INDENTURE
BETWEEN
INHALE THERAPEUTIC SYSTEMS, INC.,
AS ISSUER
AND
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
AS TRUSTEE
6 3/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2006
DATED AS OF OCTOBER 13, 1999
CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
------------- ---------
310(a)(1) 5.11
(a)(2) 5.11
(a)(3) n/a
(a)(4) n/a
(a)(5) 5.11
(b) 5.3; 5.11
(c) n/a
311(a) 5.12
(b) 5.12
(c) n/a
312(a) 2.10
(b) 14.3
(c) 14.3
313(a) 5.7
(b)(1) n/a
(b)(2) 5.7
(c) 5.7; 14.2
(d) 5.7
314(a)(1), (2), (3) 9.6; 14.6
(a)(4) 9.6; 9.7; 14.6
(b) n/a
(c)(1) 14.5
(c)(2) 14.5
(c)(3) n/a
(d) n/a
(e) 14.6
(f) n/a
315(a) 5.1(a)
(b) 5.6; 14.2
(c) 5.1(b)
(d) 5.1(c)
(e) 4.14
316(a)(last sentence) 2.13
(a)(1)(A) 4.5
(a)(1)(B) 4.4
(a)(2) n/a
(b) 4.7
(c) 7.4
317(a)(1) 4.8
(a)(2) 4.9
(b) 2.5
318(a) 14.1
(b) n/a
(c) 14.1
--------------------------------
"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE 1
Section 1.1 Definitions 1
Section 1.2 Incorporation by Reference of Trust Indenture Act 13
Section 1.3 Rules of Construction 14
ARTICLE 2 THE SECURITIES 14
Section 2.1 Title and Terms 14
Section 2.2 Form of Securities 16
Section 2.3 Legends 17
Section 2.4 Execution, Authentication, Delivery and Dating 21
Section 2.5 Registrar and Paying Agent 22
Section 2.6 Paying Agent to Hold Assets in Trust 23
Section 2.7 General Provisions Relating to Transfer and Exchange 23
Section 2.8 Book-Entry Provisions for the Global Securities 24
Section 2.9 Special Transfer Provisions 25
Section 2.10 Holder Lists 27
Section 2.11 Persons Deemed Owners 28
Section 2.12 Mutilated, Destroyed, Lost or Stolen Securities 28
Section 2.13 Treasury Securities . 29
Section 2.14 Temporary Securities 29
Section 2.15 Cancellation 29
Section 2.16 CUSIP Numbers 30
Section 2.17 Defaulted Interest 30
ARTICLE 3 SATISFACTION AND DISCHARGE 30
Section 3.1 Satisfaction and Discharge of Indenture 30
Section 3.2 Deposited Monies to be Held in Trust 32
Section 3.3 Return of Unclaimed Monies 32
ARTICLE 4 DEFAULTS AND REMEDIES 32
Section 4.1 Events of Default 32
Section 4.2 Acceleration of Maturity; Rescission and Annulment 34
Section 4.3 Other Remedies . 34
Section 4.4 Waiver of Past Defaults 35
Section 4.5 Control by Majority 35
Section 4.6 Limitation on Suit 36
Section 4.7 Unconditional Rights of Holders to Receive Payment and
to Convert 36
Section 4.8 Collection of Indebtedness and Suits for Enforcement by the
Trustee 36
Section 4.9 Trustee May File Proofs of Claim 37
Section 4.10 Restoration ofRights and Remedies 38
Section 4.11 Rights and Remedies Cumulative 38
Section 4.12 Delay or Omission Not Waiver 38
Section 4.13 Application of Money Collected 38
Section 4.14 Undertaking for Costs 39
Section 4.15 Waiver of Stay or Extension Laws 39
ARTICLE 5 THE TRUSTEE 40
Section 5.1 Certain Duties and Responsibilities 40
Section 5.2 Certain Rights of Trustee 41
Section 5.3 Individual Rights of Trustee 42
Section 5.4 Money Held in Trust 42
Section 5.5 Trustee's Disclaimer 42
Section 5.6 Notice of Defaults 43
Section 5.7 Reports by Trustee to Holders 43
Section 5.8 Compensation and Indemnification 43
Section 5.9 Replacement of Trustee 44
Section 5.10 Successor Trustee by Merger, Etc. 45
Section 5.11 Corporate Trustee Required; Eligibility 45
Section 5.12 Collection of Claims Against the Company 45
ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER
OR LEASE 45
Section 6.1 Company May Consolidate, Etc., Only on Certain Terms 45
Section 6.2 Successor Corporation Substituted 46
ARTICLE 7 AMENDMENTS, SUPPLEMENTS AND WAIVERS 46
Section 7.1 Without Consent of Holders of Securities 46
Section 7.2 With Consent of Holders of Securities 47
Section 7.3 Compliance with Trust Indenture Act 48
Section 7.4 Revocation of Consents and Effect of Consents or Votes 48
Section 7.5 Notation on or Exchange of Securities 49
Section 7.6 Trustee to Sign Amendment, Etc. 49
ARTICLE 8 MEETING OF HOLDERS OF SECURITIES 50
Section 8.1 Purposes for Which Meetings May Be Called 50
Section 8.2 Call Notice and Place of Meetings 50
Section 8.3 Persons Entitled to Vote at Meetings 50
Section 8.4 Quorum; Action 50
Section 8.5 Determination of Voting Rights; Conduct and Adjournment
of Meetings 51
Section 8.6 Counting Votes and Recording Action of Meetings 52
ARTICLE 9 COVENANTS 52
Section 9.1 Payment of Principal, Premium and Interest 52
Section 9.2 Maintenance of Offices or Agencies 53
Section 9.3 Corporate Existence 53
Section 9.4 Maintenance of Properties 53
Section 9.5 Payment of Taxes and Other Claims 54
Section 9.6 Reports 54
Section 9.7 Compliance Certificate 55
Section 9.8 Resale of Certain Securities 55
ARTICLE 10 REDEMPTION OF SECURITIES 55
Section 10.1 Optional Redemption 55
Section 10.2 Notice to Trustee 56
Section 10.3 Selection of Securities to Be Redeemed 56
Section 10.4 Notice of Redemption 56
Section 10.5 Effect of Notice of Redemption 57
Section 10.6 Deposit of Redemption Price 57
Section 10.7 Securities Redeemed in Part 58
ARTICLE 11 REPURCHASE AT THE OPTION OF A HOLDERUPON A CHANGE OF CONTROL 58
Section 11.1 Repurchase Right 58
Section 11.2 Conditions to the Company's Election to Pay the Repurchase
Price in Common Stock 59
Section 11.3 Notices; Method of Exercising Repurchase Right, Etc. 60
ARTICLE 12 CONVERSION OF SECURITIES 62
Section 12.1 Conversion Right and Conversion Price 62
Section 12.2 Exercise of Conversion Right 63
Section 12.3 Fractions of Shares 64
Section 12.4 Adjustment of Conversion Price 64
Section 12.5 Notice of Adjustments of Conversion Price 73
Section 12.6 Notice Prior to Certain Actions 74
Section 12.7 Company to Reserve Common Stock 75
Section 12.8 Taxes on Conversions 75
Section 12.9 Covenant as to Common Stock 75
Section 12.10 Cancellation of Converted Securities 75
Section 12.11 Effect of Reclassification, Consolidation, Merger or Sale 75
Section 12.12 Responsibility of Trustee for Conversion Provisions 77
ARTICLE 13 SUBORDINATION 77
Section 13.1 Securities Subordinated to Senior Debt 77
Section 13.2 Subrogation 79
Section 13.3 Obligation of the Company is Absolute and Unconditional 79
Section 13.4 Maturity of or Default on Senior Debt 80
Section 13.5 Payments on Securities Permitted 80
Section 13.6 Effectuation of Subordination by Trustee 80
Section 13.7 Knowledge of Trustee 81
Section 13.8 Trustee's Relation to Senior Debt 81
Section 13.9 Rights of Holders of Senior Debt Not Impaired 81
Section 13.10 Modification of Terms of Senior Debt 82
Section 13.11 Certain Conversions Not Deemed Payment 82
ARTICLE 14 OTHER PROVISIONS OF GENERAL APPLICATION 83
Section 14.1 Trust Indenture Act Controls 83
Section 14.2 Notices 83
Section 14.3 Communication by Holders with Other Holders 84
Section 14.4 Acts of Holders of Securities 84
Section 14.5 Certificate and Opinion as to Conditions Precedent 85
Section 14.6 Statements Required in Certificate or Opinion 85
Section 14.7 Effect of Headings and Table of Contents 86
Section 14.8 Successors and Assigns 86
Section 14.9 Separability Clause 86
Section 14.10 Benefits of Indenture 86
Section 14.11 Governing Law 86
Section 14.12 Counterparts 86
Section 14.13 Legal Holidays 87
Section 14.14 Recourse Against Others 87
EXHIBITS
EXHIBIT A: Form of Security A-1
EXHIBIT B: Form of Certificate to be Delivered by Transferee in
Connection with Transfers to Accredited Investors B-1
INDENTURE, dated as of October 13, 1999, between INHALE
THERAPEUTIC SYSTEMS, INC., a corporation duly organized and existing under
the laws of the State of Delaware, having its principal office at 000
Xxxxxxxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000 (the "Company"), and CHASE
MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
association, as Trustee (the "Trustee"), having its principal corporate trust
office at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 6 3/4% Convertible Subordinated Debentures due 2006 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth,
and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Securities, when the
Securities are executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the
Company, and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase
of the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
1 ARTICLE DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 SECTION DEFINITIONS.
For all purposes of this Indenture and the Securities, the
following terms are defined as follows:
"Act", when used with respect to any Holder of a Security,
has the meaning specified in Section 14.4(a) hereof.
"Adjusted Interest Rate" means, with respect to any Reset
Transaction, the rate per annum that is the arithmetic average of the
rates quoted by two Reference Dealers selected by the Company or its
successor as the rate at which interest on the Securities should accrue
so that the fair market value, expressed in dollars, of a Security
immediately after the later of:
(1) the public announcement of such Reset
Transaction; or
(2) the public announcement of a change in dividend
policy in connection with such Reset Transaction,
will equal the average Trading Price of a Security for the 20 Trading
Days preceding the date of public announcement of such Reset
Transaction; provided that the Adjusted
2
Interest Rate shall not be lessthan 6 3/4% per annum.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control", when used with respect to any specified
Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Bankruptcy Law" means Title 11 of the U.S. Code or any
similar federal or state law for the relief of debtors.
"Board of Directors" means either the board of directors of
the Company or any committee of that board empowered to act for it with
respect to this Indenture.
"Board Resolution" means a resolution duly adopted by the
Board of Directors, a copy of which, certified by the Secretary or an
Assistant Secretary of the Company to be in full force and effect on
the date of such certification, shall have been delivered to the
Trustee.
"Business Day", when used with respect to any Place of Payment
or Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in that
Place of Payment or Place of Conversion, as the case may be, are
authorized or obligated by law to close.
"Change of Control" means the occurrence of any of the
following after the original issuance of the Securities:
(1) 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 transactions, of shares
of capital stock of the Company entitling such person to
exercise 50% or more of the total voting power of all shares
of capital stock of the Company entitled to vote generally in
elections of directors, other than any such acquisition by the
Company, any subsidiary of the Company or any employee benefit
plan of the Company; or
(2) any consolidation or merger of the Company 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 properties
3
and assets of the Company to another person, other than (a)
any such transaction (x) that does not result in any
reclassification, conversion, exchange or cancellation of
outstanding shares of capital stock of the Company and (y)
pursuant to which holders of capital stock of the Company
immediately prior to such transaction have the entitlement to
exercise, directly or indirectly, 50% or more of the total
voting power of all shares of capital stock of the Company
entitled to vote generally in the election of directors of the
continuing or surviving person immediately after such
transaction and (b) any merger which is effected solely to
change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of
outstanding shares of Common Stock solely into shares of
common stock of the surviving entity;
provided, however, that a Change of Control shall not be deemed to have
occurred if the closing sales price per share of the Common Stock for
any five Trading Days within the period of 10 consecutive Trading Days
ending immediately after the later of the Change of Control or the
public announcement of the Change of Control, in the case of a Change
of Control under clause (1) above, or the period of 10 consecutive
Trading Days ending immediately before the Change of Control, in the
case of a Change of Control under clause (2) above, shall equal or
exceed 110% of the Conversion Price of the Securities in effect on each
such Trading Day. Beneficial ownership shall be determined in
accordance with Rule 13d-3 promulgated by the SEC under the Exchange
Act. The term "person" shall include any syndicate or group which would
be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
"Chief Executive Officer" means any co-chief executive
officer of the Company.
"Closing Date" means October 13, 1999 or such later date on
which the Securities may be delivered pursuant to the Purchase
Agreement.
"Closing Price" of any security on any date of determination
means:
(1) the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such
security on the New York Stock Exchange on such date;
(2) if such security is not listed for trading on the
New York Stock Exchange on any such date, the closing sale
price as reported in the composite transactions for the
principal U.S. securities exchange on which such security is
so listed;
(3) if such security is not so listed on a U.S.
national or regional
4
securities exchange, the closing sale price as reported by the
NASDAQ National Market;
(4) if such security is not so reported, the last
quoted bid price for such security in the over-the-counter
market as reported by the National Quotation Bureau or similar
organization; or
(5) if such bid price is not available, the average
of the mid-point of the last bid and ask prices of such
security on such date from at least three nationally
recognized independent investment banking firms retained for
this purpose by the Company.
"Common Stock" means any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which is not subject to redemption by
the Company. However, subject to the provisions of Section 12.11
hereof, shares issuable on conversion of Securities shall include only
shares of the class designated as Common Stock, par value $0.0001 per
share, of the Company at the date of this Indenture or shares of any
class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and
which are not subject to redemption by the Company, provided that if at
any time there shall be more than one such resulting class, the shares
of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting
from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the
first paragraph of this instrument until a successor corporation shall
have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor
corporation.
"Company Notice" has the meaning specified in Section 11.3
hereof.
"Company Order" means a written order signed in the name of
the Company by both (1) the Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and (2) so long as not the
same as the officer signing pursuant to clause (1), the Chief Financial
Officer, the Treasurer or the Secretary of the Company, and delivered
to the Trustee.
"Conversion Agent" means any Person authorized by the Company
to convert
5
Securities in accordance with Article 12 hereof.
"Conversion Price" has the meaning specified in Section 12.1
hereof.
"Corporate Trust Office" means for purposes of presentation or
surrender of Securities for payment, registration, transfer, exchange
or conversion or for service of notices or demands upon the Company,
the office of the Trustee located in The City of New York at which at
any particular time its corporate trust business shall be administered
(which at the date of this Indenture is located at 00 Xxxxx Xxxxxx,
Xxxx 000, Xxxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 10041), and for all other
purposes, the office of the Trustee located in the City of San
Francisco (which at the date of this Indenture is located at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 94111).
"corporation" means corporations, associations, limited
liability companies, companies and business trusts.
"Current Market Price" has the meaning set forth in Section
12.4(g).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event which is, or after notice or lapse of
time or both would be, an Event of Default.
"Default Exception" has the meaning specified in Section
4.1(d) hereof.
"Defaulted Interest" has the meaning specified in Section 2.17
hereof.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Designated Senior Debt" means Senior Debt of the Company
which, at the date of determination, has an aggregate amount
outstanding of, or under which, at the date of determination, the
holders thereof are committed to lend up to, at least $25 million and
is specifically designated in the instrument, agreement or other
document evidencing or governing that Senior Debt as "Designated Senior
Debt" for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the
right of such Senior Debt to exercise the rights of Designated Senior
Debt).
"Dividend Yield" on any security for any period means the
dividends paid or
6
proposed to be paid pursuant to an announced dividend policy on such
security for such period divided by, if with respect to dividends paid
on such security, the average Closing Price of such security during
such period and, if with respect to dividends proposed to be paid on
such security, the Closing Price of such security on the effective date
of the related Reset Transaction.
"Dollar," "U.S. Dollar" or "U.S. $" means a dollar or other
equivalent unit in such coin or currency of the United States as at the
time shall be legal tender for the payment of public and private debts.
"DTC Participants" has the meaning specified in Section 2.8
hereof.
"Event of Default" has the meaning specified in Section 4.1
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Time" has the meaning specified in Section 12.4(f)
hereof.
"fair market value" has the meaning set forth in Section
12.4(g) hereof.
"Global Security" has the meaning specified in Section 2.2
hereof.
"guarantee" means any obligation, contingent or otherwise, of
any Person, directly or indirectly guaranteeing any Indebtedness of any
other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness of such
other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or
maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part);
provided, however, that the term "guarantee" will not include
endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb has a corresponding
meaning.
"Holder", when used with respect to any Security, means the
Person in whose name the Security is registered in the Register.
7
"Indebtedness", when used with respect to any Person, and
without duplication means:
(1) all indebtedness, obligations and other
liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in
respect of overdrafts, foreign exchange contracts, currency
exchange agreements, Interest Rate Protection Agreements, and
any loans or advances from banks, whether or not evidenced by
notes or similar instruments) or evidenced by bonds,
debentures, notes or other instruments for the payment of
money, or incurred in connection with the acquisition of any
property, services or assets (whether or not the recourse of
the lender is to the whole of the assets of such Person or to
only a portion thereof), other than any account payable or
other accrued current liability or obligation to trade
creditors incurred in the ordinary course of business in
connection with the obtaining of materials or services;
(2) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with
respect to letters of credit, bank guarantees, bankers'
acceptances, surety bonds, performance bonds or other guaranty
of contractual performance;
(3) all obligations and liabilities (contingent or
otherwise) in respect of (a) leases of such Person required,
in conformity with generally accepted accounting principles,
to be accounted for as capitalized lease obligations on the
balance sheet of such Person and (b) any lease or related
documents (including a purchase agreement) in connection with
the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to
purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the landlord and the
obligations of such Person under such lease or related
document to purchase or to cause a third party to purchase the
leased property;
(4) all obligations of such Person (contingent or
otherwise) with respect to an interest rate or other swap, cap
or collar agreement or other similar instrument or agreement
or foreign currency hedge, exchange, purchase or similar
instrument or agreement;
(5) all direct or indirect guaranties or similar
agreements by such Person in respect of, and obligations or
liabilities (contingent or otherwise) of such Person to
purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or
liabilities of another Person
8
of the kind described in clauses (1) through (4);
(6) any indebtedness or other obligations described
in clauses (1) through (4) secured by any mortgage, pledge,
lien or other encumbrance existing on property which is owned
or held by such Person, regardless of whether the indebtedness
or other obligation secured thereby shall have been assumed by
such Person; and
(7) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind
described in clauses (1) through (6).
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.
"Initial Purchasers" mean Xxxxxx Brothers Inc., Deutsche Bank
Securities Inc. and U.S. Bancorp Xxxxx Xxxxxxx Inc.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a) (1),
(2), (3) or (7) under the Securities Act.
"Interest Payment Date" means each of April 13 and October 13.
"Interest Rate" means, (a) if a Reset Transaction has not
occurred, 6 3/4% per annum, or (b) following the occurrence of a Reset
Transaction, the Adjusted Interest Rate related to such Reset
Transaction to, but not including the effective date of any succeeding
Reset Transaction.
"Interest Rate Protection Agreement" means, with respect to
any Person, any interest rate swap agreement, interest rate cap or
collar agreement or other financial agreement or arrangement designed
to protect such person against fluctuations in interest rates, as in
effect from time to time.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
"Liquidated Damages" means all liquidated damages, if any,
payable pursuant to Section 3 of the Registration Rights Agreement.
