the
Company.
Section 9.7 Compliance Certificate; Notice of Registration
Default.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year of the Company, an Officer's Certificate
signed by two Officers of the Company stating that in the course of the
performance by the signers of their duties as Officers of the Company, they
would normally have knowledge of any failure by the Company to comply with all
conditions, or Default by the Company with respect to any covenants, under this
Indenture, and further stating whether or not they have knowledge of any such
failure or default and, if so, specifying each such failure or Default and the
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nature thereof. In the event an Officer of the Company comes to have actual
knowledge of a Default, regardless of the date, the Company shall deliver an
Officers' Certificate to the Trustee within five Business Days of obtaining such
actual knowledge specifying such Default and the nature and status thereof.
(b) When any Registration Default (as defined in the
Registration Rights Agreement) occurs, the Company shall promptly deliver to the
Trustee by registered or certified mail or by telegram, telex or facsimile
transmission an Officer's Certificate specifying the nature of such Registration
Default. In addition, the Company shall deliver to the Trustee on each Interest
Payment Date during the continuance of a Registration Default and on the
Interest Payment Date following the cure of a Registration Default, an Officer's
Certificate specifying the amount of Liquidated Damages which have accrued and
which are then owing under the Registration Rights Agreement.
Section 9.8 Resale of Certain Debentures.
During the period of two years after the last date of original
issuance of any Debentures, the Company shall not, and shall not permit any of
its "affiliates" (as defined under Rule 144 under the Securities Act) to, resell
any Debentures, or shares of Common Stock issuable upon conversion of the
Debentures, 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.
Section 9.9 Insurance.
The Company will at all times keep all of its and its
Subsidiaries properties which are of an insurable nature insured with insurers,
believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by corporations
similarly situated and owning like properties.
ARTICLE 10
REDEMPTION OF DEBENTURES
Section 10.1 Optional Redemption.
(a) (i) At any time prior to February 15, 2003, the Company
may, at its option, redeem the Debentures in whole at any time or in part from
time to time, upon notice as set forth in Section 10.4, at the Provisional
Redemption Price, if:
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(A) the Shelf Registration Statement covering resales of
Debentures and the Common Stock issuable upon
conversion of the Debentures is effective and
available for use and is expected to remain effective
and available for use for the 30 days following the
Redemption Date; and
(B) the Current Market Value of the Common Stock equals
or exceeds the following triggering percentages of
the Conversion Price then in effect for at least 20
Trading Days in any consecutive 30-day trading period
ending on the Trading Day prior to the date the
notice of the redemption pursuant to this Section
10.1(a) is mailed pursuant to Section 10.4. The
"Current Market Value" means the average of the high
and low sale prices of our common stock, as reported
on the Nasdaq National Market or any national
securities exchange on which the Common Stock is then
listed, on such Trading Day.
Trigger
During the Twelve Months Commencing Percentage
----------------------------------- ----------
February 15, 2000.................................... 170%
February 15, 2001.................................... 160%
February 15, 2002.................................... 150%
(ii) On the Redemption Date, the Company shall pay the
Make-Whole Amount on all Debentures called for redemption pursuant to this
Section 10.1(a), including those Debentures which are converted into Common
Stock after the date the notice of the provisional redemption is mailed and
prior to the Redemption Date.
(b) On or after February 15, 2003, the Company may, at
its option, redeem the Debentures in whole at any time or in part from time to
time, on any date prior to maturity, upon notice as set forth in Section 10.4,
at the redemption price (expressed as percentages of the principal amount) set
forth below if redeemed during the 12-month period beginning on the dates
indicated (the "Optional Redemption Price"):
Redemption Price
----------------
February 15, 2003.................................. 102.88%
February 15, 2004.................................. 101.92%
February 15, 2005.................................. 100.96%
February 15, 2006.................................. 100.00%
(c) The Company shall pay any interest on the Debentures called for redemption
pursuant to this Section 10.1 (including those Debentures which are
converted into Common Stock after the date the notice of the redemption is
mailed and prior to the Redemption Date) accrued but not paid to the
Redemption Date. Such interest shall be paid to the Holder entitled to the
Provisional Redemption Price or
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Optional Redemption Price, as applicable; provided that if the Redemption Date
is an Interest Payment Date, the Company shall pay the interest to the Holder of
the Debenture at the close of business on the corresponding Regular Record Date.
Section 10.2 Notice to Trustee.
If the Company elects to redeem Debentures pursuant to the
redemption provisions of Section 10.1(a) or (b) hereof (such election to be
evidenced by a resolution of the Company's board of directors), it shall notify
the Trustee at least 60 days prior to the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee) of such intended Redemption Date,
the principal amount of Debentures to be redeemed and the CUSIP numbers of the
Debentures to be redeemed.
Section 10.3 Selection of Debentures to Be Redeemed.
If fewer than all the Debentures are to be redeemed, the
Trustee shall select the particular Debentures to be redeemed from the
Outstanding Debentures by a method that complies with the requirements of any
exchange on which the Debentures are listed, or, if the Debentures are not
listed on an exchange, on a pro rata basis or by lot or in accordance with any
other method the Trustee considers fair and appropriate. Debentures and portions
thereof that the Trustee selects shall be in amounts equal to the minimum
authorized denominations for Debentures to be redeemed or any integral multiple
thereof.
If any Debenture selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Debentures so selected, the converted portion of such Debenture shall be
deemed to be the portion selected for redemption (provided, however, that the
Holder of such Debenture 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 Debenture). Debentures which have been converted during a selection of
Debentures 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
Registrar in writing of the Debentures selected for redemption and, in the case
of any Debentures 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 Debentures
shall relate, in the case of any Debentures redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debentures which has been
or is to be redeemed.
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Section 10.4 Notice of Redemption.
Notice of redemption shall be given in the manner provided in
Section 14.2 hereof to the Holders of Debentures to be redeemed. Such notice
shall be given not less than 20 nor more than 60 days prior to the Redemption
Date.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and interest accrued and unpaid
to the Redemption Date, if any;
(3) if fewer than all the Outstanding Debentures are to be
redeemed, the aggregate principal amount of Debentures to be redeemed
and the aggregate principal amount of Debentures which will be
outstanding after such partial redemption;
(4) that on the Redemption Date the Redemption Price and, as
provided in Section 10.1(c), interest accrued and unpaid to the
Redemption Date, and Liquidated Damages, if any, will become due and
payable upon each such Debenture to be redeemed, and that interest
thereon shall cease to accrue on and after such date;
(5) the Conversion Price, the date on which the right to
convert the principal of the Debentures to be redeemed will terminate
and the places where such Debentures may be surrendered for conversion;
(6) the place or places where such Debentures are to be
surrendered for payment of the Redemption Price and accrued and unpaid
interest, if any; and
(7) the CUSIP number of the Debentures.
The notice given shall specify the last date on which
exchanges or transfers of Debentures may be made pursuant to Section 2.7 hereof,
and shall specify the serial numbers of Debentures and the portions thereof
called for redemption.
Notice of redemption of Debentures 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 10.5 Effect of Notice of Redemption.
Notice of redemption having been given as provided in Section
10.4 hereof, the Debentures so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified (and, as
provided in Section 10.1(c), accrued interest and Liquidated Damages, if any, to
the Redemption Date) and from and
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after such date (unless the Company shall default in the payment of the
Redemption Price and accrued and unpaid interest) such Debentures shall cease to
bear interest; provided that the Company may specify in such notice conditions
to the redemption of the Debentures that must be met on or prior to the
Redemption Date, including the receipt of proceeds from concurrent equity or
other financings, in which case the Redemption Date shall not occur, and the
Debentures to be redeemed shall not be due and payable at the Redemption Price,
until such conditions are satisfied. Upon surrender of any such Debenture for
redemption in accordance with such notice (including the satisfaction of all
applicable conditions), such Debenture shall be paid by the Company at the
Redemption Price (and, as provided in Section 10.1(c), Liquidated Damages and
accrued interest, if any, to the Redemption Date); provided, however, that the
installments of interest on Debentures whose Stated Maturity is prior to or on
the Redemption Date shall be payable to the Holders of such Debentures, or one
or more Predecessor Debentures, registered as such on the relevant Record Date
according to their terms and the provisions of Section 2.7 hereof.
If any Debenture called for redemption shall not be so paid
when due upon surrender thereof for redemption, the principal and premium, if
any, shall, until paid, bear interest from the Redemption Date at the Interest
Rate.
Section 10.6 Deposit of Redemption Price.
Prior to or 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) an amount of money sufficient to pay
(x) the Redemption Price of, and accrued and unpaid interest and Liquidated
Damages, if any, on, all the Debentures to be redeemed on that Redemption Date
other than any Debentures called for redemption on that date which have been
converted prior to the date of such deposit and (y) the Make-Whole Amount, if
any, payable on Debentures called for redemption on that date which have been
converted prior to the date of such deposit.
If any Debenture 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 Debenture shall (subject to any right of the
Holder of such Debenture or any Predecessor Debenture to receive interest as
provided in the fourth paragraph of Section 2.1 hereof and to receive the
Make-Whole Amount as set forth in Section 10.1(a)(ii)) be paid to the Company on
Company Request or, if then held by the Company, shall be discharged from such
trust.
Section 10.7 Debentures Redeemed in Part.
Any Debenture 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 hereof (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
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Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Debenture without service charge, a new Debenture or Debentures
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 Debenture so surrendered.
ARTICLE 11
REPURCHASE AT THE OPTION OF A HOLDER
UPON A CHANGE OF CONTROL
Section 11.1 Repurchase Right.
In the event that a Change in Control shall occur, each Holder
shall have the right (the "Repurchase Right"), at the Holder's option, but
subject to the provisions of Section 11.2 hereof, to require the Company to
repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Debentures not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000 or an integral
multiple thereof (provided that no single Debenture may be repurchased in part
unless the portion of the principal amount of such Debenture to be Outstanding
after such repurchase is equal to $1,000 or an integral multiple thereof), on
the date (the "Repurchase Date") that is a Business Day no earlier than 30 days
nor later than 60 days after the date of the Company Notice at a purchase price
equal to 100% of the principal amount of the Debentures to be repurchased (the
"Repurchase Price"), plus interest accrued and unpaid to, but excluding, the
Repurchase Date; provided, however, that (i) installments of interest on
Debentures whose Stated Maturity is prior to or on the Repurchase Date shall be
payable to the Holders of such Debentures, or one or more Predecessor
Debentures, registered as such on the relevant Record Date according to their
terms and the provisions of Section 2.1 hereof and (ii) no Holder shall have a
Repurchase Right upon a Change of Control unless prior to any payment of the
Repurchase Price on the Repurchase Date the Company has made any applicable
change of control offers required by the Company's Senior Debt and has purchased
all Senior Debt validly tendered for payment in connection with such change of
control offers.
Subject to the fulfillment by the Company of the conditions
set forth in Section 11.2 hereof, the Company may elect to pay the Repurchase
Price by delivering the number of shares of Common Stock equal to (i) the
Repurchase Price divided by (ii) 95% of the average of the Closing Prices per
share of Common Stock for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase Date.
Section 11.2 Conditions to the Company's Election to Pay
the Repurchase Price in Common Stock.
(a) The shares of Common Stock to be issued upon repurchase
of Debentures hereunder:
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(i) shall not require registration under any federal
securities law before such shares may be freely transferable
without being subject to any transfer restrictions under the
Securities Act upon repurchase or, if such registration is
required, such registration shall be completed and shall
become effective prior to the Repurchase Date; and
(ii) shall not require registration with, or approval
of, any governmental authority under any state law or any
other federal law before shares may be validly issued or
delivered upon repurchase or if such registration is required
or such approval must be obtained, such registration shall be
completed or such approval shall be obtained prior to the
Repurchase Date.
