EXHIBIT 4.1
EXECUTION COPY
COVAD COMMUNICATIONS GROUP, INC.
3% Convertible Senior Debentures Due 2024
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INDENTURE
Dated as of March 10, 2004
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THE BANK OF NEW YORK
TRUSTEE
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions..................................................................... 1
Section 1.02. Other Definitions............................................................... 7
Section 1.03. Incorporation by Reference of Trust Indenture Act............................... 8
Section 1.04. Rules of Construction........................................................... 8
Section 1.05. Acts of Holders................................................................. 9
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating................................................................. 10
Section 2.02. Execution and Authentication.................................................... 11
Section 2.03. Registrar, Paying Agent, Conversion Agent and Calculation Agent................. 11
Section 2.04. Paying Agent to Hold Money in Trust............................................. 12
Section 2.05. Securityholder Lists............................................................ 12
Section 2.06. Transfer and Exchange........................................................... 13
Section 2.07. Replacement Securities.......................................................... 14
Section 2.08. Outstanding Securities; Determinations of Holders' Action....................... 15
Section 2.09. Temporary Securities............................................................ 16
Section 2.10. Cancellation.................................................................... 16
Section 2.11. Persons Deemed Owners........................................................... 16
Section 2.12. Global Securities............................................................... 17
Section 2.13. CUSIP Numbers................................................................... 22
Section 2.14. Ranking......................................................................... 22
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.01. Company's Right to Redeem; Notices to Trustee................................... 23
Section 3.02. Selection of Securities to Be Redeemed.......................................... 23
Section 3.03. Notice of Redemption............................................................ 24
Section 3.04. Effect of Notice of Redemption.................................................. 25
Section 3.05. Deposit of Redemption Price..................................................... 25
Section 3.06. Securities Redeemed in Part..................................................... 25
Section 3.07. Purchase of Securities by the Company at Option of the Holder................... 25
Section 3.08. Purchase of Securities at Option of the Holder Upon Change of Control........... 27
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Section 3.09. Covenants of the Company........................................................ 30
Section 3.10. Effect of Change of Control Purchase Notice..................................... 30
Section 3.11. Deposit of Change of Control Purchase Price..................................... 31
Section 3.12. Securities Purchased in Part.................................................... 32
Section 3.13. Covenant to Comply with Securities Laws Upon Purchase of Securities............. 32
Section 3.14. Repayment to the Company........................................................ 32
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities........................................................... 32
Section 4.02. SEC and Other Reports........................................................... 33
Section 4.03. Compliance Certificate.......................................................... 33
Section 4.04. Further Instruments and Acts.................................................... 33
Section 4.05. Maintenance of Office or Agency................................................. 33
Section 4.06. Delivery of Certain Information................................................. 34
Section 4.07. Registration Rights............................................................. 34
Section 4.08. Liquidated Damages Notice....................................................... 34
ARTICLE 5
SUCCESSOR PERSON
Section 5.01. When Company May Merge or Transfer Assets....................................... 35
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default............................................................... 36
Section 6.02. Acceleration.................................................................... 38
Section 6.03. Other Remedies.................................................................. 39
Section 6.04. Waiver of Past Defaults......................................................... 39
Section 6.05. Control by Majority............................................................. 39
Section 6.06. Limitation on Suits............................................................. 40
Section 6.07. Rights of Holders to Receive Payment............................................ 40
Section 6.08. Collection Suit by Trustee...................................................... 40
Section 6.09. Trustee May File Proofs of Claim................................................ 40
Section 6.10. Priorities...................................................................... 41
Section 6.11. Undertaking for Costs........................................................... 42
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee............................................................... 42
Section 7.02. Rights of Trustee............................................................... 43
Section 7.03. Individual Rights of Trustee.................................................... 45
Section 7.04. Trustee's Disclaimer............................................................ 45
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Section 7.05. Notice of Defaults.............................................................. 45
Section 7.06. Reports by Trustee to Holders................................................... 45
Section 7.07. Compensation and Indemnity...................................................... 45
Section 7.08. Replacement of Trustee.......................................................... 47
Section 7.09. Successor Trustee by Merger..................................................... 47
Section 7.10. Eligibility; Disqualification................................................... 48
Section 7.11. Preferential Collection of Claims Against Company............................... 48
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities............................................ 48
Section 8.02. Repayment to the Company........................................................ 48
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders...................................................... 49
Section 9.02. With Consent of Holders......................................................... 50
Section 9.03. Compliance with Trust Indenture Act............................................. 51
Section 9.04. Revocation and Effect of Consents, Waivers and Actions.......................... 51
Section 9.05. Notation on or Exchange of Securities........................................... 52
Section 9.06. Trustee to Sign Amendments, Etc................................................. 52
Section 9.07. Effect of Supplemental Indentures............................................... 52
ARTICLE 10
CONVERSIONS
Section 10.01. Conversion Privilege........................................................... 52
Section 10.02. Conversion Procedure; Conversion Price; Fractional Shares...................... 53
Section 10.03. Payment of Cash in Lieu of Common Stock........................................ 55
Section 10.04. Adjustment of Conversion Rate.................................................. 57
Section 10.05. Effect of Reclassification, Consolidation, Merger or Sale...................... 67
Section 10.06. Taxes on Shares Issued......................................................... 68
Section 10.07. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock........................................ 69
Section 10.08. Responsibility of Trustee...................................................... 70
Section 10.09. Notice to Holders Prior to Certain Actions..................................... 70
Section 10.10. Rights Issued in Respect of Common Stock Issued Upon Conversion................ 71
Section 10.11. Unconditional Right of Holders to Convert...................................... 71
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls................................................... 72
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Section 11.02. Notices........................................................................ 72
Section 11.03. Communication by Holders with Other Holders.................................... 73
Section 11.04. Certificate and Opinion as to Conditions Precedent............................. 73
Section 11.05. Statements Required in Certificate or Opinion.................................. 73
Section 11.06. Separability Clause............................................................ 74
Section 11.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar................. 74
Section 11.08. Legal Holidays................................................................. 74
Section 11.09. GOVERNING LAW.................................................................. 74
Section 11.10. No Recourse Against Others..................................................... 74
Section 11.11. Successors..................................................................... 74
Section 11.12. Multiple Originals............................................................. 74
Section 11.13. Table of Contents, Headings, Etc............................................... 74
EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Transfer Certificate
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INDENTURE dated as of March 10, 2004 between COVAD COMMUNICATIONS
GROUP, INC., a Delaware corporation ("COMPANY"), and THE BANK OF NEW YORK, a New
York banking corporation ("TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 3% Convertible
Senior Debentures Due 2024:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"144A GLOBAL SECURITY" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A, and that is a Restricted Security.
"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 or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BOARD RESOLUTION" means a resolution of the Board of Directors.
"BUSINESS DAY" means, with respect to any Security, a day that in the
City of New York, is not a day on which banking institutions or the Corporate
Trust Office are authorized by law or regulation to close.
"CALCULATION AGENT" means initially the Trustee and its successors and
assigns.
"CAPITAL STOCK" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
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"CERTIFICATED SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit B.
"CHANGE OF CONTROL" means the occurrence of one or more of the
following events: (i) the acquisition by any person, including any syndicate or
group deemed to be a "person" under Section 13(d)(3) of the Exchange Act of
beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of purchase, merger or other acquisition
transactions, of shares of the Company's Capital Stock entitling that person to
exercise 50% or more of the total voting power of all shares of the Company's
Capital Stock entitled to vote generally in elections of directors, other than
any acquisition by the Company, any of the Company's subsidiaries or any of the
Company's employee benefit plans (except that any of those persons shall be
deemed to have beneficial ownership of all securities it has the right to
acquire, whether the right is currently exercisable or is exercisable only upon
the occurrence of a subsequent condition); (ii) the first day on which a
majority of the members of the Company's board of directors are not Continuing
Directors; or (iii) the Company consolidates or merges with or into any other
person, any merger of another person into the Company, or any conveyance,
transfer, sale, lease or other disposition, of all or substantially all of the
Company's properties and assets to another person, other than: (A) any
transaction: (1) that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Company's Capital Stock;
and (2) pursuant to which holders of the Company's Capital Stock immediately
prior to the transaction have the entitlement to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of Capital Stock
entitled to vote generally in elections of directors of the continuing or
surviving Person immediately after giving effect to such issuance; and (B) any
merger, share exchange, transfer of assets or similar transaction solely for the
purpose of changing the Company's jurisdiction of incorporation and resulting in
a reclassification, conversion or exchange of outstanding shares of Common
Stock, if at all, solely into shares of common stock, ordinary shares or
American Depositary Shares of the surviving entity or a direct or indirect
parent of the surviving corporation.
COMMON STOCK" means the common stock, $0.001 par value per share, of
the Company of the type authorized on the date of this Indenture or any other
shares of Capital Stock of the Company into which such Common Stock shall be
reclassified or changed.
"COMPANY" means the party named as the "Company" in the first Section
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any two Officers.
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"CONTINUING DIRECTOR" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the Issuance Date or (ii) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election.
"CONVERSION PRICE" as of any date means $1,000 divided by the
Conversion Rate as of such date.
"CONVERSION RATE" has the meaning set forth in Section 10.02(a) hereof.
"CONVERSION SETTLEMENT DATE" means (i) the Conversion Date or (ii) if
the Company elects to pay cash in lieu of Common Stock pursuant to Section
10.03, the third Business Day following the final day of the Cash Settlement
Averaging Period.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee, in
the Borough of Manhattan, the City of New York, at which at any time its
corporate trust business shall be administered, which office at the date hereof
is located at The Bank of New York, 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, XX 00000,
Attention: Corporate Trust Administration, or such other address as the Trustee
may designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other address
as a successor Trustee may designate from time to time by notice to the Holders
and the Company).
"DESIGNATED SUBSIDIARY" shall mean any existing or future, direct or
indirect, Subsidiary of the Company whose assets constitute 15% or more of the
total assets of the Company on a consolidated basis.
"GLOBAL SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A, and that are registered in the register
of Securities in the name of a Depositary or a nominee thereof, and to the
extent that such Securities are Restricted Securities, such Securities will be
in the form of a 144A Global Security.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"INTEREST" means interest payable on each Security pursuant to Section
1 of the Securities.
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"INTEREST PAYMENT DATE" means March 15 and September 15 of each year,
commencing September 15, 2004.
"INTEREST RECORD DATE" means, with respect to each Interest Payment
Date, March 1 and September 1, as the case may be, next preceding such Interest
Payment Date.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"LIQUIDATED DAMAGES" means the interest that is payable by the Company
pursuant to the Registration Rights Agreement upon a Registration Default.
"NASDAQ NATIONAL MARKET" means the National Association of Securities
Dealers, Inc. Automated Quotation System National Market.
"NYSE" means The New York Stock Exchange.
"OFFICER" means the Chairman of the Board, the Chief Executive Officer,
the Chief Financial Officer, the President, any Vice President, the Treasurer,
the Assistant Treasurer, the Secretary or any Assistant Secretary of the
Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 11.04 and 11.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by an authorized
financial or accounting Officer of the Company but need not contain the
information specified in Sections 11.04 and 11.05.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 11.04 and 11.05, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"PURCHASE AGREEMENT" means the Purchase Agreement dated as of March 4,
2004 between the Company and Banc of America Securities LLC, as representative
of the initial purchasers named therein.
"REDEMPTION DATE" means the date specified in a notice of redemption on
which the Securities will be redeemed in accordance with the terms of the
Securities and this Indenture.
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"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning set
forth in Section 3.01.
"REGISTRATION DEFAULT" has the meaning specified in the Registration
Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Resale Registration Rights
Agreement, dated as of the date hereof, between the Company and Banc of America
Securities LLC, as representative of the initial purchasers named therein.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer in the Corporate Trust Office of the Trustee or any other officer
associated with the corporate trust services department of the Trustee who
customarily performs functions similar to those performed by the persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
"RESTRICTED SECURITY" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A and B of this
Indenture.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SALE PRICE" means, with respect to any security on any day, (1) the
closing sale price per share on such day (or if no closing sale price is
reported, the average of the reported closing bid and ask prices or, if more
than one in either case, the average of the average closing bid and the average
closing ask prices) as reported in composite transactions for the principal
United States national or regional securities exchange on which such security is
traded, or (2) if such security is not listed on a United States national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation System, or (3) if not so reported, the
average of the closing bid and ask prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or (4) a price determined in good faith by the
Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means any of the Company's 3% Convertible Senior
Debentures Due 2024, as amended or supplemented from time to time, issued under
this Indenture.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"STATED MATURITY", when used with respect to any Security, means March
15, 2024.
"SUBSIDIARY" means (i) a corporation, a majority of whose outstanding
Voting Stock is, at the date of determination, directly or indirectly owned by
the Company, by one or more Subsidiaries or by the Company and one or more
Subsidiaries, (ii) a partnership in which the Company or a Subsidiary holds a
majority interest in the equity capital or profits of such partnership, or (iii)
any other Person (other than a corporation) in which the Company, a Subsidiary
or the Company and one or more Subsidiaries, directly or indirectly, at the date
of determination, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such Person.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, and in effect on the date of this Indenture;
provided, however, that in the event the TIA is amended after such date, TIA
means, to the extent required by any such amendment, the TIA as so amended.
"TRADING DAY" means a day during which trading in securities generally
occurs on the NYSE or, if the Common Stock is not listed on the NYSE, on the
principal other national or regional securities exchange on which the Common
Stock then is listed or, if the Common Stock is not listed on a national or
regional securities exchange, on the National Association of Securities Dealers
Automated Quotation System or, if the Common Stock is not quoted on the National
Association of Securities Dealers Automated Quotation System, on the principal
other market on which the Common Stock is then traded.
"TRANSFER RESTRICTED SECURITIES" has the meaning specified in the
Registration Rights Agreement.