"Maturity" means the date on which the principal of such
Security becomes due
9
and payable as therein or herein provided, whether at the Stated
Maturity or by acceleration, conversion, call for redemption, exercise
of a Repurchase Right or otherwise.
"Nasdaq National Market" means the National Association of
Securities Dealers Automated Quotation National Market or any successor
national securities exchange or automated over-the-counter trading
market in the United States.
"Non-Electing Share" has the meaning specified in Section
12.11 hereof.
"Non-institutional Accredited Investor" means a Person that is
an "accredited investor" as that term is defined in Rule 501(a) (4),
(5) or (6) under the Securities Act.
"Officer" of the Company means the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer,
the Treasurer, any Vice President or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by both (1)
the Chairman of the Board, the Chief Executive Officer, the President
or a Vice President and (2) so long as not the same as the officer
signing pursuant to clause (1), the Chief Financial Officer, the
Treasurer or the Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel to the Company (and may include directors or employees
of the Company) and which opinion is acceptable to the Trustee which
acceptance shall not be unreasonably withheld.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated
and delivered under this Indenture, except Securities:
(1) previously canceled by the Trustee or delivered
to the Trustee for cancellation;
(2) for the payment or redemption of which money in
the necessary amount has been previously deposited with the
Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of
such Securities, provided that if such Securities are to be
redeemed, notice of such redemption has been duly given
pursuant to this Indenture; and
(3) which have been paid, in exchange for or in lieu
of which other
10
Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of
which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a BONA
FIDE purchaser in whose hands such Securities are valid
obligations of the Company.
"Paying Agent" has the meaning specified in Section 2.5
hereof.
"Payment Blockage Notice" has the meaning specified in Section
13.1(d) hereof.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Physical Securities" has the meaning specified in Section 2.2
hereof.
"Place of Conversion" means any city in which any Conversion
Agent is located.
"Place of Payment" means any city in which any Paying Agent is
located.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.12
hereof in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated
October 6, 1999, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Quoted Price" of the Common Stock means the last reported
sale price of the Common Stock on the Nasdaq National Market, or, if
the Common Stock is listed on a national securities exchange, then on
such exchange, or if the Common Stock is not quoted on Nasdaq National
Market or listed on an exchange, the average of the last bid and asked
price on the National Association of Securities Dealers Automated
Quotation System.
"Record Date" means either a Regular Record Date or a Special
Record Date, as the case may be, provided that, for purposes of Section
12.4 hereof, Record Date has the meaning specified in 12.4(g) hereof.
11
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which such Security is to be redeemed
pursuant to this Indenture.
"Reference Dealer" means a dealer engaged in the trading of
convertible securities.
"Reference Period" has the meaning set forth in Section
12.4(d) hereof.
"Register" has the meaning specified in Section 2.5 hereof.
"Registrar" has the meaning specified in Section 2.5 hereof.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of October 13, 1999, between the Company and the
Initial Purchasers.
"Regular Record Date" for the interest on the Securities
(including Liquidated Damages, if any) payable means the March 31
(whether or not a Business Day) next preceding an April 13 Interest
Payment Date and the September 30 (whether or not a Business Day) next
preceding an October 13 Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 11.1
hereof.
"Repurchase Price" has the meaning specified in Section 11.1
hereof.
"Repurchase Right" has the meaning specified in Section 11.1
hereof.
"Reset Transaction" means a merger, consolidation or statutory
share exchange to which the entity that is the issuer of the shares of
common stock into which the Securities are then convertible into is a
party, a sale of all or substantially all the assets of that entity, a
recapitalization of those shares of common stock or a distribution
described in Section 12.4(d) hereof, after the effective date of which
transaction or distribution the Securities would be convertible into:
(1) shares of an entity the common stock of which had
a Dividend Yield for the four fiscal quarters of such entity
immediately preceding the public announcement of such
transaction or distribution that was more than 2.5% higher
then the Dividend Yield on the Common Stock (or other common
stock then
12
issuable upon conversion of the Securities) for the four
fiscal quarters preceding the public announcement of such
transaction or distribution, or
(2) shares of an entity that announces a dividend
policy prior to the effective date of such transaction or
distribution which policy, if implemented, would result in a
Dividend Yield on such entity's common stock for the next four
fiscal quarters that would result in such a 2.5% basis point
increase.
"Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee, including any vice president,
assistant vice president, secretary, assistant secretary, the
treasurer, any assistant treasurer, the managing director or any other
officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means,
with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Restricted Securities" means the Securities defined as such
in Section 2.3 hereof.
"Restricted Securities Legend" has the meaning set forth in
Section 2.3(a) hereof.
"Rule 144" means Rule 144 under the Securities Act (including
any successor rule thereof), as the same may be amended from time to
time.
"Rule 144A" means Rule 144A as promulgated under the
Securities Act (including any successor rule thereof), as the same may
be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning ascribed to it in the first
paragraph under the caption "Recitals of the Company".
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a
claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or termination payment with respect to
or in connection with, and all fees, costs, expenses and other amounts
accrued or due on or in connection with, Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the
Company (including all deferrals, renewals, extensions or refundings
of, or amendments, modifications or supplements to, the foregoing),
unless in the case of any
13
particular Indebtedness the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities
or expressly provides that such Indebtedness is PARI PASSU or junior to
the Securities. Notwithstanding the foregoing, the term "Senior Debt"
shall include, without limitation, all Designated Senior Debt, and
shall not include Indebtedness of the Company to any Subsidiary.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" within the meaning of Rule 405 under the
Securities Act.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 2.17
hereof.
"Stated Maturity" means the date specified in any Security as
the fixed date for the payment of principal on such Security or on
which an installment of interest (including Liquidated Damages, if any)
on such Security is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and
one or more other Subsidiaries. For the purposes of this definition
only, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any
contingency.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Section 77aaa-77bbbb), as 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 such amendment, the Trust
Indenture Act of 1939, as so amended, or any successor statute.
"Trading Day" means:
(1) if the applicable security is listed or admitted
for trading on the New York Stock Exchange or another national
security exchange, a day on which the New York Stock Exchange
or such other national security exchange is open for business;
(2) if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made
thereon; or
(3) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday
or Sunday or a day on which banking
14
institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Trading Price" of a security on any date of determination
means:
(1) the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such
security on the New York Stock Exchange on such date;
(2) if such security is not listed for trading on the
New York Stock Exchange on any such date, the closing sale
price as reported in the composite transactions for the
principal U.S. securities exchange on which such security is
so listed;
(3) if such security is not so listed on a U.S.
national or regional securities exchange, the closing sale
price as reported by the NASDAQ National Market;
(4) if such security is not so reported, the last
price quoted by Interactive Data Corporation for such security
or, if Interactive Data Corporation is not quoting such price,
a similar quotation service selected by the Company;
(5) if such security is not so quoted, the average of
the mid-point of the last bid and ask prices for such security
from at least two dealers recognized as market-makers for such
security; or
(6) if such security is not so quoted, the average of
the last bid and ask prices for such security from a Reference
Dealer.
"Transfer Agent" means any Person, which may be the Company,
authorized by the Company to exchange or register the transfer of
Securities.
"Trigger Event" has the meaning specified in Section 12.4(d)
hereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Trustee" shall mean such successor Trustee.
"U.S. Government Obligations" means: (1) direct obligations of
the United States of America for the payment of which the full faith
and credit of the United States of America is pledged or (2)
obligations of a person controlled or supervised by and acting
15
as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America and which in either
case, are non-callable at the option of the issuer thereof.
"Vice President", when used with respect to the Company, means
any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
1.2 SECTION INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
1.3 SECTION RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with accounting principles
generally accepted in the United States prevailing at the time of any
relevant computation hereunder; and
16
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
2 ARTICLE
THE SECURITIES
2.1 SECTION TITLE AND TERMS.
The Securities shall be known and designated as the "6 3/4%
Convertible Subordinated Debentures due 2006"of the Company. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is limited to $100,000,000 (or $109,000,000 if the over-allotment
option set forth in Section 2 of the Purchase Agreement is exercised in full),
except for securities authenticated and delivered upon registration of, transfer
of, or in exchange for, or in lieu of other Securities pursuant to Section 2.7,
2.8, 2.9, 2.12, 7.5, 10.7, 11.1 or 12.2 hereof. The Securities shall be issuable
in denominations of $1,000 or integral multiples thereof.
The Securities shall mature on October 13, 2006.
Interest shall accrue from October 13, 1999 at the Interest
Rate until the principal thereof is paid or made available for payment. Interest
shall be payable semiannually in arrears on April 13 and October 13 in each
year, commencing April 13, 2000.
Interest on the Securities shall be computed (i) for any full
semiannual period for which a particular Interest Rate is applicable on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month. For purposes of determining the Interest Rate, the Trustee may
assume that a Reset Transaction has not occurred unless the Trustee has received
an Officers' Certificate stating that a Reset Transaction has occurred and
specifying the Adjusted Interest Rate then in effect.
A Holder of any Security at the close of business on a Regular
Record Date shall be entitled to receive interest (including Liquidated Damages,
if any) on such Security on the corresponding Interest Payment Date. A Holder of
any Security which is converted after the close of business on a Regular Record
Date and prior to the corresponding Interest Payment Date (other than any
Security whose Maturity is prior to such Interest Payment Date) shall be
entitled to receive interest (including Liquidated Damages, if any) on the
principal amount of such
17
Security, notwithstanding the conversion of such Security prior to such Interest
Payment Date. However, any such Holder which surrenders any such Security for
conversion during the period between the close of business on such Regular
Record Date and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an amount equal to
the interest (including Liquidated Damages, if any) on the principal amount of
such Security so converted, which is payable by the Company to such Holder on
such Interest Payment Date, at the time such Holder surrenders such Security for
conversion. Notwithstanding the foregoing, any such Holder which surrenders for
conversion any Security which has been called for redemption by the Company in a
notice of redemption given by the Company pursuant to Section 10.4 hereof shall
be entitled to receive (and retain) such interest (including Liquidated Damages,
if any) and need not pay the Company an amount equal to the interest (including
Liquidated Damages, if any) on the principal amount of such Security so
converted at the time such Holder surrenders such Security for conversion.
Principal of, and premium, if any, and interest on, Global
Securities shall be payable to the Depositary in immediately available funds.
Principal and premium, if any, on Physical Securities shall be
payable at the office or agency of the Company maintained for such purpose,
initially the Corporate Trust Office of the Trustee. Interest on Physical
Securities will be payable by (i) U.S. Dollar check drawn on a bank in The City
of New York mailed to the address of the Person entitled thereto as such address
shall appear in the Register, or (ii) upon application to the Registrar not
later than the relevant Record Date by a Holder of an aggregate principal amount
in excess of $5,000,000, wire transfer in immediately available funds.
The Securities shall be redeemable at the option of the
Company as provided in Article 10 hereof.
The Securities shall have a Repurchase Right exercisable at
the option of Holders as provided in Article 11 hereof.
The Securities shall be convertible as provided in Article 12
hereof.
The Securities shall be subordinated in right of payment to
Senior Debt of the Company as provided in Article 13 hereof.
2.2 SECTION FORM OF SECURITIES.
The Securities and the Trustee's certificate of authentication
to be borne by such Securities shall be substantially in the form annexed hereto
as Exhibit A, which is incorporated in and made a part of this Indenture. The
terms and provisions contained in the form of Security shall constitute, and are
hereby expressly made, a part of this Indenture and to the extent
18
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Any of the Securities may have such letters, numbers or other
marks of identification and such notations, legends and endorsements as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Securities may be
listed or designated for issuance, or to conform to usage.
Securities offered and sold to QIBs in reliance on Rule 144A
shall be issued initially only in the form of one or more permanent Global
Securities (each, a "Global Security") in registered form without interest
coupons. The Global Securities shall be:
(1) duly executed by the Company and authenticated by the
Trustee as hereinafter provided;
(2) registered in the name of the Depositary (or its nominee)
for credit to the respective accounts of the Holders at the Depositary;
and
(3) deposited with the Trustee, as custodian for the
Depositary.
The Global Securities shall be substantially in the form of Security set forth
in Exhibit A annexed hereto (including the text and schedule called for by
footnotes 1 and 2 thereto). The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary (or its nominee),
in accordance with the instructions given by the Holder thereof, as hereinafter
provided.
Securities offer and sold to Institutional Accredited
Investors and Non-institutional Accredited Investors, and Securities issued in
exchange for interests in the Global Securities pursuant to Section 2.8(d)
hereof shall be issued in the form of permanent definitive Securities (the
"Physical Securities") in registered form without interest coupons. The Physical
Securities shall be substantially in the form set forth in Exhibit A annexed
hereto.
The Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
19
2.3 SECTION LEGENDS.
(a) RESTRICTED SECURITIES LEGENDS.
Each Security issued hereunder shall, upon issuance, bear
the legend set forth in Section 2.3(a)(i) or Section 2.3(a)(ii) (each, a
"Restricted Securities Legend"), as the case may be, and such legend shall
not be removed except as provided in Section 2.3(a)(iii). Each Security that
bears or is required to bear the Restricted Securities Legend set forth in
Section 2.3(a)(i) (together with any Common Stock issued upon conversion of
the Securities and required to bear the Restricted Securities Legend set
forth in Section 2.3(a)(ii), collectively, the "Restricted Securities") shall
be subject to the restrictions on transfer set forth in this Section 2.3(a)
(including the Restricted Securities Legend set forth below), and the Holder
of each such Restricted Security, by such Holder's acceptance thereof, shall
be deemed to have agreed to be bound by all such restrictions on transfer.
As used in Section 2.3(a), the term "transfer" encompasses any
sale, pledge, transfer or other disposition whatsoever of any Restricted
Security.
(i) RESTRICTED SECURITIES LEGEND FOR SECURITIES.
Except as provided in Section 2.3(a)(iii), until two years
after the original issuance date of any Security, any certificate evidencing
such Security (and all securities issued in exchange therefor or substitution
thereof, other than Common Stock, if any, issued upon conversion thereof which
shall bear the legend set forth in Section 2.3(a)(ii), if applicable) shall bear
a Restricted Securities Legend in substantially the following form:
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR") THAT IS PURCHASING AT LEAST $100,000 IN AGGREGATE PRINCIPAL
AMOUNT OF DEBENTURES OR AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(4), (5) or (6) UNDER THE SECURITIES ACT (A "NON-INSTITUTIONAL
ACCREDITED INVESTOR") THAT IS
20
PURCHASING AT LEAST $250,000 IN AGGREGATE PRINCIPAL AMOUNT OF
DEBENTURES; (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 THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT IS PURCHASING DEBENTURES IN AGGREGATE PRINCIPAL AMOUNT OF
AT LEAST $100,000 OR TO A NON-INSTITUTIONAL ACCREDITED INVESTOR THAT IS
PURCHASING DEBENTURES IN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST
$250,000, AND THAT, IN EITHER CASE, PRIOR TO SUCH TRANSFER, FURNISHES
TO CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, AS
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND WARRANTIES RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE), (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE (2)(E) ABOVE), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT
TO CLAUSE (2)(C) OR 2(D) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL
21
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE (2)(E)
ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE
SECURITY EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "UNITED STATES"
AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
(ii) RESTRICTED SECURITIES LEGEND FOR COMMON STOCK ISSUED UPON
CONVERSION OF THE SECURITIES.
Until two years after the original issuance date of any
Security, any stock certificate representing Common Stock issued upon conversion
of such Security shall bear a Restricted Securities Legend in substantially the
following form:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE
SECURITY UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT TO AN
INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT IS PURCHASING A NUMBER OF
SHARES OF COMMON STOCK AT LEAST EQUAL TO $100,000 DIVIDED BY $32.0075
(THE INITIAL CONVERSION PRICE) OR TO A NON-INSTITUTIONAL ACCREDITED
INVESTOR (AS DEFINED AS DEFINED IN RULE 501(a)(4), (5) or (6) UNDER THE
SECURITIES ACT) THAT IS PURCHASING A NUMBER OF SHARES OF COMMON STOCK
AT LEAST EQUAL TO $250,000 DIVIDED BY $32.0075 (THE INITIAL CONVERSION
PRICE) AND THAT, IN EITHER CASE, PRIOR TO SUCH TRANSFER, FURNISHES TO
22
CHASEMELLON SHAREHOLDER SERVICES LLC, AS TRANSFER AGENT (OR ANY
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND WARRANTIES RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE), (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER; (2) PRIOR TO ANY SUCH TRANSFER
OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE, IT WILL FURNISH TO
SUCH TRANSFER AGENT (OR ANY SUCCESSOR TRANSFER AGENT, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO A CLAUSE (1)(D) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE (1)(D) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF WHICH
THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED. AS USED HEREIN, THE TERMS
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(iii) REMOVAL OF THE RESTRICTED SECURITIES LEGENDS.
Each Security or share of Common Stock issued upon conversion
of such Security shall bear the Restricted Securities Legend set forth in
Section 2.3(a)(i) or 2.3(a)(ii), as the case may be, until the earlier of:
(A) two years after the original issuance date of such
Security;
(B) such Security or Common Stock has been sold pursuant to a
registration statement that has been declared effective under the
Securities Act (and which continues
23
to be effective at the time of such sale); or
(C) such Common Stock has been issued upon conversion of
Securities that have been sold pursuant to a registration statement
that has been declared effective under the Securities Act (and which
continues to be effective at the time of such sale).
The Holder must give notice thereof to the Trustee and any transfer agent for
the Common Stock, as applicable.
Notwithstanding the foregoing, the Restricted Securities
Legend may be removed if there is delivered to the Company such satisfactory
evidence, which may include an opinion of independent counsel, as may be
reasonably required by the Company that neither such legend nor the restrictions
on transfer set forth therein are required to ensure that transfers of such
Security will not violate the registration requirements of the Securities Act.
Upon provision of such satisfactory evidence, the Trustee, at the written
direction of the Company, shall authenticate and deliver in exchange for such
Securities another Security or Securities having an equal aggregate principal
amount that does not bear such legend. If the Restricted Securities Legend has
been removed from a Security as provided above, no other Security issued in
exchange for all or any part of such Security shall bear such legend, unless the
Company has reasonable cause to believe that such other Security is a
"restricted security" within the meaning of Rule 144 and instructs the Trustee
in writing to cause a Restricted Securities Legend to appear thereon.
Any Security (or security issued in exchange or substitution
thereof) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the
Restricted Securities Legend set forth in Section 2.3(a)(i) as set forth therein
have been satisfied may, upon surrender of such Security for exchange to the
Registrar in accordance with the provisions of Section 2.7 hereof, be exchanged
for a new Security or Securities, of like tenor and aggregate principal amount,
which shall not bear the Restricted Securities Legend required by Section
2.3(a)(i).
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the Restricted Securities Legend set forth in Section
2.3(a)(ii) as set forth therein have been satisfied may, upon surrender of the
certificates representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be exchanged for
a new certificate or certificates for a like aggregate number of shares of
Common Stock, which shall not bear the Restricted Securities Legend required by
Section 2.3(a)(ii).
(b) GLOBAL SECURITY LEGEND.
24
Each Global Security shall also bear the following legend on
the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY ("DTC") TO INHALE THERAPEUTIC SYSTEMS,
INC. (OR ITS SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, CONVERSION OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
2.4 SECTION EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Two Officers shall execute the Securities on behalf of the
Company by manual or facsimile signature. If an Officer whose signature is on a
Security no longer holds that office at the time the Security is authenticated,
the Security shall be valid nevertheless.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture, or be valid or obligatory for any purpose, unless there appears on
such Security a certificate of authentication substantially in the form provided
for herein executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee may appoint an authenticating agent or agents
reasonably acceptable to the Company with respect to the Securities. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.