(b) The shares of Common Stock to be listed upon repurchase of
Debentures hereunder are, or shall have been, approved for listing on the Nasdaq
National Market or the New York Stock Exchange or listed on another national
securities exchange, in any case, prior to the Repurchase Date.
(c) All shares of Common Stock which may be issued upon
repurchase of Debentures will be issued out of the Company's authorized but
unissued Common Stock and will, upon issue, be duly and validly issued and fully
paid and nonassessable and free of any preemptive or similar rights.
(d) If any of the conditions set forth in clauses (a) through
(c) of 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 Debentures, prior to or on the 30th day after
the occurrence of a Change in Control, the Company, or, at the written request
and expense of the Company prior to or on the 30th day after such occurrence,
the Trustee, shall give to all Holders of Debentures notice, in the manner
provided in Section 14.2 hereof, of the occurrence of the Change of Control and
of the Repurchase Right set forth herein arising as a result thereof (the
"Company Notice"). The Company shall also deliver a copy of such notice of a
Repurchase Right to the Trustee. Each notice of a Repurchase Right shall state:
(1) the Repurchase Date;
(2) the date by which the Repurchase Right must be exercised;
(3) the Repurchase Price and accrued and unpaid interest, if
any, and whether the Repurchase Price shall be paid by the Company in
cash or by delivery of shares of Common Stock;
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(4) a description of the procedure which a Holder must follow
to exercise a Repurchase Right, and the place or places where such
Debentures are to be surrendered for payment of the Repurchase Price,
accrued and unpaid interest and Liquidated Damages, if any;
(5) that on the Repurchase Date the Repurchase Price, accrued
and unpaid interest and Liquidated Damages, if any, will become due and
payable upon each such Debenture designated by the Holder to be
repurchased, and that interest thereon shall cease to accrue on and
after said date;
(6) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Debentures to be
repurchased will terminate and the place where such Debentures may be
surrendered for conversion,
(7) if applicable, that no Holder shall have a Repurchase
Right upon a Change of Control unless prior to any payment of the
Repurchase Price on the Repurchase Date the Company has made any
applicable change of control offers required by the Company's Senior
Debt and has purchased all Senior Debt validly tendered for payment in
connection with such change of control offers, and
(8) the place or places where such Debentures, together with
the Option to Elect Repayment Upon a Change of Control certificate
included in Exhibit A annexed hereto are to be delivered for payment of
the Repurchase Price and accrued and unpaid interest, if any.
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 Debentures.
If any of the foregoing provisions or other provisions of this
Article 11 are inconsistent with applicable law, such law shall govern.
(b) To exercise a Repurchase Right, a Holder shall deliver to
the Trustee prior to the close of business on the third Business Day immediately
preceding the Repurchase Date:
(1) written notice of the Holder's exercise of such right,
which notice shall set forth the name of the Holder, the principal
amount of the Debentures to be repurchased (and, if any Debenture is to
be repurchased in part, the serial number thereof, the portion of the
principal amount thereof to be repurchased) and 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
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(2) the Debentures with respect to which the Repurchase Right is
being exercised.
Such written notice shall be irrevocable if not withdrawn prior to the close of
business on the third Business Day prior to the Repurchase Date by delivery to
the Trustee of a notice of withdrawal, except that the right of the Holder to
convert the Debentures with respect to which the Repurchase Right is being
exercised shall continue until the close of business on the Business Day
immediately preceding the Repurchase Date. The Company shall not pay accrued and
unpaid interest on any such Debentures so converted.
(c) In the event a 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 paid, as promptly after the Repurchase Date as practicable, together with
Liquidated Damages, if any, and accrued and unpaid interest to the Repurchase
Date payable in cash with respect to the Debentures as to which the Repurchase
Right has been exercised; provided, however, that installments of interest that
mature prior to or on the Repurchase Date shall be payable in cash to the
Holders of such Debentures, or one or more Predecessor Debentures, registered as
such at the close of business on the relevant Regular Record Date.
(d) If any Debenture (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Debenture (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the Interest Rate, and each Debenture shall remain convertible into Common Stock
until the principal of such Debenture (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(e) Any Debenture 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 his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Debenture
without service charge, a new Debenture or Debentures, containing identical
terms and conditions, each in an authorized denomination in aggregate principal
amount equal to and in exchange for the unrepurchased portion of the principal
of the Debenture so surrendered.
(f) 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
71
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 Debenture declared prior to the Repurchase Date.
(g) No fractions of shares of Common Stock shall be issued upon
repurchase of any Debenture or Debentures. If more than one Debenture 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
such repurchase shall be computed on the basis of the aggregate principal amount
of the Debentures (or specified portions thereof) to be so repurchased. Instead
of any fractional share of Common Stock which would otherwise be issued on the
repurchase of any Debenture or Debentures (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 preceding the Repurchase
Date.
(h) Any issuance and delivery of certificates for shares of Common
Stock on repurchase of Debentures shall be made without charge to the Holder of
Debentures being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the Debentures
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Debentures being repurchased, and no such issuance or delivery shall be made
unless the Persons requesting such issuance or delivery has paid to the Company
the amount of any such tax or duty or has established, to the satisfaction of
the Company, that such tax or duty has been paid.
(i) All Debentures delivered for repurchase shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.15 hereof.
ARTICLE 12
CONVERSION OF DEBENTURES
Section 12.1 Conversion Right and Conversion Price.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Outstanding Debenture or any portion of
the principal amount thereof which is $1,000 or an integral multiple of $1,000
may be converted into duly authorized, fully paid and nonassessable shares of
Common Stock, at the
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Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on
February 15, 2007.
In case a Debenture or portion thereof is called for redemption, such
conversion right in respect of the Debenture 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 Change of Control for which the Holder exercises
its Repurchase Right with respect to a Debenture or portion thereof, such
conversion right in respect of the Debenture or portion thereof shall expire at
the close of business on the Business Day immediately preceding the Repurchase
Date.
The price at which shares of Common Stock shall be delivered upon
conversion (the "Conversion Price") shall be initially equal to $49.7913 per
share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in Section 12.4 hereof.
Section 12.2 Exercise of Conversion Right.
To exercise the conversion right, the Holder of any Debenture to be
converted shall surrender such Debenture duly endorsed or assigned to the
Company or in blank, at the office of any Conversion Agent, accompanied by a
duly signed conversion notice substantially in the form attached to the
Debenture to the Company stating that the Holder elects to convert such
Debenture or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted.
To the extent provided in Section 2.1, Debentures 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 Debenture 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 and
Liquidated Damages, if any, to be received on such Interest Payment Date on the
principal amount of Debentures being surrendered for conversion. To the extent
provided in Section 2.1, Debentures which have been called for redemption by the
Company in a notice of redemption pursuant to Section 10.4, and are converted
prior to redemption, shall not require such concurrent payment to the Company
upon surrender for conversion, and if converted during time period set forth in
the preceding sentence, the Holders of such converted Debentures shall be
entitled to receive (and retain) any accrued interest on the principal of such
surrendered Debentures,and Liquidated Damages, if any.
Debentures shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Debentures for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Debentures 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
73
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 hereof.
In the case of any Debenture 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 Debenture or
Debentures of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Debentures.
If shares of Common Stock to be issued upon conversion of a Restricted
Security, or Debentures 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, such Holder must deliver to the Conversion Agent a
certificate in substantially the form set forth in the form of Debenture set
forth in Exhibit A annexed 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
Debentures issued upon conversion of any such Restricted Security not so
accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the Conversion
Agent.
Section 12.3 Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion
of any Debenture or Debentures. If more than one Debenture shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issued upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Debentures (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of any Debenture or Debentures (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 Closing Price of the Common Stock as of the Trading Day
preceding 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:
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(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:
(i) the numerator of which 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
(ii) the denominator of which shall be the sum of such
number of shares and the total number of shares constituting
such dividend or other distribution.
Such reduction shall 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 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.
(c) In case the Company shall issue rights or warrants
(other than any rights or warrants referred to in Section 12.4(d)) to
all holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share (or having a
conversion 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 Conversion Price in
effect at the opening of business on the date after such Record Date by
a fraction:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on
the Record Date
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plus the number of shares which the aggregate offering price
of the total number of shares so offered for subscription or
purchase (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market
Price, and
(ii) the denominator of which 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 (or into
which the convertible securities so offered are convertible).
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 (or securities convertible into
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 (or securities convertible into
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.
(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(c), (2) any stock,
securities or other property or assets (including cash) distributed as
dividends or distributions in connection with a reclassification,
change, merger, consolidation, statutory share exchange, combination,
sale or conveyance to which Section 12.11 hereof applies and (3) any
dividends or distributions paid exclusively in cash (the securities
described in foregoing are hereinafter in this Section 12.4(d) called
the "securities"), then, in each such case, subject to the second
succeeding paragraph of this Section 12.4(d), 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:
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(i) the numerator of which shall be the Current 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 set forth
in a Board Resolution) on such date of the portion of the
securities so distributed applicable to one share of Common Stock
(determined on the basis of the number of shares of the Common
Stock outstanding on the Record Date), and
(ii) the denominator of which shall be such Current Market
Price.
Such reduction shall become effective immediately prior to the opening
of business on the day following the Record Date. However, in the event
that the then fair market value (as so determined) of the portion of
the securities so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price on the Record
Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon
conversion of a Debenture (or any portion thereof) the amount of
securities such Holder would have received had such Holder converted
such Debenture (or portion thereof) immediately prior to such Record
Date. In the event that such dividend or distribution is not so paid or
made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution
had not been declared.
If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 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 (a "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,
77
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),
12.4(b) and 12.4(c), any dividend or distribution to which this Section
12.4(d) is applicable that also includes shares of Common Stock, a
subdivision or combination of Common Stock to which Section 12.4(c)
applies, or rights or warrants to subscribe for or purchase shares of
Common Stock to which Section 12.4(c) applies (or any combination
thereof), 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, such
subdivision or combination or such rights or warrants to which
Sections 12.4(a), 12.4(b) and 12.4(c) apply, respectively (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, such subdivision or combination or such rights
or warrants (and any
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further Conversion Price reduction required by Sections
12.4(a), 12.4(b) and 12.4(c) 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 (x) "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),
(y) "the day upon which such subdivision becomes
effective" and "the day upon which such combination
becomes effective" within the meaning of Section
12.4(b), and (z) 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(c), and
(B) any shares of Common Stock included in
such dividend or distribution shall not be deemed
"outstanding at the close of business on the date
fixed for such determination" within the meaning of
Section 12.4(a) and any reduction or increase in the
number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in
connection with such dividend or distribution.
(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 reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or
conveyance to which Section 12.11 hereof applies or as part of a
distribution referred to in Section 12.4(d) hereof), 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 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 set forth 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 12 months
preceding the date of such distribution, and in respect of
which no adjustment pursuant to Section 12.4(f) hereof has
been made,
79
exceeds 10% 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% 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.
However, in the event that the then fair market value (as so
determined) of the portion of the securities so distributed applicable
to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the
right to receive upon conversion of a Debenture (or any portion
thereof) the amount of cash such Holder would have received had such
Holder converted such Debenture (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.
(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 set forth 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 set forth 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 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
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(2) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash
within 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% 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:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered
shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and
(ii) 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) shall 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).
(g) For purposes of this Section 12.4, the following terms
shall have the meanings indicated:
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(1) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten
consecutive Trading Days immediately prior to the date in
question; provided, however, that if:
(i) 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 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;
(ii) 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
(iii) 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 (i) or (ii) of
this proviso, the Closing Price for each Trading Day
on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair
market value (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 set forth 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 "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
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each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the reciprocal
of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date, when used:
(A) 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;
(B) 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
(C) 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.
(2) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(3) "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).
(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.