"TRUSTEE" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"VOTING STOCK" of a Person means Capital Stock of such person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
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Section 1.02. Other Definitions.
DEFINED IN
TERMS: SECTION:
"Accepted Purchased Shares"................................... 10.04(g)
"Adjustment Event"............................................ 10.04(l)
"Agent Members"............................................... 2.12(e)
"beneficial owner"............................................ 3.08
"Cash Amount"................................................. 10.03(a)
"Cash Dividend" .............................................. 10.04(e)
"Cash Settlement Averaging Period"............................ 10.03(a)
"Cash Settlement Notice Period"............................... 10.03(a)
"Change of Control Purchase Date"............................. 3.08(a)
"Change of Control Purchase Notice"........................... 3.08(c)
"Change of Control Purchase Price"............................ 3.08(a)
"Company Notice".............................................. 3.08(b)
"Company Notice Date"......................................... 3.08(b)
"Conversion Agent"............................................ 2.03
"Conversion Date"............................................. 10.02(c)
"Conversion Obligation"....................................... 10.01
"Conversion Retraction Period"................................ 10.03(a)
"Conversion Settlement Distribution".......................... 10.03(a)
"Current Market Price"........................................ 10.04(h)
"DTC" ........................................................ 2.01(a)
"Depositary".................................................. 2.01(a)
"Determination Date".......................................... 10.04(l)
"Distributed Assets".......................................... 10.04(d)
"Event of Default"............................................ 6.01
"Exchange Act"................................................ 2.12(e)
"Ex-Dividend Date............................................. 10.04(d)
"Expiration Time"............................................. 10.04(f)
"Fair Market Value"........................................... 10.04(h)
"Final Notice Date"........................................... 10.03(a)
"Indebtedness"................................................ 2.14
"Legal Holiday"............................................... 11.08
"Legend"...................................................... 2.06(f)
"Liquidated Damages Notice" .................................. 4.08
"non-electing share".......................................... 10.05
"Notice of Conversion"........................................ 10.02(b)
"Notice of Default"........................................... 6.01
"Offer Expiration Time"....................................... 10.04(g)
"Paying Agent"................................................ 2.03
"Purchase Notice"............................................. 3.07
"Purchased Shares"............................................ 10.04(f)
"QIB"......................................................... 2.01(a)
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DEFINED IN
TERMS: SECTION:
"Record Date"................................................. 10.04(h)
"Registrar"................................................... 2.03
"Repurchase Date"............................................. 3.07
"Repurchase Price"............................................ 3.07
"Rights"...................................................... 10.10
"Rule 144A Information"....................................... 4.06
"Trigger Event"............................................... 10.04(d)
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company.
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 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(3) "or" is not exclusive;
(4) "INCLUDING" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
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Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company, as
described in Section 11.02. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The principal amount and serial number of any Security and the
ownership of Securities shall be proved by the register for the Securities.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining
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whether Holders of the requisite proportion of outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
outstanding Securities shall be computed as of such record date; provided that
no such authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibits A
and B, which are a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage (provided
that any such notation, legend or endorsement required by usage is in a form
acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.
(a) 144A Global Securities. Securities offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A ("QIBS")
in reliance on Rule 144A shall be issued, initially in the form of a 144A Global
Security, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary (as defined below) and registered in the
name of The Depository Trust Company ("DTC") or the nominee thereof (DTC, or any
successor thereto, and any such nominee being hereinafter referred to as the
"DEPOSITARY"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.
(b) Global Securities in General. Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, repurchases and
conversions.
Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
10
(c) Book-Entry Provisions. This Section 2.01(c) shall apply only
to Global Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(c), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall be substantially in the form of Exhibit A attached
hereto.
(d) Certificated Securities. Securities not issued as interests in
the Global Securities will be issued in certificated form substantially in the
form of Exhibit B attached hereto.
Section 2.02. Execution and Authentication. The Securities shall be
executed on behalf of the Company by any Officer. The signature of the Officer
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of the execution of the Securities Officers shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver the Securities for original
issue in an aggregate principal amount of up to $125,000,000 aggregate principal
amount upon one or more Company Orders without any further action by the Company
(other than as contemplated in Section 11.04 and Section 11.05 hereof). The
aggregate principal amount of the Securities due at the Stated Maturity thereof
outstanding at any time may not exceed the amount set forth in the foregoing
sentence.
The Securities shall be issued only in registered form without coupons
and only in denominations of $1,000 of principal amount and any integral
multiple of $1,000.
Section 2.03. Registrar, Paying Agent, Conversion Agent and Calculation
Agent. The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("REGISTRAR"), an office
or agency where Securities may be presented for purchase or payment ("PAYING
AGENT") and an office or agency where Securities may be presented for
11
conversion ("CONVERSION AGENT"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents. The term Paying Agent includes any additional paying agent,
including any named pursuant to Section 4.05. The term Conversion Agent includes
any additional conversion agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent, Calculation Agent or co-registrar (in
each case, if such Registrar, agent or co-registrar is a Person other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent, Calculation Agent and Paying Agent in connection with the Securities.
Section 2.04. Paying Agent to Hold Money in Trust. Except as otherwise
provided herein, on or prior to each due date of payments in respect of any
Security, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) sufficient to make
such payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any default by the Company in making any such payment. At
any time during the continuance of any such default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
so held in trust. If the Company, a Subsidiary or an Affiliate of either of them
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds and Common Stock disbursed by it. Upon doing so, the Paying Agent shall
have no further liability for the money or shares of Common Stock.
Section 2.05. Securityholder Lists. The Trustee shall preserve the most
recent list available to it of the names and addresses of Securityholders. If
the Trustee is not the Registrar, the Company shall cause to be furnished to the
Trustee at least semiannually on March 15 and September 15 a listing of
Securityholders dated within 15 days of the date on which the list is furnished
and at such other times as the Trustee may request in writing a list in such
form and as
12
of such date as the Trustee may reasonably require of the names and addresses of
Securityholders.
Section 2.06. Transfer and Exchange. (a) Subject to Section 2.12
hereof, upon surrender for registration of transfer of any Security, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.03, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate principal amount. The Company shall not
charge a service charge for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with the transfer
or exchange of the Securities from the Securityholder requesting such transfer
or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount upon surrender of the Securities to be exchanged, together with
a written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Change of Control Purchase
Notice has been given and not withdrawn by the Holder thereof in accordance with
the terms of Section 3.12(b) (except, in the case of Securities to be purchased
in part, the portion thereof not to be purchased) or any Securities for a period
of 15 days before the mailing of a notice of redemption of Securities to be
redeemed.
(b) Notwithstanding any provision to the contrary herein, so long
as a Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole
or in part, to the Depositary, to nominees of the Depositary or to a successor
of the Depositary or such successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
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(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(e) No Registrar shall be required to make registrations of
transfer or exchange of Securities during any periods designated in the text of
the Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the forms of Security attached hereto as Exhibits A and B
setting forth such restrictions (collectively, the "LEGEND"), or if a request is
made to remove the Legend on a Security, the Securities so issued shall bear the
Legend, or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an opinion of counsel, as may be reasonably required by the
Company and the Registrar (if not the same Person as the Trustee) and the
Trustee, that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A or Rule 144 under the Securities Act or that such Securities are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
(i) provision of such satisfactory evidence, or (ii) notification by the Company
to the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. If the Legend is removed from the face
of a Security and the Security is subsequently held by the Company or an
Affiliate of the Company, the Legend shall be reinstated.
Section 2.07. Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and principal amount, bearing a certificate number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
14
Upon the issuance of any new Securities under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.08. Outstanding Securities; Determinations of Holders'
Action. Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those cancelled by it, those paid pursuant to Section
2.07, those delivered to it for cancellation and those described in this Section
2.08 as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite principal amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent, waiver, or other Act hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
act, only Securities which a Responsible Officer of the Trustee actually knows
to be so owned shall be so disregarded. Subject to the foregoing, only
Securities outstanding at the time of such determination shall be considered in
any such determination (including, without limitation, determinations pursuant
to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Change of Control Purchase
Date, or on Stated Maturity, money sufficient to pay Securities payable on that
date, then immediately after such Redemption Date, Change of Control Purchase
Date or Stated Maturity, as the case may be, such Securities shall cease to be
outstanding and Interest and Liquidated Damages, if any, on such Securities
shall cease to accrue; provided, that if such Securities are to be redeemed,
notice
15
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 10, then from and
after the time of conversion on the date of conversion, such Security shall
cease to be outstanding and Interest and Liquidated Damages, if any, shall cease
to accrue on such Security.
Section 2.09. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 2.10. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 10. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee's customary procedure.
Section 2.11. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
16
the Company or the Trustee may treat the person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the principal amount of the Security or any portion thereof, or the payment of
any Redemption Price or Change of Control Purchase Price in respect thereof, and
Interest or Liquidated Damages thereon, for the purpose of conversion and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 2.12. Global Securities. (a) Notwithstanding any other
provisions of this Indenture or the Securities, (A) transfers of a Global
Security, in whole or in part, shall be made only in accordance with Section
2.06 and Section 2.12(a)(i) below, (B) transfers of a beneficial interest in a
Global Security for a Certificated Security shall comply with Section 2.06,
Section 2.12(a)(ii) below and Section 2.12(e)(1) below, and (C) transfers of a
Certificated Security shall comply with Section 2.06 and Sections 2.12(a)(iii)
and 2.12(a)(iv) below.
(i) Transfer of Global Security. A Global Security may
not be transferred, in whole or in part, to any person other than the
Depositary or a nominee or any successor thereof, and no such transfer
to any such other person may be registered; provided that this clause
2.12(a)(i) shall not prohibit any transfer of a Security that is issued
in exchange for a Global Security but is not itself a Global Security.
No transfer of a Security to any person shall be effective under this
Indenture or the Securities unless and until such Security has been
registered in the name of such person. Nothing in this Section
2.12(a)(i) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Security effected in accordance with
the other provisions of this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in
a Global Security for a Certificated Security. A beneficial interest in
a Global Security may not be exchanged for a Certificated Security
except upon satisfaction of the requirements set forth below and in
Section 2.12(e)(1) below. Upon receipt by the Trustee of a transfer of
a beneficial interest in a Global Security in accordance with
Applicable Procedures for a Certificated Security in the form
satisfactory to the Trustee, together with:
(A) so long as the Securities are Restricted
Securities, certification in the form set forth in Exhibit C;
(B) written instructions to the Trustee to make,
or direct the Registrar to make, an adjustment on its books
and records with respect to such Global Security to reflect a
decrease in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to
contain information
17
regarding the Depositary account to be credited with such
decrease; and
(C) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate principal amount of the Securities represented
by the Global Security to be decreased by the aggregate principal amount of the
Certificated Security to be issued, shall issue such Certificated Security and
shall debit or cause to be debited to the account of the person specified in
such instructions a beneficial interest in the Global Security equal to the
principal amount of the Certificated Security so issued.
(iii) Transfer and Exchange of Certificated Securities.
When Certificated Securities are presented to the Registrar with a
request:
(y) to register the transfer of such
Certificated Securities; or
(z) to exchange such Certificated Securities for
an equal principal amount of Certificated Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory
to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and
(2) so long as such Securities are Restricted
Securities, such Securities are being transferred or exchanged
pursuant to an effective registration statement under the
Securities Act or pursuant to clause (A), (B) or (C) below,
and are accompanied by the following additional information
and documents, as applicable:
(A) if such Certificated Securities are
being delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect; or
18
(B) if such Certificated Securities are
being transferred to the Company, a certification to
that effect; or
(C) if such Certificated Securities are
being transferred pursuant to an exemption from
registration, (i) a certification to that effect (in
the form set forth in Exhibit C, if applicable) and
(ii) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to
it as to the compliance with the restrictions set
forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Security
for a Beneficial Interest in a Global Security. A Certificated Security
may not be exchanged for a beneficial interest in a Global Security
except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(I) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit C, that such
Certificated Security (A) is being transferred to a QIB in accordance
with Rule 144A under the Securities Act or (B) is being transferred
pursuant to and in compliance with Rule 144 under the Securities Act;
and
(II) written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the
Depositary account to be credited with such increase, then the Trustee
shall cancel such Certificated Security and cause, or direct the
Registrar to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Registrar, the
aggregate principal amount of Securities represented by the Global
Security to be increased by the aggregate principal amount of the
Certificated Security to be exchanged, and shall credit or cause to be
credited to the account of the person specified in such instructions a
beneficial interest in the Global Security equal to the principal
amount of the Certificated Security so cancelled. If no Global
Securities are then outstanding, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the
form of an Officers' Certificate, a new Global Security in the
appropriate principal amount.
(b) Subject to the succeeding Section 2.12(c), every Security
shall be subject to the restrictions on transfer provided in the Legend
including the delivery of an opinion of counsel, if so provided. Whenever any
Restricted
19
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit C, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the
transferability of any Security shall cease and terminate when such Security has
been sold pursuant to an effective registration statement under the Securities
Act or transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or, if earlier, upon the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision). Any Security as to which such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.12 (accompanied, in the
event that such restrictions on transfer have terminated by reason of a transfer
in compliance with Rule 144 or any successor provision, by an opinion of counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate principal amount, which shall
not bear the Legend. The Company shall inform the Trustee of the effective date
of any registration statement registering the Securities under the Securities
Act. The Trustee shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the aforementioned opinion of counsel or
registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12,
the term "transfer" encompasses any sale, pledge, transfer, loan, hypothecation,
or other disposition of any Security.