2.5 SECTION REGISTRAR AND PAYING AGENT.
25
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (the
"Registrar") and an office or agency where Securities may be presented for
payment (the "Paying Agent"). The Registrar shall keep a register of the
Securities (the "Register") and of their transfer and exchange. The Company may
appoint one or more co-Registrars and one or more additional Paying Agents for
the Securities. The term "Paying Agent" includes any additional paying agent and
the term "Registrar" includes any additional registrar. The Company may change
any Paying Agent or Registrar without prior notice to any Holder.
The Company will cause each Paying Agent (other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of and
premium, if any, or interest (including Liquidated Damages, if any) on
Securities in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of
as provided in this Indenture;
(2) give the Trustee notice of any Default by the Company in the making
of any payment of principal and premium, if any, or interest (including
Liquidated Damages, if any); and
(3) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company shall give prompt written notice to the Trustee of
the name and address of any Agent who is not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any Affiliate of the
Company may act as Paying Agent or Registrar; provided, however, that none of
the Company, its subsidiaries or the Affiliates of the foregoing shall act:
(i) as Paying Agent in connection with redemptions, offers to
purchase and discharges, as otherwise specified in this Indenture, and
(ii) as Paying Agent or Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby initially appoints the Trustee as Registrar
and Paying Agent for the Securities.
26
2.6 SECTION PAYING AGENT TO HOLD ASSETS IN TRUST.
Not later than 11:00 a.m. (New York City time) on each due
date of the principal, premium, if any, and interest (including Liquidated
Damages, if any) on any Securities, the Company shall deposit with one or more
Paying Agents money in immediately available funds sufficient to pay such
principal, premium, if any, and interest (including Liquidated Damages, if any)
so becoming due. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company) shall have no further liability for the money
so paid over to the Trustee.
If the Company shall act as a Paying Agent, it shall, prior to
or on each due date of the principal of and premium, if any, or interest
(including Liquidated Damages, if any) on any of the Securities, segregate and
hold in trust for the benefit of the Holders a sum sufficient with monies held
by all other Paying Agents, to pay the principal and premium, if any, or
interest (including Liquidated Damages, if any) so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as provided in this
Indenture, and shall promptly notify the Trustee of its action or failure to
act.
2.7 SECTION GENERAL PROVISIONS RELATING TO TRANSFER AND EXCHANGE.
The Securities are issuable only in registered form. A Holder
may transfer a Security only by written application to the Registrar stating the
name of the proposed transferee and otherwise complying with the terms of this
Indenture. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Registrar in the Register. Furthermore, any Holder of a
Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Holder of such Global Security (or
its agent) and that ownership of a beneficial interest in the Security shall be
required to be reflected in a book-entry. Notwithstanding the foregoing, in the
case of a Restricted Security, a beneficial interest in a Global Security being
transferred in reliance on an exemption from the registration requirements of
the Securities Act other than in accordance with Rule 144 and Rule 144A may only
be transferred for a Physical Security.
When Securities are presented to the Registrar with a request
to register the transfer or to exchange them for an equal aggregate principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder
thereof or by an attorney who is authorized in writing to act on behalf of the
Holder). Subject to Section 2.4 hereof, to permit registrations of transfers and
exchanges, the Company shall execute and the
27
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange or redemption
of the Securities, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other similar governmental
charge payable upon exchanges pursuant to Section 2.14, 7.5 or 10.7 hereof).
Neither the Company nor the Registrar shall be required to
exchange or register a transfer of any Securities:
(1) for a period of 15 Business Days prior to the day of any
selection of Securities for redemption under Article 10 hereof;
(2) so selected for redemption or, if a portion of any
Security is selected for redemption, such portion thereof selected for
redemption; or
(3) surrendered for conversion or, if a portion of any
Security is surrendered for conversion, such portion thereof
surrendered for conversion.
2.8 SECTION BOOK-ENTRY PROVISIONS FOR THE GLOBAL SECURITIES.
(a) The Global Securities initially shall:
(i) be registered in the name of the Depositary
(or a nominee thereof);
(ii) be delivered to the Trustee as custodian for
such Depositary; and
(iii) bear the Restricted Securities Legend as set
forth in Section 2.3(a)(i) hereof.
Members of, or participants in, the Depositary ("DTC
Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing contained herein shall prevent the
Company, the Trustee or any agent of the Company or Trustee from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and the DTC Participants, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.
(b) The registered Holder of a Global Security may grant
proxies and otherwise authorize any Person, including DTC Participants and
Persons that may hold interests
28
through DTC Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities.
(c) A Global Security may not be transferred, in whole or in
part, to any Person other than the Depositary (or a nominee thereof), and no
such transfer to any such other Person may be registered. Beneficial interests
in a Global Security may be transferred in accordance with the rules and
procedures of the Depositary and the provisions of Section 2.9 hereof.
(d) If at any time:
(i) the Depositary notifies the Company in writing
that it is no longer willing or able to continue to act as Depositary
for the Global Securities, or the Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary
for the Global Securities is not appointed by the Company within 90
days of such notice or cessation;
(ii) the Company, at its option, notifies the Trustee
in writing that it elects to cause the issuance of the Securities in
definitive form under this Indenture in exchange for all or any part of
the Securities represented by a Global Security or Global Securities;
or
(iii) an Event of Default has occurred and is
continuing and the Registrar has received a request from the Depositary
for the issuance of Physical Securities in exchange for such Global
Security or Global Securities,
the Depositary shall surrender such Global Security or Global Securities to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate and Company Order for the authentication and
delivery of Securities, shall authenticate and deliver in exchange for such
Global Security or Global Securities, Physical Securities in an aggregate
principal amount equal to the aggregate principal amount of such Global Security
or Global Securities. Such Physical Securities shall be registered in such names
as the Depositary shall identify in writing as the beneficial owners of the
Securities represented by such Global Security or Global Securities (or any
nominee thereof).
(e) Notwithstanding the foregoing, in connection with any
transfer of beneficial interests in a Global Security to beneficial owners
pursuant to Section 2.8(d) hereof, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Global Security
in an amount equal to the principal amount of the beneficial interest in such
Global Security to be transferred.
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2.9 SECTION SPECIAL TRANSFER PROVISIONS.
Unless a Security is transferred after the time period
referred to in Rule 144(k) under the Securities Act or otherwise sold pursuant
to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such sale),
the following provisions shall apply:
(a) TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS WHICH
ARE NOT QIBS, OR NON-INSTITUTIONAL ACCREDITED INVESTORS.
The following provisions shall apply with respect to the
registration of any proposed transfer of Securities to any Institutional
Accredited Investor which is not a QIB, or any Non-institutional Accredited
Investor:
(i) The Registrar shall register the transfer if the proposed
transferee has delivered to the Trustee (A) a certificate substantially
in the form of Exhibit B annexed hereto and (B) such opinion of counsel
and other evidence satisfactory to the Company that such transfer is in
compliance with the Securities Act, as requested by the Company.
(ii) If the proposed transferor is a DTC Participant holding a
beneficial interest in Global Securities, upon receipt by the Registrar
of the documents required by clause (i) of this Section 2.9(a) and
instructions given in accordance with the procedures of the Depositary
and of the Registrar, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Global
Securities in an amount equal to the principal amount of the beneficial
interest in the Global Securities to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or
more Physical Securities of like tenor and amount.
(iii) If the Securities to be transferred consist of Physical
Securities, upon receipt by the Registrar of the documents referred to
in clause (i) of this Section 2.9(a), the Company shall execute and the
Trustee shall authenticate and deliver, new Physical Securities
registered in the name of the transferee and the Trustee shall cancel
the Physical Securities presented for transfer.
(b) TRANSFERS TO QIBS.
The following provisions shall apply with respect to the
registration of any proposed transfer of Securities to a QIB:
(i) If the Securities to be transferred consist of an interest
in the Global Securities, the transfer of such interest may be effected
only through the book-entry
30
system maintained by the Depositary.
(ii) If the Securities to be transferred consist of Physical
Securities, the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Security stating
or has otherwise advised the Company and the Registrar in writing that:
(A) it is purchasing the Securities for its own
account or an account with respect to which it exercises sole
investment discretion, in each case for investment and not
with a view to distribution;
(B) it and any such account is a QIB within the
meaning of Rule 144A;
(C) it is aware that the sale to it is being made in
reliance on Rule 144A;
(D) it acknowledges that it has received such
information regarding the Company as it has requested pursuant
to Rule 144A or has determined not to request such
information; and
(E) it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
In addition, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Global Securities
in an amount equal to the principal amount of the Physical Securities
to be transferred, and the Trustee shall cancel the Physical Securities
so transferred.
(c) GENERAL.
By its acceptance of any Security bearing the Restricted
Securities Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and agrees that it will
transfer such Security only as provided in this Indenture. The Registrar shall
not register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The
Registrar shall be entitled to receive and rely on written instructions from the
Company verifying that such transfer complies with such restrictions on
transfer. In connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Registrar or the Company such
31
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.8 hereof or this
Section 2.9. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Registrar.
2.10 SECTION Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders relating to such
Interest Payment Date or request, as the case may be.
2.11 SECTION PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the registered Holder of a Global Security as the absolute
owner of such Global Security for the purpose of receiving payment thereof or on
account thereof and for all other purposes whatsoever, whether or not such
Security be overdue, and notwithstanding any notice of ownership or writing
thereon, or any notice of previous loss or theft or other interest therein. The
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name any Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and premium, if any, and
interest (including Liquidated Damages, if any) on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and
notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein.
2.12 SECTION MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
32
If there is delivered to the Company and the Trustee
(1) evidence to their satisfaction of the destruction, loss or theft
of any Security, and
(2) such security or indemnity as may be required by them to save each
of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security has been
acquired by a BONA FIDE purchaser, the Company shall execute and, upon
request, the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of like tenor
and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion,
but subject to any conversion rights, may, instead of issuing a new Security,
pay such Security, upon satisfaction of the condition set forth in the preceding
paragraph.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and such new
Security shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
2.13 SECTION TREASURY SECURITIES.
In determining whether the Holders of the requisite principal
amount of Outstanding Securities are present at a meeting of Holders for quorum
purposes or have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any Affiliate of
the Company shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee shall be protected in relying upon any such
determination as to the presence of a quorum or upon any such request, demand,
33
authorization, direction, notice, consent or waiver, only such Securities of
which the Trustee has received written notice and are so owned shall be so
disregarded.
2.14 SECTION TEMPORARY SECURITIES .
Pending the preparation of Securities in definitive form, the
Company may execute and the Trustee shall, upon written request of the Company,
authenticate and deliver temporary Securities (printed or lithographed).
Temporary Securities shall be issuable in any authorized denomination, and
substantially in the form of the Securities in definitive form but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every such temporary
Security shall be executed by the Company and authenticated by the Trustee upon
the same conditions and in substantially the same manner, and with the same
effect, as the Securities in definitive form. Without unreasonable delay, the
Company will execute and deliver to the Trustee Securities in definitive form
(other than in the case of Securities in global form) and thereupon any or all
temporary Securities (other than any such Securities in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 9.2 and the Trustee shall authenticate and deliver
in exchange for such temporary Securities an equal aggregate principal amount of
Securities in definitive form. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits and subject to
the same limitations under this Indenture as Securities in definitive form
authenticated and delivered hereunder.
2.15 SECTION CANCELLATION.
All securities surrendered for payment, redemption,
repurchase, conversion, registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the
Trustee. All Securities so delivered shall be canceled promptly by the
Trustee, and no Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. Upon written
instructions of the Company, the Trustee shall destroy canceled Securities
and, after such destruction, shall deliver a certificate of such destruction
to the Company. If the Company shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless the same are delivered to
the Trustee for cancellation.
2.16 SECTION CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP"
numbers (if then generally in use), and the Trustee shall use CUSIP numbers
in notices of redemption or exchange as a convenience to Holders; provided
that any such notice shall state that no representation is made
34
as to the correctness of such numbers either as printed on the Securities or as
contained in any such notice and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
2.17 SECTION DEFAULTED INTEREST.
If the Company fails to make a payment of interest (including
Liquidated Damages, if any) on any Security when due and payable ("Defaulted
Interest"), it shall pay such Defaulted Interest plus (to the extent lawful) any
interest payable on the Defaulted Interest, in any lawful manner. It may elect
to pay such Defaulted Interest, plus any such interest payable on it, to the
Persons who are Holders of such Securities on which the interest is due on a
subsequent Special Record Date. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Security.
The Company shall fix any such Special Record Date and payment date for such
payment. At least 15 days before any such Special Record Date, the Company shall
mail to Holders affected thereby a notice that states the Special Record Date,
the Interest Payment Date, and amount of such interest (and such Liquidated
Damages, if any) to be paid.
3 ARTICLE
SATISFACTION AND DISCHARGE
3.1 SECTION SATISFACTION AND DISCHARGE OF INDENTURE.
When:
(1) the Company shall deliver to the Trustee for cancellation
all Securities previously authenticated (other than any Securities
which have been destroyed, lost or stolen and in lieu of, or in
substitution for which, other Securities shall have been authenticated
and delivered) and not previously canceled, or
(2) (A) all the Securities not previously canceled or
delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one
year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption,
(B) the Company shall deposit with the Trustee, in
trust, cash in U.S. dollars and/or U.S. Government Obligations which
through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without
35
reinvestment and assuming no tax liability will be imposed on such
Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay
principal of, premium, if any, or interest (including Liquidated
Damages, if any) on all of the Securities (other than any Securities
which shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Securities shall have been
authenticated and delivered) not previously canceled or delivered to
the Trustee for cancellation, on the dates such payments of principal,
premium, if any, or interest (including Liquidated Damages, if any) are
due to such date of maturity or redemption, as the case may be, and
(C) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that (x)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date of execution of
this Indenture, there has been a change in the applicable federal
income tax law, in the case of either clause (x) or (y) to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject
to federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and
discharge had not occurred, and
if, in the case of either clause (1) or (2), the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to:
(i) remaining rights of registration of transfer,
substitution and exchange and conversion of Securities,
(ii) rights hereunder of Holders to receive payments of
principal of and premium, if any, and interest (including
Liquidated Damages, if any) on, the Securities and the other
rights, duties and obligations of Holders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with
the Trustee, and
(iii) the rights, obligations and immunities of the
Trustee hereunder),
and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided, however, the Company shall reimburse the
Trustee for all amounts due the Trustee under Section 5.8 hereof
36
and for any costs or expenses thereafter reasonably and properly incurred by the
Trustee and to compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture or the
Securities.
3.2 SECTION DEPOSITED MONIES TO BE HELD IN TRUST .
Subject to Section 3.3 hereof, all monies deposited with the
Trustee pursuant to Section 3.1 hereof shall be held in trust and applied by it
to the payment, notwithstanding the provisions of Article 13 hereof, either
directly or through any Paying Agent (including the Company if acting as its own
Paying Agent), to the Holders of the particular Securities for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal, premium, if any, and interest
(including Liquidated Damages, if any). All monies deposited with the Trustee
pursuant to Section 3.1 hereof (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon request of the Company.
3.3 SECTION RETURN OF UNCLAIMED MONIES.
The Trustee and the Paying Agent shall pay to the Company any
money held by them for the payment of principal or premium, if any, or interest
(including Liquidated Damages, if any) that remains unclaimed for two years
after the date upon which such payment shall have become due. After payment to
the Company, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
4 ARTICLE
DEFAULTS AND REMEDIES
4.1 SECTION EVENTS OF DEFAULT.
An "Event of Default" with respect to the Securities occurs
when any of the following occurs (whatever the reason for such Event of Default
and whether it shall be occasioned by the provisions of Article 13 hereof or be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the Company defaults in the payment of the principal of or
premium, if any, on any of the Securities when it becomes due and
payable at Maturity, upon redemption or exercise of a Repurchase Right
or otherwise, whether or not such payment is
37
prohibited by Article 13 hereof; or
(b) the Company defaults in the payment of interest (including
Liquidated Damages, if any) on any of the Securities when it becomes
due and payable and such default continues for a period of 30 days,
whether or not such payment is prohibited by Article 13 hereof; or
(c) the Company fails to perform or observe any other term,
covenant or agreement contained in the Securities or this Indenture and
the default continues for a period of 60 days after written notice of
such failure, requiring the Company to remedy the same, shall have been
given to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities; or
(d) (i) the Company fails to make any payment by the end of
the applicable grace period, if any, after the maturity of any
Indebtedness for borrowed money in an amount in excess of $5,000,000
(provided that such failure shall not constitute an Event of Default if
(1) the Company determines, in good faith, that a lessor under a lease
described in clause (3)(a) of the definition of Indebtedness breached a
covenant under the lease and the Company has given notice of the breach
to the lessor and the Trustee and (2) as a result of the breach, the
Company withholds payment under the lease) (a "Default Exception"), or
(ii) there is an acceleration of any Indebtedness for borrowed money in
an amount in excess of $5,000,000 because of a default with respect to
such Indebtedness (other than a Default Exception) without such
Indebtedness having been discharged or such acceleration having been
cured, waived, rescinded or annulled, in the case of either (i) or (ii)
above, for a period of 30 days after written notice to the Company by
the Trustee or to the Company and the Trustee by Holders of at least
25% in aggregate principal amount of the Outstanding Securities; or
(e) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable U.S. federal or
state bankruptcy, insolvency, reorganization or other similar law or
(ii) a decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable U.S. federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60
consecutive days; or
38
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable U.S. federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
the Company to the entry of a decree or order for relief in respect of
the Company in an involuntary case or proceeding under any applicable
U.S. federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against the Company, or the filing by the Company of a
petition or answer or consent seeking reorganization or relief under
any applicable U.S. federal or state law, or the consent by the Company
to the filing of such petition or to the appointment of or the taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by the Company of an
assignment for the benefit of creditors, or the admission by the
Company in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company expressly
in furtherance of any such action.
4.2 SECTION ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to Outstanding Securities
(other than an Event of Default specified in Section 4.1(e) or 4.1(f) hereof)
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities, by written notice to
the Company, may declare due and payable 100% of the principal amount of all
Outstanding Securities plus any accrued and unpaid interest to the date of
payment. Upon a declaration of acceleration, such principal and accrued and
unpaid interest to the date of payment shall be immediately due and payable.
If an Event of Default specified in Section 4.1(e) or 4.1(f)
hereof occurs, all unpaid principal and accrued and unpaid interest (including
Liquidated Damages, if any) on the Outstanding Securities shall become and be
immediately due and payable, without any declaration or other act on the part of
the Trustee or any Holder.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities by written notice to the Trustee may rescind and annul an
acceleration and its consequences if:
(1) all existing Events of Default, other than the nonpayment
of principal of or interest on the Securities which have become due
solely because of the acceleration, have been remedied, cured or
waived, and
(2) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction;
39
provided, however, that in the event such declaration of acceleration has been
made based on the existence of an Event of Default under Section 4.1(d) hereof
and such Event of Default has been remedied, cured or waived in accordance with
Section 4.1(d) hereof, then, without any further action by the Holders, such
declaration of acceleration shall be rescinded automatically and the
consequences of such declaration shall be annulled. No such rescission or
annulment shall affect any subsequent Default or impair any right consequent
thereon.