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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 20 days and the reduction is
irrevocable during the period and the Board of Directors determines in
good faith that such reduction would be in the best interests of the
Company, which determination shall be conclusive and set forth in a
Board Resolution. Whenever the Conversion Price is reduced pursuant to
the preceding sentence, the Company shall mail to the Trustee and each
Holder at the address of such Holder as it appears in the Register a
notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 12.4(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 Debenture 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 hereof.
(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) If the distribution date for the rights provided in
the Company's rights agreement, if any, occurs prior to the date a
Debenture is converted, the Holder of the Debenture who converts such
Debenture after the distribution date is not entitled to receive the
rights that would otherwise be attached (but for the date of
conversion) to the shares of Common Stock received upon such
conversion; provided, however, that an adjustment shall be made to the
Conversion Price pursuant to clause 12.4(b) as if the rights were being
distributed to the common stockholders of the Company immediately prior
to such
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conversion. If such an adjustment is made and the rights are later
redeemed, invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Price, on an equitable basis, to
take account of such event.
Section 12.5 Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided (other
than in the case of an adjustment pursuant to the second paragraph of Section
12.4(h) for which the notice required by such paragraph has been provided), the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such adjustment is based.
Promptly after delivery of such Officers' Certificate, the Company shall prepare
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, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the effective date of
such adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.
Section 12.6 Notice Prior to Certain Actions.
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 its consolidated retained earnings;
(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 securities convertible into shares of
capital stock of any class) or of any other rights;
(3) there shall occur any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, a change in par value, a change from par value to no par value or a
change from no par value to par value), or any merger, consolidation,
statutory share exchange or combination to which the Company is a party and
for which approval of any shareholders of the Company is required, or the
sale, transfer or conveyance 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;
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 hereof, and
shall cause
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to be provided to the Trustee and all Holders in accordance with Section
14.2 hereof, 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 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, merger,
consolidation, statutory share exchange, combination, sale, transfer,
conveyance, 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, merger, consolidation, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 12.6.
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 Debentures, the
full number of shares of fully paid and nonassessable Common Stock then issuable
upon the conversion of all Outstanding Debentures.
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 Debentures
pursuant hereto. A Holder delivering a Debenture 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 Debenture or Debentures to be
converted, and no such issue or delivery shall be made unless 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.
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Section 12.9 Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures 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 Debentures.
All Debentures 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), 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,
(ii) any merger, consolidation, statutory share exchange or
combination of the Company with another corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange
for such Common Stock or
(iii) any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other corporation as a
result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or
in exchange for such Common Stock,
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 TIA as in force at the date of execution of such supplemental indenture if
such supplemental indenture is then required to so comply) providing that such
Debenture 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, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Debentures been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share
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exchange, 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 merger, consolidation,
statutory share exchange, sale or conveyance (provided that, if the kind or
amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share 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 merger, consolidation, statutory share exchange, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
12. If, in the case of any such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock
includes shares of stock or other securities and assets of a corporation other
than the successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
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 Debentures 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 hereof.
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 Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 12.11 applies to any event or occurrence, Section 12.4
hereof shall not apply.
Section 12.12 Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 5.1 hereof, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Debentures 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 hereof, nor
any Conversion Agent shall be accountable with respect to the validity or value
(of the kind or amount) of any Common Stock, or of any
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other securities or property, which may at any time be issued or delivered upon
the conversion of any Debenture; and it or they do not make any representation
with respect thereto. Neither the Trustee, subject to the provisions of Section
5.1 hereof, 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 Debenture for the purpose of conversion; and the Trustee, subject to the
provisions of Section 5.1 hereof, 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 Debentures Subordinated to Senior Debt.
The Company covenants and agrees, and each Holder of Debentures, by
such Holder's acceptance thereof, likewise covenants and agrees, that the
Indebtedness represented by the Debentures and the payment of the principal of
and premium, if any, and interest (including Liquidated Damages, if any) on each
and all of the Debentures is hereby expressly subordinated and junior, to the
extent and in the manner set forth and as set forth in this Section 13.1, 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, the holders of all Senior
Debt shall first be entitled to receive payment of the full amount due thereon
in respect of all such Senior Debt and all other amounts due or provision shall
be made for such amount in cash, or other payments satisfactory to the holders
of Senior Debt, before the Holders of any of the Debentures 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 (including Liquidated Damages, if any) on the Indebtedness evidenced
by the Debentures, except that the Company may make payments on the Debentures
in Permitted Junior Securities.
(b) In the event of any acceleration of Maturity of the Debentures
because of an Event of Default, unless the full amount due in respect of all
Senior Debt is paid in cash or other form of payment satisfactory to the holders
of Senior Debt, 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 Debentures or to acquire any of the Debentures (including any
redemption, conversion or cash repurchase pursuant to the exercise of the
Repurchase Right), except that the Company may make payments on the
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Debentures in Permitted Junior Securities, and the Company shall give prompt
written notice of such acceleration to such holders of Senior Debt.
(c) In the event of and during the continuance of any default in
payment of the principal of or premium, if any, or interest on, or other payment
obligation in respect of, any Senior Debt, unless all such payments due in
respect of such Senior Debt have been paid in full in cash or other payments
satisfactory to the holders of Senior Debt, 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 Debentures or to acquire any of
the Debentures (including any redemption, conversion or cash repurchase pursuant
to the exercise of the Repurchase Right), except that the Company may make
payments on the Debentures in Permitted Junior Securities. 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.
(d) During the continuance of any event of default with respect to
any Designated Senior Debt, as such event of default is defined under any such
Designated Senior Debt or in any agreement pursuant to which any Designated
Senior Debt has been issued (other than a default in payment of the principal of
or premium, if any, or interest on, or other payment obligation in respect of
any Designated Senior Debt), permitting the holder or holders of such Designated
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 Debentures, other than
payments in Permitted Junior Securities, for 179 days following notice in
writing (a "Payment Blockage Notice") to the Company, from any holder or holders
of such Designated Senior Debt or their representative or representatives or the
trustee or trustees under any indenture or under which any instrument evidencing
any such Designated 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 Designated Senior Debt has been paid in full; provided,
--------
however, if the maturity of such Designated Senior Debt is accelerated, no
-------
payment may be made on the Debentures, other than payments in Permitted Junior
Securities, until such Designated Senior Debt has been paid in full in cash or
other payment satisfactory to the holders of such Designated Senior Debt or such
acceleration has been cured or waived.
For purposes of this Section 13.1(d), such Payment Blockage 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 Payment Blockage Notice. The provisions of this Section
13.1(d) shall apply only to one such Payment Blockage Notice given in any period
of 365 days with respect to any issue of Designated Senior Debt, and no such
continuing event of default that existed or was continuing on the date of
delivery of any Payment Blockage Notice shall be, or shall be made, the basis
for a subsequent Payment Blockage Notice.
(e) In the event that, notwithstanding the foregoing provisions of
Sections 13.1(a), 13.1(b), 13.1(c) and 13.1(d), any payment on account of
principal,
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premium, if any, or interest (including Liquidated Damages, if any) on the
Debentures 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) or
13.1(b), then, unless all Senior Debt is paid in full in cash, or provision
shall be made therefor,
(ii) after the happening of an event of default of the type specified
in Section 13.1(c) above, then, unless 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(d) above and delivery of a Payment Blockage Notice, then,
unless such event of default shall have been cured or waived or the 179-day
period specified in Section 13.1(d) shall have expired,
such payment (subject, in each case, to the provisions of Section 13.7 hereof)
shall be held in trust for the benefit of, and shall be immediately paid over
to, the holders of Designated Senior Debt (unless an event described in Section
13.1(a), (b) or (c) has occurred, in which case the payment shall be held in
trust for the benefit of, and shall be immediately paid over to all 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
Designated Senior Debt or Senior Debt, as the case may be, may have been issued,
as their interests may appear.
Section 13.2 Subrogation.
Subject to the payment in full of all Senior Debt to which the
Indebtedness evidenced by the Debentures is in the circumstances subordinated as
provided in Section 13.1 hereof, the Holders of the Debentures 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 Debentures shall be paid in
full, and, as between the Company, its creditors other than holders of such
Senior Debt, and the Holders of the Debentures, 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 Debentures shall be deemed to be a
payment by the Company on account of such Senior Debt, provided that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debentures, on the one hand,
and the holders of Senior Debt, on the other hand.
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Section 13.3 Obligation of the Company is Absolute and Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in
the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of and premium, if any,
and interest (including Liquidated Damages, if any) on the Debentures 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 Debentures
and creditors of the Company other than the holders of Senior Debt, nor shall
anything contained herein or therein prevent the Trustee or the Holder of any
Debenture 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, all principal of or premium, if any, or interest on, or other payment
obligations in respect of 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 Debentures, except that the Company may make
payments on the Debentures in Permitted Junior Securities.
Section 13.5 Payments on Debentures 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 Debentures 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 Debentures.
Section 13.6 Effectuation of Subordination by Trustee.
Each Holder of Debentures, 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 Debentures shall be entitled
to rely upon
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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 Debentures, for the purpose of ascertaining the
Persons 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, or other payment obligation in respect of 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 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 Debentures, 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 contained in this Article shall apply to claims of or payments
to the Trustee under or pursuant to Section 5.8 hereof.
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
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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.
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 Debentures 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 Debentures
relating to the subordination thereof.
Section 13.11 Certain Conversions Not Deemed Payment.
For the purposes of this Article 13 only:
(1) the issuance and delivery of junior securities upon conversion of
Debentures in accordance with Article 12 hereof shall not be deemed to
constitute a payment or distribution on account of the principal of,
premium, if any, or interest (including Liquidated Damages, if any) on
Debentures or on account of the purchase or other acquisition of
Debentures, and
(2) the payment, issuance or delivery of cash (except in satisfaction
of fractional shares pursuant to Section 12.3 hereof), property or
securities (other than junior securities) upon conversion of a Debenture
shall be deemed to constitute payment on account of the principal of,
premium, if any, or interest (including Liquidated Damages, if any) on such
Debenture.
For the purposes of this Section 13.11, the term "junior securities" means:
(a) shares of any common stock of the Company or
94
(b) other securities of the Company that are subordinated in right of
payment to all Senior Debt that may be outstanding at the time of issuance
or delivery of such securities to substantially the same extent as, or to a
greater extent that, the Debentures are so subordinated as provided in this
Article.
Nothing contained in this Article 13 or elsewhere in this Indenture or in the
Debentures is intended to or shall impair, as among the Company, its creditors
(other than holders of Senior Debt) and the Holders of Debentures, the right,
which is absolute and unconditional, of the Holder of any Debenture to convert
such Debenture in accordance with Article 12 hereof.
Article 14
OTHER PROVISIONS OF GENERAL APPLICATION
Section 14.1 Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA which are
required to be part of this Indenture, and shall, to the extent applicable, be
governed by such provisions.
Section 14.2 Notices.
Any notice or communication to the Company or the Trustee is duly
given if in writing and delivered in person or mailed by first-class mail to the
address set forth below:
(a) if to the Company:
Primus Telecommunications Group, Incorporated
0000 Xxx Xxxxxx Xxxx
XxXxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, III
95
(b) if to the Trustee:
First Union National Bank
000 Xxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first-class
mail to his address shown on the Register kept by the Registrar. Failure to mail
a notice or communication to a Holder or any defect in such notice or
communication shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed or sent in the manner provided
above within the time prescribed, it is duly given as of the date it is mailed,
whether or not the addressee receives it, except that notice to the Trustee
shall only be effective upon receipt thereof by the Trustee.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee at the same time.
Section 14.3 Communication by Holders with Other Holders.
Holders may communicate pursuant to Section 312(b) of the TIA with
other Holders with respect to their rights under the Debentures or this
Indenture. The Company, the Trustee, the Registrar and anyone else shall have
the protection of Section 312(c) of the TIA.