(e) The provisions of this clause (e) shall apply only to Global
Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole
or in part for a Security registered in the name of any person
other than the Depositary or one or more nominees thereof,
provided that a Global Security may be exchanged for
Securities registered in the names of any person designated by
the Depositary in the event that (i) the Depositary has
notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or such
Depositary has ceased to be a "clearing agency" registered
under the
20
Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and a successor Depositary is not appointed by the
Company within 90 days or (ii) an Event of Default has
occurred and is continuing with respect to the Securities. Any
Global Security exchanged pursuant to clause (i) above shall
be so exchanged in whole and not in part, and any Global
Security exchanged pursuant to clause (ii) above may be
exchanged in whole or from time to time in part as directed by
the Depositary. Any Security issued in exchange for a Global
Security or any portion thereof shall be a Global Security;
provided that any such Security so issued that is registered
in the name of a person other than the Depositary or a nominee
thereof shall not be a Global Security.
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully
registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global
Security or portion thereof to be so exchanged, shall be
registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear
the applicable legends provided for herein. Any Global
Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Registrar. With regard to any
Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its
nominee with respect to such Global Security, the principal
amount thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative
thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any person,
including Agent Members (as defined below) and persons that
may hold interests through Agent Members, to take any action
which a holder is entitled to take under this Indenture or the
Securities.
(4) In the event of the occurrence of any of the events specified
in clause (1) above, the Company will promptly make available
to the Trustee a reasonable supply of Certificated Securities
in definitive, fully registered form, without interest
coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "AGENT MEMBERS") nor any other persons on
whose behalf Agent Members may act shall have any rights under
21
this Indenture with respect to any Global Security registered
in the name of the Depositary or any nominee thereof, or under
any such Global Security, and the Depositary or such nominee,
as the case may be, may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute
owner and holder of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the
Depositary or such nominee, as the case may be, or impair, as
between the Depositary, its Agent Members and any other person
on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of
the rights of a holder of any Security.
Section 2.13. CUSIP Numbers. The Company may issue the Securities with
one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption or repurchase as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption or repurchase
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption or repurchase shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
Section 2.14. Ranking. The indebtedness of the Company arising under or
in connection with this Indenture and every outstanding Security issued under
this Indenture from time to time constitutes and will constitute a senior
unsecured general obligation of the Company, ranking equally with other existing
and future senior unsecured Indebtedness of the Company and ranking senior in
right of payment to any future Indebtedness of the Company that is expressly
made subordinate to the Securities by the terms of such Indebtedness. For
purposes of this Section 2.14 only, "INDEBTEDNESS" means, without duplication,
the principal or face amount of (i) all obligations for borrowed money, (ii) all
obligations evidenced by debentures, notes or other similar instruments, (iii)
all obligations in respect of letters of credit or bankers acceptances or
similar instruments (or reimbursement obligations with respect thereto), (iv)
all obligations to pay the deferred purchase price of property or services, (v)
all obligations as lessee that are capitalized in accordance with generally
accepted accounting principles, and (vi) all Indebtedness of others guaranteed
by the Company or any of its Subsidiaries or for which the Company or any of its
Subsidiaries is legally responsible or liable (whether by agreement to purchase
indebtedness of, or to supply funds or to invest in, others).
22
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.01. Company's Right to Redeem; Notices to Trustee. Prior to
March 20, 2009, the Securities will not be redeemable at the Company's option.
Beginning on March 20, 2009, the Company, at its option, may redeem the
Securities in accordance with the provisions of this Section 3.01 and Section 5
of the Securities for cash at any time as a whole, or from time to time in part,
at a redemption price (the "REDEMPTION PRICE") equal to 100% of the principal
amount of the Securities to be redeemed together in each case with accrued and
unpaid Interest, and accrued and unpaid Liquidated Damages, if any, on the
Securities redeemed to (but not including) the Redemption Date. If the Company
elects to redeem Securities pursuant to this Section 3.01 and Section 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
principal amount of Securities to be redeemed and the Redemption Price.
The Company will give the notice to the Trustee provided for in this
Section 3.01 by a Company Order at least 30 days but not more than 60 days
before the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee).
Securities called for redemption may be surrendered for conversion
until the close of business on the Business Day immediately preceding the
Redemption Date.
Section 3.02. Selection of Securities to Be Redeemed. If less than all
of the Securities are to be redeemed, unless the procedures of the Depositary
provide otherwise, the Trustee shall select the Securities to be redeemed from
the outstanding Securities not previously called for redemption, by lot, or, on
a pro rata basis or by another method the Trustee considers fair and appropriate
(so long as such method is not prohibited by the rules of any stock exchange on
which the Securities are then listed). The Trustee shall make the selection of
the Securities or portions of the Securities to be redeemed and shall notify the
Company of such selection within three Business Days after it receives the
notice provided for in Section 3.01 from outstanding Securities not previously
called for redemption.
Securities and portions of Securities that the Trustee selects shall be
in principal amounts of $1,000 or integral multiples of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of the Securities to be redeemed.
Securities and portions of Securities that are to be redeemed are
convertible, pursuant to Section 10.01(a), by the Holder until the close of
business on the Business Day prior to the Redemption Date. If any Security
selected for partial redemption is converted in part before termination of the
conversion right
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with respect to the portion of the Security so selected, the converted portion
of such Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities that 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.
Section 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate on the date of such notice;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any
time before the close of business on the Business Day prior to
the Redemption Date;
(6) that Holders who want to convert their Securities must satisfy
the requirements set forth in Section 8 of the Securities;
(7) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price;
(8) if fewer than all of the outstanding Securities are to be
redeemed, the certificate numbers, if any, and principal
amounts of the particular Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, Interest and Liquidated Damages, if any, on
Securities called for redemption will cease to accrue on and
after the Redemption Date; and
(10) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least seven Business Days prior to the date by
which such notice of redemption must be given to Holders in accordance with this
Section 3.03.
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Section 3.04. Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice except for
Securities that are converted in accordance with the terms of this Indenture. If
the Company has complied with the deposit requirement of Section 3.05, from and
after the Redemption Date, Securities called for redemption shall cease to be
outstanding and shall no longer accrue Interest or Liquidated Damages, if any,
and the Holders thereof shall only be entitled to receive the Redemption Price
with respect to such Securities. Upon surrender to the Paying Agent, such
Securities shall be paid at the Redemption Price stated in the notice.
Section 3.05. Deposit of Redemption Price. Prior to 2:00 p.m. (New York
City time), on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall as promptly as practicable return to
the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 10. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
Section 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in principal amount to the unredeemed portion of the Security
surrendered.
Section 3.07. Purchase of Securities by the Company at Option of the
Holder. Securities shall be purchased by the Company pursuant to Section 6 of
the Securities at the option of the Holder on March 15, 2009, March 15, 2014 and
March 15, 2019 (each, a "REPURCHASE DATE"), at a purchase price equal to 100% of
the principal amount of those Securities, plus accrued and unpaid Interest and
accrued and unpaid Liquidated Damages, if any, on those Securities, to such
Repurchase Date (the "REPURCHASE PRICE"). The Company will be required to give
notice at least 20 Business Days prior to each Repurchase Date to all Holders at
their addresses shown in the register of the Registrar and to beneficial owners
as required by applicable law stating, among other things, the procedures that
Holders must follow to require the Company to repurchase their Securities
described below. Purchases of Securities hereunder shall be made, at the option
of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written notice
of purchase (a "PURCHASE NOTICE") during the period beginning
at any time from the opening of business on the date that is
20 Business
25
Days prior to the relevant Repurchase Date until the close of
business on the Repurchase Date stating:
(A) if Certificated Securities have been issued for such
Security, the certificate number of the Security which the
Holder will deliver to be purchased, or the appropriate
Depositary procedures if Certificated Securities have not been
issued for such Security;
(B) the portion of the principal amount of the Security
which the Holder will deliver to be purchased, which portion
must be in principal amounts of $1,000 or an integral multiple
of $1,000,
(C) that such Security shall be purchased by the Company
as of the Repurchase Date pursuant to the terms and conditions
specified in Section 6 of the Securities and in this
Indenture, and
(2) delivery of such Security to the Paying Agent at any time
after delivery of the Purchase Notice (together with all
necessary endorsements) at the offices of the Paying Agent,
such delivery being a condition to receipt by the Holder of
the Repurchase Price therefor; provided, however, that such
Repurchase Price shall be so paid pursuant to this Section
3.07 only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof in
the related Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.07, a portion of a Security, if the principal amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.07 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Repurchase Date
and the time of delivery of the Security.
(b) Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this Section
3.07 shall have the right to withdraw such Purchase Notice at any time prior to
the close of business on the Repurchase Date by delivery of a written notice of
withdrawal to the Paying Agent specifying:
(1) the principal amount of the Security with respect to which
such notice of withdrawal is being submitted;
(2) if Certificated Securities have been issued for such Security,
the certificate number of the Security in respect of which
such notice of
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withdrawal is being submitted, or if Certificated Securities
have not been issued in respect of such Security, the
appropriate Depositary procedures; and
(3) the principal amount, if any, of such Security which remains
subject to the original Change of Control Purchase Notice and
which has been or will be delivered for purchase by the
Company.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
Section 3.08. Purchase of Securities at Option of the Holder Upon
Change of Control. (a) (i) If a Change of Control has occurred, all or any
portion of the outstanding Securities of any Holder equal to $1,000 or an
integral multiple of $1,000, not previously called for redemption, shall be
purchased by the Company, at the option of the Holder thereof, at a purchase
price in cash equal to 100% of the principal amount of those Securities, plus
accrued and unpaid Interest and accrued and unpaid Liquidated Damages, if any,
on those Securities (the "CHANGE OF CONTROL PURCHASE PRICE"), to but not
including the purchase date selected by the Company (the "CHANGE OF CONTROL
PURCHASE DATE"), as of the date that is 30 days after the Company Notice Date
(as defined in Section 3.08(b)), subject to satisfaction by or on behalf of the
Holder of the requirements set forth in Section 3.08(c).
(ii) Notwithstanding the provisions of Section 3.08(a)(i),
the Company shall not be required to purchase the Securities of the
Holders upon a Change of Control pursuant to this Section 3.08 if:
(A) the Sale Price per share of Common Stock for
any five Trading Days within the period of 10 consecutive
Trading Days (x) 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 set forth under
clauses (i) or (ii) of the definition of Change of Control, or
(y) ending immediately before the Change of Control in the
case of a Change of Control set forth under clause (iii) of
the definition of Change of Control, equals or exceeds 110% of
the Conversion Price of the Securities in effect on each of
those five Trading Days; or
(B) One hundred percent of the consideration in
the transaction or transactions (other than cash payments for
fractional shares and cash payments made in respect of
dissenters' appraisal rights) constituting a Change of Control
consists of shares of common stock, ordinary shares or
American Depositary Shares traded or to be traded immediately
following a Change of Control on a national securities
exchange or the Nasdaq National
27
Market, and, as a result of the transaction or transactions,
the Securities become convertible into that common stock,
ordinary shares or American Depositary Shares (and any rights
attached thereto).
For the purposes of the "Change of Control" definition, (x) whether a
person is a "beneficial owner" shall be determined in accordance with Rule 13d-3
under the Exchange Act and (y) the term "person" includes any syndicate or group
that would be deemed to be a "person" under Section 13(d)(3) of the Exchange
Act.
(b) No later than 30 days after the occurrence of a Change of
Control, the Company shall mail a written notice of the Change of Control by
first class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law), which notice shall comply with the requirements of
Section 3.08(f) (the "COMPANY NOTICE"). As used in this Indenture, the "COMPANY
NOTICE DATE" means the date on which the Company sends the Company Notice.
(c) A Holder may exercise its rights specified in Section 3.08(a)
upon delivery of a written notice of purchase (a "CHANGE OF CONTROL PURCHASE
NOTICE") to the Paying Agent at any time on or prior to the close of business on
the Change of Control Purchase Date stating:
(i) if Certificated Securities have been issued for such
Security, the certificate number of the Security which the Holder will
deliver to be purchased, or the appropriate Depositary procedures if
Certificated Securities have not been issued;
(ii) the portion of the principal amount of the Security
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple of $1,000; and
(iii) that such Security shall be purchased pursuant to the
terms and conditions specified in Section 6 of the Securities and in
this Indenture.
(d) The delivery of such Security to the Paying Agent with the
Change of Control Purchase Notice (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change of Control Purchase Price therefor; provided, however, that
such Change of Control Purchase Price shall be so paid pursuant to this Section
3.08 only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change of Control
Purchase Notice.
(e) The Company shall purchase from the Holder thereof, pursuant
to this Section 3.08, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply
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to the purchase of all of a Security also apply to the purchase of such portion
of such Security.
(f) The "COMPANY NOTICE" shall contain the following:
(1) A brief statement of the events causing the
Change of Control and the date of such Change of Control;
(2) A form of Change of Control Purchase Notice;
(3) The date by which the Change of Control
Purchase Notice pursuant to this Section 3.08 must be
delivered to the Paying Agent in order for a Holder to
exercise the repurchase rights, which shall be the second
Business Day prior to the Change of Control Purchase Date;
(4) The Change of Control Purchase Date;
(5) The Change of Control Purchase Price and the
Conversion Rate as of the date of the Company Notice;
(6) The name and address of the Paying Agent and
the Conversion Agent;
(7) A statement that Securities as to which a
Change of Control Purchase Notice has been given may be
converted if they are otherwise convertible only in accordance
with Article 10 hereof and Section 8 of the Securities if the
applicable Change of Control Purchase Notice has been
irrevocably withdrawn prior to the close of business on the
Business Day immediately preceding the Change of Control
Purchase Date in accordance with the terms of this Indenture;
(8) A statement that Securities must be
surrendered to the Paying Agent to collect payment;
(9) A statement that the Change of Control
Purchase Price for any Security as to which a Change of
Control Purchase Notice has been given and not withdrawn will
be paid promptly following the later of the Change of Control
Purchase Date and the time of surrender of such Security as
described in (9) above;
(10) A brief statement of the procedures the
Holder must follow to exercise its rights under Section 3.08;
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(11) A brief statement of the conversion rights
with respect to the Securities, which may be by reference to
Article 10 of this Indenture;
(12) A brief statement of the timing for
withdrawing a Change of Control Purchase Notice or submitting
a conditional withdrawal pursuant to the terms of Section
3.10;
(13) A statement that, unless the Company
defaults in making payment on Securities for which a Change of
Control Purchase Notice has been submitted, Interest or
Liquidated Damages, if any, on such Securities will cease to
accrue on and after the Change of Control Purchase Date; and
(14) the CUSIP number of the Securities.