4.3 SECTION OTHER REMEDIES.
If an Event of Default with respect to Outstanding Securities
occurs and is continuing, the Trustee may pursue any available remedy by
proceeding at law or in equity to collect the payment of principal of or
interest on the Securities or to enforce the performance of any provision of the
Securities.
The Trustee may maintain a proceeding in which it may
prosecute and enforce all rights of action and claims under this Indenture or
the Securities, even if it does not possess any of the Securities or does not
produce any of them in the proceeding.
4.4 SECTION WAIVER OF PAST DEFAULTS .
The Holders, either (a) through the written consent of not
less than a majority in aggregate principal amount of the Outstanding
Securities, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present, by the Holders of at
least a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting, may, on behalf of the Holders of all of the
Securities, waive an existing Default or Event of Default, except a Default or
Event of Default:
(1) in the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any) on any Security
(provided, however, that subject to Section 4.7 hereof, the Holders of
a majority in aggregate principal amount of the Outstanding Securities
may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration); or
(2) in respect of a covenant or provision hereof which, under
Section 7.2 hereof, cannot be modified or amended without the consent
of the Holders of each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; provided, however, that no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
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4.5 SECTION CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have acted as a meeting
pursuant to the provisions of this Indenture) shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that:
(1) conflicts with any law or with this Indenture;
(2) the Trustee determines may be unduly prejudicial to the
rights of the Holders not joining therein, or
(3) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
4.6 SECTION LIMITATION ON SUIT.
No Holder of any Security shall have any right to pursue any
remedy with respect to this indenture or the Securities (including, instituting
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver or trustee) unless:
(1) such Holder has previously given written notice to the Trustee of
an Event of Default that is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against any costs, expenses and liabilities incurred
in complying with such request;
(4) the Trustee has failed to comply with the request for 60 days after
its receipt of such notice, request and offer of indemnity; and
(5) during such 60-day period, no direction inconsistent with such
written request has been given to the Trustee by the Holders of a
majority in aggregate principal amount of the Outstanding Securities
(or such amount as shall have acted at a meeting pursuant to the
provisions of this Indenture);
41
provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain preference or priority over
another Holder.
4.7 SECTION UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PAYMENT
AND TO CONVERT .
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on such Security on the Stated
Maturity expressed in such Security (or, in the case of redemption, on the
Redemption Date, or in the case of the exercise of a Repurchase Right, on the
Repurchase Date) and to convert such Security in accordance with Article 12, and
to bring for the enforcement of any such payment on or after such respective
dates and right to convert, and such rights shall not be impaired or affected
without the consent of such Holder.
4.8 SECTION COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY THE TRUSTEE .
The Company covenants that if:
(1) a Default or Event of Default is made in the payment of any
interest (including Liquidated Damages, if any) on any Security when
such interest (including Liquidated Damages, if any) becomes due and
payable and such Default or Event of Default continues for a period of
30 days, or
(2) a Default or Event of Default is made in the payment of the
principal of or premium, if any, on any Security at the Maturity
thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable (as expressed
therein or as a result of any acceleration effected pursuant to Section 4.2
hereof) on such Securities for principal and premium, if any, and interest
(including Liquidated Damages, if any) and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium, if any, and on any overdue interest (including Liquidated Damages, if
any), calculated using the Interest Rate, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or
42
final decree and may enforce the same against the Company and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders of Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
4.9 SECTION TRUSTEE MAY FILE PROOFS OF CLAIM .
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or the property of the Company
or its creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest (including
Liquidated Damages, if any)) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of principal and
premium, if any, and interest (including Liquidated Damages, if any)
owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders of Securities allowed in such
judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceedings is hereby authorized by
each Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 5.8.
Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept, or adopt on behalf of any Holder
of a Security, any plan of reorganization,
43
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Holder of a Security in any such proceeding.
4.10 SECTION RESTORATION OF RIGHTS AND REMEDIES .
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
4.11 SECTION RIGHTS AND REMEDIES CUMULATIVE .
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 2.12, no right or remedy conferred in this Indenture upon
or reserved to the Trustee or to the Holders of Securities is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
4.12 SECTION DELAY OR OMISSION NOT WAIVER .
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or any acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Securities may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities, as the case may be.
4.13 SECTION APPLICATION OF MONEY COLLECTED.
Subject to Article 13, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or premium, if any, or interest (including Liquidated
Damages, if any), upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
44
FIRST: To the payment of all amounts due the Trustee;
SECOND: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest (including Liquidated
Damages, if any) on the Securities and coupons in respect of which or
for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and premium, if any,
and interest (including Liquidated Damages, if any), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
4.14 SECTION UNDERTAKING FOR COSTS .
All parties to this Indenture agree, and each Holder of any
Security by such Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal of or
premium, if any, or interest (including Liquidated Damages, if any) on any
Security on or after the Stated Maturity expressed in such Security (or, in the
case of redemption or exercise of a Repurchase Right, on or after the Redemption
Date) or for the enforcement of the right to convert any Security in accordance
with Article 12.
4.15 SECTION WAIVER OF STAY OR EXTENSION LAWS .
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim to take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
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5 ARTICLE
THE TRUSTEE
5.1 SECTION CERTAIN DUTIES AND RESPONSIBILITIES .
(a) Except during the continuance of an Event of Default,
(1) The Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture or the TIA,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; provided, however, that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates or opinions to determine whether or not, on their face,
they conform to the requirements to this Indenture (but need not
investigate or confirm the accuracy of any facts stated therein).
(b) In case an Event of Default actually known to a
Responsible Officer of the Trustee has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that: (d)
(1) This paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section 5.1;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with a
direction received by it of the Holders of
46
a majority in principal amount of the Outstanding Securities (or such
lesser amount as shall have acted at a meeting pursuant to the
provisions of this Indenture) relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
(d) Whether or not herein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 5.1.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers. The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability, cost or expense (including, without limitation, reasonable fees of
counsel).
(f) The Trustee shall not be obligated to pay interest on any
money or other assets received by it unless otherwise agreed in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.
(h) The Trustee shall not be deemed to have notice or actual
knowledge of any Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event which
is in fact a Default is received by the Trustee pursuant to Section 14.2 hereof,
and such notice references the Securities and this Indenture.
(i) The rights, privileges, protections, immunities and
benefits given to the Trustee hereunder, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each Paying Agent,
authenticating agent, Conversion Agent or Registrar acting hereunder.
5.2 SECTION CERTAIN RIGHTS OF TRUSTEE .
47
Subject to the provisions of Section 5.1 hereof and subject to
Section 315(a) through (d) of the TIA:
(1) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on the Officers' Certificate or Opinion of
Counsel
(3) The Trustee may act through attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
(4) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith which it believed to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture, unless the Trustee's conduct constitutes
negligence.
(5) The Trustee may consult with counsel of its selection and
the advice of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(6) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(7) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty unless so
specified herein.
5.3 SECTION 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 any Affiliate of the Company with the same rights it would have if it
were not Trustee. However, in the event that the Trustee acquires any
conflicting interest (as such term is defined in Section 310(b) of the TIA), it
must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (to the extent permitted under Section 310(b) of the TIA) or
resign. Any agent may do the same
48
with like rights and duties. The Trustee is also subject to Sections 5.11 and
5.12 hereof.
5.4 SECTION MONEY HELD IN TRUST .
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise expressly agreed with the Company.
5.5 SECTION TRUSTEE'S DISCLAIMER .
The recitals contained herein and in the Securities
(except for those in the certificate of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity,
sufficiency or priority of this Indenture or of the Securities. The Trustee
shall not be accountable for the use or application by the Company of Securities
or the proceeds thereof.
5.6 SECTION NOTICE OF DEFAULTS .
Within 90 days after the occurrence of any Default or
Event of Default hereunder of which the Trustee has received written notice, the
Trustee shall give notice to Holders pursuant to Section 14.2 hereof, unless
such Default or Event of Default shall have been cured or waived; provided,
however, that, except in the case of a Default or Event of Default in the
payment of the principal of or premium, if any, or interest (including
Liquidated Damages, if any), or in the payment of any redemption or repurchase
obligation on any Security, the Trustee shall be protected in withholding such
notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the Holders.
5.7 SECTION REPORTS BY TRUSTEE TO HOLDERS.
The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
by Section 313 of the TIA at the times and in the manner provided by the TIA.
A copy of each report at the time of its mailing to
Holders shall be filed with the SEC, if required, and each stock exchange, if
any, on which the Securities are listed. The Company shall promptly notify
the Trustee when the Securities become listed on any stock exchange.
5.8 SECTION COMPENSATION AND INDEMNIFICATION.
49
The Company covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) and the Company covenants and
agrees to pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ), except to the extent
that any such expense, disbursement or advance is due to its negligence or bad
faith. When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 4.1 hereof, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy law. The Company also covenants to indemnify the Trustee and its
officers, directors, employees and agents for, and to hold such Persons harmless
against, any loss, liability or expense incurred by them, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts
hereunder or the performance of their duties hereunder, including the costs and
expenses of defending themselves against or investigating any claim of liability
in the premises, except to the extent that any such loss, liability or expense
was due to the negligence or willful misconduct of such Persons. The obligations
of the Company under this Section 5.8 to compensate and indemnify the Trustee
and its officers, directors, employees and agents and to pay or reimburse such
Persons for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture or the earlier resignation or removal of the Trustee. Such additional
indebtedness shall be a senior claim to that of the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the Holders of particular Securities, and the Securities are
hereby subordinated to such senior claim. "Trustee" for purposes of this Section
5.8 shall include any predecessor Trustee, but the negligence or willful
misconduct of any Trustee shall not affect the indemnification of any other
Trustee.
5.9 SECTION REPLACEMENT OF TRUSTEE .
A resignation or removal of the Trustee and appointment of
a successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 5.9.
The Trustee may resign and be discharged from the trust
hereby created by so notifying the Company in writing. The Holders of at least a
majority in aggregate principal amount of Outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company must
remove the Trustee if:
(i) the Trustee fails to comply with Section 5.10 hereof
or Section 310 of the
50
TIA;
(ii) the Trustee becomes incapable of acting.
(iii) the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the Trustee under
any Bankruptcy Law; or
(iv) a Custodian or public officer takes charge of the
Trustee or its property.
If the Trustee resigns or is removed or if a vacancy
exists in the office of the Trustee for any reason, the Company shall promptly
appoint a successor Trustee. The Trustee shall be entitled to payment of its
fees and reimbursement of its expenses while acting as Trustee. Within one year
after the successor Trustee takes office, the Holders of at least a majority in
aggregate principal amount of Outstanding Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
Any Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee if the Trustee fails to comply with Section 5.10 hereof.
If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation or removal, the resigning or removed Trustee, as the
case may be, may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of the successor Trustee's
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee. Notwithstanding
replacement of the Trustee pursuant to this Section 5.9, the Company's
obligations under Section 5.8 hereof shall continue for the benefit of the
retiring Trustee with respect to expenses, losses and liabilities incurred by it
prior to such replacement.
5.10 SECTION SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 5.10 hereof, if the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the successor entity without any further act shall be the successor
Trustee as to the Securities.
51
5.11 SECTION CORPORATE TRUSTEE REQUIRED; ELIGIBILITY .
The Trustee shall at all times satisfy the requirements of
Section 310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have
(or, in the case of a corporation included in a bank holding company system, the
related bank holding company shall at all times have), a combined capital and
surplus of at least $100 million as set forth in its (or its related bank
holding company's) most recent published annual report of condition. The Trustee
is subject to Section 310(b) of the TIA.
5.12 SECTION COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to Section 311(a) of the TIA,
excluding any creditor relationship listed in Section 311(b) of the TIA. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the TIA to the extent indicated therein.
6 ARTICLE
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
6.1 SECTION COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS .
The Company shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Company shall not permit any
Person to consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company,
unless:
(1) in the event that the Company shall consolidate with
or merge into another Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Company is merged
or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, limited liability company, partnership
or trust organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and,
if the entity surviving such transaction or transferee entity is not
the Company, then such surviving or transferee entity shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and premium, if any and interest (including
Liquidated Damages, if any), on all the Securities and the performance
of every covenant of this Indenture on the party of the Company to be
performed or observed and shall have
52
provided for conversion rights in accordance with Section 12.11 hereof;
(2) at the time of consummation of such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
6.2 SECTION SUCCESSOR CORPORATION SUBSTITUTED .
Upon any consolidation or merger by the Company with or
into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person,
in accordance with Section 6.1 hereof, the successor corporation formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
herein, and thereafter, except in the case of a lease to another Person, the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Securities.
7 ARTICLE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
7.1 SECTION WITHOUT CONSENT OF HOLDERS OF SECURITIES .
Without the consent of any Holders of Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may amend this Indenture and the Securities 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) make provision with respect to the conversion rights
of Holders of Securities pursuant to Section 12.11 hereof;
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(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 6 hereof;
(e) reduce the Conversion Price; provided, that such
reduction in the Conversion Price shall not adversely affect the
interest of the Holders of Securities (after taking into account
tax and other consequences of such reduction) in any material
respect;
(f) comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the
TIA;
(g) make any changes or modifications to this Indenture
necessary in connection with the registration of any Securities
under the Securities Act as contemplated in the Registration
Rights Agreement, provided, that such action pursuant to this
clause (g) does not adversely affect the interests of the Holders
of Securities in any material respect;
(h) cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other
provision herein or which is otherwise defective, or to make any
other provisions with respect to matters or questions arising
under this Indenture which the Company and the Trustee may deem
necessary or desirable and which shall not be inconsistent with
the provisions of this Indenture, provided, that such action
pursuant to this clause (h) does not adversely affect the
interests of the Holders of Securities in any material respect;
(i) add or modify any other provisions with respect to
matters or questions arising under this Indenture which the
Company and the Trustee may deem necessary or desirable and which
shall not be inconsistent with the provisions of this Indenture,
provided, that such action pursuant to this clause (i) does not
adversely affect the interests of the Holders of Securities in
any material respect; or
(j) make provision for the establishment of a book-entry
system, in which Holders would have the option to participate,
for the clearance and settlement of transactions in Securities
originally issued in definitive form.
7.2 SECTION WITH CONSENT OF HOLDERS OF SECURITIES .
Except as provided below in this Section 7.2, this
Indenture or the Securities may be amended or supplemented, and noncompliance in
any particular instance with any provision of this Indenture or the Securities
may be waived, in each case (i) with the written consent of the Holders of at
least a majority in aggregate principal amount of the Outstanding Securities or
(ii)
54
by the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of a majority in
aggregate principal amount of the Outstanding Securities represented at such
meeting.
Without the written consent or the affirmative vote of
each Holder of Securities, an amendment or waiver under this Section 7.2 may
not:
(a) change the Stated Maturity of the principal of, or any
installment of interest (including Liquidated Damages, if any) on, any
Security;
(b) reduce the principal amount of, or premium, if any, on
any Security;
(c) reduce the Interest Rate or interest (including
Liquidated Damages, if any) on any Security;
(d) change the currency of payment of principal of,
premium, if any, or interest (including Liquidated Damages, if any) on
any Security;
(e) impair the right of any Holder to institute suit for
the enforcement of any payment in or with respect to any Security;
(f) modify the obligation of the Company to maintain an
office or agency in The City of New York pursuant to Section 9.2
hereof;
(g) except as permitted by Section 12.11 hereof, adversely
affect the Repurchase Right or the right to convert any Security as
provided in Article 12 hereof;
(h) modify the subordination provisions of the Securities
in a manner adverse to the Holders of Securities,
(i) modify any of the provisions of this Section, Section
4.4 or Section 14.11, except to increase any percentage contained
herein or therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; or
(j) reduce the requirements of Section 8.4 hereof for
quorum or voting, or reduce the percentage in aggregate principal
amount of the Outstanding Securities the consent of whose Holders is
required for any such supplemental indenture or the consent of whose
Holders is required for any waiver provided for in this Indenture.
It shall not be necessary for any Act of Holders of
Securities under this Section to
55
approve the particular form of any proposal supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
7.3 SECTION Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall
be set forth in a supplemental indenture that complies with the TIA as then in
effect.
7.4 SECTION REVOCATION OF CONSENTS AND EFFECT OF
CONSENTS OR VOTES.
Until an amendment, supplement or waiver becomes effective, a
written consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security, even if notation of the
consent is not made on any Security; provided, however, that unless a record
date shall have been established, any such Holder or subsequent Holder may
revoke the consent as to its Security or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment, supplement
or waiver becomes effective.
An amendment, supplement or waiver becomes effective on
receipt by the Trustee of written consents from or affirmative votes by, as the
case may be, the Holders of the requisite percentage of aggregate principal
amount of the Outstanding Securities, and thereafter shall bind every Holder of
Securities; provided, however, if the amendment, supplement or waiver makes a
change described in any of the clauses (a) through (j) of Section 7.2 hereof,
the amendment, supplement or waiver shall bind only each Holder of a Security
which has consented to it or voted for it, as the case may be, and every
subsequent Holder of a Security or portion of a Security that evidences the same
indebtedness as the Security of the consenting or affirmatively voting, as the
case may be, Holder.
7.5 SECTION NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security:
(a) the Trustee may require the Holder of a Security to
deliver such Securities to the Trustee, the Trustee may place an
appropriate notation on the Security about the changed terms and return
it to the Holder and the Trustee may place an appropriate notation on
any Security thereafter authenticated; or
(b) if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
56
Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.
7.6 SECTION Trustee to Sign Amendment, Etc.
The Trustee shall sign any amendment authorized pursuant
to this Article 7 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If the amendment does adversely affect
the rights, duties, liabilities or immunities of the Trustee, the Trustee may
but need not sign it. In signing or refusing to sign such amendment, the Trustee
shall be entitled to receive and shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment is authorized or permitted by this Indenture.
8 ARTICLE
MEETING OF HOLDERS OF SECURITIES
8.1 SECTION PURPOSES FOR WHICH MEETINGS MAY BE CALLED .
A meeting of Holders of Securities may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities.
8.2 SECTION CALL NOTICE AND PLACE OF MEETINGS .
(a) The Trustee may at any time call a meeting of Holders of
Securities for any purpose specified in Section 8.1 hereof, to be held at such
time and at such place in The City of New York. Notice of every meeting of
Holders of Securities, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 14.2 hereof, not less than 21 nor more
than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities shall have requested the Trustee to call a meeting of the
Holders of Securities for any purpose specified in Section 8.1 hereof, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities in the amount specified, as the
case may be, may determine the time and the place in The City of New York for
57
such meeting and may call such meeting for such purposes by giving notice
thereof as provided in paragraph (a) of this Section.
8.3 SECTION PERSONS ENTITLED TO VOTE AT MEETINGS .
To be entitled to vote at any meeting of Holders of
Securities, a Person shall be (a) a Holder of one or more Outstanding
Securities, or (b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
8.4 SECTION QUORUM; ACTION .
The Persons entitled to vote a majority in principal
amount of the Outstanding Securities shall constitute a quorum. In the absence
of a quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 8.2(a) hereof, except
that such notice need be given only once and not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of the
principal amount of the Outstanding Securities which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any
meeting adjourned for a lack of a quorum, the Persons entitled to vote 25% in
principal amount of the Outstanding Securities at the time shall constitute a
quorum for the taking of any action set forth in the notice of the original
meeting.
At a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid, any resolution and all matters
(except as limited by the proviso to Section 7.2 hereof) shall be effectively
passed and decided if passed or decided by the Persons entitled to vote not less
than a majority in principal amount of Outstanding Securities represented and
voting at such meeting.