Section 14.4 Acts of Holders of Debentures.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Debentures 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 Debentures voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Debentures 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
96
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 Debentures 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 Debenture, shall be sufficient for any purpose of
this Indenture and (subject to Section 5.1 hereof) 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 Debentures shall be proved in the manner
provided in Section 8.6 hereof.
(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 Debentures held by any
Person, and the date of such Person holding the same, shall be proved by the
Register.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holders of any Debenture shall bind every
future Holder of the same Debenture and the Holder of every Debenture 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 Debenture.
Section 14.5 Certificate and Opinion as to Conditions Precedent.
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.
97
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.
Section 14.6 Statements Required in Certificate or Opinion.
Each 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.
Section 14.7 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 14.8 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
98
Section 14.9 Separability Clause.
In case any provision in this Indenture or the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 14.10 Benefits of Indenture.
Nothing contained in this Indenture or in the Debentures, 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 Debentures,
any benefit or legal or equitable right, remedy or claim under this Indenture.
Section 14.11 Governing Law.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 14.12 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 14.13 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture or the last day on which a Holder of a Debenture has a
right to convert such Debenture 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 Debentures) payment of interest (including Liquidated
Damages, if any) or principal or premium, if any, or conversion of the
Debentures, 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 14.14 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 Debenture, 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
99
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.
100
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
By: /s/ K. Xxxx Xxxxx
-------------------------------
Name: K. Xxxx Xxxxx
Title: President and Chief Executive Officer
FIRST UNION NATIONAL BANK
By: /s/ Xxxxx XxXxxxx
---------------------------------------
Name: Xxxxx XxXxxxx
Title:
101
EXHIBIT A
FORM OF DEBENTURE
[FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED (OR ITS SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, CONVERSION OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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 SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN./1/
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
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 (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT OR (B) IT IS A NON-U.S. PERSON OUTSIDE THE UNITED STATES
ACQUIRING THE SECURITY IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT;
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO PRIMUS
TELECOMMUNICATIONS GROUP, INCORPORATED OR ANY SUBSIDIARY OF PRIMUS
TELECOMMUNICATIONS GROUP, INCORPORATED, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO A NON-U.S. PERSON
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (E) 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
_____________________
/1/ This legend should be included only if the Security is issued in global
form.
A-1
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) 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)(E)
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 TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER
IS PURSUANT TO CLAUSE 2(D) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS PRIMUS TELECOMMUNICATIONS
GROUP, INCORPORATED 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)(E) 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
A-2
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
5-3/4% Convertible Subordinated Debenture due 2007
CUSIP NO. ________
No._____________ $_________________
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED, a Delaware corporation
(the "Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _____________________, or its registered assigns, the principal sum of ______
U.S. Dollars ($______________ ) on February 15, 2007.
Interest Payment Dates: February 15 and August 15, commencing August
15, 2000
Regular Record Dates: February 1 and August 1
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.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed manually or by facsimile by its duly authorized officers.
Dated: February 24, 2000 PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 5-3/4% Convertible
Subordinated Debentures due 2007 described
in the within-named Indenture.
First Union National Bank,
as Trustee
By:_________________________________
Authorized Signatory
Dated: February 24, 2000
A-4
[REVERSE OF SECURITY]
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
5-3/4% Convertible Subordinated Debenture due 2007
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Principal and Interest.
Primus Telecommunications Group, Incorporated, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the Interest Rate from the date of issuance until repayment at
Maturity, redemption or repurchase. The Company will pay interest on this
Security semiannually in arrears on February 15 and August 15 of each year (each
an "Interest Payment Date"), commencing August 15, 2000.
Interest on the 5-3/4% Convertible Subordinated Debentures due 2007
(the "Securities") shall be computed (i) for any full semiannual period for
which a particular Interest Rate is applicable on the basis of a 360-day year of
twelve 30-day months and (ii) for any period for which a particular Interest
Rate is applicable shorter than a full semiannual period for which interest is
calculated, on the basis of a 30-day month and, for such periods of less than a
month, the actual number of days elapsed over a 30-day month.
A Holder of any Security at the close of business on a Regular Record
Date shall be entitled to receive interest on such Security on the corresponding
Interest Payment Date. A Holder of any Security which is converted after the
close of business on a Regular Record Date and prior to the corresponding
Interest Payment Date (other than any Security whose Maturity is prior to such
Interest Payment Date) shall be entitled to receive interest on the principal
amount of such Security, notwithstanding the conversion of such Security prior
to such Interest Payment Date. However, any such Holder which surrenders any
such Security for conversion during the period between the close of business on
such Regular Record Date and ending with the opening of business on the
corresponding Interest Payment Date shall be required to pay the Company an
amount equal to the interest on the principal amount of such Security so
converted, which is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such Security for conversion.
Notwithstanding the foregoing, any such Holder which surrenders for conversion
any Security which has been called for redemption by the Company in a notice of
redemption given by the Company pursuant to Section 10.4 of the Indenture shall
be entitled to receive (and retain) such interest and need not pay the Company
an amount equal to the interest on the principal amount of such Security so
converted at the time such Holder surrenders such Security for conversion.
A-5
In accordance with the terms of the Resale Registration Rights
Agreement, dated February 24, 2000, between the Company, Primus
Telecommunications, Inc., Primus Telecommunications (Australia) Pty. Ltd.,
Primus Telecommunications Pty. Ltd., and Xxxxxx Brothers Inc., Xxxxxx Xxxxxxx &
Co. Incorporated and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (the
"Initial Purchasers"), during the first 90 days following a Registration Default
(as defined in the Resale Registration Rights Agreement), the Interest Rate
borne by the Securities shall be increased by 0.25% on:
(A) August 23, 2000 (the "Effectiveness Target Date"), if the Shelf
Registration Statement is not declared effective by the Securities and
Exchange Commission prior to or on August 22, 2000;
(B) subject to the exceptions in the Resale Registration Rights
Agreement, the day after the fifth Business Day after the Shelf
Registration Statement, previously declared effective, ceases to be
effective or fails to be usable after the Effectiveness Target Date and
during the period required by the Resale Registration Rights Agreement for
the Shelf Registration Statement to be effective, if a post-effective
amendment (or report filed pursuant to the Exchange Act) that cures the
Shelf Registration Statement is not filed with the Securities and Exchange
Commission during such five Business Day period; or
(C) the day following the 45th or 75th day, as the case may be, of
any period that the prospectus contained in the Shelf Registration
Statement has been suspended, if such suspension has not been terminated.
From and after the 91st day following such Registration Default, the Interest
Rate borne by the Securities shall be increased by 0.50%. In no event shall the
Interest Rate borne by the Securities be increased by more than 0.50%.
Any amount of additional interest will be payable in cash
semiannually, in arrears, on each Interest Payment Date and will cease to accrue
on the date the Registration Default is cured. The Holder of this Security is
entitled to the benefits of the Resale Registration Rights Agreement.
2. Method of Payment.
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.
Principal of, and premium, if any, and interest on, Global Securities
will be payable to the Depositary in immediately available funds.
Principal and premium, if any, on Physical Securities will be payable
at the office or agency of the Company maintained for such purpose, initially
the Corporate
A-6
Trust Office of the Trustee. Interest on Physical Securities will be payable by
(i) 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
Register, or (ii) upon application to the Registrar not later than the relevant
Record Date by a Holder of an aggregate principal amount in excess of
$5,000,000, wire transfer in immediately available funds.
3. Paying Agent and Registrar.
Initially, First Union National Bank, the Trustee under the Indenture,
will act as Paying Agent and Registrar. The Company may change the Paying Agent
or Registrar without notice to any Holder.
4. Indenture.
The Company issued this Security under an Indenture, dated as of
February 24, 2000 (the "Indenture"), between the Company and First Union
National Bank, as trustee (the "Trustee"). The terms of the Security include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended ("TIA"). This Security is subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Security and the terms of
the Indenture, the terms of the Indenture shall control.
5. Optional Redemption.
(a) (i) The Company may redeem this Security at any time prior to
February 15, 2003 in whole at any time or in part from time to time at the
Provisional Redemption Price, if:
(A) the Shelf Registration Statement covering resales of this
Security and the Common Stock issuable upon conversion of this
Security is effective and available for use and is expected to
remain effective and available for use for the 30 days following
the Redemption Date; and
(B) the Current Market Value of the Common Stock equals or exceeds
the following triggering percentages of the Conversion Price then
in effect for at least 20 Trading Days in any consecutive 30-day
trading period ending on the Trading Day prior to the date the
notice of the redemption is mailed.
A-7
Trigger
During the Twelve Months Commencing Percentage
----------------------------------- ----------
February 15, 2000................... 170%
February 15, 2001................... 160%
February 15, 2002................... 150%
(ii) On the Redemption Date, the Company shall pay the Make-Whole
Amount on this Security if called for redemption pursuant to Section 10.1(a) of
the Indenture, whether or not converted into Common Stock after the date the
notice of the provisional redemption is mailed and prior to the Redemption Date.
(b) This Security may be redeemed in whole or in part, upon not less
than 20 nor more than 60 days' notice, at any time on or after February 15,
2003, at the option of the Company, at the Redemption Prices (expressed as
percentages of the principal amount) set forth below.
During the Twelve Months
Commencing Redemption Prices
---------- -----------------
February 15, 2003..................... 102.88%
February 15, 2004..................... 101.92%
February 15, 2005..................... 100.96%
February 15, 2006..................... 100.00%
(c) The Company shall pay any interest on the Securities called for
redemption accrued but not paid to the Redemption Date, pursuant to the terms of
the Indenture.
Securities in original denominations larger than $1,000 may be
redeemed in part. 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.
On and after the Redemption Date, interest ceases to accrue on
Securities or portions of Securities called for redemption, unless the Company
defaults in the payment of the Redemption Price.
A-8
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
6. Repurchase Right Upon a Change of Control.
If a Change in Control occurs, the Holder of Securities, at the
Holder's option, shall have the right, subject to the conditions and in
accordance with the provisions of the Indenture, to require the Company to
repurchase the Securities (or any portion of the principal amount hereof that is
at least $1,000 or an integral multiple thereof, provided that the portion of
the principal amount of this Security to be Outstanding after such repurchase is
at least equal to $1,000) at the Repurchase Price in cash, plus any interest
accrued and unpaid to the Repurchase Date.
Subject to the conditions provided in the Indenture, the Company may
elect to pay the Repurchase Price by delivering a number of shares of Common
Stock equal to (i) the Repurchase Price divided by (ii) 95% of the average of
the Closing Prices per share for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase Date.
No fractional shares of Common Stock will be issued upon repurchase of
any Securities. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of such Securities, the Company shall pay a
cash adjustment as provided in the Indenture.
A Company Notice will be given by the Company to the Holders as
provided in the Indenture. To exercise a Repurchase Right, a Holder must deliver
to the Trustee a written notice as provided in the Indenture.
7. Conversion Rights.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of Securities is entitled, at such Holder's option, at any time
before the close of business on February 15, 2007, to convert the Holder's
Securities (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount thereof or of such portion,
into duly authorized, fully paid and nonassessable shares of Common Stock of the
Company at the Conversion Price in effect at the time of conversion.
In the case of a Security (or a portion thereof) called for
redemption, such conversion right in respect of the Security (or such portion
thereof) 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 Change of Control for which the
Holder exercises its Repurchase Right with respect to a Security (or a portion
thereof), such conversion right in respect of the Security (or portion thereof)
shall expire at the close of business on the Business Day preceding the
Repurchase Date.
A-9
The Conversion Price shall be initially equal to $49.7913 per share of
Common Stock. The Conversion Price shall be adjusted under certain circumstances
as provided in the Indenture.