(ii) At the Company's request, the Trustee shall give such
Company Notice in the Company's name and at the Company's expense, if,
at least three Business Days before the applicable Company Notice Date,
the Company shall have delivered an Officers' Certificate to the
Trustee specifying the information required by Section 3.08(f) in the
Company Notice.
Section 3.09. Covenants of the Company. All shares of Common Stock
delivered upon purchase of the Securities shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
nonassessable, and shall be free from preemptive rights and free of any lien or
adverse claim.
Section 3.10. Effect of Change of Control Purchase Notice. (a) Upon
receipt by the Paying Agent of the Change of Control Purchase Notice specified
in Section 3.08(c), and regardless of whether the Security in respect of which
the Change of Control Purchase Notice was given is delivered to the Paying
Agent, the Holder of the Security in respect of which such Change of Control
Purchase Notice was given shall (unless such Change of Control Purchase Notice
is withdrawn as specified in the following paragraph) thereafter be entitled
solely to receive the Change of Control Purchase Price with respect to such
Security. Such Change of Control Purchase Price shall be paid to such Holder,
subject to receipt of funds by the Paying Agent, promptly following the later of
(x) the Change of Control Purchase Date with respect to such Security and (y)
the time of delivery of such Security to the Paying Agent by the Holder thereof
in the manner required by Section 3.08. Securities in respect of which a Change
of Control Purchase Notice has been given by the Holder thereof may not be
converted pursuant to Article 10 hereof on or after the date of the delivery of
such Change of Control Purchase Notice unless such Change of Control Purchase
Notice has first been validly and irrevocably withdrawn as specified in the
following paragraph.
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(b) A Change of Control Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change of Control Purchase Notice at any time prior to the
close of business on the Change of Control Purchase Date specifying:
(1) the principal amount of the Security with respect to which
such notice of withdrawal is being submitted;
(2) if Certificated Securities have been issued for such Security,
the certificate number of the Security in respect of which
such notice of withdrawal is being submitted, or if
Certificated Securities have not been issued in respect of
such Security, the appropriate Depositary procedures; and
(3) the principal amount, if any, of such Security which remains
subject to the original Change of Control Purchase Notice and
which has been or will be delivered for purchase by the
Company.
(c) There shall be no purchase of any Securities pursuant to
Section 3.08 if there has occurred (prior to, on or after the giving, by the
Holders of such Securities, of the required Change of Control Purchase Notice)
and is continuing an Event of Default (other than a default in the payment of
the Change of Control Purchase Price with respect to such Securities). The
Paying Agent will promptly return to the respective Holders thereof any
Securities (x) with respect to which a Change of Control Purchase Notice has
been withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Change of Control Purchase Price with respect to such Securities) in which case,
upon such return, the Change of Control Purchase Notice with respect thereto
shall be deemed to have been withdrawn.
(d) The Paying Agent shall promptly notify the Company of the
receipt by it of any Change of Control Purchase Notice or written withdrawal
thereof.
Section 3.11. Deposit of Change of Control Purchase Price. Prior to
5:00 p.m. (New York City time) on the Business Day following the Change of
Control Purchase Date, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) an amount of cash (in immediately available funds if
deposited on such Business Day) sufficient to pay the aggregate Change of
Control Purchase Price of all the Securities or portions thereof that are to be
purchased as of the Change of Control Purchase Date. Upon such deposit,
Securities being purchased shall cease to be outstanding and shall no longer
accrue interest or Liquidated Damages, if any, and the Holders thereof shall
only be entitled to receive the Change of Control Purchase Price with respect to
such Securities. Upon
31
surrender to the Paying Agent, such Securities shall be paid at the Change of
Control Purchase Price.
Section 3.12. Securities Purchased in Part. Any Certificated Security
which is to be purchased only in part shall be surrendered at the office of the
Paying Agent (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 such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered which is not
purchased.
Section 3.13. Covenant to Comply with Securities Laws Upon Purchase of
Securities. When complying with the provisions of Section 3.08 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall (i)
comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the
Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, and (iii) otherwise comply with all Federal
and state securities laws so as to permit the rights and obligations under
Section 3.08 to be exercised in the time and in the manner specified in Sections
3.08.
Section 3.14. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed as provided in
Section 8.02 hereof, together with interest or dividends, if any, thereon, held
by them for the payment of the Change of Control Purchase Price; provided,
however, that to the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 3.11 exceeds the aggregate Change of Control
Purchase Price of the Securities or portions thereof which the Company is
obligated to purchase as of the Change of Control Purchase Date, then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Change of Control Purchase Date, the Trustee shall return any such
excess to the Company together with interest or dividends, if any, thereon.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities. The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts of cash in
immediately available funds to be given to the Trustee or Paying Agent, shall be
32
deposited with the Trustee or Paying Agent by 11:00 a.m., New York City time, by
the Company. The principal amount of, and Interest and Liquidated Damages, if
any, on the Securities, and the Redemption Price and the Change of Control
Purchase Price shall be considered paid on the applicable date due if on such
date (or, in the case of Change of Control Purchase Price, on the Business Day
following the applicable Change of Control Purchase Date) the Trustee or the
Paying Agent holds, in accordance with this Indenture, cash sufficient to pay
all such amounts then due.
Section 4.02. SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report 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 that any such reports,
information or documents filed with the SEC pursuant to its Electronic Data and
Gathering Analysis and Retrieval System shall be deemed filed with the Trustee.
The Company also shall comply with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely conclusively on Officers' Certificates).
Section 4.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending in December, 2004) an Officers'
Certificate, stating whether or not to the knowledge of the signers thereof, the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Section 4.04. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 4.05. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or
33
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office of The Bank of New
York located at The Bank of New York, 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, XX
00000, Attention: Corporate Trust Administration, shall initially be such office
or agency for all of the aforesaid purposes. The Company shall give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 11.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes.
Section 4.06. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of shares of Common Stock issued upon conversion thereof, or in
accordance with Section 3.08(c), the Company will promptly furnish or cause to
be furnished Rule 144A Information (as defined below) to such Holder or any
beneficial owner of Securities or holder or beneficial owner of shares of Common
Stock, or to a prospective purchaser of any such security designated by any such
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act in connection with the
resale of any such security. "RULE 144A INFORMATION" shall be such information
as is specified pursuant to Rule 144A(d)(4) under the Securities Act. Whether a
person is a beneficial owner shall be determined by the Company to the Company's
reasonable satisfaction.
Section 4.07. Registration Rights. The Company shall use its best
efforts to effect the registration with the SEC of the Securities and the Common
Stock issuable upon conversion of the Securities in the manner and pursuant to
the terms of the Registration Rights Agreement.
Section 4.08. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Securities pursuant to the
Registration Rights Agreement, the Company will provide written notice
("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen days prior to the payment date for the Liquidated
Damages, and the Liquidated Damages Notice shall set forth the amount of
Liquidated Damages to be paid by the Company on such payment date.
34
The Trustee shall not at any time be under any duty to any holder of Securities
to determine the Liquidated Damages, or with respect to the nature, extent or
calculation of the amount of Liquidated Damages when made, or with respect to
the method employed in such calculation of the Liquidated Damages. Unless and
until the Trustee shall receive a Liquidated Damages Notice, the Trustee may
assume without inquiry that no Liquidated Damages are payable.
ARTICLE 5
SUCCESSOR PERSON
Section 5.01. When Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into any other Person or convey,
transfer, sell, lease or otherwise dispose of all or substantially all of its
properties and assets to any Person, unless:
(a) either (1) the Company shall be the continuing
corporation or (2) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the Person
that acquires by conveyance, transfer or lease all or substantially all
of the properties and assets of the Company (i) shall be a corporation
organized and validly existing under the laws of the United States or
any State thereof or the District of Columbia and (ii) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form reasonably satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture;
(b) immediately prior to and after giving effect to such
transaction, no Event of Default, and no event that, after notice or
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article 5 and that all
conditions precedent herein provided for relating to such transaction
have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of the properties and assets of one or more Subsidiaries (other
than to the Company or another Subsidiary), which, if such assets were owned by
the Company, would constitute substantially all of the properties and assets of
the Company, shall be deemed to be the transfer of substantially all of the
properties and assets of the Company.
35
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person 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 had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental
indenture, the Company shall be discharged from all obligations and covenants
under this Indenture and the Securities. Subject to Section 9.06, the Company,
the Trustee and the successor Person shall enter into a supplemental indenture
to evidence the succession and substitution of such successor Person and such
discharge and release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. So long as any Securities are
outstanding, each of the following shall be an "EVENT OF DEFAULT":
(1) following the exercise by the Holder of the right to convert a
Security in accordance with Article 10 hereof, the Company (x) fails to
deliver the cash, if any, required to be delivered as part of the
applicable Conversion Settlement Distribution on the applicable
Conversion Settlement Date or (y) fails to deliver the Common Stock
required to be delivered as part of the applicable Conversion
Settlement Distribution as required pursuant to Section 10.02(d)(ii);
(2) the Company defaults in its obligation to repurchase any
Security, or any portion thereof, at the option of a Holder pursuant to
and in accordance with Section 3.08 hereof;
(3) the Company defaults in its obligation to redeem any Security,
or any portion thereof, called for redemption by the Company pursuant
to and in accordance with Section 3.01 hereof;
(4) the Company defaults in the payment of the principal amount of
any Security when the same becomes due and payable at its Stated
Maturity or the payment of any portion of the principal amount of any
Security, when the same becomes due and payable;
(5) the Company defaults in the payment of any Interest or
Liquidated Damages when due and payable, and continuance of such
default for a period of 30 days;
(6) the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those
referred to in
36
clause (1) through clause (5) above) and such failure continues for 60
days after receipt by the Company of a Notice of Default;
(7) a failure to pay when due (at stated maturity, upon
acceleration or otherwise) any indebtedness for borrowed money of the
Company or any Designated Subsidiary in an aggregate amount of $10
million or more;
(8) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company or any of
its Subsidiaries that is a Designated Subsidiary or any group of two or
more Subsidiaries that, taken as a whole, would constitute a Designated
Subsidiary, in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Company or any of its Subsidiaries that
is a Designated Subsidiary or any group of two or more Subsidiaries
that, taken as a whole, would constitute a Designated Subsidiary, as
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company or any of its Subsidiaries that is a Designated
Subsidiary or any group of two or more Subsidiaries that, taken as a
whole, would constitute a Designated Subsidiary, under any applicable
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; and
(9) the commencement by the Company or any of its Subsidiaries
that is a Designated Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Designated
Subsidiary, of a voluntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by the Company or any of its Subsidiaries that is a
Designated Subsidiary or any group of two or more Subsidiaries that,
taken as a whole, would constitute a Designated Subsidiary, to the
entry of a decree or order for relief in respect of the Company or any
of its Subsidiaries that is a Designated Subsidiary or any group of two
or more Subsidiaries that, taken as a whole, would constitute a
Designated Subsidiary, in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law
or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company, or the filing by the Company or any of
its Subsidiaries that is a Designated Subsidiary or any group of two or
more Subsidiaries that, taken as a whole, would constitute a Designated
Subsidiary, of a petition or answer or consent seeking reorganization
or relief under any applicable law, or the consent by the Company to
the filing of such petition
37
or to the appointment of or the taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
the making by the Company or any of its Subsidiaries that is a
Designated Subsidiary or any group of two or more Subsidiaries that,
taken as a whole, would constitute a Designated Subsidiary, of an
assignment for the benefit of creditors, or the admission by the
Company or any of its Subsidiaries that is a Designated Subsidiary or
any group of two or more Subsidiaries that, taken as a whole, would
constitute a Designated Subsidiary, in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company or any of its Subsidiaries that is a Designated
Subsidiary or any group of two or more Subsidiaries that, taken as a
whole, would constitute a Designated Subsidiary, expressly in
furtherance of any such action.
For the avoidance of doubt, clauses (6) and (7) above shall not
constitute an Event of Default until the Trustee notifies the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities at the
time outstanding notify the Company and the Trustee, of such default and the
Company does not cure such default (and such default is not waived) within the
time specified in clauses (6) and (7) above after actual receipt of such notice.
Any such notice must specify the default, demand that it be remedied and state
that such notice is a "NOTICE OF DEFAULT."
The Trustee shall, within 90 days of the occurrence of an Event of
Default, give to the Holders of the Securities notice of all uncured Events of
Defaults known to it and written notice of any event which with the giving of
notice or the lapse of time, or both, would become an Event of Default, its
status and what action the Company is taking or proposes to take with respect
thereto; provided, however, the Trustee shall be protected in withholding such
notice if it, in good faith, determines that the withholding of such notice is
in the best interest of such Holders, except in the case of an Event of Default
specified in clauses (1) through (5) of this Section 6.01.
Section 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 6.01(8) or 6.01(9)) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities at the time outstanding by notice
to the Company and the Trustee, may declare the principal amount of the
Securities together with any accrued and unpaid Interest and accrued and unpaid
Liquidated Damages, if any on all the Securities to be immediately due and
payable. Upon such a declaration, such accelerated amount shall be due and
payable immediately. If an Event of Default specified in Section 6.01(8) or
6.01(9) occurs and is continuing, the principal amount of the Securities
together with any accrued and unpaid Interest and accrued and unpaid Liquidated
Damages, if any, on all the Securities shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholders. The
38
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding, by notice to the Trustee (and without notice to any other
Securityholder) may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the principal
amount of the Securities and any accrued and unpaid Interest, and accrued and
unpaid Liquidated Damages, if any, that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.07 have been
paid. No such rescission shall affect any subsequent Event of Default or impair
any right consequent thereto.