Any resolution passed or decisions taken at any meeting of
Holders of Securities
58
duly held in accordance with this Section shall be binding on all the Holders of
Securities, whether or not present or represented at the meeting.
8.5 SECTION DETERMINATION OF VOTING RIGHTS; CONDUCT AND
ADJOURNMENT OF MEETINGS.
(a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
Securities and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 1.3 hereof and the
appointment of any proxy shall be proved in the manner specified in Section 1.3
hereof. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 1.3 hereof or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 8.2(b) hereof, in which case the Company or the Holders of Securities
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Securities represented at the meeting.
(c) At any meeting each Holder of a Security or proxy shall be
entitled to one vote for each $1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.
(d) Any meeting of Holders of Securities duly called
pursuant to Section 8.2 hereof at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount
of the Outstanding Securities represented at the meeting, and the meeting may
be held as so adjourned without further notice.
8.6 SECTION COUNTING VOTES AND RECORDING ACTION OF
MEETINGS.
The vote upon any resolution submitted to any meeting of
Holders of Securities shall be by written ballots on which shall be subscribed
the signatures of the Holders of
59
Securities or of their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more Persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 8.2 hereof and, if applicable, Section
8.4 hereof. Each copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy shall be
delivered to the Company and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.
9 ARTICLE
COVENANTS
9.1 SECTION PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST .
The Company will duly and punctually pay the principal of
and premium, if any, and interest (including Liquidated Damages, if any) in
respect of the Securities in accordance with the terms of the Securities and
this Indenture. The Company will deposit or cause to be deposited with the
Trustee as directed by the Trustee, no later than the day of the Stated Maturity
of any Security or installment of interest (including Liquidated Damages, if
any), all payments so due.
9.2 SECTION MAINTENANCE OF OFFICES OR AGENCIES .
The Company hereby appoints the Trustee's Corporate Trust
Office as its office in The City of New York, where Securities may be:
(i) presented or surrendered for payment;
(ii) surrendered for registration of transfer or exchange;
(iii) surrendered for conversion;
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture maybe served.
60
The Company may at any time and from time to time vary or
terminate the appointment of any such office or appoint any additional offices
for any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of and premium, if any, and interest (including
Liquidated Damages, if any) on the Securities have been made available for
payment and either paid or returned to the Company pursuant to the provisions of
Section 9.3 hereof, the Company will maintain in The City of New York, an office
or agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Company will give prompt written notice to the Trustee, and notice to the
Holders in accordance with Section 14.2 hereof, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain any such
required office or agency in The City of New York, or shall fail to furnish the
Trustee with the address thereof, presentations and surrenders may be made at,
and notices and demands may be served on, the Corporate Trust Office of the
Trustee.
9.3 SECTION CORPORATE EXISTENCE .
Subject to Article 6 hereof, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Company determines that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
9.4 SECTION MAINTENANCE OF PROPERTIES .
The Company will maintain and keep its properties and
every part thereof in such repair, working order and condition, and make or
cause to be made all such needful and proper repairs, renewals and replacements
thereto, as in the judgment of the Company are necessary in the interests of the
Company; provided, however, that nothing contained in this Section shall prevent
the Company from selling, abandoning or otherwise disposing of any of its
properties or discontinuing a part of its business from time to time if, in the
judgment of the Company, such sale, abandonment, disposition or discontinuance
is advisable and does not materially adversely affect the interests or business
of the Company.
9.5 SECTION PAYMENT OF TAXES AND OTHER CLAIMS .
61
The Company will, and will cause any Significant
Subsidiary to, promptly pay and discharge or cause to be paid and discharged all
material taxes, assessments and governmental charges or levies lawfully imposed
upon it or upon its income or profits or upon any of its property, real or
personal, or upon any part thereof, as well as all material claims for labor,
materials and supplies which, if unpaid, might by law become a lien or charge
upon its property; provided, however, that neither the Company nor any
Significant Subsidiary shall be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge, levy, or claim if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company or such Significant Subsidiary, as
the case may be, shall have set aside on its books reserves deemed by it
adequate with respect thereto.
9.6 SECTION REPORTS.
(a) The Company shall deliver to the Trustee within 15
days after it files them with the SEC copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act; provided, however, the Company shall not be required to deliver to
the Trustee any materials for which the Company has sought and received
confidential treatment by the SEC. The Company also shall comply with the other
provisions of Section 314(a) of the TIA.
(b) If at any time the Company is not subject to Section
13 or 15(d) of the Exchange Act, upon the request of a Holder of a Security, the
Company will promptly furnish or cause to be furnished to such Holder or to a
prospective purchaser of such Security designated by such Holder, as the case
may be, the information, if any, required to be delivered by it pursuant to Rule
144A(d)(4) under the Securities Act to permit compliance with Rule 144A in
connection with the resale of such Security; provided, however, that the Company
shall not be required to furnish such information in connection with any request
made on or after the date which is two years from the later of the date such
security was last acquired from the Company or an "affiliate" of the Company.
9.7 SECTION COMPLIANCE CERTIFICATE .
The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, an Officers' Certificate
stating that in the course of the performance by the signers of their duties as
Officers of the Company, they would normally have knowledge of any failure by
the Company to comply with all conditions, or Default by the Company with
respect to any covenants, under this Indenture, and further stating whether or
not they have knowledge of any such failure or default and, if so, specifying
each such failure or Default and
62
the nature thereof. In the event an Officer of the Company comes to have actual
knowledge of a Default, regardless of the date, the Company shall deliver an
Officers' Certificate to the Trustee specifying such Default and the nature and
status thereof.
9.8 SECTION RESALE OF CERTAIN SECURITIES .
During the period of two years after the last date of
original issuance of any Securities, the Company shall not, and shall not permit
any of its "affiliates" (as defined under Rule 144 under the Securities Act) to,
resell any Securities, or shares of Common Stock issuable upon conversion of the
Securities, which constitute "restricted securities" under Rule 144, that are
acquired by any of them within the United States or to "U.S. persons" (as
defined in Regulation S) except pursuant to an effective registration statement
under the Securities Act or an applicable exemption therefrom. The Trustee shall
have no responsibility or liability in respect of the Company's performance of
its agreement in the preceding sentence.
10 ARTICLE
REDEMPTION OF SECURITIES
10.1 SECTION OPTIONAL REDEMPTION .
The Securities are not redeemable prior to October 13,
2002. On or after October 13, 2002, the Company may, at its option, redeem the
Securities in whole at any time or in part from time to time, on any date prior
to maturity, upon notice as set forth in Section 10.4, at the redemption price
(expressed as percentages of the principal amount) set forth below if redeemed
during the 12-month period beginning October 13 of the years indicated and
ending October 12 of the following year:
Redemption Price
----------------
2002 103.375%
2003 102.250%
2004 101.125%
2005 100.000%
("the Redemption Price"), plus any interest accrued but not paid to the
Redemption Date.
10.2 SECTION NOTICE TO TRUSTEE .
If the Company elects to redeem Securities pursuant to the
redemption
63
provisions of Section 10.1 hereof, it shall notify the Trustee at least 30 days
prior to the Redemption Date of such intended Redemption Date, the principal
amount of Securities to be redeemed and the CUSIP numbers of the Securities to
be redeemed.
10.3 SECTION SELECTION OF SECURITIES TO BE REDEEMED .
If fewer than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed from the
Outstanding Securities by a method that complies with the requirements of any
exchange on which the Securities are listed, or, if the Securities are not
listed on an exchange, on a PRO RATA basis or by lot or in accordance with any
other method the Trustee considers fair and appropriate. Securities and portions
thereof that the Trustee selects shall be in amounts equal to the minimum
authorized denominations for Securities to be redeemed or any integral multiple
thereof.
If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security
shall be deemed to be the portion selected for redemption (provided, however,
that the Holder of such Security so converted and deemed redeemed shall not be
entitled to any additional interest payment as a result of such deemed
redemption than such Holder would have otherwise been entitled to receive upon
conversion of such Security). Securities which have been converted during a
selection of Securities to be redeemed may be treated by the Trustee as
Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
10.4 SECTION NOTICE OF REDEMPTION .
Notice of redemption shall be given in the manner provided
in Section 14.2 hereof to the Holders of Securities to be redeemed. Such notice
shall be given not less than 20 nor more than 60 days prior to the Redemption
Date.
All notices of redemption shall state:
(1) the Redemption Date;
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(2) the Redemption Price and interest accrued and unpaid to
the Redemption Date, if any;
(3) if fewer than all the Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be redeemed
and the aggregate principal amount of Securities which will be
outstanding after such partial redemption;
(4) that on the Redemption Date the Redemption Price and
interest accrued and unpaid to the Redemption Date, if any, will become
due and payable upon each such Security to be redeemed, and that
interest thereon shall cease to accrue on and after such date;
(5) the Conversion Price, the date on which the right to
convert the principal of the Securities to be redeemed will terminate
and the places where such Securities may be surrendered for conversion;
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued and unpaid
interest, if any; and
(7) the CUSIP number of the Securities.
The notice given shall specify the last date on which
exchanges or transfers of Securities may be made pursuant to Section 2.7 hereof,
and shall specify the serial numbers of Securities and the portions thereof
called for redemption.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name of and at the expense of the Company.
10.5 SECTION EFFECT OF NOTICE OF REDEMPTION .
Notice of redemption having been given as provided in
Section 10.4 hereof, the Securities so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein specified and from
and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued and unpaid interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in accordance
with such notice, such Security shall be paid by the Company at the Redemption
Price; provided, however, the installments of interest on Securities whose
Stated Maturity is prior to or on the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Record Date according to their terms and the provisions of
Section 2.7 hereof.
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If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the Interest Rate.
10.6 SECTION DEPOSIT OF REDEMPTION PRICE .
Prior to or on any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent an amount of money sufficient to
pay the Redemption Price of all the Securities to be redeemed on that Redemption
Date, other than any Securities called for redemption on that date which have
been converted prior to the date of such deposit, and accrued and unpaid
interest, if any, on such Securities.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the fourth to last paragraph of Section 2.1 hereof) be paid to the
Company on Company Request or, if then held by the Company, shall be discharged
from such trust.
10.7 SECTION SECURITIES REDEEMED IN PART .
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 9.2 hereof (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or the Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
11 ARTICLE
REPURCHASE AT THE OPTION OF A HOLDER
UPON A CHANGE OF CONTROL
11.1 SECTION REPURCHASE RIGHT .
In the event that a Change in Control shall occur, each
Holder shall have the right
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(the "Repurchase Right"), at the Holder's option, but subject to the provisions
of Section 11.2 hereof, to require the Company to repurchase, and upon the
exercise of such right the Company shall repurchase, all of such Holder's
Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or any integral multiple
thereof (provided that no single Security may be repurchased in part unless the
portion of the principal amount of such Security to be Outstanding after such
repurchase is equal to $1,000 or integral multiples thereof), on the date (the
"Repurchase Date") that is 45 days after the date of the Company Notice at a
purchase price equal to 100% of the principal amount of the Securities to be
repurchased (the "Repurchase Price"), plus interest accrued and unpaid to, but
excluding, the Repurchase Date; provided, however, that installments of interest
on Securities whose Stated Maturity is prior to or on the Repurchase Date shall
be payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 2.1 hereof.
Subject to the fulfilment by the Company of the conditions
set forth in Section 11.2 hereof, the Company may elect to pay the Repurchase
Price by delivering the number of shares of Common Stock equal to (i) the
Repurchase Price divided by (ii) 95% of the average of the Closing Prices per
share of Common Stock for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase Date.
Whenever in this Indenture (including Sections 2.2, 4.1(a)
and 4.7 hereof) or Exhibit A annexed hereto there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect to
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that, for the purposes of Article 13 hereof, such
reference shall be deemed to include reference to the Repurchase Price only to
the extent the Repurchase Price is payable in cash.
11.2 SECTION CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE
REPURCHASE PRICE IN COMMON STOCK .
(a) The shares of Common Stock to be issued upon
repurchase of Securities hereunder:
(i) shall not require registration under any federal
securities law before such shares may be freely transferable
without being subject to any transfer restrictions under the
Securities Act upon repurchase or, if such registration is
required, such registration shall be completed and shall
become effective prior to the Repurchase Date; and
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(ii) shall not require registration with, or approval
of, any governmental authority under any state law or any
other federal law before shares may be validly issued or
delivered upon repurchase or if such registration is required
or such approval must be obtained, such registration shall be
completed or such approval shall be obtained prior to the
Repurchase Date.
(b) The shares of Common Stock to be listed upon
repurchase of Securities hereunder are, or shall have been, approved for listing
on the Nasdaq National Market or the New York Stock Exchange or listed on
another national securities exchange, in any case, prior to the Repurchase Date.
(c) All shares of Common Stock which may be issued upon
repurchase of Securities will be issued out of the Company's authorized but
unissued Common Stock and will, upon issue, be duly and validly issued and
fully paid and nonassessable and free of any preemptive or similar rights.
(d) If any of the conditions set forth in clauses (a)
through (d) of this Section 11.2 are not satisfied in accordance with the
terms thereof, the Repurchase Price shall be paid by the Company only in
cash.
11.3 SECTION NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT,
ETC.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, prior to or on the 30th day after
the occurrence of a Change in Control, the Company, or, at the written request
and expense of the Company prior to or on the 30th day after such occurrence,
the Trustee, shall give to all Holders of Securities notice, in the manner
provided in Section 14.2 hereof, of the occurrence of the Change of Control and
of the Repurchase Right set forth herein arising as a result thereof (the
"Company Notice"). The Company shall also deliver a copy of such notice of a
Repurchase Right to the Trustee. Each notice of a Repurchase Right shall state:
(1) the Repurchase Date;
(2) the date by which the Repurchase Right must exercised;
(3) the Repurchase Price and accrued and unpaid interest, if
any, and whether the Repurchase Price shall be paid by the Company in
cash or by delivery of shares of Common Stock;
(4) a description of the procedure which a Holder must follow
to exercise a Repurchase Right, and the place or places where such
Securities, are to be surrendered for \
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payment of the Repurchase Price and accrued and unpaid interest, if
any;
(5) that on the Repurchase Date the Repurchase Price and
accrued and unpaid interest, if any, will become due and payable upon
each such Security designated by the Holder to be repurchased, and that
interest thereon shall cease to accrue on and after said date;
(6) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Securities to be
repurchased will terminate and the place where such Securities may be
surrendered for conversion, and
(7) the place or places where such Securities, together with
the Option to Elect Repayment Upon a Change of Control certificate
included in Exhibit A annexed hereto are to be delivered for payment of
the Repurchase Price and accrued and unpaid interest, if any.
No failure of the Company to give the foregoing notices or
defect therein shall limit any Holder's right to exercise a Repurchase Right or
affect the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of
this Article 11 are inconsistent with applicable law, such law shall govern.
(b) To exercise a Repurchase Right, a Holder shall
deliver to the Trustee prior to or on the 30th day after the date of the
Company Notice:
(1) written notice of the Holder's exercise of such right,
which notice shall set forth the name of the Holder, the principal
amount of the Securities to be repurchased (and, if any Security is to
be repurchased in part, the serial number thereof, the portion of the
principal amount thereof to be repurchased) and a statement that an
election to exercise the Repurchase Right is being made thereby, and,
in the event that the Repurchase Price shall be paid in shares of
Common Stock, the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock shall be issued,
and
(2) the Securities with respect to which the Repurchase
Right is being exercised.
Such written notice shall be irrevocable, except that the right of the Holder to
convert the Securities with respect to which the Repurchase Right is being
exercised shall continue until the close of business on the Business Day
immediately preceding the Repurchase Date.
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(c) In the event a Repurchase Right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid to
the Trustee the Repurchase Price in cash or shares of Common Stock, as provided
above, for payment to the Holder on the Repurchase Date or, if shares of Common
Stock are to be paid, as promptly after the Repurchase Date as practicable,
together with accrued and unpaid interest to the Repurchase Date payable in cash
with respect to the Securities as to which the Repurchase Right has been
exercised; provided, however, that installments of interest that mature prior to
or on the Repurchase Date shall be payable in cash to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the Interest Rate, and each Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part
shall be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of
the Repurchase Price shall be deemed to have been effected immediately prior to
the close of business on the Repurchase Date and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such repurchase shall be deemed to have become on the
Repurchase Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for repurchase on a date when the
stock transfer books of the Company shall be closed shall constitute the Person
or Persons in whose name or names the certificate or certificates for such
shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Security
declared prior to the Repurchase Date.
(g) No fractions of shares of Common Stock shall be issued
upon repurchase of any Security or Securities. If more than one Security shall
be repurchased from the same Holder
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and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issued upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities (or specified
portions thereof) to be so repurchased. Instead of any fractional share of
Common Stock which would otherwise be issued on the repurchase of any Security
or Securities (or specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction (calculated to the nearest one-100th of a
share) in an amount equal to the same fraction of the Quoted Price of the Common
Stock as of the Trading Day preceding the Repurchase Date.
(h) Any issuance and delivery of certificates for shares
of Common Stock on repurchase of Securities shall be made without charge to the
Holder of Securities being repurchased for such certificates or for any tax or
duty in respect of the issuance or delivery of such certificates or the
Securities represented thereby; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect of (i) income of
the Holder or (ii) any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of the Holder
of the Securities being repurchased, and no such issuance or delivery shall be
made unless the Persons requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be
delivered to the Trustee to be canceled at the direction of the Trustee, which
shall dispose of the same as provided in Section 2.15 hereof.
12 ARTICLE
CONVERSION OF SECURITIES
12.1 SECTION CONVERSION RIGHT AND CONVERSION PRICE .
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may
be converted at the principal amount thereof, or of such portion thereof, into
duly authorized, fully paid and nonassessable shares of Common Stock, at the
Conversion Price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of business on
October 13, 2006.
In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security or the portion so
called, shall expire at the close of business on the second Business Day
preceding the Redemption Date, unless the Company defaults in making the payment
due upon redemption. In the case of a Change of Control for which the Holder
71
exercises its Repurchase Right with respect to a Security or portion thereof,
such conversion right in respect of the Security or portion thereof shall expire
at the close of business on the Business Day immediately preceding the
Repurchase Date.
The price at which shares of Common Stock shall be
delivered upon conversion (the "Conversion Price") shall be initially equal to
$32.0075 per share of Common Stock. The Conversion Price shall be adjusted in
certain instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (h)
and (1) of Section 12.4 hereof.
12.2 SECTION EXERCISE OF CONVERSION RIGHT .
To exercise the conversion right, the Holder of any
Security to be converted shall surrender such Security duly endorsed or assigned
to the Company or in blank, at the office of any Conversion Agent, accompanied
by a duly signed conversion notice substantially in the form attached to the
Security to the Company stating that the Holder elects to convert such Security
or, if less than the entire principal amount thereof is to be converted, the
portion thereof to be converted.
Securities surrendered for conversion during the period
from the close of business on any Regular Record Date to the opening of business
on the next succeeding Interest Payment Date (except in the case of any Security
whose Maturity is prior to such Interest Payment Date) shall be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest to be received on such Interest
Payment Date on the principal amount of Securities being surrendered for
conversion.
Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after the
conversion date, the Company shall cause to be issued and delivered to such
Conversion Agent a certificate or certificates for the number of full shares of
Common Stock issuable upon conversion, together with payment in lieu of any
fraction of a share as provided in Section 12.3 hereof.
In the case of any Security which is converted in part
only, upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Security or Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Securities.