To exercise the conversion right, the Holder must surrender the
Security (or portion thereof) duly endorsed or assigned to the Company or in
blank, at the office of the Conversion Agent, accompanied by a duly signed
conversion notice to the Company. Any Security surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the corresponding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date), shall also be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of the Securities being
surrendered for conversion.
No fractional shares of Common Stock will be issued upon conversion of
any Securities. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of such Securities, the Company shall pay a
cash adjustment as provided in the Indenture.
8. Subordination.
The Indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinated 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.
9. Denominations; Transfer; Exchange.
The Securities are issuable in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. A
Holder may register the transfer or exchange of Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture.
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.
A-10
In the event of redemption, conversion or repurchase of the Securities
in part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion thereof will be issued in the name of the Holder hereof.
10. Persons Deemed Owners.
The registered Holder of this Security shall be treated as its owner
for all purposes.
11. Unclaimed Money.
The Trustee and the Paying Agent shall pay to the Company any money
held by them for the payment of principal, premium, if any, or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due. After payment to the Company, Holders entitled to the money
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity.
Subject to certain conditions contained in the Indenture, the Company
may discharge its obligations under the Securities and the Indenture if (1) (a)
all of the Outstanding Securities shall become due and payable at their
scheduled Maturity within one year or (b) all of the Outstanding Securities are
scheduled for redemption within one year, and (2) the Company shall have
deposited with the Trustee money and/or U.S. Government Obligations sufficient
to pay the principal of, and premium, if any, and interest on, all of the
Outstanding Securities on the date of Maturity or redemption, as the case may
be.
13. Amendment; Supplement; Waiver.
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 aggregate principal amount of the Outstanding Securities (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.
A-11
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.
14. Defaults and Remedies.
The Indenture provides that an Event of Default with respect to the
Securities occurs when any of the following occurs:
(a) default in the payment of interest or Liquidated Damages, if any,
on any of the Securities when due and payable and continuance of such default
for a period of 30 days; or
(b) default in the payment of principal of (or premium, if any, on)
any of the Securities at its Stated Maturity, upon acceleration, redemption or
otherwise; or
(c) default in the payment of principal, interest or Liquidated
Damages, if any, on any of the Securities required to be purchased pursuant to a
Repurchase Right;
(d) default in the performance or breach of any covenant or agreement
of the Company in this Indenture or under the Securities (other than a default
in the performance, or breach, of a covenant or agreement specified in the
preceding clause (a), (b) or (c)), and continuance of such default or breach for
a period of 30 consecutive days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding Securities
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Restricted Subsidiary having an outstanding principal
amount of $10.0 million or more in the aggregate for all such issues of all such
Persons, whether such Indebtedness now exists or shall hereafter be created, (I)
an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled by the earlier of (x) the expiration of any applicable
grace period or (y) the thirtieth day after such default; and/or (II) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
by the earlier of (x) the expiration of any applicable grace period or (y) the
thirtieth day after such default;
A-12
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10.0 million in the aggregate for all such final
judgments or orders (treating any deductibles, self-insurance or retention as
not so covered) shall be rendered against the Company or any Restricted
Subsidiary and shall not be paid or discharged, and there shall be any period of
30 consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and not
paid or discharged against all such Persons to exceed $10.0 million during which
a stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) there are certain events of bankruptcy, insolvency or
reorganization of the Company or any Significant Subsidiary.
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.
15. Authentication.
This Security shall not be valid until the Trustee (or authenticating
agent) executes the certificate of authentication on the other side of this
Security.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
17. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders under the Indenture,
Holders of Transfer Restricted Securities shall have all the rights set forth in
the Resale Registration Rights Agreement.
18. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on this Security and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on this Security or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
19. Governing Law.
A-13
The Indenture and this Security shall be governed by, and construed in
accordance with, the law of the State of New York.
20. Successor Corporation.
In the event a successor corporation assumes all the obligations of
the Company under this Security, pursuant to the terms hereof and of the
Indenture, the Company will be released from all such obligations.
A-14
ASSIGNMENT FORM
To assign this Security, fill in the form below and have your
signature guaranteed: (I) or (we) assign and transfer this Security to:
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated:_________________ Your Name:____________________________________
(Print your name exactly as it appears on the
face of this Security)
Your Signature:_______________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee*:_________________________
________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-15
In connection with any transfer of this Security occurring prior to the date
which is the end of the period referred to in Rule 144(k) under the Securities
Act (other than a transfer pursuant to an effective registration statement under
the Securities Act) , the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[_] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[_] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless the conditions to any such transfer of registration set
forth herein and in Sections 2.7, 2.8 and 2.9 of the Indenture shall have been
satisfied.
Dated:_______________________ ________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee:
________________________________________
Signature must be guaranteed by a
participant in a recognized signature
guaranty medallion program or other
signature guarantor acceptable to the
Trustee.
A-16
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion, in each case for investment and not with a view to
distribution, and that it and any such account is a "Qualified Institutional
Buyer" within the meaning of Rule 144A under the Securities Act of 1933 and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:_______________________ ____________________________________________
NOTICE: To be executed by an executive
officer.
A-17
CONVERSION NOTICE
TO: PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
0000 Xxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
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. To the extent provided
in the Indenture, any amount required to be paid to the undersigned on account
of interest (including Liquidated Damages, if any), accompanies this Security.
Dated:_______________ Your Name:____________________________________
(Print your name exactly as it appears on the
face of this Security)
Your Signature:_______________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee*:_________________________
Social Security or other Taxpayer
Identification Number:________________________
Principal amount to be converted (if less than all): $
________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-18
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)
______________________________________________________
(Xxxxxx Xxxxxxx)
______________________________________________________
(City, State and Zip Code)
A-19
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
0000 Xxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Primus Telecommunications Group, Inc. (the
"Company") as to the occurrence of a Change of Control 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 interest and
Liquidated Damages, if any, accrued and unpaid to, but excluding, such date, to
the registered holder hereof.
Dated:______________ Your Name:___________________________________
(Print your name exactly as it appears on the
face of this Security)
Your Signature:_______________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee*:_________________________
Social Security or other Taxpayer
Identification Number:________________________
Principal amount to be converted (if less than all): $
________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-20
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES/2/
The following exchanges of a part of this Global Security for Physical
Securities have been made:
Principal Amount of
Amount of decrease in Amount of increase in this Global Security Signature of
Principal Amount of Principal Amount of following such decrease authorized officer
Date of Exchange this Global Security this Global Security (or increase) of Trustee
---------------- -------------------- -------------------- ------------- ---------
_______________
/2/ This schedule should be included only if the Security is issued in global
form.
A-21
EXHIBIT B
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
[Date]
First Union National Bank, as Trustee
Corporate Trust
000 Xxxx Xxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Primus Telecommunications Group, Incorporated (the "Company")
5 3/4% Convertible Subordinated Debentures due 2007 (the
"Debentures")
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate
principal amount of Debentures, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S ("Regulation S") under the
Securities Act of 1933, as amended (the "Securities Act"), and accordingly,
we hereby certify as follows:
1. The offer of the Debentures was not made to a person in the
United States (unless such person or the account held by it for which
it is acting is excluded from the definition of "U.S. person" pursuant
to Rule 902(k)(1) of Regulation S under the circumstances described in
Rule 902(k)(2) of Regulation S) or specifically targeted at an
identifiable group of U.S. citizens abroad.
2. Either (a) at the time the buy order was originated, the
buyer was outside the United States or we and any person acting on our
behalf reasonably believed that the buyer was outside the United
States or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market, and neither we
nor any person acting on our behalf knows that the transaction was
pre-arranged with a buyer in the United States.
3. Neither we, any of our affiliates, nor any person acting on
our or their behalf has made any directed selling efforts in the
United States in contravention of the requirements of Rule 903(a) or
Rule 904(a) of Regulation S, as applicable.
4. The proposed transfer of Debentures is not part of a plan
or scheme to evade the registration requirements of the Securities
Act.
5. If we are a dealer or a person receiving a selling
concession or other fee or remuneration in respect of the Debentures,
and the proposed transfer takes place before the Offshore Restriction
Date referred to in the Indenture, dated as of February 24, 2000,
among the Company and the Trustee, or we are an officer or
B-1
director of the Company or a distributor, we certify that the proposed
transfer is being made in accordance with the provisions of Rules 903
and 904(b) of Regulation S.
You and the Company are entitled to rely upon this Certificate
and are irrevocably authorized to produce this Certificate or a copy
hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby. Terms used in this certificate have the meanings set forth in
Regulation S.
Very truly yours,
[Name of Transferor]
By:_________________________________
Authorized Signature
B-2
EXHIBIT C
---------
Rule 144A Certificate
---------------------
To: First Union National Bank, as Trustee
Corporate Trust
000 Xxxx Xxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Office
Re: Primus Telecommunications Group, Incorporated (the
"Company") 5 3/4% Convertible Subordinated Debentures
due 2007 (the "Debentures")
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____________
aggregate principal amount of Debentures, we confirm that such sale has
been effected pursuant to and in accordance with Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act"). We are
aware that the transfer of Debentures to us is being made in reliance on
the exemption from the provisions of Section 5 of the Securities Act
provided by Rule 144A. If the Company is not subject to Section 13 or 15(d)
of the Exchange Act, prior to the date of this Certificate we have been
given the opportunity to obtain from the Company the information referred
to in Rule 144A(d)(4), and have either declined such opportunity or have
received such information.
You and the Company are entitled to rely upon this Certificate
and are irrevocably authorized to produce this Certificate or a copy hereof
to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:_________________________________
Name:
Title:
Address:
Date of this Certificate: ________ __, ____
C-1
--------------------------------------------------------------------------------
RESALE REGISTRATION RIGHTS AGREEMENT
Dated as of February 24, 2000
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
PRIMUS TELECOMMUNICATIONS, INC.
PRIMUS TELECOMMUNICATIONS (AUSTRALIA) PTY. LTD.
PRIMUS TELECOMMUNICATIONS PTY. LTD.
and
XXXXXX BROTHERS INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
--------------------------------------------------------------------------------
RESALE REGISTRATION RIGHTS AGREEMENT, dated as of February 24, 2000,
among Primus Telecommunications Group, Incorporated, a Delaware corporation
(together with any successor entity, herein referred to as the "Issuer"), Primus
Telecommunications Incorporated, a Delaware corporation, Primus
Telecommunications (Australia) Pty. Ltd., an Australian corporation, Primus
Telecommunications Pty. Ltd., an Australian corporation, and Xxxxxx Brothers
Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx &
Co. Incorporated (collectively, the "Initial Purchasers").
Pursuant to the Purchase Agreement, dated February 17, 2000, between
the Issuer, the Principal Subsidiaries (as defined below) and the Initial
Purchasers (the "Purchase Agreement"), the Initial Purchasers have agreed to
purchase from the Issuer up to $250,000,000 ($300,000,000 if the Initial
Purchasers exercise the over-allotment option in full) in aggregate principal
amount of 5 3/4% Convertible Subordinated Debentures due 2007 (the
"Debentures"). The Debentures will be convertible into fully paid, nonassessable
common stock, par value $.01 per share, of the Issuer (the "Common Stock") on
the terms, and subject to the conditions, set forth in the Indenture (as defined
herein). To induce the Initial Purchasers to purchase the Debentures, and in
satisfaction of a condition to the Initial Purchasers' obligations under the
Purchase Agreement, the Issuer has agreed to provide the registration rights set
forth in this Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:
Advice: As defined in Section 4(c)(ii) hereof.
Agreement: This Resale Registration Rights Agreement.
Blue Sky Application: As defined in Section 6(a) hereof.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: A day other than a Saturday or Sunday or any federal
holiday in the United States.
Closing Date: The date of this Agreement.
Commission: Securities and Exchange Commission.