For the avoidance of doubt, nothing in this Indenture is intended to
provide creditor rights for amounts in excess of the principal amount of any
Security, plus accrued and unpaid Interest and Liquidated Damages, if any.
Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, but shall not be obligated to, pursue any available
remedy to collect the payment of the principal amount of the Securities and any
accrued and unpaid Interest and accrued and unpaid Liquidated Damages, if any,
on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative, to the extent permitted by law.
Section 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing or past Event of Default and its consequences except (1) an Event of
Default described in Section 6.01 clauses (1) through (5) or (2) an Event of
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Securityholder affected. When an Event of Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Event of Default or impair any consequent right.
Section 6.05. Control by Majority. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
39
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee is offered indemnity reasonably
satisfactory to it.
Section 6.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of
the Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of such notice, request and offer of security or
indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount of the Securities and any accrued and unpaid Interest,
accrued and unpaid Liquidated Damages, if any, in respect of the Securities held
by such Holder, on or after the respective due dates expressed in the Securities
or any Redemption Date or Change of Control Purchase Date, and to convert the
Securities in accordance with Article 10, or to bring suit for the enforcement
of any such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of such Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default
described in Section 6.01(2), 6.01(3) or 6.01(4) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount owing with respect to the Securities
and the amounts provided for in Section 7.07.
Section 6.09. 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
40
Company or any other obligor upon the Securities or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal amount of the Securities and any accrued and unpaid
Interest and accrued and unpaid Liquidated Damages, if any, in respect of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of any such amount) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole principal amount of
the Securities and any accrued and unpaid Interest and accrued and unpaid
Liquidated Damages, if any, 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 or any other amounts due the Trustee under
Section 7.07) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the Securities
for the principal amount of the Securities and any accrued and unpaid Interest
and accrued and unpaid Liquidated Damages, if any, as the case may be, ratably,
without preference or priority of any kind, according to such amounts due and
payable on the Securities; and
THIRD: the balance, if any, to the Company.
41
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate principal amount of the
Securities at the time outstanding.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee. The duties and responsibilities of the
Trustee shall be as provided by the TIA and as set forth herein.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture, but in the case of
any such certificates or opinions which by any
provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or
not they conform to the requirements of this
Indenture, but need not confirm or investigate the
accuracy of mathematical calculations or other facts
stated therein.
42
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this Section (c) does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity reasonably satisfactory to it against any
loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on
any money received by it hereunder unless otherwise agreed in writing with the
Company.
Section 7.02. Rights of Trustee. Subject to its duties and
responsibilities under the TIA.
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
43
(d) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith which it believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(h) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, 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;
(i) the Trustee shall not be deemed to have notice 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 such a default is
received by a Responsible Officer of the Trustee at the Corporate Trust Office
of the Trustee, and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, 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 to each agent, custodian and other person
employed to act hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers'
44
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.
Section 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent or co-registrar may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use or application of the proceeds from the
Securities, it shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
Section 7.05. Notice of Defaults. If an Event of Default occurs and if
it is known to the Trustee, the Trustee shall give to each Securityholder notice
of the Event of Default within 90 days after it occurs or, if later, within 15
days after it is known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured or waived before the giving of such
notice. Notwithstanding the preceding sentence, except in the case of an Event
of Default described in Section 6.01(1) and 6.01(2), the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interest of the
Securityholders. The Trustee shall not be deemed to have knowledge of an Event
of Default unless a Responsible Officer of the Trustee has received written
notice of such Event of Default, which notice specifically references this
Indenture and the Securities.
Section 7.06. Reports by Trustee to Holders. Within 75 days after each
December 31 beginning with the December 31 following the date of this Indenture,
the Trustee shall mail to each Securityholder a brief report dated as of such
December 31 that complies with TIA Section 313(a), if required by such Section
313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee promptly
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
Section 7.07. Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for all
services
45
rendered by it hereunder (which compensation shall not be limited (to the extent
permitted by law) by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and their
officers, directors, employees and agents for, and to hold them harmless
against, any loss, damage, claim, liability, cost or expense (including
attorney's fees and expenses, and taxes (other than taxes based upon, measured
by or determined by the income of the Trustee)) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim (whether asserted by the Company or any Holder or any
other person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the principal
amount of, or the Redemption Price, Change of Control Purchase Price, Interest,
or Liquidated Damages, if any, as the case may be, on particular Securities.
The provisions of this Section 7.07 shall apply with the same force and
effect to the Trustee acting in its capacity as Conversion Agent, Registrar,
Paying Agent and Calculation Agent.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 6.01(8) or 6.01(9), the expenses, including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any bankruptcy law.
In no event shall the Trustee be liable for any indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
In no event shall the Trustee be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or
46
undeclared), terrorism, fire, riot, embargo, government action, including any
laws, ordinances, regulations, governmental action or the like which delay,
restrict or prohibit the providing of services contemplated by this Agreement.
Section 7.08. Replacement of Trustee. The Trustee may resign by so notifying
the Company; provided, however, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this Section 7.08.
The Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may remove the Trustee by so notifying the Trustee and the
Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may petition any court of competent jurisdiction at the expense
of the Company for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets (including the administration of the trust
created by this
47
Indenture) to, another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
(or its parent holding company) shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced or repaid pursuant to Section 2.07) for cancellation or (ii)
all outstanding Securities have become due and payable and the Company deposits
with the Trustee or the Paying Agent cash sufficient to pay all amounts due and
owing on all outstanding Securities (other than Securities replaced pursuant to
Section 2.07), and if the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 7.07, cease to be of
further effect. The Trustee shall join in the execution of a document prepared
by the Company acknowledging satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers' Certificate and Opinion of
Counsel and at the cost and expense of the Company.
Section 8.02. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company promptly any money or securities held by them
for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee and the Paying Agent
shall have no further liability to the Securityholders with respect to such
money or securities for that period commencing after the return thereof.
48
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without the consent of any
Securityholder to:
(a) add to the covenants of the Company for the benefit of the
Holders of Securities;
(b) surrender any right or power herein conferred upon the
Company;
(c) provide for conversion rights of Holders of Securities if any
reclassification or change of the Common Stock or any consolidation,
merger or sale of all or substantially all of the Company's assets
occurs;
(d) provide for the assumption of the Company's obligations to the
Holders of Securities in the case of a merger, consolidation,
conveyance, transfer or lease pursuant to Article 5 hereof;
(e) increase the Conversion Rate; provided, however, that such
increase in the Conversion Rate shall not adversely affect the
interests of the Holders of Securities (after taking into account tax
and other consequences of such increase);
(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 necessary in connection with
the registration of the Securities under the Securities Act as
contemplated in the Registration Rights Agreement; provided, however,
that such action pursuant to this clause (g) does not, in the good
faith opinion of the Board of Directors of the Company (as evidenced by
a Board Resolution) and the Trustee, adversely affect the interests of
the Holders of Securities in any material respect;
(h) cure any ambiguity, omission or inconsistency, or to correct
or supplement any defective provisions of this Indenture; provided,
however, that such action pursuant to this clause (h) does not, in the
good faith opinion of the Board of Directors of the Company (as
evidenced by a Board Resolution) and the Trustee, adversely affect the
interests of the Holders of Securities in any material respect;
provided further that any amendment made solely to conform the
provisions of this Indenture to the description of the Securities in
the Offering Memorandum will not be deemed to adversely affect the
interests of the Holders of Securities in any material respect;
49
(i) add or modify any other provisions herein with respect to
matters or questions arising hereunder which the Company and the
Trustee may deem necessary or desirable and which will not adversely
affect the interests of the Holders of Securities in any material
respect;
(j) evidence the acceptance of the appointment by a successor
Trustee;
(k) comply with the requirements of this Indenture regarding
merger and the transfer of assets; or
(l) provide for uncertificated Securities in addition to
Certificated Securities so long as such uncertificated Securities are
in registered form for purposes of the Internal Revenue Code of 1986,
as amended.
Section 9.02. With Consent of Holders. Except as provided below in this
Section 9.02, this Indenture or the Securities may be amended, modified or
supplemented, and noncompliance in any particular instance with any provision of
this Indenture or the Securities may be waived, in each case with the written
consent of the Holders of at least a majority of the principal amount of the
Securities at the time outstanding, the Company may modify and amend this
Indenture or the Securities and waive noncompliance by the Company.
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment, supplement or waiver under this
Section 9.02 may not:
(a) change the maturity of any Security, or the payment date of
any installment of Interest or Liquidated Damages payable on any
Security;
(b) reduce the principal amount of, or the Interest or Liquidated
Damages payable on, or the Redemption Price or Change of Control
Purchase Price of, any Security;
(c) impair or adversely affect the conversion rights of any Holder
of Securities;
(d) change the currency of any amount owed or owing under the
Security or any Interest or Liquidated Damages thereon from U.S.
Dollars;
(e) alter the manner of calculation or otherwise modify the rate
of accrual of Liquidated Damages on any Security or extend time for
payment of any amounts due and payable to the Holders of the
Securities;
50
(f) impair the right of any Holder to institute suit for the
enforcement of any payment or with respect to, or conversion of, any
Security;
(g) modify the Company's obligation to maintain an office or
agency in New York pursuant to Section 4.05;
(h) adversely affect the purchase right of the Holders of the
Securities as provided in Article 3 (including after a Change in
Control), except as otherwise permitted pursuant to Article 5 hereof;
(i) modify the provisions of Sections 3.01 through 3.06 in a
manner adverse to the Holders of the Securities;
(j) modify any of the provisions of this Section, or reduce the
percentage of the aggregate principal amount of outstanding Securities
required to amend, modify or supplement the Indenture or the Securities
or waive an Event of 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 Security affected thereby; or
(k) reduce the percentage of the aggregate principal amount of the
outstanding Securities the consent of whose Holders is required for any
waiver provided for in this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
Nothing in this Section 9.02 shall impair the ability of the Company
and the Trustee to amend this Indenture or the Securities without the consent of
any Securityholder to provide for the assumption of the Company's obligations to
the Holders of Securities in the case of a merger, consolidation, conveyance,
transfer or lease pursuant to Article 5 hereof.
Section 9.03. Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.04. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action
51
as to such Holder's Security or portion of the Security if the Trustee receives
the notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Securityholder.
Section 9.05. Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 9.06. Trustee to Sign Amendments, Etc. The Trustee shall sign
any amendment or supplemental indenture authorized pursuant to this Article 9 if
the amendment or supplemental indenture contained therein does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but need not, sign such amendment or supplemental indenture. In
signing such amendment or supplemental indenture the Trustee shall receive, and
(subject to the provisions of Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment or supplemental indenture is authorized or permitted by this
Indenture.
Section 9.07. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE 10
CONVERSIONS
Section 10.01. Conversion Privilege. Subject to and upon compliance
with the provisions of this Article 10, a Holder of a Security shall have the
right, at such Holder's option, to convert all or any portion (if the portion to
be converted is $1,000 principal amount or an integral multiple thereof) of such
Security into shares of Common Stock at the Conversion Rate in effect on the
Conversion Date at any time prior to the earlier of, as applicable: (a) the
close of business on the date of the Stated Maturity, and (b) if such Security
has been called for redemption pursuant to Section 3.01, the close of business
on the Business Day preceding the applicable Redemption Date. Notwithstanding
the foregoing, a Security in respect of which a Holder has delivered a Change of
Control Purchase Notice exercising such Holder's option to require the Company
52
to repurchase such Security may be converted only if such notice is withdrawn in
accordance with Section 3.10 hereof. Notwithstanding any other provision of the
Securities or this Indenture, all Securityholders' rights with respect to
conversion of the Securities and the Company's obligation to deliver shares of
Common Stock upon such conversion (the "CONVERSION OBLIGATION"), are subject, in
their entirety, to the Company's right, in its sole and absolute discretion, to
elect to satisfy such Conversion Obligation in any manner permitted pursuant to
Section 10.03.
Section 10.02. Conversion Procedure; Conversion Price; Fractional
Shares.
(a) Subject to the Company's rights under Section 10.03, each
Security shall be convertible at the office of the Conversion Agent into fully
paid and nonassessable shares (calculated to the nearest 1/100th of a share) of
Common Stock. The rate at which shares of Common Stock shall be delivered upon
conversion (the "CONVERSION RATE") shall be initially 315.04 shares of Common
Stock for each $1,000 principal amount of Securities. The Conversion Rate shall
be adjusted by the Company in certain instances as provided in Section 10.04
hereof, but shall not be adjusted for any accrued and unpaid Interest, or
Liquidated Damages, if any. Upon conversion, no payment shall be made by the
Company with respect to any accrued and unpaid Interest, if any. Instead, such
amount shall be deemed paid by the applicable Conversion Settlement Distribution
delivered upon conversion of any Security. In addition, no payment or adjustment
shall be made in respect of dividends on the Common Stock with a record date
prior to the date of conversion. The Company shall not issue any fraction of a
share of Common Stock in connection with any conversion of Securities, but
instead shall, subject to Section 10.04(i) hereof, make a cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the Sale
Price of the Common Stock on the Trading Day immediately preceding the
Conversion Date.
(b) Before any Holder of a Security shall be entitled to convert
the same into Common Stock, such Holder shall (1) in the case of Global
Securities, comply with the procedures of the Depositary in effect at that time,
and in the case of Certificated Securities, surrender such Securities, duly
endorsed to the Company or in blank, at the office of the Conversion Agent, and
(2) give written notice to the Company in form on reverse of such Certificated
Security (a "NOTICE OF CONVERSION") at said office or place that such Holder
elects to convert the same and shall state in writing therein the principal
amount of Securities to be converted and the name or names (with addresses) in
which such Holder wishes the certificate or certificates for Common Stock
included in the Conversion Settlement Distribution, if any, to be registered.
53
Before any such conversion, a Holder also shall pay all taxes or
duties, if any, as provided in Section 10.06 and any amount payable pursuant to
Section 10.02(g).