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If shares of Common Stock to be issued upon conversion of
a Restricted Security, or Securities to be issued upon conversion of a
Restricted Security in part only, are to be registered in a name other than that
of the Holder of such Restricted Security, such Holder must deliver to the
Conversion Agent a certificate in substantially the form set forth in the form
of Security set forth in Exhibit A annexed hereto, dated the date of surrender
of such Restricted Security and signed by such Holder, as to compliance with the
restrictions on transfer applicable to such Restricted Security. Neither the
Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be required
to register in a name other than that of the Holder shares of Common Stock or
Securities issued upon conversion of any such Restricted Security not so
accompanied by a properly completed certificate.
The Company hereby initially appoints the Trustee as the
Conversion Agent.
12.3 SECTION FRACTIONS OF SHARES .
No fractional shares of Common Stock shall be issued upon
conversion of any Security or Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issued upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issued upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction (calculated to the nearest one-100th of a share) in an amount
equal to the same fraction of the Quoted Price of the Common Stock as of the
Trading Day preceding the date of conversion.
12.4 SECTION ADJUSTMENT OF CONVERSION PRICE .
The Conversion Price shall be subject to adjustments,
calculated by the Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or
make a distribution to all holders of the outstanding Common Stock in
shares of Common Stock, the Conversion Price in effect at the opening
of business on the date following the date fixed for the determination
of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Conversion Price by
a fraction:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on
the Record Date (as defined in Section 12.4(g)) fixed for such
determination, and
(ii) the denominator of which shall be the sum of such
number of shares
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and the total number of shares constituting such dividend or other
distribution.
Such reduction shall become effective immediately after the opening of
business on the day following the Record Date. If any dividend or
distribution of the type described in this Section 12.4(a) is declared
but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such dividend
or distribution had not been declared.
(b) In case the outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common Stock,
the Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective
shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased,
such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the
day upon which such subdivision or combination becomes effective.
(c) In case the Company shall issue rights or warrants
(other than any rights or warrants referred to in Section 12.4(d))
to all holders of its outstanding shares of Common Stock entitling
them to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share (or
having a conversion price per share) less than the Current Market
Price (as defined in Section 12.4(g)) on the Record Date fixed for
the determination of stockholders entitled to receive such rights or
warrants, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price
in effect at the opening of business on the date after such Record
Date by a fraction:
(i) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the
Record Date plus the number of shares which the aggregate offering
price of the total number of shares so offered for subscription or
purchase (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market Price,
and
(ii) the denominator of which shall be the number
of shares of Common Stock outstanding on the close of business on
the Record Date plus the total number of additional shares of Common
Stock so offered for subscription or purchase (or into which the
convertible securities so offered are convertible).
Such adjustment shall become effective immediately after the opening of
business on the
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day following the Record Date fixed for determination of
stockholders entitled to receive such rights or warrants. To the
extent that shares of Common Stock (or securities convertible into
Common Stock) are not delivered pursuant to such rights or warrants,
upon the expiration or termination of such rights or warrants the
Conversion Price shall be readjusted to the Conversion Price which
would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of the delivery of
only the number of shares of Common Stock (or securities convertible
into Common Stock) actually delivered. In the event that such rights
or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if
such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of
such consideration if other than cash, to be determined by the Board
of Directors.
(d) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock shares of
any class of capital stock of the Company (other than any dividends
or distributions to which Section 12.4(a) applies) or evidences of
its indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 12.4(c),
(2) any stock, securities or other property or assets (including
cash) distributed in connection with a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale
or conveyance to which Section 12.11 hereof applies and (3)
dividends and distributions paid exclusively in cash (the securities
described in foregoing clauses (1), (2) and (3) hereinafter in this
Section 12.4(d) called the "securities"), then, in each such case,
subject to the second succeeding paragraph of this Section 12.4(d),
the Conversion Price shall be reduced so that the same shall be
equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record Date
(as defined in Section 12.4(g)) with respect to such distribution by
a fraction:
(i) the numerator of which shall be the Current
Market Price (determinedas provided in Section 12.4(g)) on
such date less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive
and set forth in a Board Resolution) on such date of the
portion of the securities so distributed applicable to one
share of Common Stock (determined on the basis of the
number of shares of the Common Stock outstanding on the
Record Date), and
(ii) the denominator of which shall be such Current
Market Price.
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Such reduction shall become effective immediately prior to the
opening of business on the day following the Record Date. However,
in the event that the then fair market value (as so determined) of
the portion of the securities so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market Price
on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to
receive upon conversion of a Security (or any portion thereof) the
amount of securities such Holder would have received had such Holder
converted such Security (or portion thereof) immediately prior to
such Record Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to
be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
If the Board of Directors determines the fair
market value of any distribution for purposes of this Section
12.4(d) by reference to the actual or when issued trading market for
any securities comprising all or part of such distribution, it must
in doing so consider the prices in such market over the same period
(the "Reference Period") used in computing the Current Market Price
pursuant to Section 12.4(g) to the extent possible, unless the Board
of Directors in a Board Resolution determines in good faith that
determining the fair market value during the Reference Period would
not be in the best interest of the Holder.
Rights or warrants distributed by the Company to
all holders of Common Stock entitling the holders thereof to
subscribe for or purchase shares of the Company's capital stock
(either initially or under certain circumstances), which rights or
warrants, until the occurrence of a specified event or events
("Trigger Event"):
(i) are deemed to be transferred with such shares
of Common Stock;
(ii) are not exercisable; and
(iii) are also issued in respect of future
issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this
Section 12.4(d) (and no adjustment to the Conversion Price under
this Section 12.4(d) will be required) until the occurrence of the
earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or
warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to
purchase a different number or amount of the foregoing or to
purchase any of the foregoing at a different purchase price, then
the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and
a termination or expiration of the existing right or warrant without
exercise by the
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holder thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event or
other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion
Price under this Section 12.4(d):
(1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or
warrant (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the
date of such redemption or repurchase, and
(2) in the case of such rights or warrants all of
which shall have expired or been terminated without
exercise, the Conversion Price shall be readjusted as if
such rights and warrants had never been issued.
For purposes of this Section 12.4(d) and Sections 12.4(a),
12.4(b) and 12.4(c), any dividend or distribution to which this
Section 12.4(d) is applicable that also includes shares of Common
Stock, a subdivision or combination of Common Stock to which Section
12.4(c) applies, or rights or warrants to subscribe for or purchase
shares of Common Stock to which Section 12.4(c) applies (or any
combination thereof), shall be deemed instead to be:
(1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or
warrants other than such shares of Common Stock, such
subdivision or combination or such rights or warrants to
which Sections 12.4(a), 12.4(b) and 12.4(c) apply,
respectively (and any Conversion Price reduction required
by this Section 12.4(d) with respect to such dividend or
distribution shall then be made), immediately followed by
(2) a dividend or distribution of such shares of
Common Stock, such subdivision or combination or such
rights or warrants (and any further Conversion Price
reduction required by Sections 12.4(a), 12.4(b) and 12.4(c)
with respect to such dividend or distribution shall then be
made), except:
(A) the Record Date of such dividend or
distribution shall be substituted as (x) "the date
fixed for the determination of stockholders
entitled to receive such dividend or other
distribution", "Record Date fixed for such
determinations" and "Record Date" within the
meaning of Section
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12.4(a), (y) "the day upon which such subdivision
becomes effective" and "the day upon which such
combination becomes effective" within the meaning
of Section 12.4(b), and (z) as "the date fixed for
the determination of stockholders entitled to
receive such rights or warrants", "the Record Date
fixed for the determination of the stockholders
entitled to receive such rights or warrants" and
such "Record Date" within the meaning of Section
12.4(c), and
(B) any shares of Common Stock included in
such dividend or distribution shall not be deemed
"outstanding at the close of business on the date
fixed for such determination" within the meaning of
Section 12.4(a) and any reduction or increase in
the number of shares of Common Stock resulting from
such subdivision or combination shall be
disregarded in connection with such dividend or
distribution.
(e) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock cash
(excluding any cash that is distributed upon a reclassification,
change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 12.11 hereof
applies or as part of a distribution referred to in Section 12.4(d)
hereof), in an aggregate amount that, combined together with:
(1) the aggregate amount of any other such
distributions to all holders of Common Stock made
exclusively in cash within the 12 months preceding the date
of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 12.4(e) has been made,
and
(2) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors,
whose determination shall be conclusive and set forth in a
Board Resolution) of consideration payable in respect of
any tender offer by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within
the 12 months preceding the date of such distribution, and
in respect of which no adjustment pursuant to Section
12.4(f) hereof has been made,
exceeds 10% of the product of the Current Market Price (determined
as provided in Section 12.4(g)) on the Record Date with respect to
such distribution times the number of shares of Common Stock
outstanding on such date, then and in each such case, immediately
after the close of business on such date, the Conversion Price shall
be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
close of business on such Record Date by a fraction:
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(i) the numerator of which shall be equal to
the Current Market Price on the Record Date less an amount
equal to the quotient of (x) the excess of such combined
amount over such 10% and (y) the number of shares of Common
Stock outstanding on the Record Date, and
(ii) the denominator of which shall be equal to
the Current Market Price on such date.
However, in the event that the then fair market value (as so
determined) of the portion of the securities so distributed
applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion of a Security
(or any portion thereof) the amount of cash such Holder would have
received had such Holder converted such Security (or portion
thereof) immediately prior to such Record Date. In the event that
such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would
then be in effect if such dividend or distribution had not been
declared.
(f) In case a tender offer made by the Company or any
of its subsidiaries for all or any portion of the Common Stock shall
expire and such tender offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and set forth
in a Board Resolution) that combined together with:
(1) the aggregate of the cash plus the fair
market value (as determined by the Board of Directors,
whose determination shall be conclusive and set forth in a
Board Resolution), as of the expiration of such tender
offer, of consideration payable in respect of any other
tender offers, by the Company or any of its subsidiaries
for all or any portion of the Common Stock expiring within
the 12 months preceding the expiration of such tender offer
and in respect of which no adjustment pursuant to this
Section 12.4(f) has been made, and
(2) the aggregate amount of any distributions
to all holders of the Company's Common Stock made
exclusively in cash within 12 months preceding the
expiration of such tender offer and in respect of which no
adjustment pursuant to Section 12.4(e) has been made,
exceeds 10% of the product of the Current Market Price (determined
as provided in Section 12.4(g)) as of the last time (the "Expiration
Time") tenders could have been made
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pursuant to such tender offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the
date of the Expiration Time, the Conversion Price shall be adjusted
so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on
the date of the Expiration Time by a fraction:
(i) the numerator of which shall be the number
of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time multiplied by the
Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time, and
(ii) the denominator shall be the sum of (x) the
fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the terms of
the tender offer) of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the
Expiration Time.
Such reduction (if any) shall become effective immediately prior to
the opening of business on the day following the Expiration Time. In
the event that the Company is obligated to purchase shares pursuant
to any such tender offer, but the Company is permanently prevented
by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if
such tender offer had not been made. If the application of this
Section 12.4(f) to any tender offer would result in an increase in
the Conversion Price, no adjustment shall be made for such tender
offer under this Section 12.4(f).
(g) For purposes of this Section 12.4, the following
terms shall have the meanings indicated:
(1) "Current Market Price" shall mean the average
of the daily Closing Prices per share of Common Stock for
the ten consecutive Trading Days immediately prior to the
date in question; provided, however, that if:
(i) the "ex" date (as hereinafter defined)
for any event (other than the issuance or
distribution requiring such computation) that
requires an
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adjustment to the Conversion Price pursuant to
Section 12.4(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the
Closing Price for each Trading Day prior to the
"ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction
by which the Conversion Price is so required to be
adjusted as a result of such other event;
(ii) the "ex" date for any event (other
than the issuance or distribution requiring such
computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b),
(c), (d), (e) or (f) occurs on or after the "ex"
date for the issuance or distribution requiring
such computation and prior to the day in question,
the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of
such other event; and
(iii) the "ex" date for the issuance or
distribution requiring such computation is prior to
the day in question, after taking into account any
adjustment required pursuant to clause (i) or (ii)
of this proviso, the Closing Price for each Trading
Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair
market value (as determined by the Board of
Directors in a manner consistent with any
determination of such value for purposes of Section
12.4(d) or (f), whose determination shall be
conclusive and set forth in a Board Resolution) of
the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one
share of Common Stock as of the close of business
on the day before such "ex" date.
For purposes of any computation under Section 12.4(f), the
Current Market Price of the Common Stock on any date shall
be deemed to be the average of the daily Closing Prices per
share of Common Stock for such day and the next two
succeeding Trading Days; provided, however, that if the
"ex" date for any event (other than the tender offer
requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 12.4(a), (b), (c),
(d), (e) or (f) occurs on or after the Expiration Time for
the tender or exchange offer requiring such computation and
prior to the day in question, the Closing Price for each
Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is
so required to be adjusted as a result of such other event.
For purposes of this paragraph, the term "ex" date, when
used:
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(A) with respect to any issuance or
distribution, means the first date on which the
Common Stock trades regular way on the relevant
exchange or in the relevant market from which the
Closing Price was obtained without the right to
receive such issuance or distribution;
(B) with respect to any subdivision or
combination of shares of Common Stock, means the
first date on which the Common Stock trades regular
way on such exchange or in such market after the
time at which such subdivision or combination
becomes effective, and
(C) with respect to any tender or exchange
offer, means the first date on which the Common
Stock trades regular way on such exchange or in
such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Price are called for pursuant
to this Section 12.4, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 12.4 and to avoid
unjust or inequitable results as determined in good faith
by the Board of Directors.
(2) "fair market value" shall mean the amount
which a willing buyer would pay a willing seller in an
arm's length transaction.
(1) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in
which the holders of Common Stock have the right to receive
any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged
for or converted into any combination of cash, securities
or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(h) The Company may make such reductions in the
Conversion Price, in addition to those required by Sections 12.4(a),
(b), (c), (d), (e) or (f), as the Board of Directors considers to be
advisable to avoid or diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least 20 days and the reduction
is irrevocable during the period and the Board of Directors
82
determines in good faith that such reduction would be in the best
interests of the Company, which determination shall be conclusive
and set forth in a Board Resolution. Whenever the Conversion Price
is reduced pursuant to the preceding sentence, the Company shall
mail to the Trustee and each Holder at the address of such Holder as
it appears in the Register a notice of the reduction at least 15
days prior to the date the reduced Conversion Price takes effect,
and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
(i) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 12.4(i) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article 12 shall
be made by the Company and shall be made to the nearest cent or to
the nearest one hundredth of a share, as the case may be. No
adjustment need be made for a change in the par value or no par
value of the Common Stock.
(j) In any case in which this Section 12.4 provides
that an adjustment shall become effective immediately after a Record
Date for an event, the Company may defer until the occurrence of
such event (i) issuing to the Holder of any Security converted after
such Record Date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to
such adjustment and (ii) paying to such holder any amount in cash in
lieu of any fraction pursuant to Section 12.3 hereof.
(k) For purposes of this Section 12.4, the number of
shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(l) If the distribution date for the rights provided in
the Company's rights agreement, if any, occurs prior to the date a
Security is converted, the Holder of the Security who converts such
Security after the distribution date is not entitled to receive the
rights that would otherwise be attached (but for the date of
conversion) to the shares of Common Stock received upon such
conversion; provided, however, that an adjustment shall be made to
the Conversion Price pursuant to clause 12.4(b) as if the rights
were being distributed to the common stockholders of the Company
immediately prior to such conversion. If such an adjustment is made
and the rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment shall be made to the Conversion
Price, on an equitable basis, to take account of such event.
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12.5 SECTION NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price is adjusted as herein
provided (other than in the case of an adjustment pursuant to the second
paragraph of Section 12.4(h) for which the notice required by such paragraph
has been provided), the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers' Certificate setting
forth the adjusted Conversion Price and showing in reasonable detail the
facts upon which such adjustment is based. Promptly after delivery of such
Officers' Certificate, the Company shall prepare a notice stating that the
Conversion Price has been adjusted and setting forth the adjusted Conversion
Price and the date on which each adjustment becomes effective, and shall mail
such notice to each Holder at the address of such Holder as it appears in the
Register within 20 days of the effective date of such adjustment. Failure to
deliver such notice shall not effect the legality or validity of any such
adjustment.
12.6 SECTION NOTICE PRIOR TO CERTAIN ACTIONS.
In case at any time after the date hereof:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out
of its capital surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class (or of
securities convertible into shares of capital stock of any class) or
of any other rights;
(3) there shall occur any reclassification of the
Common Stock of the Company (other than a subdivision or combination
of its outstanding Common Stock, a change in par value, a change
from par value to no par value or a change from no par value to par
value), or any merger, consolidation, statutory share exchange or
combination to which the Company is a party and for which approval
of any shareholders of the Company is required, or the sale,
transfer or conveyance of all or substantially all of the assets of
the Company; or
(4) there shall occur the voluntary or involuntary
dissolution, liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of securities pursuant to Section 9.2 hereof, and
shall cause to be provided to the
84
Trustee and all Holders in accordance with Section 14.2 hereof, at least 20
days (or 10 days in any case specified in clause (1) or (2) above) prior to
the applicable record or effective date hereinafter specified, a notice
stating:
(A) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or
(B) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale,
transfer, conveyance, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, merger,
consolidation, statutory share exchange, sale, transfer,
dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect
therein shall affect the legality or validity of the proceedings or actions
described in clauses (1) through (4) of this Section 12.6.
12.7 SECTION COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times use its best efforts to
reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the full number of shares of fully paid and
nonassessable Common Stock then issuable upon the conversion of all
Outstanding Securities.
12.8 SECTION TAXES ON CONVERSIONS.
Except as provided in the next sentence, the Company will
pay any and all taxes (other than taxes on income) and duties that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of Securities pursuant hereto. A Holder delivering a Security for
conversion shall be liable for and will be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery
shall be made unless the Person requesting such issue has paid to the Company
the amount of any such tax or duty, or has established to the satisfaction of
the Company that such tax or duty has been paid.
12.9 SECTION COVENANT AS TO COMMON STOCK.
85
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 12.8, the Company will pay
all taxes, liens and charges with respect to the issue thereof.
12.10 SECTION CANCELLATION OF CONVERTED SECURITIES.
All Securities delivered for conversion shall be delivered
to the Trustee to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 2.9.
12.11 SECTION EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE.
If any of following events occur, namely:
(i) any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination),
(ii) any merger, consolidation, statutory share exchange
or combination of the Company with another corporation as a result
of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect
to or in exchange for such Common Stock or
(iii) any sale or conveyance of the properties and assets
of the Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common
Stock,
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply
with the TIA as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply)
providing that such Security shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Securities been converted into
Common Stock immediately prior to such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
assuming such holder of Common Stock did not exercise its rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such
86
merger, consolidation, statutory share exchange, sale or conveyance is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("Non-Electing Share"), then for the
purposes of this Section 12.11 the kind and amount of securities, cash or
other property receivable upon such merger, consolidation, statutory share
exchange, sale or conveyance for each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 12. If, in the case of any such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also
be executed by such other corporation and shall contain such additional
provisions to protect the interests of the Holders of the Securities as the
Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent practicable the provisions providing for
the Repurchase Rights set forth in Article 13 hereof.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder, at the address of such
Holder as it appears on the Register, within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of
such supplemental indenture.
The above provisions of this Section shall similarly apply
to successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 12.11 applies to any event or occurrence,
Section 12.4 hereof shall not apply.