Common Stock: As defined in the preamble hereto.
Damages Payment Date: Each Interest Payment Date. For purposes of
this Agreement, if no Debentures are outstanding, "Damages Payment Date"
shall mean each February 15 and August 15.
Debentures: As defined in the preamble hereto.
Effectiveness Period: As defined in Section 2(a)(iii) hereof.
Effectiveness Target Date: As defined in Section 2(a)(ii) hereof.
Exchange Act: Securities Exchange Act of 1934, as amended.
Holder: A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.
Indemnified Holder: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated as of October 13, 1999, between the
Issuer and Chase Manhattan Bank and Trust Company, National Association, as
trustee (the "Trustee"), pursuant to which the Debentures are to be issued,
as such Indenture is amended, modified or supplemented from time to time in
accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture.
Issuer: As defined in the preamble hereto.
Liquidated Damages: As defined in Section 3(a) hereof.
Majority of Holders: Holders holding over 50% of the aggregate
principal amount of Debentures outstanding; provided that, for purpose of
this definition, a holder of shares of Common Stock which constitute
Transfer Restricted Securities and issued upon conversion of the Debentures
shall be deemed to hold an aggregate principal amount of Debentures (in
addition to the principal amount of Debentures held by such holder) equal
to the product of (x) the number of such shares of Common Stock held by
such holder and (y) the prevailing conversion price, such prevailing
conversion price as determined in accordance with Section 12 of the
Indenture.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, unincorporated
organization, trust, joint venture or a government or agency or political
subdivision thereof.
Prospectus: The prospectus included in a Shelf Registration
Statement, as amended or supplemented by any prospectus supplement and by
all other amendments thereto, including post-effective amendments, and all
material incorporated by reference into such Prospectus.
Questionnaire Deadline: As defined in Section 2(b) hereof.
2
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur. In the case of a
Holder of shares of Common Stock issued upon conversion of the Debentures,
"Record Holder" shall mean each Person who is a Holder of shares of Common
Stock which constitute Transfer Restricted Securities on the February 1 or
August 1 immediately preceding the Damages Payment Date.
Registration Default: As defined in Section 3(a) hereof.
Sale Notice: As defined in Section 4(e) hereof.
Securities Act: Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 2(a)(i) hereof.
Shelf Registration Statement: As defined in Section 2(a)(i) hereof.
Suspension Period. As defined in Section 4(b)(i) hereof.
TIA: Trust Indenture Act of 1939, as in effect on the date the
Indenture is qualified under the TIA.
Transfer Restricted Securities: Each Debenture and each share of
Common Stock issued upon conversion of Debentures until the earlier of:
(i) the date on which such Debenture or such share of Common
Stock issued upon conversion has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement;
(ii) the date on which such Debenture or such share of Common
Stock issued upon conversion is transferred in compliance with Rule 144
under the Securities Act or may be sold or transferred pursuant to Rule 144
under the Securities Act (or any other similar provision then in force); or
(iii) the date on which such Debenture or such share of Common
Stock issued upon conversion ceases to be outstanding (whether as a result
of redemption, repurchase and cancellation, conversion or otherwise).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Issuer are sold to an underwriter for reoffering to
the public.
3
2. Shelf Registration.
(a) The Issuer shall:
(i) not later than 90 days after the date hereof (the "Shelf
Filing Deadline"), cause to be filed a registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement"),
which Shelf Registration Statement shall provide for resales of all
Transfer Restricted Securities held by Holders that have provided the
information required pursuant to the terms of Section 2(b) hereof;
(ii) use its reasonable best efforts to cause the Shelf
Registration Statement to be declared effective by the Commission as
promptly as practicable, but in no event later than 180 days after the date
hereof (the "Effectiveness Target Date"); and
(iii) use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 4(b) hereof to the extent necessary
to ensure that (A) it is available for resales by the Holders of Transfer
Restricted Securities entitled to the benefit of this Agreement and (B)
conforms with the requirements of this Agreement and the Securities Act and
the rules and regulations of the Commission promulgated thereunder as
announced from time to time for a period (the "Effectiveness Period") of:
(1) two years following the last date of original issuance
of Debentures; or
(2) such shorter period that will terminate when (x) all
of the Holders of Transfer Restricted Securities are able to sell all
Transfer Restricted Securities immediately without restriction
pursuant to Rule 144(k) under the Securities Act or any successor rule
thereto, (y) when all Transfer Restricted Securities have ceased to be
outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise) or (z) all Transfer Restricted
Securities registered under the Shelf Registration Statement have been
sold.
(b) No Holder of Transfer Restricted Securities may include any of
its Transfer Restricted Securities in the Shelf Registration Statement pursuant
to this Agreement unless such Holder furnishes to the Issuer in writing, prior
to or on the 20th Business Days after receipt of a request therefor (the
"Questionnaire Deadline"), such information as the Issuer may reasonably request
for use in connection with the Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein and in any application to be filed with
or under state securities laws. In connection with all such requests for
information from Holders of Transfer Restricted Securities, the Issuer shall
notify such Holders of the requirements set forth in the preceding sentence. No
Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages
pursuant to
4
Section 3 hereof unless such Holder shall have provided all such reasonably
requested information prior to or on the Questionnaire Deadline. Each Holder as
to which the Shelf Registration Statement is being effected agrees to furnish
promptly to the Issuer all information required to be disclosed in order to make
information previously furnished to the Issuer by such Holder not materially
misleading.
3. Liquidated Damages.
(a) If:
(i) the Shelf Registration Statement has not been declared
effective by the Commission prior to or on the Effectiveness Target Date;
(ii) subject to the provisions of Section 4(b)(i) hereof, the
Shelf Registration Statement is filed and declared effective but, during
the Effectiveness Period and after the Effectiveness Target Date, shall
thereafter cease to be effective or fail to be usable for its intended
purpose without being succeeded within five Business Days by a post-
effective amendment to the Shelf Registration Statement or a report filed
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act that cures such failure and, in the case of a post-effective
amendment, is itself immediately declared effective; or
(iii) prior to or on the 45th or 75th day, as the case may be,
of any Suspension Period, such suspension has not been terminated,
(each such event referred to in foregoing clauses (i) through (iii), a
"Registration Default"), the Issuer hereby agrees to pay liquidated damages
("Liquidated Damages") with respect to the Transfer Restricted Securities from
and including the day following the Registration Default to but excluding the
day on which the Registration Default has been cured:
(A) in respect of the Debentures, to each holder of
Debentures, (x) with respect to the first 90-day period during which a
Registration Default shall have occurred and be continuing, in an
amount per year equal to an additional 0.25% of the principal amount
of the then outstanding and not converted Debentures, and (y) with
respect to the period commencing on the 91st day following the day the
Registration Default shall have occurred and be continuing, in an
amount per year equal to an additional 0.50% of the principal amount
of the then outstanding and not converted Debentures; provided that in
no event shall the aggregate Liquidated Damages pursuant to this
clause (A) and clause (B) accrue at a rate per year exceeding 0.50% of
the sum of the principal amount of the then outstanding and not
converted Debentures plus the principal amount of the converted
Debentures; and
(B) in respect of any shares of Common Stock, to each
holder of shares of Common Stock issued upon conversion of Debentures,
(x) with respect to the first 90-day period in which a Registration
Default
5
shall have occurred and be continuing, in an amount per year equal to
0.25% of the principal amount of the converted Debentures, and (y)
with respect to the period commencing the 91st day following the day
the Registration Default shall have occurred and be continuing, in an
amount per year equal to 0.50% of the principal amount of the
converted Debentures; provided that in no event shall the aggregate
Liquidated Damages pursuant to this clause (B) and clause (A) above
accrue at a rate per year exceeding 0.50% of the sum of the principal
amount of the outstanding and not converted Debentures plus the
principal amount of the then converted Debentures.
(b) All accrued Liquidated Damages shall be paid in arrears to Record
Holders by the Issuer on each Damages Payment Date by wire transfer of
immediately available funds or by federal funds check. Following the cure of all
Registration Defaults relating to any particular Debenture or share of Common
Stock, the accrual of Liquidated Damages with respect to such Debenture or share
of Common Stock will cease.
All obligations of the Issuer set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.
The Liquidated Damages set forth above shall be the exclusive monetary
remedy available to the Holders of Transfer Restricted Securities for such
Registration Default.
4. Registration Procedures.
(a) In connection with the Shelf Registration Statement, the Issuer
shall comply with all the provisions of Section 4(b) hereof and shall, in
accordance with Section 2, prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form
under the Securities Act.
(b) In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Issuer shall:
(i) Subject to any notice by the Issuer in accordance with
this Section 4(b) of the existence of any fact or event of the kind
described in Section 4(b)(iii)(D), use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective during the
Effectiveness Period; upon the occurrence of any event that would cause the
Shelf Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not be effective and
usable for resale of Transfer Restricted Securities during the
Effectiveness Period, the Issuer shall file promptly an appropriate
amendment to the Shelf Registration Statement or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act, in
6
the case of clause (A), correcting any such misstatement or omission, and,
in the case of either clause (A) or (B), use its reasonable best efforts to
cause such amendment to be declared effective and the Shelf Registration
Statement and the related Prospectus to become usable for their intended
purposes as soon as practicable thereafter. Notwithstanding the foregoing,
the Issuer may suspend the effectiveness of the Shelf Registration
Statement by written notice to the Holders for a period not to exceed an
aggregate of 45 days in any 90-day period (each such period, a "Suspension
Period") if:
(x) an event occurs and is continuing as a result of which
the Shelf Registration Statement would, in the Issuer's reasonable
judgment, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and
(y) the Issuer reasonably determines that the disclosure
of such event at such time would have a material adverse effect on the
business of the Issuer (and its subsidiaries, if any, taken as a
whole);
provided that in the event the disclosure relates to a previously
undisclosed proposed or pending material business transaction, the
disclosure of which would impede the Issuer's ability to consummate such
transaction, the Issuer may extend a Suspension Period from 45 days to 75
days; provided, however, that the Suspension Periods shall not exceed an
aggregate of 90 days in any 360-day period. Each holder, by its acceptance
of a Debenture, agrees to hold any communication by us in response to a
notice of a proposed material business transaction in confidence.
(ii) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective during the
Effectiveness Period; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act, and to comply fully with the
applicable provisions of Rules 424 and 430A under the Securities Act in a
timely manner; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Shelf
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the Prospectus.
(iii) Advise the underwriter(s), if any, and, in the case of
(A), (C) and (D) below, the selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing:
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Shelf
7
Registration Statement or any post-effective amendment thereto, when
the same has become effective,
(B) of any request by the Commission for amendments to the
Shelf Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement under
the Securities Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or
(D) of the existence of any fact or the happening of any
event, during the Effectiveness Period, that makes any statement of a
material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Shelf Registration Statement or
the Prospectus in order to make the statements therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Issuer
shall use its reasonable best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.
(iv) Furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, a copy of the
Shelf Registration Statement and copies of any Prospectus included therein
or any amendments or supplements to any the Shelf Registration Statement or
Prospectus (other than documents incorporated by reference after the
initial filing of the Shelf Registration Statement), which documents will
be subject to the review of such holders and underwriter(s), if any, for a
period of two Business Days, and the Issuer will not file the Shelf
Registration Statement or Prospectus or any amendment or supplement to the
Shelf Registration Statement or Prospectus (other than documents
incorporated by reference) to which a selling Holder of Transfer Restricted
Securities covered by the Shelf Registration Statement or the
underwriter(s), if any, shall reasonably object within two Business Days
after the receipt thereof. A selling Holder or underwriter, if any, shall
be deemed to have reasonably objected to such filing if the Shelf
Registration Statement, amendment, Prospectus or supplement, as applicable,
as proposed to be filed, contains a material misstatement or omission.