If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares of Common Stock, if any, that
shall be deliverable upon conversion as part of the Conversion Settlement
Distribution shall be computed by the Company on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted thereby) so surrendered.
(c) A Security shall be deemed to have been converted as of the
close of business on the date (the "CONVERSION DATE") that is the latest of (i)
the date the Holder has complied with Section 10.02(b), (ii) the expiration of
the Cash Settlement Notice Period or (iii) if the Company elects to pay cash in
lieu of Common Stock pursuant to Section 10.03, the expiration of the Conversion
Retraction Period.
(d) Subject to the next succeeding sentence, the Company will, as
soon as practicable following the Conversion Settlement Date, (i) pay the cash
component (including cash in lieu of any fraction of a share to which such
Holder would otherwise be entitled), if any, of the Conversion Settlement
Distribution determined pursuant to Section 10.03 to the Holder of a Security
surrendered for conversion, or such Holder's nominee or nominees, and (ii)
issue, or cause to be issued, and deliver to the Conversion Agent or to such
Holder, or such Holder's nominee or nominees, certificates for the number of
full shares of Common Stock, if any, to which such Holder shall be entitled as
part of such Conversion Settlement Distribution. The Company shall not be
required to deliver certificates for shares of Common Stock while the stock
transfer books for such stock or the security register are duly closed for any
purpose, but certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or security
register, and the Person or Persons entitled to receive the Common Stock as part
of the applicable Conversion Settlement Distribution upon such conversion shall
be treated for all purposes as the record holder or holders of such Common
Stock, as of the close of business on the applicable Conversion Settlement Date.
(e) In case any Security shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the Holder of the Security so
surrendered, without charge to such Holder (subject to the provisions of Section
10.06 hereof), a new Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Securities.
(f) By delivering the applicable Conversion Settlement
Distribution upon conversion of any Security to the Conversion Agent or to the
Holder or such
54
Holder's nominee or nominees, the Company will have satisfied in full its
Conversion Obligation with respect to such Security, and upon such delivery
accrued and unpaid Interest with respect to such Security will be deemed to be
paid in full rather than canceled, extinguished or forfeited.
(g) If a Securityholder delivers a Notice of Conversion after the
Interest Record Date for a payment of Interest but prior to the corresponding
Interest Payment Date, such Securityholder must pay to the Company, at the time
such Securityholder surrenders Securities for conversion, an amount equal to the
Interest, that has accrued and will be paid on the related Interest Payment
Date. This Section 10.02(g) shall not apply to a Securityholder that converts
Securities after an Interest Record Date for a payment of Interest but on or
prior to the corresponding Interest Payment Date if (1) the Company has
specified a Redemption Date during such period, (2) the Company has specified a
Change of Control Purchase Date during such period or (3) any overdue Interest
exists at the time of conversion with respect to the Securities converted.
Notwithstanding the foregoing, the Company shall refund any amount paid by a
Securityholder pursuant to this Section 10.02(g) if the Cash Settlement Notice
Period or, if the Company elects to pay cash in lieu of Common Stock pursuant to
Section 10.03, the Cash Settlement Averaging Period, ends on or subsequent to
the Interest Payment Date immediately following the date such Securityholder
delivered a Notice of Conversion. Such refunded amount shall be paid at the time
of delivery of the Conversion Settlement Distribution following conversion of
any Securities.
Section 10.03. Payment of Cash in Lieu of Common Stock.
(a) If a Holder elects to convert all or any portion of a Security
into shares of Common Stock as set forth in Section 10.01 and the Company
receives such Holder's Notice of Conversion on or prior to the day that is 20
days prior to the Stated Maturity, or with respect to Securities called for
redemption pursuant to Section 3.01, the applicable Redemption Date (the "FINAL
NOTICE DATE"), the Company may choose to satisfy all or any portion of its
Conversion Obligation in cash. Upon such election, the Company will notify such
Holder through the Trustee of the dollar amount to be satisfied in cash (which
must be expressed either as 100% of the Conversion Obligation or as a fixed
dollar amount) at any time on or before the date that is two Business Days
following the Company's receipt of the Notice of Conversion as specified in
Section 10.02 (such period, the "CASH SETTLEMENT NOTICE PERIOD"). If the Company
elects to pay cash for any portion of the shares otherwise issuable to the
Holder, the Holder may retract the Notice of Conversion at any time during the
two Business Day period beginning on the day after the final day of the Cash
Settlement Notice Period (the "CONVERSION RETRACTION PERIOD"); no such
retraction can be made (and a Notice of Conversion shall be irrevocable) if the
Company does not elect to deliver cash in lieu of shares of Common Stock (other
than cash in lieu of fractional shares). With respect to any Notice of
Conversion received by the Company prior to the Final Notice Date, the
"CONVERSION SETTLEMENT DISTRIBUTION" for any Security
55
subject to such Notice of Conversion shall consist of cash, Common Stock or a
combination thereof, as selected by the Company as set forth below:
(i) if the Company elects to satisfy the entire
Conversion Obligation in shares of Common Stock, the Conversion
Settlement Distribution shall be a number of shares, for each $1,000
original principal amount of Securities, equal to the then current
Conversion Rate; provided that if on the date a Holder submits the
Notice of Conversion such Holder holds Transfer Restricted Securities
and there exists a Registration Default affecting the Common Stock, for
purposes of this Section 10.03(a)(i) and 10.03(a)(iii), the Conversion
Rate shall be multiplied by 1.03. The Company will pay cash for all
fractional shares of Common Stock. The cash payment for such fractional
shares will be based on the Sale Price of the Company's Common Stock on
the Trading Date immediately prior to the Conversion Date;
(ii) if the Company elects to satisfy the entire
Conversion Obligation in cash, the Conversion Settlement Distribution
shall be, for each $1,000 original principal amount of Securities, cash
in an amount equal to the product of the then current Conversion Rate
and the average Sale Price of the Common Stock during the 20 Trading
Days beginning on the Trading Day immediately following the final day
of the Conversion Retraction Period (the "CASH SETTLEMENT AVERAGING
PERIOD"); and
(iii) if the Company elects to satisfy a fixed portion
(other than 100%) of the Conversion Obligation in cash, the Conversion
Settlement Distribution shall consist of such cash amount ("CASH
AMOUNT") and a number of shares, for each $1,000 original principal
amount of Securities, equal to the then Current Conversion Rate, plus
Liquidated Damages shares, if any, minus the number of shares equal to
the sum, for each day of the Cash Settlement Averaging Period, of (x)
5% of the Cash Amount, divided by (y) the Sale Price of the Common
Stock on such day; provided, however, that the number of shares will
not be less than zero. The Company will pay cash for all fractional
shares of Common Stock. The cash payment for fractional shares will be
based on the Sale Price of our Common Stock on the Trading Day
immediately prior to the Conversion Date.
If the Company elects to satisfy all or any portion of the Conversion
Obligation in cash and the Conversion Notice has not been retracted, then
settlement (in cash and/ or shares) will occur on the Business Day following the
Cash Settlement Averaging Period. If the Company elects to satisfy the entire
Conversion Obligation in shares of Common Stock then settlement will occur on
the third Business Day following the Conversion Date.
56
(b) At any time on or before any Final Notice Date, the Company
will notify the Trustee whether it intends to satisfy all or any portion of the
Conversion Obligation with respect to conversions of Securities for which the
Company receives a Notice of Conversion after such Final Notice Date and the
dollar amount to be satisfied in cash (which must be expressed either as 100% or
as a fixed dollar amount). In such case, the applicable Conversion Settlement
Distribution will be computed by the Company in the same manner as set forth in
clause (a) above except that the Cash Settlement Averaging Period shall be the
20 Trading Days beginning on the first Trading Day following the Company's
receipt of the Notice of Conversion.
Section 10.04. Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Rate shall be increased so that the same shall equal the
rate determined by dividing the Conversion Rate 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 by a
fraction,
(i) the numerator of which shall be the number of shares
of the Common Stock outstanding at the close of business on the date
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 increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purpose of this
paragraph (a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. If any dividend or
distribution of the type described in this Section 10.04(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights (excluding any
Rights pursuant to the Rights Agreement) or warrants to all holders of
its outstanding shares of Common Stock entitling them (for a period
expiring within sixty (60) days after the date of the issuance of such
rights or warrants) to subscribe for or purchase shares of Common Stock
at a price per share less than the Sale Price on the date fixed for
determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect
immediately prior to the
57
date fixed for determination of stockholders entitled to receive such
rights or warrants 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 date fixed
for determination of stockholders entitled to receive such rights or
warrants plus the number of shares that the aggregate offering price of
the total number of shares so offered would purchase at such Sale
Price; and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding on the date fixed for determination
of stockholders entitled to receive such rights or warrants plus the
total number of additional shares of Common Stock offered for
subscription or purchase.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. In the event that such rights or warrants are not so issued,
the Conversion Rate shall again be adjusted to be the Conversion Rate that 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 Sale Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
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.
58
(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 or evidences of its indebtedness or assets (including
securities, but excluding (i) any rights or warrants referred to in Section
10.04(b), (ii) any dividends or distributions to which Section 10.04(a) applies,
(iii) any distributions paid exclusively in cash referred to in Section
10.04(e)or (iv) any dividends or distributions in connection with a
reclassification, change, consolidation, merger, combination, statutory share
exchange, sale or conveyance to the extent that it resulted in an adjustment to
the conversion consideration) (any of the foregoing hereinafter in this Section
10.04(d) called the "DISTRIBUTED ASSETS"), then, in each such case (unless the
Company elects to reserve such Distributed Assets for distribution to the
Holders upon the conversion of the Securities so that any such holder converting
Securities will receive upon such conversion, in addition to the shares of
Common Stock to which such holder is entitled, the amount and kind of such
Distributed Assets which such holder would have received if such holder had
converted its Securities into Common Stock immediately prior to the Record Date
(as defined in Section 10.04(h)(iii)) for such distribution of the Distributed
Assets), the Conversion Rate shall be adjusted so that the same shall be equal
to the rate determined by dividing the Conversion Rate in effect on the Record
Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market
Price per share of the Common Stock on such Record Date less the Fair
Market Value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the
Board of Directors) on the Record Date of the portion of the
Distributed Assets so distributed applicable to one share of Common
Stock; and
(ii) the denominator of which shall be the Current Market
Price per share of the Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided, however, that in the event (1)
the then Fair Market Value (as so determined) of the portion of the Distributed
Assets so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Record Date or
(2) the Current Market Price of Common Stock on the Record Date exceeds the then
Fair Market Value (as so determined) of the portion of the Distributed Assets so
distributed applicable to one share of Common Stock by less than $1.00, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of Distributed
Assets such holder would have received had such holder converted each Security
on the Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared. If the Fair Market Value of any distribution requiring an adjustment
pursuant to this
59
Section 10.04(d) can be determined by reference to the actual or when issued
trading market for any securities, the Board of Directors must determine the
Fair Market Value of such distribution by reference to the prices in such market
over the same period used in computing the Current Market Price of the Common
Stock.
Notwithstanding the foregoing, if the Distributed Assets distributed by
the Company to all holders of its Common Stock consists of capital stock of, or
similar equity interests in, a Subsidiary or other business unit (unless such
capital stock or similar equity interests are distributed to the Securityholders
in such distribution as if such holders had converted their Securities into
Common Stock), the Conversion Rate shall be increased so that the same shall be
equal to the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Record Date with respect to
such distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the average
of the closing Sale Prices of the Common Stock for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading
Day after the date on which "ex-dividend trading" commences for such
dividend or distribution on the New York Stock Exchange, Nasdaq or such
other national or regional exchange or market on which such securities
are then listed or quoted (the "EX-DIVIDEND DATE") plus (B) the average
of the Closing Sale Prices of the securities distributed in respect of
each share of Common Stock for the ten (10) consecutive Trading Days
commencing on and including the fifth Trading Day after the Ex-Dividend
Date; and
(ii) the denominator of which shall be the average of the
closing Sale Prices of the Common Stock for the ten (10) consecutive
Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date,
such adjustment to become effective the later of (x) ten (10) Trading
Days after the effective date of such distribution of capital stock of, or
similar equity interests in, a Subsidiary or other business unit or (y) after
the ten (10) consecutive Trading Days commencing on and including the fifth
Trading Day after the Ex-Dividend Date; provided that the Company may in lieu of
the foregoing adjustment make adequate provision so that each Securityholder
shall have the right to receive upon conversion the amount of Distributed Assets
such holder would have received had such holder converted each Security on the
Record Date with respect to such distribution; and provided further that if (x)
the average of the Closing Sale Prices of the Common Stock for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date minus (y) the average of the Closing Sale Prices of the
securities distributed in respect of each share Common Share for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading Day
60
after the Ex-Dividend Date is less than $1.00, then the adjustment provided by
for by this paragraph shall not be made and in lieu thereof the provisions of
the first paragraph of this Section 10.04(d) shall apply to such distribution.
In any case in which this paragraph is applicable, Section 10.04(a), Section
10.04(b) and the first paragraph of this Section 10.04(d) shall not be
applicable.
Rights or warrants distributed by the Company to all holders of Common
Stock (including any Rights pursuant to the Rights Agreement) entitling the
holders thereof to subscribe for or purchase shares of the Company's Capital
Stock (either initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events ("TRIGGER EVENT"):
(i) are deemed to be transferred with such shares of Common Stock; (ii) are not
exercisable; and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this Section
10.04 (and no adjustment to the Conversion Rate under this Section 10.04 will be
required) until the occurrence of the earliest Trigger Event, whereupon such
rights and warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Rate shall be made under this
Section 10.04(d). If any such right or warrant, including any such existing
rights or warrants distributed prior to the date of this Indenture, are subject
to events, upon the occurrence of which such rights or warrants become
exercisable to purchase different securities, evidences of indebtedness or other
assets, then the date of the occurrence of any and each such event shall be
deemed to be the date of distribution and record date with respect to new rights
or warrants with such rights (and a termination or expiration of the existing
rights or warrants without exercise by any of the holders 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 was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Rate under this
Section 10.04 was made, (1) in the case of any such rights or warrants that
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights and warrants had not been
issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 10.04(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually
61
distributed, or reserved by the Company for distribution to holders of
Securities upon conversion by such holders of Securities to Common Stock.