12.12 SECTION RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
The Trustee, subject to the provisions of Section 5.1
hereof, and any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with
respect to the nature or intent of any such adjustments when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee, subject to
the provisions of Section 5.1 hereof, nor any Conversion Agent shall be
accountable with respect to the validity or value (of the kind or amount) of
any Common Stock, or of any other securities or property, which may at any
time be issued or delivered upon the conversion of any Security; and it or
they do not make any
87
representation with respect thereto. Neither the Trustee, subject to the
provisions of Section 5.1 hereof, nor any Conversion Agent shall be
responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of stock or share certificates or other
securities or property upon the surrender of any Security for the purpose of
conversion; and the Trustee, subject to the provisions of Section 5.1 hereof,
and any Conversion Agent shall not be responsible or liable for any failure
of the Company to comply with any of the covenants of the Company contained
in this Article.
13ARTICLE
SUBORDINATION
13.1 SECTION SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company covenants and agrees, and each Holder of
Securities, by such Holder's acceptance thereof, likewise covenants and
agrees, that the Indebtedness represented by the Securities and the payment
of the principal of and premium, if any, and interest (including Liquidated
Damages, if any) on each and all of the Securities is hereby expressly
subordinated and junior, to the extent and in the manner set forth and as set
forth in this Section 13.1, in right of payment to the prior payment in full
of all Senior Debt.
(a) In the event of any distribution of assets of the Company
upon any dissolution, winding up, liquidation or reorganization of the
Company, whether in bankruptcy, insolvency, reorganization or receivership
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of the Company or otherwise, the
holders of all Senior Debt shall first be entitled to receive payment of the
full amount due thereon in respect of all such Senior Debt and all other
amounts due or provision shall be made for such amount in cash, or other
payments satisfactory to the holders of Senior Debt, before the Holders of
any of the Securities are entitled to receive any payment or distribution of
any character, whether in cash, securities or other property, on account of
the principal of or premium, if any, or interest (including Liquidated
Damages, if any) on the Indebtedness evidenced by the Securities.
(b) In the event of any acceleration of Maturity of the
Securities because of an Event of Default, unless the full amount due in
respect of all Senior Debt is paid in cash or other form of payment
satisfactory to the holders of Senior Debt, no payment shall be made by the
Company with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities or to acquire any of
the Securities (including any redemption, conversion or cash repurchase
pursuant to the exercise of the Repurchase Right), and the Company shall give
prompt written notice of such acceleration to such holders of Senior Debt.
(c) In the event of and during the continuance of any default
in payment of the
88
principal of or premium, if any, or interest on, rent or other payment
obligation in respect of, any Senior Debt, unless all such payments due in
respect of such Senior Debt have been paid in full in cash or other payments
satisfactory to the holders of Senior Debt, no payment shall be made by the
Company with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities or to acquire any of
the Securities (including any redemption, conversion or cash repurchase
pursuant to the exercise of the Repurchase Right). The Company shall give
prompt written notice to the Trustee of any default under any Senior Debt or
under any agreement pursuant to which Senior Debt may have been issued.
(d) During the continuance of any event of default with respect
to any Designated Senior Debt, as such event of default is defined under any
such Designated Senior Debt or in any agreement pursuant to which any
Designated Senior Debt has been issued (other than a default in payment of
the principal of or premium, if any, or interest on, rent or other payment
obligation in respect of any Designated Senior Debt), permitting the holder
or holders of such Designated Senior Debt to accelerate the maturity thereof
(or in the case of any lease, permitting the landlord either to terminate the
lease or to require the Company to make an irrevocable offer to terminate the
lease following an event of default thereunder), no payment shall be made by
the Company, directly or indirectly, with respect to principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Securities
for 179 days following notice in writing (a "Payment Blockage Notice") to the
Company, from any holder or holders of such Designated Senior Debt or their
representative or representatives or the trustee or trustees under any
indenture or under which any instrument evidencing any such Designated Senior
Debt may have been issued, that such an event of default has occurred and is
continuing, unless such event of default has been cured or waived or such
Designated Senior Debt has been paid in full; provided, however, if the
maturity of such Designated Senior Debt is accelerated (or in the case of any
lease, as a result of such event of default, the landlord under the lease has
given the Company notice of its intention to terminate the lease or to
require the Company to make an irrevocable offer to terminate the lease), no
payment may be made on the Securities until such Designated Senior Debt has
been paid in full in cash or other payment satisfactory to the holders of
such Designated Senior Debt or such acceleration (or termination, in the case
of a lease) has been cured or waived.
For purposes of this Section 13.1(d), such Payment Blockage
Notice shall be deemed to include notice of all other events of default under
such indenture or instrument which are continuing at the time of the event of
default specified in such Payment Blockage Notice. The provisions of this
Section 13.1(d) shall apply only to one such Payment Blockage Notice given in
any period of 365 days with respect to any issue of Designated Senior Debt,
and no such continuing event of default that existed or was continuing on the
date of delivery of any Payment Blockage Notice shall be, or shall be made,
the basis for a subsequent Payment Blockage Notice.
(e) In the event that, notwithstanding the foregoing provisions
of Sections
89
13.1(a), 13.1(b), 13.1(c) and 13.1(d), any payment on account of principal,
premium, if any, or interest (including Liquidated Damages, if any) on the
Securities shall be made by or on behalf of the Company and received by the
Trustee, by any Holder or by any Paying Agent (or, if the Company is acting
as its own Paying Agent, money for any such payment shall be segregated and
held in trust):
(i) after the occurrence of an event specified in
Section 13.1(a) or 13.1(b), then, unless all Senior Debt is paid in
full in cash, or provision shall be made therefor,
(ii) after the happening of an event of default of the
type specified in Section 13.1(c) above, then, unless the amount of
such Senior Debt then due shall have been paid in full, or provision
made therefor or such event of default shall have been cured or
waived, or
(iii) after the happening of an event of default of the
type specified in Section 13.1(d) above and delivery of a Payment
Blockage Notice, then, unless such event of default shall have been
cured or waived or the 179-day period specified in Section 13.1(d)
shall have expired,
such payment (subject, in each case, to the provisions of Section 13.7
hereof) shall be held in trust for the benefit of, and shall be immediately
paid over to, the holders of Designated Senior Debt (unless an event
described in Section 13.1(a), (b) or (c) has occurred, in which case the
payment shall be held in trust for the benefit of, and shall be immediately
paid over to all holders of Senior Debt) or their representative or
representatives or the trustee or trustees under any indenture under which
any instruments evidencing any of the Designated Senior Debt or Senior Debt,
as the case may be, may have been issued, as their interests may appear.
13.2 SECTION SUBROGATION.
Subject to the payment in full of all Senior Debt to which
the Indebtedness evidenced by the Securities is in the circumstances
subordinated as provided in Section 13.1 hereof, the Holders of the
Securities shall be subrogated to the rights of the holders of such Senior
Debt to receive payments or distributions of cash, property or securities of
the Company applicable to such Senior Debt until all amounts owing on the
Securities shall be paid in full, and, as between the Company, its creditors
other than holders of such Senior Debt, and the Holders of the Securities, no
such payment or distribution made to the holders of Senior Debt by virtue of
this Article which otherwise would have been made to the holders of the
Securities shall be deemed to be a payment by the Company on account of such
Senior Debt, provided that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of Senior Debt,
on the other hand.
90
13.3 SECTION OBLIGATION OF THE COMPANY IS ABSOLUTE AND
UNCONDITIONAL.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Debt, and the Holders
of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on the
Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of
the Holders of the Securities and creditors of the Company other than the
holders of Senior Debt, nor shall anything contained herein or therein
prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders
of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
13.4 SECTION MATURITY OF OR DEFAULT ON SENIOR DEBT.
Upon the maturity of any Senior Debt by lapse of time, acceleration
or otherwise, all principal of or premium, if any, or interest on, rent or
other payment obligations in respect of all such matured Senior Debt shall
first be paid in full, or such payment shall have been duly provided for,
before any payment on account of principal, or premium, if any, or interest
(including Liquidated Damages, if any) is made upon the Securities.
13.5 SECTION PAYMENTS ON SECURITIES PERMITTED.
Except as expressly provided in this Article, nothing
contained in this Article shall affect the obligation of the Company to make,
or prevent the Company from making, payments of the principal of, or premium,
if any, or interest (including Liquidated Damages, if any) on the Securities
in accordance with the provisions hereof and thereof, or shall prevent the
Trustee or any Paying Agent from applying any moneys deposited with it
hereunder to the payment of the principal of, or premium, if any, or interest
(including Liquidated Damages, if any) on the Securities.
13.6 SECTION EFFECTUATION OF SUBORDINATION BY TRUSTEE.
Each Holder of Securities, by such Holder's acceptance
thereof, authorizes and directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
91
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation
or reorganization proceeding affecting the affairs of the Company is pending
or upon a certificate of the trustee in bankruptcy, receiver, assignee for
the benefit of creditors, liquidating trustee or agent or other Person making
any payment or distribution, delivered to the Trustee or to the Holders of
the Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, and as to other facts pertinent
to the right of such Persons under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Persons pending judicial
determination as to the right of such Persons to receive such payment.
13.7 SECTION KNOWLEDGE OF TRUSTEE.
Notwithstanding the provision of this Article or any other
provisions of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any Senior Debt, of any default in payment of principal
of, premium, if any, or interest on, rent or other payment obligation in
respect of any Senior Debt, or of any facts which would prohibit the making
of any payment of moneys to or by the Trustee, or the taking of any other
action by the Trustee, unless a Responsible Officer of the Trustee having
responsibility for the administration of the trust established by this
Indenture shall have received written notice thereof from the Company, any
Holder of Securities, any Paying or Conversion Agent of the Company or the
holder or representative of any class of Senior Debt, and, prior to the
receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such default or facts exist; provided, however,
that unless on the third Business Day prior to the date upon which by the
terms hereof any such moneys may become payable for any purpose the Trustee
shall have received the notice provided for in this Section 13.7, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date.
13.8 SECTION TRUSTEE'S RELATION TO SENIOR DEBT.
The Trustee shall be entitled to all the rights set forth
in this Article with respect to any Senior Debt at the time held by it, to
the same extent as any other holder of Senior Debt and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing contained in this Article shall apply to claims of
or payments to the Trustee under or pursuant to Section 5.8 hereof.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or
92
to observe only such of its covenants and obligations as are specifically set
forth in this Article, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and the Trustee shall not be liable to any holder of
Senior Debt if it shall pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
13.9 SECTION RIGHTS OF HOLDERS OF SENIOR DEBT NOT IMPAIRED.
No right of any present or future holder of any Senior Debt
to enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
13.10 SECTION MODIFICATION OF TERMS OF SENIOR DEBT.
Any renewal or extension of the time of payment of any
Senior Debt or the exercise by the holders of Senior Debt of any of their
rights under any instrument creating or evidencing Senior Debt, including
without limitation the waiver of default thereunder, may be made or done all
without notice to or assent from the Holders of the Securities or the Trustee.
No compromise, alteration, amendment, modification,
extension, renewal or other change of, or waiver, consent or other action in
respect of, any liability or obligation under or in respect of, or of any of
the terms, covenants or conditions of any indenture or other instrument under
which any Senior Debt is outstanding or of such Senior Debt, whether or not
such release is in accordance with the provisions or any applicable document,
shall in any way alter or affect any of the provisions of this Article or of
the Securities relating to the subordination thereof.
13.11 SECTION CERTAIN CONVERSIONS NOT DEEMED PAYMENT.
For the purposes of this Article 13 only:
(1) the issuance and delivery of junior securities upon
conversion of Securities in accordance with Article 12 hereof shall
not be deemed to constitute a payment or distribution on account of
the principal of, premium, if any, or interest (including Liquidated
Damages, if any) on Securities or on account of the purchase or
other acquisition of Securities, and
(2) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 12.3
hereof), property or securities (other than junior
93
securities) upon conversion of a Security shall be deemed to
constitute payment on account of the principal of, premium, if any,
or interest (including Liquidated Damages, if any) on such Security.
For the purposes of this Section 13.11, the term "junior securities" means:
(a) shares of any common stock of the Company or
(b) other securities of the Company that are
subordinated in right of payment to all Senior Debt that may be
outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent that,
the Securities are so subordinated as provided in this Article.
Nothing contained in this Article 13 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its
creditors (other than holders of Senior Debt) and the Holders of Securities,
the right, which is absolute and unconditional, of the Holder of any Security
to convert such Security in accordance with Article 12 hereof.
14 ARTICLE
OTHER PROVISIONS OF GENERAL APPLICATION
14.1 SECTION Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA
which are required to be part of this Indenture, and shall, to the extent
applicable, be governed by such provisions.
14.2 SECTION NOTICES.
Any notice or communication to the Company or the Trustee
is duly given if in writing and delivered in person or mailed by first-class
mail to the address set forth below:
(a) if to the Company:
Inhale Therapeutic Systems, Inc.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx
Attention: Xxxxxxx X. Xxxxx, Esq.
with a copy to:
Xxxxxx Godward LLP
0000 Xxxx Xxxx Xxxx
00
Xxxxxxxx #0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
(b) if to the Trustee:
Chase Manhattan Bank and Trust Company, National
Association
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by
first-class mail to his address shown on the Register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in such
notice or communication shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed or sent in the
manner provided above within the time prescribed, it is duly given as of the
date it is mailed, whether or not the addressee receives it, except that
notice to the Trustee shall only be effective upon receipt thereof by the
Trustee.
If the Company mails a notice or communication to Holders,
it shall mail a copy to the Trustee at the same time.
14.3 SECTION Communication by Holders with Other Holders.
Holders may communicate pursuant to Section 312(b) of the
TIA with other Holders with respect to their rights under the Securities or
this Indenture. The Company, the Trustee, the Registrar and anyone else shall
have the protection of Section 312(c) of the TIA.
14.4 SECTION ACTS OF HOLDERS OF SECURITIES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by:
(1) one or more instruments of substantially similar tenor
signed by such
95
Holders in person or by agent or proxy duly appointed in writing;
(2) the record of Holders of Securities voting in favor
thereof, either in person or by proxies duly appointed in writing,
at any meeting of Holders of Securities duly called and held in
accordance with the provisions of Article 8; or
(3) a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered
to the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments and record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders of Securities signing such instrument or instruments and so voting at
such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject
to Section 5.1 hereof) conclusive in favor of the Trustee and the Company if
made in the manner provided in this Section. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 8.6
hereof.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be provided in any manner which the Trustee
reasonably deems sufficient.
(c) The principal amount and serial numbers of Securities held
by any Person, and the date of such Person holding the same, shall be proved
by the Register.
(d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of the Holders of any 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.
14.5 SECTION CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
96
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon an Opinion of Counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the Opinion of Counsel with respect to the matters upon which such
certificate or opinion is based is erroneous. Any such Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such Counsel all such conditions precedent, if any,
have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
14.6 SECTION STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate
or opinion on behalf of the Company has read such covenant or
condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
97
14.7 SECTION EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
14.8 SECTION SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
14.9 SECTION SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
14.10 SECTION BENEFITS OF INDENTURE.
Nothing contained in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder, the holders of Senior Debt and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under
this Indenture.
14.11 SECTION GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
14.12 SECTION COUNTERPARTS.
This instrument may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original but all such counterparts shall together constitute but one and the
same instrument.
14.13 SECTION LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security or the last day on which a Holder of
a Security has a right to convert such Security shall not be a Business Day
at any Place of Payment or Place of Conversion, then
98
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest (including Liquidated Damages, if any) or principal or
premium, if any, or conversion of the Securities, need not be made at such
Place of Payment or Place of Conversion on such day, but may be made on the
next succeeding Business Day at such Place of Payment or Place of Conversion
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity or on such last day for conversion,
provided, that in the case that payment is made on such succeeding Business
Day, no interest shall accrue on the amount so payable for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as
the case may be.
14.14 SECTION RECOURSE AGAINST OTHERS.
No recourse for the payment of the principal of or premium,
if any, or interest (including Liquidated Damages, if any) on any Security,
or for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or of any successor corporation, whether by
virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance thereof and as part of the consideration for the issue thereof,
expressly waived and released.
99
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the day and year first above written.
100
INHALE THERAPEUTIC SYSTEMS, INC.
By: /s/ Xxxxxx Chess
_______________________________
Name:
Title:
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxx
_______________________________
Name:
Title:
101
EXHIBIT A
FORM OF SECURITY
[FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO INHALE THERAPEUTIC SYSTEMS, INC. (OR ITS
SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.1
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED
IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR") THAT IS PURCHASING AT LEAST $100,000 IN
AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES OR AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(4), (5) or (6) UNDER THE SECURITIES ACT (A
"NON-INSTITUTIONAL ACCREDITED INVESTOR") THAT IS PURCHASING AT LEAST $250,000
IN AGGREGATE PRINCIPAL AMOUNT OF DEBENTURES; (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 THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS
PURCHASING DEBENTURES IN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $100,000 OR
TO A NON-INSTITUTIONAL ACCREDITED INVESTOR THAT IS
----------------------
1 This legend should be included only if the Security is issued in global
form.
102
PURCHASING DEBENTURES IN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $250,000, AND
THAT, IN EITHER CASE, PRIOR TO SUCH TRANSFER, FURNISHES TO CHASE MANHATTAN
BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, AS
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND WARRANTIES RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF LETTER CAN BE OBTAINED
FROM SUCH TRUSTEE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF SUCH SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(E)
ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED
TRANSFER IS PURSUANT TO CLAUSE (2)(C) OR 2(D) ABOVE, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE (2)(E) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE
OF THE SECURITY EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "UNITED STATES"
AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
103
INHALE THERAPEUTIC SYSTEMS, INC.
6 3/4% Convertible Subordinated Debenture due 2006
CUSIP NO. 457 191____
No._______ $_______________
INHALE THERAPEUTIC SYSTEMS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_______________, or its registered assigns, the principal sum of ______________
U.S. Dollars ($____________________) on October 13, 2006.
Interest Payment Dates: April 13 and October 13, commencing
April 13, 2000
Regular Record Dates: March 31 and September 30
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
104
IN WITNESS WHEREOF, the Company has caused this Security to
be duly executed manually or by facsimile by its duly authorized officers.
Dated: October 13, 1999 INHALE THERAPEUTIC SYSTEMS, INC.
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
105
Trustee's Certificate of Authentication
This is one of the 6 3/4% Convertible Subordinated Debentures due 2006
described in the within-named Indenture.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:_____________________________
Authorized Signatory
Dated: October 13, 1999
106
[REVERSE OF SECURITY]
INHALE THERAPEUTIC SYSTEMS, INC.
6 3/4% Convertible Subordinated Debenture due 2006
Capitalized terms used herein but not defined shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.
1. Principal and Interest.
Inhale Therapeutic Systems, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of this Security
at the Interest Rate from the date of issuance until repayment at Maturity,
redemption or repurchase. The Company will pay interest on this Security
semiannually in arrears on April 13 and October 13 of each year (each an
"Interest Payment Date"), commencing April 13, 2000.
Interest on the Securities shall be computed (i) for any full
semiannual period for which a particular Interest Rate is applicable on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable shorter than a full semiannual
period for which interest is calculated, on the basis of a 30-day month and,
for such periods of less than a month, the actual number of days elapsed over
a 30-day month.