8
(v) Subject to the execution of a confidentiality agreement
reasonably acceptable to the Issuer, make available at reasonable times for
inspection by one or more representatives of the selling Holders,
designated in writing by a Majority of Holders whose Transfer Restricted
Securities are included in the Shelf Registration Statement, any
underwriter, if any, participating in any distribution pursuant to the
Shelf Registration Statement, and any attorney or accountant retained by
the Majority of Holders or any of the underwriter(s), all financial and
other records, pertinent corporate documents and properties of the Issuer
as shall be reasonably necessary to enable them to exercise any applicable
due diligence responsibilities, and cause the Issuer's officers, directors,
managers and employees to supply all information reasonably requested by
any such representative or representatives of the selling Holders,
underwriter, attorney or accountant in connection with the Shelf
Registration Statement after the filing thereof and before its
effectiveness; provided, however, that any information designated by the
Company as confidential at the time of delivery of such information shall
be kept confidential by the recipient thereof.
(vi) If requested by any selling Holders or the underwriter(s),
if any, promptly incorporate in the Shelf Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such selling Holders and underwriter(s), if
any, may reasonably request to have included therein, including, without
limitation: (1) information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, (2) information with respect to the
principal amount of Debentures or number of shares of Common Stock being
sold (3) the purchase price being paid therefor and (4) any other terms of
the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as reasonably practicable after the Issuer
is notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment.
(vii) Furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto (and any documents incorporated by reference therein or
exhibits thereto (or exhibits incorporated in such exhibits by reference)
as such Person may request).
(viii) Deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons reasonably may request; subject to any notice by
the Issuer in accordance with this Section 4(b) of the existence of any
fact or event of the kind described in Section 4(b)(iii)(D), the Issuer
hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto.
9
(ix) If an underwriting agreement is entered into and the
registration is an Underwritten Registration, the Issuer shall:
(A) upon request, furnish to each selling Holder and each
underwriter, if any, in such substance and scope as they may
reasonably request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the date of
closing of any sale of Transfer Restricted Securities in an
Underwritten Registration:
(1) a certificate, dated the date of such closing,
signed by (y) the Chairman of the Board, its President or a Vice
President and (z) the Chief Financial Officer of the Issuer
confirming, as of the date thereof, such matters as such parties
may reasonably request;
(2) opinions, each dated the date of such closing, of
counsel to the Issuer covering such matters as are customarily
covered in legal opinions to underwriters in connection with
primary underwritten offerings of securities; and
(3) customary comfort letters, dated the date of such
closing, from the Issuer's independent accountants (and from any
other accountants whose report is contained or incorporated by
reference in the Shelf Registration Statement), in the customary
form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with primary
underwritten offerings of securities;
(B) set forth in full in the underwriting agreement, if
any, indemnification provisions and procedures which provide rights no
less protective than those set forth in Section 6 hereof with respect
to all parties to be indemnified; and
(C) deliver such other documents and certificates as may
be reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the selling
Holders pursuant to this clause (ix).
(x) Before any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s), if any, may reasonably request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that the Issuer shall not be
10
required (A) to register or qualify as a foreign corporation or a dealer of
securities where it is not now so qualified or to take any action that
would subject it to the service of process in any jurisdiction where it is
not now so subject or (B) to subject themselves to taxation in any such
jurisdiction if they are not now so subject.
(xi) Cooperate with the selling Holders and the underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends (unless required by applicable securities laws); and
enable such Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any, may
reasonably request at least two Business Days before any sale of Transfer
Restricted Securities made by such underwriter(s).
(xii) Use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Shelf Registration Statement to be
registered with or approved by such other U.S. governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso in clause (x) above.
(xiii) Subject to Section 4(b)(i) hereof, if any fact or event
contemplated by Section 4(b)(iii)(D) hereof shall exist or have occurred,
use its reasonable best efforts prepare a supplement or post-effective
amendment to the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(xiv) Provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Shelf Registration
Statement and provide the Trustee under the Indenture with certificates for
the Debentures that are in a form eligible for deposit with The Depository
Trust Company.
(xv) Cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter that is required to be retained in accordance with the
rules and regulations of the NASD.
(xvi) Otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission and all reporting
requirements under the rules and regulations of the Exchange Act.
11
(xvii) Cause the Indenture to be qualified under the TIA not
later than the effective date of the Shelf Registration Statement required
by this Agreement, and, in connection therewith, cooperate with the trustee
and the holders of Debentures to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance with
the terms of the TIA; and execute and use its reasonable best efforts to
cause the trustee thereunder to execute all documents that may be required
to effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified in a
timely manner.
(xviii) Cause all Transfer Restricted Securities covered by the
Shelf Registration Statement to be listed or quoted, as the case may be, on
each securities exchange or automated quotation system on which similar
securities issued by the Issuer are then listed or quoted.
(xix) Provide promptly to each Holder upon written request each
document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act after the effective date of the Shelf
Registration Statement.
(xx) If requested by the underwriters in an Underwritten
Offering, make appropriate officers of the Issuer available to the
underwriters for meetings with prospective purchasers of the Transfer
Restricted Securities and prepare and present to potential investors
customary "road show" material in a manner consistent with other new
issuances of other securities similar to the Transfer Restricted
Securities.
(c) Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Issuer of the existence of
any fact of the kind described in Section 4(b)(iii)(D) hereof, such Holder will,
and will use its reasonable best efforts to cause any underwriter(s) in an
Underwritten Offering to, forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement until:
(i) such Holder has received copies of the supplemented or
amended Prospectus contemplated by Section 4(b)(xiii) hereof; or
(ii) such Holder is advised in writing (the "Advice") by the
Issuer that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus.
If so directed by the Issuer, each Holder will deliver to the Issuer (at the
Issuer's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of suspension.
12
(d) Each Holder who intends to be named as a selling Holder in the
Shelf Registration Statement shall furnish to the Issuer in writing, within 20
Business Days after receipt of a request therefor as set forth in a
questionnaire, such information regarding such Holder and the proposed
distribution by such Holder of its Transfer Restricted Securities as the Issuer
may reasonably request for use in connection with the Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. (The form of
the questionnaire is attached hereto as Exhibit A.) Holders that do not complete
the questionnaire and deliver it to the Issuer shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement and therefore shall not be permitted to sell any
Transfer Restricted Securities pursuant to the Shelf Registration Statement.
Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall promptly furnish to the Issuer in writing such
other information as the Issuer may from time to time reasonably request in
writing.
(e) Upon the effectiveness of the Shelf Registration Statement, each
Holder shall notify the Issuer at least three Business Days prior to any
intended distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "Sale Notice"), which notice shall be effective for
five Business Days. 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.
5. Registration Expenses.
(a) All expenses incident to the Issuer's performance of or
compliance with this Agreement shall be borne by the Issuer regardless of
whether a Shelf Registration Statement becomes effective, including, without
limitation:
(i) all registration and filing fees and expenses (including
filings made by any Initial Purchasers or Holders with the NASD);
(ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing of
Prospectuses and certificates for the Common Stock to be issued upon
conversion of the Debentures), messenger and delivery services and
telephone;
(iv) all fees and disbursements of counsel to the Issuer and,
subject to Section 5(b) below, the Holders of Transfer Restricted
Securities;
(v) all application and filing fees in connection with
listing (or authorizing for quotation) the Common Stock on a national
securities exchange or automated quotation system pursuant to the
requirements hereof; and
(vi) all fees and disbursements of independent certified
public accountants of the Issuer (including the expenses of any special
audit and comfort letters required by or incident to such performance).
13
The Issuer shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.
(b) In connection with the Shelf Registration Statement required by
this Agreement, the Issuer shall reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities being registered pursuant to the Shelf
Registration Statement, as applicable, for the reasonable fees and disbursements
of not more than one counsel, which shall be Weil, Gotshal & Xxxxxx LLP, or such
other counsel as may be chosen by a Majority of Holders for whose benefit the
Shelf Registration Statement is being prepared and which shall be reasonably
acceptable to the Issuer. The Issuer shall not be required to pay any
underwriter discount, commission or similar fees related to the sale of the
Securities.
6. Indemnification and Contribution.
(a) The Issuer and Primus Telecommunications, Inc., a Delaware
corporation, and Primus Telecommunications (Australia) Pty. Ltd., a company
organized under the laws of Australia, and Primus Telecommunications Pty. Ltd.,
a company organized under the laws of Australia (together, the "Principal
Subsidiaries"), jointly and severally, shall indemnify and hold harmless each
Holder, such Holder's directors, officers and employees and each person, if any,
who controls such Holder within the meaning of Section 15 of the Securities Act
(each, an "Indemnified Holder"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to resales
of the Transfer Restricted Securities), to which such Indemnified Holder may
become subject, under the Securities Act or otherwise, insofar as any such loss,
claim, damage, liability or action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Shelf Registration Statement or
Prospectus or any amendment or supplement thereto or (B) any blue sky
application or other document or any amendment or supplement thereto
prepared or executed by the Issuer (or based upon written information
furnished by or on behalf of the Issuer expressly for use in such blue sky
application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or
other jurisdiction (such application or document being hereinafter called a
"Blue Sky Application"); or
(ii) the omission or alleged omission to state therein any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading,
14
and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Issuer shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in the Shelf Registration Statement or Prospectus or amendment or
supplement thereto or Blue Sky Application in reliance upon and in conformity
with written information furnished to the Issuer by or on behalf of any Holder
(or its related Indemnified Holder) specifically for use therein; provided
further that as to any preliminary Prospectus, this indemnity agreement shall
not inure to the benefit of any Indemnified Holder or any officer, employee,
director or controlling person of that Indemnified Holder on account of any
loss, claim, damage, liability or action arising from the sale of the Transfer
Restricted Securities sold pursuant to the Shelf Registration Statement to any
person by such Indemnified Holder if (i) that Indemnified Holder failed to send
or give a copy of the Prospectus, as the same may be amended or supplemented, to
that person within the time required by the Securities Act and (ii) the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such preliminary Prospectus was corrected
in the Prospectus or a supplement or amendment thereto, as the case may be,
unless in each case, such failure resulted from noncompliance by the Issuer with
Section 4. The foregoing indemnity agreement is in addition to any liability
which the Issuer and the Principal Subsidiaries may otherwise have to any
Indemnified Holder.
(b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Issuer, its directors, officers and employees and each person, if
any, who controls the Issuer within the meaning of Section 15 of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Issuer or any such officer, employee
or controlling person may become subject, insofar as any such loss, claim,
damage or liability or action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Shelf Registration Statement or Prospectus
or any amendment or supplement thereto or any Blue Sky Application; or
(ii) the omission or the alleged omission to state therein any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Issuer and any such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Issuer and the Principal Subsidiaries or
15
any such officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Holder may
otherwise have to the Issuer and any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been materially prejudiced by such failure and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 6.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective directors, employees, officers
and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 6 if such indemnified party shall have
been advised in writing that the representation of such indemnified party and
those directors, employees, officers and controlling persons by the same counsel
would be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, and in that event the fees
and expenses of such separate counsel shall be paid by the indemnifying party.
It is understood that the indemnifying party shall not be liable for the fees
and expenses of more than one separate firm (in addition to local counsel in
each jurisdiction) for all indemnified parties in connection with any proceeding
or related proceedings. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 6(a) and 6(b), shall use its reasonable best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall:
(i) without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld) settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement,
16
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding, or
(ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss of liability by reason of
such settlement or judgment in accordance with this Section 6.
(d) If the indemnification provided for in this Section 6 shall
for any reason be unavailable or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b) in respect of any loss, claim, damage or
liability (or action in respect thereof) referred to therein, each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability (or action in respect thereof, in such proportion as
is appropriate to reflect the relative fault of the Company and the Principal
Subsidiaries, on the one hand, and the Holders, on the other hand, with respect
to the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company and the Principal Subsidiaries, on the one hand, or the
Holders, on the other hand, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Each of the Company and the Principal Subsidiaries and
each Holder agrees that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation (even
if either the Holders or the Company and the Principal Subsidiaries, as the case
may be, were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 6(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(d), no Holder
shall be required to indemnify or contribute any amount in excess of the amount
by which the total price at which the Transfer Restricted Securities purchased
by it were resold exceeds the amount of any damages which such Holder has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity. The Holders' obligations
to contribute as provided in this Section 6(d) are several and not joint.
17
(e) The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Initial Purchaser, any Holder or any person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any person controlling the Company, and (iii) any sale of Transfer
Restricted Securities pursuant to a Shelf Registration Statement.
7. Rule 144A. In the event the Issuer is not subject to Section
13 or 15(d) of the Exchange Act, the Issuer hereby agrees with each Holder, for
so long as any Transfer Restricted Securities remain outstanding, to make
available to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
8. Participation in Underwritten Registrations. No Holder may
participate in any Underwritten Registration hereunder unless such Holder:
(i) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements
and
(ii) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up
letters and other documents reasonably required under the terms of such
underwriting arrangements.
Selection of Underwriters. The Majority of Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
In any such Underwritten Offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by a
Majority of Holders whose Transfer Restricted Securities are included in such
offering; provided, that such investment bankers and managers must be reasonably
satisfactory to the Issuer.
9. Miscellaneous.
(a) Remedies. The Issuer acknowledges and agrees that any failure
by the Issuer to comply with its obligations under Section 2 hereof may result
in material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Issuer's obligations under Section 2
hereof. The Issuer further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
18
(b) No Inconsistent Agreements. The Issuer will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. In addition, the
Issuer shall not grant to any of its security holders (other than the holders of
Transfer Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. Other than as disclosed in the
Issuer's Offering Memorandum dated February 17, 2000, the Issuer has not
previously entered into any agreement (which has not expired or been terminated)
granting any registration rights with respect to its securities to any Person
which rights conflict with the provisions hereof.
(c) Adjustments Affecting Transfer Restricted Securities. The
Issuer shall not, directly or indirectly, take any action with respect to the
Transfer Restricted Securities as a class that would adversely affect the
ability of the Holders of Transfer Restricted Securities to include such
Transfer Restricted Securities in a registration undertaken pursuant to this
Agreement.
(d) Amendments and Waivers. This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given, unless the Issuer has obtained the written
consent of a Majority of Holders; provided, however, that no amendment,
modification, supplement, waiver or consent to or departure from the provisions
of Section 6 that materially and adversely affects a Holder hereof shall be
effective as against any such Holder of Transfer Restricted Securities unless
consented to in writing by such Holder.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the registrar under the Indenture or the transfer agent of
the Common Stock, as the case may be; and
(ii) if to the Issuer or any of the Principal Subsidiaries:
0000 Xxx Xxxxxx Xxxx
XxXxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
19
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(iii) if to the Initial Purchasers:
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, XX 00000
Attention: Syndicate Department
Facsimile: (000) 000-0000.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
A document or notice shall be deemed to have been furnished to
the Holders of the Transfer Restricted Securities if it is provided to the
registered holders of the Transfer Restricted Securities at the address set
forth in clause (1) above.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that (i) nothing contained herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms of the Purchase Agreement or the Indenture and (ii) this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder. If any transferee of any Holder
shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof. The
Initial Purchasers (in their capacity as Initial Purchasers) shall have no
liability or obligation to the Issuer with respect to any failure by a Holder to
comply with, or breach by any Holder of, any of the obligations of such Holder
under this Agreement.
20
(g) Purchases and Sales of Debentures. The Company shall not, and
shall use its reasonable best efforts to cause its affiliates (as defined in
Rule 405 under the Securities Act) not to, purchase and then resell or otherwise
transfer any Debentures.
(h) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuer and Principal
Subsidiaries, on the one hand, and the Initial Purchasers, on the other hand,
and such Initial Purchasers shall have the right to enforce such agreements
directly to the extent they deem such enforcement necessary or advisable to
protect their rights or the rights of Holders hereunder.
(i) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(j) Securities Held by the Issuer or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Issuer or its "affiliates" (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(l) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
(m) Consent to Jusisdiction. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("Related Proceedings") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such Jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. Each of Primus
Telecommunications (Australia) Pty. Ltd. and Primus Telecommunications Pty. Ltd.
hereby irrevocably appoints CT Corporation System, which currently maintains a
New
21
York City office at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx
of America, as its agent to receive service of process or other legal summons
for purposes of any such action or proceeding that may be instituted in any
state or federal court in the City and State of New York.
(n) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(o) Entire Agreement. This Agreement. together with the Purchase
Agreement and the Indenture, is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Issuer with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(p) Required Consents. Whenever the consent or approval of Holders of
a specified percentage of Transfer Restricted Securities is required hereunder,
Transfer Restricted Securities held by the Issuer or its affiliates (as such
term is defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
22
In Witness Whereof, the parties have executed this Agreement as of the
date first written above.
Primus Telecommunications
Group, Incorporated
By:______________________________
Name: K. Xxxx Xxxxx
Title: President and Chief Executive
Officer
Primus Telecommunications,
Inc.
By:______________________________
Name: K. Xxxx Xxxxx
Title: President
Primus Telecommunications
(Australia) Pty. Ltd.
By:______________________________
Name: K. Xxxx Xxxxx
Title: Director
Primus Telecommunications
Pty. Ltd.
By:______________________________
Name: K. Xxxx Xxxxx
Title: Director
23
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx &
Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co.
Incorporated
By: Xxxxxx Brothers Inc.
By:___________________________
Authorized Representative
24
Exhibit A
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
NOTICE OF REGISTRATION STATEMENT
AND
SELLING SECURITYHOLDER ELECTION AND QUESTIONNAIRE
__________________________
NOTICE
Primus Telecommunications Group, Incorporated (the "Company")
has filed, or intends shortly to file, with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 or such other
Form as may be available (the "Shelf Registration Statement") for the
registration and resale under Rule 415 of the Securities Act of 1933, as amended
(the "Securities Act"), of the Company's % Convertible Subordinated Debentures
due 2007 (CUSIP No.________) (the "Debentures"), and common stock, par value $
per share, issuable upon conversion thereof (the "Shares" and together with the
Debentures, the "Transfer Restricted Securities") in accordance with the terms
of the Registration Rights Agreement, dated as of ________ __, 2000 (the
"Registration Rights Agreement") between the Company and Xxxxxx Brothers Inc.,
and ___________. A copy of the Registration Rights Agreement is available from
the Company. All capitalized terms not otherwise defined herein have the meaning
ascribed thereto in the Registration Rights Agreement.
To sell or otherwise dispose of any Transfer Restricted
Securities pursuant to the Shelf Registration Statement, a beneficial owner of
Transfer Restricted Securities generally will be required to be named as a
selling securityholder in the related Prospectus, deliver a Prospectus to
purchasers of Transfer Restricted Securities, be subject to certain civil
liability provisions of the Securities Act and be bound by those provisions of
the Registration Rights Agreement applicable to such beneficial owner (including
certain indemnification rights and obligations, as described below). To be
included in the Shelf Registration Statement, this Election and Questionnaire
must be completed, executed and delivered to the Company at the address set
forth herein for receipt PRIOR TO OR ON [insert date that is 20 business days
from the notice date] (the "Election and Questionnaire Deadline"). Beneficial
owners that do not complete and return this Election and Questionnaire prior to
the Election and Questionnaire Deadline and deliver it to the Company as
provided below will not be named as selling securityholders in the prospectus
and therefore will not be permitted to sell any Transfer Restricted Securities
pursuant to the Shelf Registration Statement.
A-1
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus.
ELECTION
The undersigned holder (the "Selling Securityholder") of
Transfer Restricted Securities hereby elects to include in the Shelf
Registration Statement the Transfer Restricted Securities beneficially owned by
it and listed below in Item 3 (unless otherwise specified under Item 3). The
undersigned, by signing and returning this Election and Questionnaire,
understands that it will be bound with respect to such Transfer Restricted
Securities by the terms and conditions of this Election and Questionnaire and
the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Selling
Securityholder has agreed to indemnify and hold harmless the Company, the
Company's directors, the Company's officers who sign the Shelf Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against certain losses arising in connection with statements concerning
the Selling Securityholder made in the Shelf Registration Statement or the
related Prospectus in reliance upon the information provided in this Election
and Questionnaire.
The Selling Securityholder hereby provides the following
information to the Company and represents and warrants that such information is
accurate and complete:
QUESTIONNAIRE
1. (a) Full legal name of Selling Securityholder:
(b) Full legal name of registered holder (if not the same as (a)
above) through which Transfer Restricted Securities listed in
(3) below are held:
(c) Full legal name of DTC participant (if applicable and if not
the same as (b) above) through which Transfer Restricted
Securities listed in (3) are held:
2. Address for notices to Selling Securityholders:
Telephone:
Fax:
Contact Person:
A-2
3. Beneficial ownership of Transfer Restricted Securities:
(a) Type of Transfer Restricted Securities beneficially owned, and
principal amount of Debentures or number of shares of Common
Stock, as the case may be, beneficially owned:
(b) CUSIP No(s). of such Transfer Restricted Securities
beneficially owned:
4. Beneficial ownership of the Issuer's securities owned by the Selling
Securityholder:
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Issuer other
than the Transfer Restricted Securities listed above in Item (3)
("Other Securities").
(a) Type and amount of Other Securities beneficially owned by the
Selling Securityholder:
(b) CUSIP No(s). of such Other Securities beneficially owned:
5. Relationship with the Issuer
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Issuer (or their predecessors or affiliates)
during the past three years.
State any exceptions here:
6. Plan of Distribution
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement
only as follows (if at all). Such Transfer Restricted Securities may be
sold from time to time directly by the undersigned or, alternatively,
through underwriters, broker-dealers or agents. If the Transfer
Restricted Securities are sold through underwriters or broker-dealers,
the Selling Securityholder will be responsible for underwriting
discounts or commissions or agent's commissions. Such Transfer
Restricted Securities may be
A-3
sold in one or more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at the time of
sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve crosses or block transactions):
on any national securities exchange or quotation
service on which the Transfer Restricted Securities may be listed or
quoted at the time of sale;
in the over-the-counter market;
in transactions otherwise than on such exchanges or
services or in the over-the-counter market; or
through the writing of options.
In connection with sales of the Transfer Restricted Securities or
otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities and deliver Transfer Restricted Securities to
close out such short positions, or loan or pledge Transfer Restricted
Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event will such method(s) of distribution take the form of
an underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Issuer.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder relating to stock manipulation, particularly Regulation M
thereunder (or any successor rules or regulations), in connection with any
offering of Transfer Restricted Securities pursuant to the Shelf Registration
Statement. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth therein.
Pursuant to the Registration Rights Agreement, the Issuer has agreed
under certain circumstances to indemnify the Selling Securityholders against
certain liabilities.
In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the
A-4
Shelf Registration Statement, the undersigned agrees to promptly notify the
Issuer of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing at the address set forth
below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related Prospectus. The undersigned understands that such information will be
relied upon by the Issuer in connection with the preparation or amendment of the
Shelf Registration Statement and the related Prospectus.
A-5
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
Beneficial Owner
By: _______________________________
Name:
Title:
Please return the completed and executed Notice and Questionnaire to Primus
Telecommunications Group, Incorporated at:
Primus Telecommunications Group, Incorporated
0000 Xxx Xxxxxx Xxxx
XxXxxx, XX 00000
Attention: Xxxxx Xxxxxxx
A-6