For purposes of this Section 10.04(d) and Sections 10.04(a) and (b),
any dividend or distribution to which this Section 10.04(d) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 10.04(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Sections
10.04(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Sections 10.04(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 10.04(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to substantially all holders of its Common Stock cash (a "CASH
DIVIDEND") (excluding any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on such Record Date by a
fraction,
(i) the numerator of which shall be the Current Market
Price of the Common Stock on the Record Date, and
(ii) the denominator of which shall be such Current Market
Price of the Common Stock less the amount per share of Common Stock of
such Cash Dividend,
such adjustment to be effective immediately prior to the opening of business on
the day following the Record Date.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose
62
determination shall be conclusive and described in a resolution of the Board of
Directors) that as of the last time (the "EXPIRATION TIME") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it may be amended)
exceeds the last reported Sale Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "PURCHASED SHARES") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the last reported Sale Price of the
Common Stock on the Trading Day next succeeding the Expiration Time,
and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by last reported Sale Price
of the Common Stock on the Trading Day next succeeding the Expiration
Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. In the event that the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "OFFER
EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the last reported
Sale Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time, and in which, as of the Offer Expiration Time the Board of
Directors is not recommending rejection of the offer, the Conversion Rate shall
be adjusted so that the same shall equal the rate determined by multiplying the
63
Conversion Rate in effect immediately prior to the Offer Expiration Time by a
fraction
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Offer Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "ACCEPTED PURCHASED SHARES") and (y)
the product of the number of shares of Common Stock outstanding (less
any Accepted Purchased Shares) at the Offer Expiration Time and the
last reported Sale Price of the Common Stock on the Trading Day next
succeeding the Offer Expiration Time, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Offer Expiration Time multiplied by the last reported
Sale Price of the Common Stock on the Trading Day next succeeding the
Offer Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Offer Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 10.04(g) shall not be made if, as of the
Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Section 10.05.
(h) For purposes of this Section 10.04, the following terms shall
have the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the
daily Sale Prices per share of Common Stock for the ten consecutive
Trading Days ending on the earlier of such date of determination and
the day before the "ex" date with respect to the issuance,
distribution, subdivision or combination requiring such computation
immediately prior to the date in question. For purpose of this
paragraph, the term "ex" date, (1) when used with respect to any
issuance or distribution, means the first date on which the Common
Stock trades, regular way, on the relevant exchange or in the relevant
market from which the Sale Price was obtained without the right to
receive such issuance or distribution, and (2) when
64
used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades, regular
way, on such exchange or in such market after the time at which such
subdivision or combination becomes effective.
In the event that another issuance, distribution, subdivision, combination or
tender or exchange offer to which Section 10.04 applies occurs during the period
applicable for calculating "Current Market Price" pursuant to the definition in
the preceding paragraph, "Current Market Price" shall be calculated for such
period in a manner determined by the Board of Directors to reflect the impact of
such issuance, distribution, subdivision, combination or tender or exchange
offer on the Sale Price of the Common Stock during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.
(iii) "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).
(i) The Company may make such increases in the Conversion Rate, in
addition to those required by Sections 10.04(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any distribution; provided,
however, that such increase in the Conversion Rate shall not adversely affect
the interests of the Holders of Securities (after taking into account tax and
other consequences of such increase).
(j) To the extent permitted by applicable law, the Company from
time to time may increase the Conversion Rate by any amount for any period of
time if the period is at least twenty (20) days, the increase is irrevocable
during the period and the Board of Directors shall have made a determination
that such increase would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Rate is increased
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Securities a notice of the increase at least fifteen (15) days prior to
the date the increased Conversion Rate takes effect, and such notice shall state
the increased Conversion Rate and the period during which it will be in effect.
(k) Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than
65
the Trustee an Officers' Certificate setting forth the Conversion Rate after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Rate and may assume that the last
Conversion Rate of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Security at his
last address appearing on the Security register provided for in Section 2.03 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 10.04 provides that an
adjustment shall become effective immediately after (1) a record date or Record
Date for an event, (2) the date fixed for the determination of stockholders
entitled to receive a dividend or distribution pursuant to Section 10.04(a), (3)
a date fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 10.04(b), (4) the Expiration Time for any tender
offer pursuant to Section 10.04(f), or (5) the Offer Expiration Time for a
tender or exchange offer pursuant to Section 10.03(g) (each a "DETERMINATION
DATE"), the Company may elect to defer until the occurrence of the relevant
Adjustment Event (as hereinafter defined) (x) issuing to the holder of any
Security converted after such Determination Date and before the occurrence of
such Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 10.04(a). For purposes of
this Section 10.04(k), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5)
hereof, the date a sale or exchange of Common Stock pursuant to such
tender or exchange offer is consummated and becomes irrevocable.
66
(m) For purposes of this Section 10.04, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
(n) No adjustment to the Conversion Rate need be made:
(1) upon the issuance of Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of
additional optional amounts in Common Stock under any plan;
(2) upon the issuance of Common Stock or options or
rights to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed
by the Company or any Subsidiary;
(3) upon the issuance of Common Stock pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible
security not described in (2) above and outstanding as of the date the
Securities were first issued; or
(4) for a change in the par value of the Common Stock.
Section 10.05. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 10.04(c) applies or a change in par value, or from
par value to no par value, or from no par value to par value), (ii) any
consolidation, merger, statutory share exchange or combination of the Company
with another Person as a result of which holders of Common Stock shall be
entitled to receive stock, other 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 substantially
as an entirety to any other Person, in each case as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing Person, as the
case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the TIA as in force at the date of execution of such
supplemental indenture) providing that each Security shall be convertible,
subject to the provisions of Section 10.03, into the kind and amount of shares
of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger, statutory
share exchange, combination, sale or conveyance by a holder of
67
a number of shares of Common Stock issuable upon conversion of such Securities
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock are available to convert all such Securities) immediately prior to such
reclassification, change, consolidation, merger, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, statutory share exchange,
combination, sale or conveyance (provided that, if the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, statutory share exchange,
combination, 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
("NONELECTING SHARE"), then for the purposes of this Section 10.05 the kind and
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger, statutory
share exchange, combination, sale or conveyance for each nonelecting share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the nonelecting shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 10. In signing such supplemental
indenture, the Trustee shall receive, and shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Securities, at its address appearing on
the Security register provided for in Section 2.03 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, statutory share
exchanges, combinations, sales and conveyances.
If this Section 10.05 applies to any event or occurrence, Section 10.04
shall not apply.
Section 10.06. Taxes on Shares Issued. The issue of stock certificates
on conversions of Securities shall be made without charge to the converting
Holder for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Securities converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the
68
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 10.07. Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock.
(a) The Company shall provide, free from preemptive rights, out of
its authorized but unissued shares or shares held in treasury, sufficient shares
of Common Stock to provide for the conversion of the Securities from time to
time as such Securities are presented for conversion.
(b) Before taking any action which would cause an adjustment
increasing the Conversion Rate to an amount that would cause the Conversion
Price to be reduced below the then par value, if any, of the shares of Common
Stock issuable upon conversion of the Securities, the Company will take all
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue shares of such Common Stock at
such adjusted Conversion Rate.
(c) (i) The Company covenants that all shares of Common Stock
which may be issued upon conversion of Securities or in payment of the Change of
Control Purchase Price will upon issue be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
(ii) The Company covenants that, if any shares of Common
Stock to be provided for the purpose of conversion of Securities
hereunder or for payment of the Change of Control Purchase Price
require registration with or approval of any governmental authority
under any federal or state law before such shares may be validly issued
upon conversion, the Company will in good faith and as expeditiously as
possible, to the extent then permitted by the rules and interpretations
of the Securities and Exchange Commission (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.
(iii) The Company further covenants that, if at any time
the Common Stock shall be listed on the NYSE or any other national
securities exchange or automated quotation system, the Company will, if
permitted by the rules of such exchange or automated quotation system,
list and keep listed, so long as the Common Stock shall be so listed on
such exchange or automated quotation system, all Common Stock issuable
upon conversion of the Security or in payment of the Change of Control
Purchase Price; provided, however, that, if the rules of such exchange
or automated quotation system permit the Company to defer the listing
of such Common Stock until the first conversion of the Securities into
Common Stock or the first payment of the Change of Control Purchase
69
Price in Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable
upon conversion of the Securities or in payment of the Change of
Control Purchase Price in accordance with the requirements of such
exchange or automated quotation system at such time.
Section 10.08. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Securities to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Security for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article 10. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 10.05 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Holders upon the conversion of their Securities after any event
referred to in such Section 10.05 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 7.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 10.09. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 10.04; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its outstanding
Common
70
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation, merger or statutory share
exchange to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
Holder of Securities at his address appearing on the register provided for in
Section 2.03 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution of rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, or statutory share
exchange, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, or statutory share exchange, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, or statutory share exchange, sale,
transfer, dissolution, liquidation or winding up. Unless and until the Trustee
shall receive such notice, the Trustee may assume that no event required to be
disclosed in a notice delivered pursuant to this Section 10.09 has occurred.
Section 10.10. Rights Issued in Respect of Common Stock Issued Upon
Conversion. If the Company hereafter adopts any stockholder rights plan
involving the issuance of preference share purchase rights or other similar
rights (the "RIGHTS") to all holders of the Common Stock, a Securityholder shall
be entitled to receive upon conversion of its Securities in addition to the
shares of Common Stock issuable upon conversion the related Rights for the
Common Stock, unless such Rights under the future stockholder rights plan have
separated from the Common Stock at the time of conversion, in which case the
Conversion Rate shall be adjusted as provided in Section 10.04(d) on the date
such Rights separate from the Common Stock.
Section 10.11. Unconditional Right of Holders to Convert.
(a) Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to convert its Security in accordance with this Article 10 and to
bring an action for the
71
enforcement of any such right to convert, and such rights shall not be impaired
or affected without the consent of such Holder.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.02. Notices. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Covad Communications Group, Inc.
000 Xxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax: 000-000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 0X
Xxx Xxxx, XX 00000
Attn: Corporate Trust Administration
(Covad Communications Group, Inc.
3% Convertible Senior Debentures Due 2024)
Fax: 000-000-0000
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed
to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If
72
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders,
it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Section 11.05. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are
based;
(3) a statement that, in the opinion of each such person,
he has made such examination or investigation as is necessary to enable
such person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement that, in the opinion of such person, such
covenant or condition has been complied with.
provided however, that with respect to matter of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
73
Section 11.06. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.07. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 11.08. Legal Holidays. A "LEGAL HOLIDAY" is any day other than
a Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest shall accrue with respect to such payment
for the intervening period. If an Interest Record Date is a Legal Holiday, the
Interest Record Date shall not be affected.
Section 11.09. GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 11.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
Section 11.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 11.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 11.13. Table of Contents, Headings, Etc. The table of contents,
cross-references sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
74
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
COVAD COMMUNICATIONS GROUP, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Executive Vice President
and Chief Financial Officer
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxx Xxxxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Assistant Treasurer
75
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND ACCORDINGLY, THIS SECURITY AND THE COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A ADOPTED
UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY, OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY,
EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF; (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OF
1933, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D) TO AN INSTITUTIONAL INVESTOR THAT
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IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT OF 1933 AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER;
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(C)
OR 2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
The foregoing legend may be removed from this Security on satisfaction
of the conditions specified in the Indenture.
A-2
COVAD COMMUNICATIONS GROUP, INC.
3% Convertible Senior Debentures Due 2024
CUSIP: 000000XX0
ISSUE DATE:_______________ Principal Amount: $____________
COVAD COMMUNICATIONS GROUP, INC., a Delaware corporation, promises to
pay to Cede & Co. or registered assigns, the principal amount of _______________
dollars ($ _______________), on March 15, 2024.
Interest Rate: 3% per year.
Interest Payment Dates: March 15 and September 15 of each year,
commencing September 15, 2004.
Interest Record Date: March 1 and September 1 of each year.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:_________________________ COVAD COMMUNICATIONS
GROUP, INC.
By:_______________________________
Name: Xxxx Xxxxxxx
Title: Executive Vice President
and Chief Financial Officer
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated:_____________________
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[FORM OF REVERSE OF GLOBAL SECURITY]
3% Convertible Senior Debentures Due 2024
This Security is one of a duly authorized issue of 3% Convertible
Senior Debentures Due 2024 (the "SECURITIES") of Covad Communications Group,
Inc., a Delaware corporation (including any successor corporation under the
Indenture hereinafter referred to, the "Company"), issued under an Indenture,
dated as of March 10, 2004 (the "INDENTURE"), between the Company and The Bank
of New York, as trustee (the "TRUSTEE"). The terms of the Security include those
stated in the Indenture, those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended ("TIA"), and those set forth in this
Security. 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. Capitalized terms used but not defined herein have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST.
The Securities shall bear interest on the principal amount thereof at a
rate of 3% per year. The Company shall also pay Liquidated Damages as set forth
in the Registration Rights Agreement.
Interest will be payable semi-annually on each Interest Payment Date to
Holders at the close of business on the preceding Interest Record Date. Interest
will be computed on the basis of a 360-day year comprised of twelve 30 day
months.
The Company will pay Interest to a person other than the Securityholder
of record on the Interest Record Date if the Company elects to redeem, or
Securityholders elect to require the Company to repurchase, the Securities on a
date that is after a Interest Record Date but on or prior to the corresponding
Interest Payment Date. In that instance, the Company will pay accrued and unpaid
Interest on the Securities being redeemed or purchased to, but not including,
the Redemption Date or the Change of Control Purchase Date, as the case may be,
to the same person to whom it will pay the principal of those Securities.
If the principal amount of any Security, or any accrued and unpaid
Interest or Liquidated Damages, if any, are not paid when due (whether upon
acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to Section 3.01 of the Indenture and
Section 5 hereof, upon the date set for payment of the Repurchase Price pursuant
to Section 3.07 of the Indenture and Section 6 hereof upon the date set for
payment of the Change in
A-6
Control Purchase Price pursuant to Section 3.08 of the Indenture and Section 6
hereof, upon the Stated Maturity of the Securities, upon the Interest Payment
Dates or upon the Liquidated Damages Payment Dates (as defined in the
Registration Rights Agreement), then in each such case the overdue amount shall,
to the extent permitted by law, bear cash interest at the rate of 3% per annum,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
in cash on each Interest Payment Date, or, if earlier, the date such overdue
amount is paid.
2. METHOD OF PAYMENT.
Except as provided below, the Company shall pay Interest on (i) Global
Securities, to DTC in immediately available funds, (ii) any Certificated
Security having an aggregate principal amount of $5,000,000 or less, by check
mailed to the Holder of such Security and (iii) any Certificated Security having
an aggregate principal amount of more than $5,000,000, by wire transfer in
immediately available funds at the election of the Holder of any such Security.
At Stated Maturity, the Company will pay Interest on Certificated
Securities at the Company's office or agency in New York City.
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Prices, Change of Control Purchase Prices
and at Stated Maturity on (i) Global Securities, to DTC in immediately available
funds and (ii) any Certificated Security, to the Holder who surrenders such
Security at the office or agency of the Company in New York City. The Company
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may make such cash payments by check payable in such money.
If any Interest Payment Date (other than an Interest Payment Date
coinciding with the Stated Maturity or earlier Redemption Date, Repurchase Date
or Change Of Control Purchase Date) of a Security falls on a day that is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day. If the Stated Maturity, Redemption Date, Repurchase
Date or Change Of Control Purchase Date of a Security would fall on a day that
is not a Business Day, the required payment of interest, if any, and principal
will be made on the next succeeding Business Day and no interest on such payment
will accrue for the period from and after the Stated Maturity, Redemption Date,
Repurchase Date or Change Of Control Purchase Date to such next succeeding
Business Day.
3. [Reserved]
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4. INDENTURE.
The Securities are senior unsecured obligations of the Company limited
to $125,000,000 aggregate principal amount. The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. REDEMPTION AT THE OPTION OF THE COMPANY.
No sinking fund is provided for the Securities. Beginning on March 20,
2009, the Company, at its option, may redeem the Securities in accordance with
the Article 3 of the Indenture for cash at any time as a whole, or from time to
time in part, at a redemption price (the "REDEMPTION PRICE") equal to the
principal amount of the Securities to be redeemed together in each case with
accrued and unpaid Interest, and accrued and unpaid Liquidated Damages, if any,
on the Securities redeemed to (but excluding) the Redemption Date.
In no event will any Security be redeemable at the option of the
Company before March 20, 2009.
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER.
On March 15, 2009, March 15, 2014 and March 15, 2019 (each, a
"REPURCHASE DATE"), Holders may require the Company to repurchase for cash any
outstanding Securities for which the Holder has properly delivered and not
withdrawn a written Repurchase Notice, subject to certain additional conditions,
at a Repurchase Price equal to 100% of the principal amount of the Securities
plus accrued and unpaid Interest and Liquidated Damages, if any, to the
Repurchase Date.
Holders may submit their Securities for repurchase to the paying agent,
which will initially be the Trustee, at any time from the opening of business on
the date that is 20 Business Days prior to the Repurchase Date until the close
of business on the Repurchase Date.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to offer to purchase all or
any portion of the Securities held by such Holder within 30 days (which purchase
shall occur on a Business Day specified by the Company that is 30 Business Days
after the date the Company gives notice of the Change of Control pursuant to the
Indenture) after the occurrence of a Change of Control of the Company for a
Change of Control Purchase Price equal to the principal amount of those
Securities plus accrued and unpaid Interest, and Liquidated Damages, if any, on
those Securities up to (but excluding) the Change of Control Purchase Date. The
Change of Control Purchase Price shall be paid in cash, subject to the terms and
conditions of the Indenture.
A-8
Holders have the right to withdraw any Change of Control Purchase
Notice by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture.
If cash sufficient to pay the Change of Control Purchase Price of all
Securities or portions thereof to be purchased as of the Change of Control
Purchase Date is deposited with the Paying Agent, on the Business Day following
the Change of Control Purchase Date, Interest and Liquidated Damages, if any,
will cease to accrue on such Securities (or portions thereof) immediately after
such Change of Control Purchase Date, and the Holder thereof shall have no other
rights as such other than the right to receive the Change of Control Purchase
Price upon surrender of such Security.
7. NOTICE OF REDEMPTION.
Notice of redemption pursuant to Section 3.01 of the Indenture and
Section 5 of this Security will be mailed, as provided in the Indenture, at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, immediately on and after such Redemption Date
Interest, and Liquidated Damages, if any, will cease to accrue on such
Securities or portions thereof. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in integral multiples of
$1,000 of principal amount.
8. CONVERSION.
Subject to and in compliance with the provisions of the Indenture, a
Holder is entitled, at such Holder's option, to convert the Holder's Security
(or any portion of the principal amount thereof that is $1,000 or an integral
multiple $1,000), into fully paid and nonassessable shares of Common Stock at
the Conversion Rate in effect at the time of conversion; provided, however, the
Company may satisfy its obligation with respect to any demand for conversion by
delivering Common Stock, cash or a combination of cash and Common Stock.
A Security in respect of which a Holder has delivered a Purchase Notice
or a Change of Control Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
Purchase Notice or a Change of Control Purchase Notice is withdrawn in
accordance with the terms of the Indenture.
The initial Conversion Rate is 315.04 shares of Common Stock per $1,000
principal amount, subject to adjustment in certain events described in the
Indenture. The Conversion Rate shall not be adjusted for any accrued and unpaid
Interest. Upon conversion, no payment shall be made by the Company with respect
to accrued and unpaid Interest, if any. Instead, such amount shall be
A-9
deemed paid by the cash or shares of Common Stock delivered upon conversion of
any Security. In addition, no payment or adjustment shall be made in respect of
dividends on the Common Stock the record date for which is prior to the date of
conversion, except as set forth in the Indenture.
No fractional shares of Common Stock shall be issued upon conversion of
any Security. Instead of any fractional share of Common Stock that would
otherwise be issued upon conversion of such Security, the Company shall pay a
cash adjustment as provided in the Indenture.
If the Company (i) is a party to a consolidation, merger, statutory
share exchange or combination, (ii) reclassifies the Common Stock, or (iii)
sells or conveys its properties and assets substantially as an entirety to any
Person, the right to convert a Security into shares of Common Stock may be
changed into a right to convert it into securities, cash or other assets of the
Company or such other Person, in each case in accordance with the Indenture.
9. [Reserved]
10. PAYING AGENT, CONVERSION AGENT, REGISTRAR AND CALCULATION AGENT.
Initially, the Trustee will act as Paying Agent, Conversion Agent,
Registrar and Calculation Agent. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or Calculation Agent without notice, other
than notice to the Trustee; provided that the Company will maintain at least one
Paying Agent in the State of New York, City of New York, Borough of Manhattan,
which shall initially be an office or agency of the Trustee. The Company or any
of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or Calculation Agent.
11. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Change of Control Purchase Notice has been
given and not withdrawn (except, in the case of a Security to be purchased in
part, the portion of the Security not to be purchased) or any Securities for a
period of 15 days before the mailing of a notice of redemption of Securities to
be redeemed.
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12. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
13. UNCLAIMED MONEY OR SECURITIES.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person.
14. AMENDMENT; WAIVER.
Subject to certain exceptions set forth in Section 9.02 of the
Indenture, (i) the Indenture or the Securities may be amended with the written
consent of the Holders of at least a majority in aggregate principal amount of
the outstanding Securities and (ii) certain Events of Defaults may be waived
with the written consent of the Holders of a majority in aggregate principal
amount of the outstanding Securities. The Company and the Trustee may amend the
Indenture or the Securities without the consent of the Holders in the
circumstances specified in Section 9.01 of the Indenture.
15. DEFAULTS AND REMEDIES.
If any Event of Default with respect to Securities shall occur and be
continuing, the principal amount of the Securities and any accrued and unpaid
Interest, and accrued and unpaid Liquidated Damages, if any, on all the
Securities may be declared due and payable in the manner and with the effect
provided in the Indenture.
16. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. CALCULATIONS IN RESPECT OF SECURITIES.
The Company or its agents will be responsible for making all
calculations called for under the Securities including, but not limited to,
determination of the market prices for the Securities and of the Common Stock
and the amounts of
A-11
Liquidated Damages, if any, accrued on the Securities. Any calculations made in
good faith and without manifest error will be final and binding on Holders of
the Securities. The Company or its agents will be required to deliver to the
Trustee a schedule of its calculations and the Trustee will be entitled to
conclusively rely upon the accuracy of such calculations without independent
verification.
19. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
20. AUTHENTICATION.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
21. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder 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 Gift to Minors
Act).
22. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
23. COPY OF INDENTURE.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
COVAD COMMUNICATIONS GROUP, INC.
000 Xxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
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24. REGISTRATION RIGHTS.
The Holders of the Securities are entitled to the benefits of a Resale
Registration Rights Agreement, dated as of March 10, 2004, between the Company
and Banc of America Securities LLC, as representative of the initial purchasers
named therein, including the receipt of Liquidated Damages upon a Registration
Default (as defined in such agreement). The Company shall make payments of
Liquidated Damages on the Liquidated Damages Payment Dates (as defined in the
Registration Rights Agreement), but otherwise in accordance with the provisions
set forth herein for the payment of Interest.
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ASSIGNMENT FORM CONVERSION NOTICE
------------------------------------------------------------------------------------------------
To assign this Security, fill in the form To convert this Security into Common Stock
below: of the Company, check the box [ ]
I or we assign and transfer this Security to To convert only part of this Security,
____________________________________________ state the principal amount to be converted
_____________________________
(Insert assignee's soc. sec. or tax ID no.) (which must be $1,000 or an integral
_____________________________ multiple of $1,000):
_____________________________
_____________________________ If you want the stock certificate made out
(Print or type assignee's name, address and in another person's name fill in the
form zip code) below:
_____________________________
_____________________________
and irrevocably appoint (Insert the other person's soc. sec. tax ID
no.)
____________________ agent to transfer this _____________________________
Security on the books of the Company. The _____________________________
agent may substitute another to act for him. _____________________________
_____________________________
_____________________________
(Print or type other person's name, address
and zip code)
Date: __________ Your Signature: _________________________________
________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed
__________________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By:__________________________________
Authorized Signatory
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SCHEDULE OF INCREASES AND DECREASES
OF GLOBAL SECURITY
Initial Principal Amount of Global Security: $125,000,000
Principal Amount
Amount of Amount of of Global
Increase in Decrease in Security After Notation by
Principal Amount Principal Amount Increase or Registrar or
Date of Global Security of Global Security Decrease Security Custodian
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EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF,
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2)
AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO COVAD
COMMUNICATIONS GROUP, INC. (THE "ISSUER"), (B) UNDER A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" THAT IS
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE), OR (D)
UNDER AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OF 1933, AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER
OF THIS SECURITY WITHIN THE LATER OF (X) TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY AND (Y) THREE MONTHS AFTER IT CEASES TO BE AN AFFILIATE (WITHIN
THE MEANING OF RULE 144 ADOPTED UNDER THE SECURITIES ACT) OF THE ISSUER, FURNISH
TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE 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. IN ADDITION,
THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTIONS WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT.
The foregoing legend may be removed from this Security on satisfaction
of the conditions specified in the Indenture.
B-1
COVAD COMMUNICATIONS GROUP, INC.
3% Convertible Senior Debentures Due 2024
CUSIP: 000000XX0
ISSUE DATE: Xxxxx 00, 0000 Xxxxxxxxx Xxxxxx: $[___________]
No. [R-1]
Covad Communications Group, Inc., a Delaware corporation, promises to
pay to [_____________] or registered assigns, the principal amount of
[_____________], on March 15, 2024.
Interest Rate: 3% per year.
Interest Payment Dates: March 15 and September 15 of each year,
commencing September 15, 2004.
Interest Record Date: March 1 and September 1 of each year.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:________________ COVAD COMMUNICATIONS
GROUP, INC.
By: __________________________
Title: _________________________
B-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated:_________________
B-3
[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO
EXHIBIT A]
B-4
EXHIBIT C
COVAD COMMUNICATIONS GROUP, INC.
3% Convertible Senior Debentures Due 2024
Transfer Certificate
In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the Securities Act of 1933, as amended (the
"SECURITIES ACT") (or any successor provision), the undersigned registered owner
of this Security hereby certifies with respect to $ __________________ principal
amount of the above-captioned Securities presented or surrendered on the date
hereof (the "SURRENDERED SECURITIES") for registration of transfer, or for
exchange or conversion where the securities issuable upon such exchange or
conversion are to be registered in a name other than that of the undersigned
registered owner (each such transaction being a "TRANSFER"), that such transfer
complies with the restrictive legend set forth on the face of the Surrendered
Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is made to the
Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities is pursuant to an
effective registration statement under the Securities Act; or
[_] The transfer of the Surrendered Securities complies with Rule
144A under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to Rule
144 under the Securities Act and each of the conditions set
forth in such rule have been met;
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"AFFILIATE").
C-1
[_] The transferee is an Affiliate of the Company.
DATE: __________________________________
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary,
the title of the person signing on behalf of such registered owner must be
stated.)
Signature Guaranteed
________________________________________
Participant in a Recognized Signature
C-2