A Holder of any Security at the close of business on a Regular
Record Date shall be entitled to receive interest on such Security on the
corresponding Interest Payment Date. A Holder of any Security which is
converted after the close of business on a Regular Record Date and prior to
the corresponding Interest Payment Date (other than any Security whose
Maturity is prior to such Interest Payment Date) shall be entitled to receive
interest on the principal amount of such Security, notwithstanding the
conversion of such Security prior to such Interest Payment Date. However, any
such Holder which surrenders any such Security for conversion during the
period between the close of business on such Regular Record Date and ending
with the opening of business on the corresponding Interest Payment Date shall
be required to pay the Company an amount equal to the interest on the
principal amount of such Security so converted, which is payable by the
Company to such Holder on such Interest Payment Date, at the time such Holder
surrenders such Security for conversion. Notwithstanding the foregoing, any
such Holder which surrenders for conversion any Security which has been
called for redemption by the Company in a notice of redemption given by the
Company pursuant to Section 10.4 of the Indenture shall be entitled to
receive (and retain) such interest and need not pay the Company an amount
equal to the interest on the principal amount of such Security so converted
at the time such Holder surrenders such Security for conversion.
In accordance with the terms of the Resale Registration
Rights Agreement, dated October 13, 1999, between the Company and Xxxxxx
Brothers Inc., Deutsche Bank Securities Inc. and U.S. Bancorp Xxxxx Xxxxxxx
Inc., during the first 90 days following a Registration Default (as defined
in the Resale Registration Rights Agreement), the Interest Rate borne by the
Securities shall be increased by 0.25% on:
(A) January 12, 2000, if the shelf registration
statement (the "Shelf Registration Statement") is not filed prior to
or on January 11, 2000;
(B) April 11, 2000, if the Shelf Registration Statement
is not declared effective by the Securities and Exchange Commission
prior to or on April 10, 2000;
(C) the day after the fifth Business Day after the
Shelf Registration Statement, previously declared effective, ceases
to be effective or fails to be usable, if a post-effective amendment
(or report filed pursuant to the Exchange Act) that cures the Shelf
Registration Statement is not filed with the Securities and Exchange
Commission during such five Business Day period; or
(D) the day following the 45th or 60th day, as the case
may be, of any period that the prospectus contained in the Shelf
Registration Statement has been suspended, if such suspension has
not been terminated.
From and after the 91st day following such Registration Default, the Interest
Rate borne by the Securities shall be increased by 0.50%. In no event shall
the Interest Rate borne by the Securities be increased by more than 0.50%.
Any amount of additional interest will be payable in cash
semiannually, in arrears, on each Interest Payment Date and will cease to
accrue on the date the Registration Default is cured. The Holder of this
Security is entitled to the benefits of the Resale Registration Rights
Agreement.
2. Method of Payment.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Principal of, and premium, if any, and interest on, Global
Securities will be payable to the Depositary in immediately available funds.
Principal and premium, if any, on Physical Securities will
be payable at the office or agency of the Company maintained for such
purpose, initially the Corporate Trust Office of the Trustee. Interest on
Physical Securities will be payable by (i) U.S. Dollar check drawn on a bank
in The City of New York mailed to the address of the Person entitled thereto
as such address shall appear in the Register, or
(ii) upon application to the Registrar not later than the relevant Record
Date by a Holder of an aggregate principal amount in excess of $5,000,000,
wire transfer in immediately available funds.
3. Paying Agent and Registrar.
Initially, Chase Manhattan Bank and Trust Company, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change the Paying Agent or Registrar without
notice to any Holder.
4. Indenture.
The Company issued this Security under an Indenture, dated
as of October 13, 1999 (the "Indenture"), between the Company and Chase
Manhattan Bank and Trust Company, National Association, as trustee (the
"Trustee"). The terms of the Security include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended ("TIA"). This Security is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of all such
terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the
Indenture, the terms of the Indenture shall control.
5. Optional Redemption.
This Security is not redeemable prior to October 13, 2002.
This Security may be redeemed in whole or in part, upon not less than 20 nor
more than 60 days' notice, at any time on or after October 13, 2002, at the
option of the Company, at the Redemption Prices (expressed as percentages of
the principal amount) set forth below, plus any interest accrued but unpaid
to the Redemption Date.
During the Twelve Months
Commencing Redemption Prices
---------- -----------------
October 13, 2002 103.375%
October 13, 2003 102.250%
October 13, 2004 101.125%
October 13, 2005 100.000%
Securities in original denominations larger than $1,000 may
be redeemed in part. If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Security so selected, the converted portion of such
Security shall be deemed to be the portion selected for redemption (provided,
however, that the Holder of such Security so converted and deemed redeemed
shall not be entitled to any additional interest payment as a result of such
deemed redemption than such Holder would have otherwise been entitled to
receive upon conversion of such Security). Securities which have been
converted during a selection of Securities to be redeemed may be treated by
the Trustee as Outstanding for the purpose of such selection.
On and after the Redemption Date, interest ceases to accrue
on Securities or portions of Securities called for redemption, unless the
Company defaults in the payment of the Redemption Price.
Notice of redemption will be given by the Company to the
Holders as provided in the Indenture.
6. Repurchase Right Upon a Change of Control.
If a Change in Control occurs, the Holder of Securities, at
the Holder's option, shall have the right, in accordance with the provisions
of the Indenture, to require the Company to repurchase the Securities (or any
portion of the principal amount hereof that is at least $1,000 or an integral
multiple thereof, provided that the portion of the principal amount of this
Security to be Outstanding after such repurchase is at least equal to $1,000)
at the Repurchase Price in cash, plus any interest accrued and unpaid to the
Repurchase Date.
Subject to the conditions provided in the Indenture, the
Company may elect to pay the Repurchase Price by delivering a number of
shares of Common Stock equal to (i) the Repurchase Price divided by (ii) 95%
of the average of the Closing Prices per share for the five consecutive
Trading Days immediately preceding and including the third Trading Day prior
to the Repurchase Date.
No fractional shares of Common Stock will be issued upon
repurchase of any Securities. Instead of any fractional share of Common Stock
which would otherwise be issued upon conversion of such Securities, the
Company shall pay a cash adjustment as provided in the Indenture.
A Company Notice will be given by the Company to the
Holders as provided in the Indenture. To exercise a repurchase Right, a
Holder must deliver to the Trustee a written notice as provided in the
Indenture.
7. Conversion Rights.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of Securities is entitled, at such Holder's option, at
any time before the close of business on October 13, 2006, to convert the
Holder's Securities (or any portion of the principal amount hereof which is
$1,000 or an integral multiple thereof), at the principal amount thereof or
of such portion, into duly authorized, fully paid and nonassessable shares of
Common Stock of the Company at the Conversion Price in effect at the time of
conversion.
In the case of a Security (or a portion thereof) called for
redemption, such conversion right in respect of the Security (or such portion
thereof) so called, shall expire at the close of business on the second
Business Day preceding the Redemption Date, unless the Company defaults in
making the payment due upon redemption. In the case of a Change of Control
for which the Holder exercises its Repurchase Right with respect to a
Security (or a portion thereof), such conversion right in respect of the
Security (or portion thereof) shall expire at the close of business on the
Business Day preceding the Repurchase Date.
The Conversion Price shall be initially equal to $32.0075
per share of Common Stock. The Conversion Price shall be adjusted under
certain circumstances as provided in the Indenture.
To exercise the conversion right, the Holder must surrender
the Security (or portion thereof) duly endorsed or assigned to the Company or
in blank, at the office of the Conversion Agent, accompanied by a duly signed
conversion notice to the Company. Any Security surrendered for conversion
during the period from the close of business on any Regular Record Date to
the opening of business on the corresponding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date),
shall also be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of the
Securities being surrendered for conversion.
No fractional shares of Common Stock will be issued upon
conversion of any Securities. Instead of any fractional share of Common Stock
which would otherwise be issued upon conversion of such Securities, the
Company shall pay a cash adjustment as provided in the Indenture.
8. Subordination.
The Indebtedness evidenced by this Security is, to the
extent and in the manner provided in the Indenture, subordinated and subject
in right of payment to the prior payment in full of all amounts then due on
all Senior Debt of the Company, and this Security is issued subject to such
provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
9. Denominations; Transfer; Exchange.
The Securities are issuable in registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000 in
excess thereof. A Holder may register the transfer or exchange of Securities
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.
In the event of a redemption in part, the Company will not
be required (a) to register the transfer of, or exchange, Securities for a
period of 15 days immediately preceding the date notice is given identifying
the serial numbers of the Securities called for such redemption, or (b) to
register the transfer of, or exchange, any such Securities, or portion
thereof, called for redemption.
In the event of redemption, conversion or repurchase of the
Securities in part only, a new Security or Securities for the unredeemed,
unconverted or unrepurchased portion thereof will be issued in the name of
the Holder hereof.
10. Persons Deemed Owners.
The registered Holder of this Security shall be treated as
its owner for all purposes.
11. Unclaimed Money.
The Trustee and the Paying Agent shall pay to the Company
any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years after the date upon which such
payment shall have become due. After payment to the Company, Holders entitled
to the money must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money
shall cease.
12. Discharge Prior to Redemption or Maturity.
Subject to certain conditions contained in the Indenture,
the Company may discharge its obligations under the Securities and the
Indenture if (1) (a) all of the Outstanding Securities shall become due and
payable at their scheduled Maturity within one year or (b) all of the
Outstanding Securities are scheduled for redemption within one year, and (2)
the Company shall have deposited with the Trustee money and/or U.S.
Government Obligations sufficient to pay the principal of, and premium, if
any, and interest on, all of the Outstanding Securities on the date of
Maturity or redemption, as the case may be.
13. Amendment; Supplement; Waiver.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Outstanding Securities (or such lesser amount as shall have acted at a
meeting pursuant to the provisions of the Indenture). The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security or such other
Security.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on this
Security at the times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security (or pay cash in lieu of conversion) as
provided in the
Indenture.
14. Defaults and Remedies.
The Indenture provides that an Event of Default with
respect to the Securities occurs when any of the following occurs:
(a) the Company defaults in the payment of the
principal of or premium, if any, on any of the Securities when it
becomes due and payable at Maturity, upon redemption or exercise of
a Repurchase Right or otherwise, whether or not such payment is
prohibited by the subordination provisions of Article 13 of the
Indenture;
(b) the Company defaults in the payment of interest on
any of the Securities when it becomes due and payable and such
default continues for a period of 30 days, whether or not such
payment is prohibited by the subordination provisions of Article 13
of the Indenture;
(c) the Company fails to perform or observe any other
term, covenant or agreement contained in the Securities or the
Indenture and such default continues for a period of 60 days after
written notice of such failure is given as specified in the
Indenture;
(d) (i) the Company fails to make any payment by the end of
the applicable grace period, if any, after the maturity of any
Indebtedness for borrowed money in an amount in excess of $5,000,000
(provided that such failure shall not constitute an Event of Default
if (1) the Company determines, in good faith, that a lessor under a
lease described in clause (3)(a) of the definition of Indebtedness
set forth in the Indenture breached a covenant under the lease and
the Company has given notice of the breach to the lessor and the
Trustee and (2) as a result of the breach, the Company withholds
payment under the lease) (a "Default Exception"), or (ii) there is
an acceleration of any Indebtedness for borrowed money in an amount
in excess of $5,000,000 because of a default with respect to such
Indebtedness (other than a Default Exception) without such
Indebtedness having been discharged or such acceleration having been
cured, waived, rescinded or annulled, in the case of either clause
(i) or (ii) above, for a period of 30 days after written notice is
given to the Company as specified in the Indenture; and
(e) there are certain events of bankruptcy, insolvency
or reorganization of the Company.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
15. Authentication.
This Security shall not be valid until the Trustee (or
authenticating agent) executes the certificate of authentication on the other
side of this Security.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to
Minors Act).
17. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders under the
Indenture, Holders of Transfer Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement.
18. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on this Security and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on this Security or
as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
19. Governing Law.
The Indenture and this Security shall be governed by, and
construed in accordance with, the law of the State of New York.
20. Successor Corporation.
In the event a successor corporation assumes all the
obligations of the Company under this Security, pursuant to the terms hereof
and of the Indenture, the Company will be released from all such obligations.
ASSIGNMENT FORM
To assign this Security, fill in the form below and have your
signature guaranteed: (I) or (we) assign and transfer this Security to:
------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: Your Name:
----------------- ----------------------------------------
(Print your name exactly as it appears
on the face of this Security)
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
------------------------------
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
In connection with any transfer of this Security occurring prior to the date
which is the earlier of the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Security in the name of any Person
other than the Holder hereof unless the conditions to any such transfer of
registration set forth herein and in Sections 2.7, 2.8 and 2.9 of the
Indenture shall have been satisfied.
Dated:
-------------------- ---------------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
Signature Guarantee:
---------------------------------------
Signature must be guaranteed by a
participant in a recognized
signature guaranty medallion program
or other signature guarantor
acceptable to the Trustee.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion, in each case for investment and not with a view
to distribution, and that it and any such account is a "Qualified
Institutional Buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
------------------ -----------------------------------------------
NOTICE: To be executed by an executive officer
CONVERSION NOTICE
TO: INHALE THERAPEUTIC SYSTEMS, INC.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
The undersigned registered owner of this Security hereby
irrevocably exercises the option to convert this Security, or the portion
hereof (which is $1,000 principal amount or an integral multiple thereof)
below designated, into shares of Common Stock in accordance with the terms of
the Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon such conversion, together with any check in
payment for fractional shares and any Securities representing any unconverted
principal amount hereof, be issued and delivered to the registered holder
hereof unless a different name has been indicated below. If shares or any
portion of this Security not converted are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto. Any amount required to be paid to the
undersigned on account of interest (including Liquidated Damages, if any)
accompanies this Security.
Dated: Your Name:
------------------- --------------------------------------
(Print your name exactly as it appears
on the face of this Security)
Your Signature:
---------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
---------------------------
Social Security or other Taxpayer
Identification Number:
--------------------------
Principal amount to be converted (if less than all): $
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
Fill in for registration of shares (if to be issued) and Securities (if to be
delivered) other than to and in the name of the registered holder:
------------------------------------------------------------
(Name)
------------------------------------------------------------
(Street Address)
------------------------------------------------------------
(City, State and Zip Code)
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: INHALE THERAPEUTIC SYSTEMS, INC.
000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
The undersigned registered owner of this Security hereby
irrevocably acknowledges receipt of a notice from Inhale Therapeutic Systems,
Inc. (the "Company") as to the occurrence of a Change of Control with respect
to the Company and requests and instructs the Company to repay the entire
principal amount of this Security, or the portion thereof (which is $1,000
principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Security,
together with interest (including Liquidated Damages, if any) accrued and
unpaid to, but excluding, such date, to the registered holder hereof, in cash.
Dated: Your Name:
----------------- -------------------------------------
(Print your name exactly as it appears
on the face of this Security)
Your Signature:
---------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee*:
---------------------------
Social Security or other Taxpayer
Identification Number:
--------------------------
Principal amount to be repaid (if less than all): $
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES1
The following exchanges of a part of this Global Security
for Physical Securities have been made:
Principal Amount
of this
Global Security Signature of
Amount of decrease in Amount of increase in following such authorized
Date of Principal Amount of Principal Amount of decrease officer of
Exchange this Global Security this Global Security (or increase) Trustee
-------- -------------------- -------------------- ------------- -------
--------------------------
1 This schedule should be included only if the Security is issued in global
form.
EXHIBIT B
FORM OF CERTIFICATE TO BE DELIVERED BY
TRANSFEREE IN CONNECTION WITH TRANSFERS
TO ACCREDITED INVESTORS
[Date]
Chase Manhattan Bank and Trust Company, National Association
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: INHALE THERAPEUTIC SYSTEMS, INC.
Ladies and Gentlemen:
In connection with the undersigned's proposed purchase of
$___________ aggregate principal amount of 6 3/4% Convertible Subordinated
Debentures due 2006 (the "Debentures") of Inhale Therapeutic Systems, Inc.
(the "Company"), the undersigned confirms, represents and warrants that:
(1) The undersigned is (a) an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act of 1933, as amended (the "Securities Act")
or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501 under the Securities Act
(an "Institutional Accredited Investor") or (b) an "accredited
investor" within the meaning of Rule 501(a)(4), (5) or (6) under the
Securities Act (a "Non-institutional Accredited Investor").
(2) (A) Any purchase of the Securities by the
undersigned will be for the undersigned's own account or for the
account of one or more other Institutional Accredited Investors or
Non-institutional Accredited Investors or as fiduciary for the
account of one or
more trusts, each of which is an "accredited investor" within the meaning of
Rule 501(a)(7) under the Securities Act and for each of which the undersigned
exercises sole investment discretion or (B) the undersigned is a "bank",
within the meaning of Section 3(a)(2) of the Securities Act, or a "savings
and loan association" or other institution described in Section
3(a)(5)(A) of the Securities Act that is acquiring the Securities as
fiduciary for the account of one or more institutions for which the
undersigned exercises sold investment discretion.
(3) In the event that the undersigned is an Institutional
Accredited Investor that is purchasing Securities, the undersigned
will acquire Securities having a minimum aggregate principal amount
of $100,000 for its own account or for any separate account for
which the undersigned is acting.
(4) In the event that the undersigned is a
Non-institutional Accredited Investor that is purchasing Securities,
the undersigned will acquire Securities having a minimum aggregate
principal amount of $250,000 for its own account or for any separate
account for which the undersigned is acting.
(5) The undersigned has such knowledge and experience in
financial and business matters that the undersigned is capable of
evaluating the merits and risks of its investment in the Securities,
and the undersigned and any accounts for which it is acting is each
able to bear the economic risk of its or their investment.
(6) The undersigned is not acquiring the Securities with a
view to distribution thereof or with any present intention of
offering or selling any Securities or the Common Stock of the
Company issuable upon conversion thereof, except as permitted below;
provided that the disposition of the undersigned's property and the
property of any accounts for which the undersigned is acting as
fiduciary will remain at all times within the undersigned's control.
(7) The undersigned understands that the Securities and the
shares of Common Stock issuable upon conversion thereof have not
been registered under the Securities Act or any applicable state
securities laws.
(8) The undersigned agrees, on its own behalf and on behalf
of each account for which the undersigned acquires any Securities,
that if in the future the undersigned decides to resell or otherwise
transfer such Securities within two years after the original
issuance of the Securities, such Securities may be resold or
otherwise transferred only:
(A) to the Company or any subsidiary thereof;
(B) to a person which is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act)
in compliance with Rule 144A under the Securities Act;
(C) pursuant to an exemption from registration under
the Securities Act to an Institutional Accredited Investor
that is purchasing Securities having an aggregate principal
amount of at least $100,000 (or a number of shares of
Common Stock at least equal to $100,000 divided by $32.0075
(the initial conversion price)) or to a Non-institutional
Accredited Investor that is purchasing Securities having an
aggregate principal amount of at least $250,000 (or a
number of shares of Common Stock at least equal to $250,000
divided by $32.0075 (the initial conversion price)), and
that, in either case, prior to such transfer, furnishes to
you (or the transfer agent, as the case may be) a signed
letter substantially in the form of this letter;
(D) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if
available); or
(E) pursuant to a registration statement which has
been declared effective under the Securities Act (and
continues to be effective at the time of such transfer).
The undersigned further agrees to provide to any person purchasing
any of the Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.
(9) The undersigned understands that, on any proposed
resale of any Securities, the undersigned will be required to
furnish to you and the Company such certifications, legal opinions
and other information as you and the Company may reasonably require
to confirm that the proposed sale complies with the foregoing
restrictions. The undersigned further understands that the
Securities purchased by the undersigned will be in definitive form
and will bear a legend to the foregoing effect.
Each of the Company, the Trustee and the initial purchasers of
the Securities are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to
the matters covered hereby.
Very truly yours,
By:
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Name:
Title:
Address:
