EXHIBIT 4.1
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INDENTURE
BETWEEN
VERTEX PHARMACEUTICALS INCORPORATED,
AS ISSUER
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
5% CONVERTIBLE SUBORDINATED NOTES DUE 2007
DATED AS OF MARCH 14, 2000
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
ACT SECTION SECTION
--------------- ---------
310(a)(1).............................................................5.11
(a)(2).......................................................5.11
(a)(3)........................................................n/a
(a)(4)........................................................n/a
(a)(5).......................................................5.11
(b).....................................................5.3; 5.11
(c)...........................................................n/a
311(a) .............................................................5.12
(b)..........................................................5.12
(c)...........................................................n/a
312(a) .............................................................2.10
(b) .........................................................14.3
(c)..........................................................14.3
313(a) ..............................................................5.7
(b)(1)........................................................n/a
(b)(2)........................................................5.7
(c).....................................................5.7; 14.2
(d)...........................................................5.7
314(a)(1), (2), (3)..............................................9.6; 14.6
(a)(4)................................................; 9.7; 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
i
(c)...........................................................7.4
317(a)(1)..............................................................4.8
(a)(2)........................................................4.9
(b)...........................................................2.5
318(a) 14.1
(b)...........................................................n/a
(c)..........................................................14.1
--------------------------------
"n/a" means not applicable.
* This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.
ii
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..............................................................2
Section 1.1 Definitions.....................................................................................2
Section 1.2 Incorporation by Reference of Trust Indenture Act..............................................13
Section 1.3 Rules of Construction..........................................................................14
ARTICLE 2 THE SECURITIES.........................................................................................15
Section 2.1 Title and Terms................................................................................15
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.....................................................................21
Section 2.6 Paying Agent to Hold Assets in Trust...........................................................22
Section 2.7 General Provisions Relating to Transfer and Exchange...........................................23
Section 2.8 Book-Entry Provisions for the Global Securities................................................23
Section 2.9 Special Transfer Provisions....................................................................25
Section 2.10 Holder Lists...................................................................................26
Section 2.11 Persons Deemed Owners..........................................................................26
Section 2.12 Mutilated, Destroyed, Lost or Stolen Securities................................................27
Section 2.13 Treasury Securities............................................................................27
Section 2.14 Temporary Securities...........................................................................28
Section 2.15 Cancellation...................................................................................28
Section 2.16 CUSIP Numbers..................................................................................28
Section 2.17 Defaulted Interest.............................................................................29
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...........................................................31
Section 3.3 Return of Unclaimed Monies.....................................................................31
ARTICLE 4 DEFAULTS AND REMEDIES..................................................................................32
Section 4.1 Events of Default..............................................................................32
Section 4.2 Acceleration of Maturity; Rescission and Annulment.............................................33
Section 4.3 Other Remedies.................................................................................34
Section 4.4 Waiver of Past Defaults........................................................................34
Section 4.5 Control by Majority............................................................................34
Section 4.6 Limitation on Suit.............................................................................35
Section 4.7 Unconditional Rights of Holders to Receive Payment and to Convert..............................35
Section 4.8 Collection of Indebtedness and Suits for Enforcement by the Trustee............................36
Section 4.9 Trustee May File Proofs of Claim...............................................................36
Section 4.10 Restoration of Rights and Remedies.............................................................37
Section 4.11 Rights and Remedies Cumulative.................................................................37
Section 4.12 Delay or Omission Not Waiver...................................................................38
Section 4.13 Application of Money Collected.................................................................38
Section 4.14 Undertaking for Costs..........................................................................38
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...................................................46
Section 6.1 Company May Consolidate, Etc., Only on Certain Terms...........................................46
Section 6.2 Successor Substituted..........................................................................46
ARTICLE 7 AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................................................48
Section 7.1 Without Consent of Holders of Securities.......................................................48
Section 7.2 With Consent of Holders of Securities..........................................................49
Section 7.3 Compliance with Trust Indenture Act............................................................50
Section 7.4 Revocation of Consents and Effect of Consents or Votes.........................................50
Section 7.5 Notation on or Exchange of Securities..........................................................50
Section 7.6 Trustee to Sign Amendment, Etc.................................................................51
ARTICLE 8 MEETING OF HOLDERS OF SECURITIES.......................................................................52
Section 8.1 Purposes for Which Meetings May Be Called......................................................52
Section 8.2 Call Notice and Place of Meetings..............................................................52
Section 8.3 Persons Entitled to Vote at Meetings...........................................................52
Section 8.4 Quorum; Action.................................................................................53
Section 8.5 Determination of Voting Rights; Conduct and Adjournment of Meetings............................53
Section 8.6 Counting Votes and Recording Action of Meetings................................................54
ARTICLE 9 COVENANTS..............................................................................................55
Section 9.1 Payment of Principal, Premium and Interest.....................................................55
Section 9.2 Maintenance of Offices or Agencies.............................................................55
Section 9.3 Corporate Existence............................................................................56
Section 9.4 Maintenance of Properties......................................................................56
Section 9.5 Payment of Taxes and Other Claims..............................................................56
Section 9.6 Reports........................................................................................56
Section 9.7 Compliance Certificate.........................................................................57
Section 9.8 Resale of Certain Securities...................................................................57
ARTICLE 10 REDEMPTION OF SECURITIES..............................................................................58
Section 10.1 Provisional Redemption.........................................................................58
Section 10.2 Optional Redemption............................................................................58
Section 10.3 Notice to Trustee..............................................................................59
Section 10.4 Selection of Securities to Be Redeemed.........................................................59
Section 10.5 Notice of Redemption...........................................................................59
Section 10.6 Effect of Notice of Redemption.................................................................60
Section 10.7 Deposit of Redemption Price....................................................................61
Section 10.8 Securities Redeemed in Part....................................................................61
ARTICLE 11 REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL.........................................62
Section 11.1 Repurchase Right...............................................................................62
Section 11.2 Conditions to the Company's Election to Pay the Repurchase Price in Common Stock...............62
Section 11.3 Notices; Method of Exercising Repurchase Right, Etc............................................63
ARTICLE 12 CONVERSION OF SECURITIES..............................................................................67
Section 12.1 Conversion Right and Conversion Price..........................................................67
Section 12.2 Exercise of Conversion Right...................................................................67
Section 12.3 Fractions of Shares............................................................................68
Section 12.4 Adjustment of Conversion Price.................................................................69
Section 12.5 Notice of Adjustments of Conversion Price......................................................77
Section 12.6 Notice Prior to Certain Actions................................................................78
Section 12.7 Company to Reserve Common Stock................................................................79
Section 12.8 Taxes on Conversions...........................................................................79
Section 12.9 Covenant as to Common Stock....................................................................79
Section 12.10 Cancellation of Converted Securities...........................................................79
Section 12.11 Effect of Recapitalization, Reclassification, Consolidation,
Merger or Sale.................................................................................79
Section 12.12 Responsibility of Trustee for Conversion Provisions............................................81
ARTICLE 13 SUBORDINATION.........................................................................................82
Section 13.1 Securities Subordinated to Senior Debt.........................................................82
Section 13.2 Subrogation....................................................................................84
Section 13.3 Obligation of the Company Is Absolute and Unconditional........................................84
Section 13.4 Maturity of or Default on Senior Debt..........................................................84
Section 13.5 Payments on Securities Permitted...............................................................85
Section 13.6 Effectuation of Subordination by Trustee.......................................................85
Section 13.7 Knowledge of Trustee...........................................................................85
Section 13.8 Trustee's Relation to Senior Debt..............................................................86
Section 13.9 Rights of Holders of Senior Debt Not Impaired..................................................86
Section 13.10 Modification of Terms of Senior Debt...........................................................86
Section 13.11 Certain Conversions Not Deemed Payment.........................................................86
ARTICLE 14 OTHER PROVISIONS OF GENERAL APPLICATION...............................................................88
Section 14.1 Trust Indenture Act Controls...................................................................88
Section 14.2 Notices........................................................................................88
Section 14.3 Communication by Holders with Other Holders....................................................89
Section 14.4 Acts of Holders of Securities..................................................................89
Section 14.5 Certificate and Opinion as to Conditions Precedent.............................................90
Section 14.6 Statements Required in Certificate or Opinion..................................................90
Section 14.7 Effect of Headings and Table of Contents.......................................................91
Section 14.8 Successors and Assigns.........................................................................91
Section 14.9 Separability Clause............................................................................91
Section 14.10 Benefits of Indenture..........................................................................91
Section 14.11 Governing Law..................................................................................91
Section 14.12 Counterparts...................................................................................91
Section 14.13 Legal Holidays.................................................................................91
Section 14.14 Recourse Against Others........................................................................92
EXHIBITS
EXHIBIT A: Form of Security.............................................................A-1
INDENTURE, dated as of March 14, 2000, between VERTEX PHARMACEUTICALS
INCORPORATED, a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts, having its principal office at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company"), and STATE STREET BANK
AND TRUST COMPANY, as trustee (the "Trustee"), having its principal corporate
trust office at 0 Xxxxxx xx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5%
Convertible Subordinated Notes due 2007 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 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 Interest Rate shall not be less than 5% 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.
2
"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;
(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 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 or (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;
(3) during any consecutive two-year period, individuals who at
the beginning of that two-year period constituted the Board of Directors
(together with any new directors whose election to the Board of Directors,
or whose nomination for election by the stockholders of the Company, was
approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose elections or
nominations for election were previously so approved) cease for any reason
to constitute a majority of the Board of Directors then in office; or
(4) the Company is liquidated or dissolved or a resolution is
passed by the Company's stockholders approving a plan of liquidation or
dissolution of the Company other than in a transaction which complies with
the provisions described in Article 6 of the Indenture.
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
3
group which would be deemed to be a "person" under Section 13(d)(3) of the
Exchange Act.
"Chief Executive Officer" means any chief executive officer of the
Company.
"Closing Date" means March 14, 2000 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 (regular way) on
the New York Stock Exchange on such date;
(2) if such security is not listed for trading on the New York
Stock Exchange on any such date, the closing sale price as reported in the
composite transactions for the principal U.S. securities exchange on which
such security is so listed;
(3) if such security is not so listed on a U.S. national or
regional securities exchange, the closing sale price as reported by the
Nasdaq National Market;
(4) if such security is not so reported, the last 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 $0.01 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
4
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 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 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 (which at the date of
this Indenture is located at 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000), and for all other purposes, the office of the Trustee located in
Boston, Massachusetts (which at the date of this Indenture is located at 0
Xxxxxx xx Xxxxxxxxx, 0xx Xxxxx, Corporate Trust Department, Boston,
Massachusetts 02111-1724).
"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.
"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 $20 million and is specifically designated in the
instrument evidencing or governing that Senior Debt as "Designated Senior
Debt" for purposes of this Indenture, provided that such instrument may
place limitations and conditions on the right of such Senior Debt to
exercise the rights of Designated Senior Debt.
5
"Dividend Yield" on any security for any period means the dividends
paid or proposed to be paid pursuant to an announced dividend policy on
such security for such period divided by, if with respect to dividends paid
on such security, the average Closing Price of such security during such
period and, if with respect to dividends proposed to be paid on such
security, the Closing Price of such security on the effective date of the
related Reset Transaction.
"Dollar," "U.S. Dollar" or "U.S. $" means a dollar or other equivalent
unit in such coin or currency of the United States as at the time shall be
legal tender for the payment of public and private debts.
"DTC Participants" has the meaning specified in Section 2.8 hereof.
"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.
"Indebtedness," when used with respect to any Person, and without
duplication means:
6
(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 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, refinancings,
replacements, restatements and refundings of, or amendments, modifications
or supplements to, any indebtedness, obligation or liability of the kind
described in clauses (1) through (6).
7
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Initial Purchasers" means Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, Bear, Xxxxxxx & Co. Inc., Credit Suisse First
Boston Corporation, FleetBoston Xxxxxxxxx Xxxxxxxx Inc. and XX Xxxxx
Securities Corporation.
"Interest Payment Date" means each March 14 and September 14.
"Interest Rate" means, (a) if a Reset Transaction has not occurred, 5%
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 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.
"Officer" of the Company means the Chief Executive Officer, the
President, the Chief Business Officer, the Treasurer, any Vice President or
the Clerk of the Company.
"Officers' Certificate" means a certificate signed by both (1) 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
Business Officer, the Treasurer or the Clerk 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.
8
"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 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 March 8,
2000, 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
9
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 Section 12.4(g) hereof.
"Redemption Date," when used with respect to any Security to be
redeemed, means the Optional Redemption Date in the event of an Optional
Redemption or the Provisional Redemption Date, in the event of a
Provisional Redemption, as the case may be.
"Redemption Price," when used with respect to any Security to be
redeemed, means the Optional Redemption Price, in the event of an Optional
Redemption, or the Provisional Redemption Price, in the event of a
Provisional Redemption, as the case may be.
"Reference Dealer" means a dealer engaged in the trading of
convertible securities.
"Reference Period" has the meaning set forth in Section 12.4(d)
hereof.
"Register" has the meaning specified in Section 2.5 hereof.
"Registrar" has the meaning specified in Section 2.5 hereof.
"Registration Rights Agreement" means the Resale Registration Rights
Agreement dated March 14, 2000, 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 1 (whether or not a
Business Day) next preceding a March 14 Interest Payment Date and the
September 1 (whether or not a Business Day) next preceding a September 14
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:
10
(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 than the Dividend Yield on the Common Stock (or other common
stock then 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 as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from
time to time.
"Rule 144A" means Rule 144A as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from
time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" 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 subsequently 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), except for (a) any Indebtedness that by its terms
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities or expressly provides that such Indebtedness
11
is equal with or junior to the Securities and (b) any Indebtedness between
or among the Company and/or any of its subsidiaries, a majority of the
voting stock of which we directly or indirectly own, or any of the
Company's Affiliates. The term "Senior Debt" shall include, without
limitation, all Designated Senior Debt.
"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 institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Trading Price" of a security on any date of determination means:
(1) the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of such security (regular way) on
the New York Stock Exchange on such date;
12
(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 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."
SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
13
"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.
SECTION 1.3 RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with accounting principles
generally accepted in the United States prevailing at the time of any
relevant computation hereunder; and
(3) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
14
ARTICLE 2
THE SECURITIES
SECTION 2.1 TITLE AND TERMS.
The Securities shall be known and designated as the "5% Convertible
Subordinated Notes due 2007" of the Company. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
limited to $175,000,000 (or $201,250,000 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, 10.8, 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 March 14, 2007.
Interest shall accrue from March 14, 2000 at the Interest Rate until the
principal thereof is paid or made available for payment. Interest shall be
payable semiannually in arrears on March 14 and September 14 in each year,
commencing September 14, 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 Security on such Interest Payment Date,
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 10.5 hereof (whether the
Redemption Date for such Security is on
15
such Interest Payment Date or otherwise) 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 located in the city where the
Corporate Trust Office of the Trustee is located 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.
SECTION 2.2 FORM OF SECURITIES.
The Securities and the Trustee's certificate of authentication to be borne
by such Securities shall be substantially in the form 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 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.
The Securities will be offered and sold only to QIBs in reliance on Rule
144A and 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:
16
(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 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.
SECTION 2.3 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
17
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 NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER
THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE 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 THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS AND 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 THIS NOTE EVIDENCED HEREBY
PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM
THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY.
(ii) Restricted Securities Legend for Common Stock Issued Upon
Conversion of the Securities.
18
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 COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD 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 NOTE UPON THE CONVERSION OF
WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL
OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE
144A, (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND
THAT 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 EQUISERVE LIMITED PARTNERSHIP, AS TRANSFER AGENT (OR ANY
SUCCESSOR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS AND 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 CLAUSE (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 (C) OR (D) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE
COMMON STOCK EVIDENCED HEREBY WAS ISSUED.
(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 to be effective at the
time of such sale); or
19
(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.
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 VERTEX PHARMACEUTICALS INCORPORATED (OR ITS
SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER ENTITY
20
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.
SECTION 2.4 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.
SECTION 2.5 REGISTRAR AND PAYING AGENT.
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:
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(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.
SECTION 2.6 PAYING AGENT TO HOLD ASSETS IN TRUST.
Not later than 11:00 a.m. (New York City time) on each due date of the
principal, premium, if any, and interest (including Liquidated Damages, if any)
on any 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.
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SECTION 2.7 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 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 10.8 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.
SECTION 2.8 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
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(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 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 of like tenor as that
of the Global 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 nominees thereof).
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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.
SECTION 2.9 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.
With respect to the registration of any proposed transfer of Securities to
a QIB:
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 system maintained by the Depositary.
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
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Physical Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred.
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 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.
SECTION 2.10 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee prior to
or on each Interest Payment Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders relating to such
Interest Payment Date or request, as the case may be.
SECTION 2.11 PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the registered Holder of a Global 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.
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SECTION 2.12 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there 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.
SECTION 2.13 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,
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.
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SECTION 2.14 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.
SECTION 2.15 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.
SECTION 2.16 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 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.
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SECTION 2.17 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.
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ARTICLE 3
SATISFACTION AND DISCHARGE
SECTION 3.1 SATISFACTION AND DISCHARGE OF INDENTURE.
When:
(1) The Company shall deliver to the Trustee for cancellation all
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 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
30
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:
(II) remaining rights of registration of transfer, substitution
and exchange and conversion of Securities,
(III) 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
(IV) 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 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.
SECTION 3.2 DEPOSITED MONIES TO BE HELD IN TRUST.
Subject to Section 3.3 hereof, all monies deposited with the Trustee
pursuant to Section 3.1 hereof shall be held in trust and applied by it to the
payment, notwithstanding the provisions of Article 13 hereof, either directly or
through any Paying Agent (including the Company if acting as its own Paying
Agent), to the Holders of the particular 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.
SECTION 3.3 RETURN OF UNCLAIMED MONIES.
The Trustee and the Paying Agent shall pay to the Company any money held by
them for the payment of principal or premium, if any, or interest (including
Liquidated Damages, if any) that remains unclaimed for two years after the date
upon which such payment shall have become due. After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person,
and all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
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ARTICLE 4
DEFAULTS AND REMEDIES
SECTION 4.1 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 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 deliver shares of Common Stock, together with cash
instead of fractional shares, when those shares of Common Stock or cash instead
of fractional shares are required to be delivered following conversion of a
Security in accordance with Article 12, and that failure continues for 10 days;
or
(D) the Company fails to perform or observe any other term, covenant or
agreement contained in the Securities or this Indenture and the failure
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
(E) (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 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 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
(F) 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
32
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
(G) 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.
SECTION 4.2 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(f) or 4.1(g) 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(f) or 4.1(g) 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;
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(e) hereof
and such Event of Default has been remedied, cured or waived in accordance with
Section 4.1(e) hereof, then, without any further action by the Holders, such
declaration of acceleration shall be rescinded automatically and the
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consequences of such declaration shall be annulled. No such rescission or
annulment shall affect any subsequent Default or impair any right consequent
thereon.
SECTION 4.3 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.
SECTION 4.4 WAIVER OF PAST DEFAULTS.
The Holders, either (a) through the written consent of not less than a
majority in aggregate principal amount of the Outstanding 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);
(2) in respect of the right to convert any Security in accordance
with Article 12; or
(3) 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.
SECTION 4.5 CONTROL BY MAJORITY.
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, shall have the right to direct the time, method and place of
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conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. However, the Trustee may refuse to
follow any direction that:
(1) conflicts with any law or with this Indenture;
(2) the Trustee determines may be unduly prejudicial to the
rights of the Holders not joining therein; or
(3) may expose the Trustee to personal liability.
The Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 4.6 LIMITATION ON SUIT.
No Holder of any 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);
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.
SECTION 4.7 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
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convert such Security in accordance with Article 12, and to bring suit for the
enforcement of any such payment on or after such respective dates and right to
convert, and such rights shall not be impaired or affected without the consent
of such Holder.
SECTION 4.8 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY THE
TRUSTEE.
The Company covenants that if:
(1) a Default or Event of Default is made in the payment of any
interest (including Liquidated Damages, if any) on any 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 shall, 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 final decree and may enforce the same
against the Company and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 4.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or the property of the Company or
its creditors, the Trustee (irrespective of whether the principal of the
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,
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(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, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder of a Security in any such
proceeding.
SECTION 4.10 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Security has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Securities shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
SECTION 4.11 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.
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SECTION 4.12 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.
SECTION 4.13 APPLICATION OF MONEY COLLECTED.
Subject to Article 13, any money and property 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 and
property on account of principal or premium, if any, or interest (including
Liquidated Damages, if any), upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee;
SECOND: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest (including Liquidated
Damages, if any) on the Securities and coupons in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and premium, if any, and interest
(including Liquidated Damages, if any), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 4.14 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
such Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not 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.
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SECTION 4.15 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim to
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE 5
THE TRUSTEE
SECTION 5.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(A) Except during the continuance of an Event of Default,
(1) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture or the TIA, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; provided,
however, that in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates or opinions to determine whether
or not, on their face, they conform to the requirements to this Indenture
(but need not investigate or confirm the accuracy of any facts stated
therein).
(B) In case an Event of Default actually known to a Responsible Officer of
the Trustee has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(C) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) This paragraph (c) shall not be construed to limit the effect
of paragraph (a) of this Section 5.1;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with a
direction received by it of the Holders of a majority in principal amount
of the Outstanding 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.
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(D) Whether or not herein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
5.1.
(E) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers. The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability, cost or
expense (including, without limitation, reasonable fees of counsel).
(F) The Trustee shall not be obligated to pay interest on any money or
other assets received by it unless otherwise agreed in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(G) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(H) The Trustee shall not be deemed to have notice or actual knowledge of
any Event of Default or a Registration Default (as such term is defined in the
Registration Rights Agreement) or the obligation of the Company to pay
Liquidated Damages 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.
SECTION 5.2 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 5.1 hereof and subject to Sections
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
41
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel
(3) The Trustee may act through attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
(4) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith which it believed to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture, unless the Trustee's conduct constitutes negligence.
(5) The Trustee may consult with counsel of its selection and the
advice of such counsel as to matters of law shall be full and complete
authorization and protection in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(6) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(7) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty unless so specified
herein.
SECTION 5.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of 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 with like rights and duties. The Trustee is also subject to
Sections 5.11 and 5.12 hereof.
SECTION 5.4 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
expressly agreed with the Company.
SECTION 5.5 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.
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SECTION 5.6 NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default or Event of Default
hereunder of which the Trustee has received written notice, the Trustee shall
give notice to Holders pursuant to Section 14.2 hereof, unless such Default or
Event of Default shall have been cured or waived; provided, however, that,
except in the case of a Default or Event of Default in the payment of the
principal of or premium, if any, or interest (including Liquidated Damages, if
any), or in the payment of any redemption or repurchase obligation on any
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.
SECTION 5.7 REPORTS BY TRUSTEE TO HOLDERS.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required by Section 313 of the
TIA at the times and in the manner provided by the TIA.
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC, if required, and each stock exchange, if any, on which the
Securities are listed. The Company shall promptly notify the Trustee when the
Securities become listed on any stock exchange.
SECTION 5.8 COMPENSATION AND INDEMNIFICATION.
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Company covenants and agrees to pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ), except to the extent that any such expense, disbursement or
advance is due to its negligence or bad faith. When the Trustee incurs expenses
or renders services in connection with an Event of Default specified in Section
4.1 hereof, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law. The Company also covenants
to indemnify the Trustee and its officers, directors, employees and agents for,
and to hold such Persons harmless against, any loss, liability or expense
incurred by them, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder 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
43
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.
SECTION 5.9 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 5.9.
The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company in writing. The Holders of at least a majority in
aggregate principal amount of Outstanding 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 5.11 hereof or
Section 310 of the TIA;
(II) the Trustee becomes incapable of acting.
(III) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law; or
(IV) a Custodian or public officer takes charge of the Trustee or
its property.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason, the Company shall promptly appoint a successor
Trustee. The Trustee shall be entitled to payment of its fees and reimbursement
of its expenses while acting as Trustee. Within one year after the successor
Trustee takes office, the Holders of at least a majority in aggregate principal
amount of Outstanding 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 5.11 hereof.
If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation or removal, the resigning or removed Trustee, as the case may be,
may petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
Company shall mail a notice of the successor Trustee's succession to the
Holders. The retiring Trustee shall promptly transfer all property held by it as
44
Trustee to the successor Trustee. Notwithstanding replacement of the Trustee
pursuant to this Section 5.9, the Company's obligations under Section 5.8 hereof
shall continue for the benefit of the retiring Trustee with respect to expenses,
losses and liabilities incurred by it prior to such replacement.
SECTION 5.10 SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 5.11 hereof, if the Trustee consolidates with, merges or
converts into, or transfers or sells 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.
SECTION 5.11 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
The Trustee shall at all times satisfy the requirements of Sections
310(a)(1), (2) and (5) of the TIA. The Trustee shall at all times have (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company shall at all times have), a combined capital and surplus of
at least $100 million as set forth in its (or its related bank holding
company's) most recent published annual report of condition. The Trustee is
subject to Section 310(b) of the TIA.
SECTION 5.12 COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated therein.
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ARTICLE 6
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 6.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with 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 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.
SECTION 6.2 SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger by the Company with or into any other
Person 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 Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease to another Person, the
46
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
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ARTICLE 7
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 7.1 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;
(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, correct or supplement any provision herein which
may be inconsistent with any other provision herein or which is otherwise
defective, or 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, in the good faith opinion of the Board of Directors and the Trustee,
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
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(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.
SECTION 7.2 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 by the Company 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) 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 affected, 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 on or with respect to, or the conversion of, 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 right
to convert any Security as provided in Article 12 hereof;
(h) adversely affect the Repurchase Right;
(i) modify the subordination provisions of the Securities in a manner
adverse to the Holders of Securities,
(j) 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
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(k) 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 approve the particular form of any proposal supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 7.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Securities shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 7.4 REVOCATION OF CONSENTS AND EFFECT OF CONSENTS OR VOTES.
Until an amendment, supplement or waiver becomes effective, a written
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a 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 (k) 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.
SECTION 7.5 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.
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Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 7.6 TRUSTEE TO SIGN AMENDMENT, ETC.
The Trustee shall sign any amendment authorized pursuant to this Article 7
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If the amendment does adversely affect the rights,
duties, liabilities or immunities of the Trustee, the Trustee may but need not
sign it. In signing or refusing to sign such amendment, the Trustee shall be
entitled to receive and shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
is authorized or permitted by this Indenture.
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ARTICLE 8
MEETING OF HOLDERS OF SECURITIES
SECTION 8.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.
Notwithstanding anything contained in this Article 8, the Trustee may,
during the pendency of a Default or an Event of Default, call a meeting of
Holders of Securities in accordance with its standard practices.
SECTION 8.2 CALL NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Securities for
any purpose specified in Section 8.1 hereof, to be held at such time and at such
place in The City of New York or Boston, Massachusetts. Notice of every meeting
of Holders of Securities, setting forth the time and the place of such meeting,
in general terms the action proposed to be taken at such meeting and the
percentage of the principal amount of the Outstanding Securities which shall
constitute a quorum 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 such meeting and may call such
meeting for such purposes by giving notice thereof as provided in paragraph (a)
of this Section.
SECTION 8.3 PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities, a Person
shall be (a) a Holder of one or more Outstanding Securities or (b) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities by such Holder or Holders. The only Persons who
shall be entitled to be present or to speak at any meeting of Holders shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
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SECTION 8.4 QUORUM; ACTION.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 8.2(a) 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.
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 second paragraph of 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 duly held in accordance with this Section shall be binding on all the
Holders of Securities, whether or not present or represented at the meeting.
SECTION 8.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate.
(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.
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(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.
SECTION 8.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts and serial numbers of the Outstanding Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Securities shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 8.2 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.
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ARTICLE 9
COVENANTS
SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of and premium, if
any, and interest (including Liquidated Damages, if any) in respect of the
Securities in accordance with the terms of the Securities and this Indenture.
The Company will deposit or cause to be deposited with the Trustee as directed
by the Trustee, 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.
SECTION 9.2 MAINTENANCE OF OFFICES OR AGENCIES.
The Company hereby appoints the Trustee's Corporate Trust Office as its
office in The City of New York, where 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.
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.
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SECTION 9.3 CORPORATE EXISTENCE.
Subject to Article 6 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; 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.
SECTION 9.4 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.
SECTION 9.5 PAYMENT OF TAXES AND OTHER CLAIMS.
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.
SECTION 9.6 REPORTS.
(a) The Company shall deliver to the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;
provided, however, the Company shall not be required to deliver to the Trustee
any materials for which the Company has sought and received confidential
treatment by the SEC. The Company also shall comply with the other provisions of
Section 314(a) of the TIA.
(b) If at any time the Company is not subject to Section 13 or 15(d) of the
Exchange Act, upon the request of a Holder of a 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
56
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.
SECTION 9.7 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 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 the nature thereof. Within five Business Days of an
Officer of the Company coming 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.
SECTION 9.8 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 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.
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ARTICLE 10
REDEMPTION OF SECURITIES
SECTION 10.1 PROVISIONAL REDEMPTION.
Any time prior to March 17, 2003, the Company may, at its option, redeem
the Securities in whole or in part on any date from time to time, upon notice as
set forth in Section 10.5, at a redemption price equal to $1,000 per $1,000
principal amount of the Securities redeemed plus accrued and unpaid interest, if
any (such amount, together with the Make-Whole Payment described below, the
"Provisional Redemption Price"), to but excluding the date of redemption (the
"Provisional Redemption Date") if (i) the Closing Price of the Common Stock has
exceeded 150% of the Conversion Price (as defined in Article 12 and as such may
be adjusted from time to time) then in effect for at least 20 Trading Days in
any consecutive 30-Trading Day period ending on the Trading Day prior to the
date of mailing of the provisional notice of redemption pursuant to Section 10.5
(the "Notice Date") and (ii) a registration statement covering resales of the
Securities and the Common Stock issuable upon conversion thereof is effective
and available for use and is expected to remain effective for the 30 days
following the Provisional Redemption Date.
Upon any such Provisional Redemption, the Company shall make an additional
payment in cash (the "Make-Whole Payment") with respect to the Securities called
for redemption to Holders on the Notice Date in an amount equal to $107.14 per
$1,000 principal amount of the Securities, less the amount of any interest
actually paid on such Securities prior to the Notice Date. The Company shall
make the Make-Whole Payment on all Securities called for Provisional Redemption,
including those Securities converted into Common Stock between the Notice Date
and the Provisional Redemption Date.
SECTION 10.2 OPTIONAL REDEMPTION.
Except as set forth under Section 10.1, the Securities are not redeemable
prior to March 17, 2003. On and after March 17, 2003, 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 10.5, at the
redemption price (expressed as percentages of the principal amount) set forth
below if redeemed during the 12-month period beginning March 14 or 17, as the
case may be, of the years indicated and ending March 13 of the following year:
During the Twelve Months
Commencing Redemption Prices
March 17, 2003 through March 13, 2004....... 102.857%
March 14, 2004 through March 13, 2005....... 102.143%
March 14, 2005 through March 13, 2006....... 101.429%
March 14, 2006 and thereafter............... 100.714%
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(the "Optional Redemption Price"), plus any interest accrued but not paid prior
to the Optional Redemption Date.
SECTION 10.3 NOTICE TO TRUSTEE.
If the Company elects to redeem Securities pursuant to the redemption
provisions of Section 10.1 or Section 10.2 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.
SECTION 10.4 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.
SECTION 10.5 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.
SECTION 10.6 EFFECT OF NOTICE OF REDEMPTION.
Notice of redemption having been given as provided in Section 10.5 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 plus accrued
and unpaid interest, if any; provided, however, that 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 2.1 hereof.
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.
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SECTION 10.7 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.
SECTION 10.8 SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 9.2 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.
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ARTICLE 11
REPURCHASE AT THE OPTION OF A HOLDER
UPON A CHANGE OF CONTROL
SECTION 11.1 REPURCHASE RIGHT.
In the event that a Change of Control shall occur, each Holder shall have
the right (the "Repurchase Right"), at the Holder's option, but subject to the
provisions of Section 11.2 hereof, to require the Company to repurchase, and
upon the exercise of such right the Company shall repurchase, all of such
Holder's 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 fulfillment by the Company of the conditions set forth in
Section 11.2 hereof, the Company may elect to pay the Repurchase Price by
delivering the number of shares of Common Stock equal to (i) the Repurchase
Price divided by (ii) 95% of the average of the Closing Prices per share of
Common Stock for the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Repurchase Date.
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.
SECTION 11.2 CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE REPURCHASE
PRICE IN COMMON STOCK.
(a) The shares of Common Stock to be issued upon repurchase of 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.
SECTION 11.3 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for redemption all of
the Outstanding Securities, prior to or on the 30th day after the occurrence of
a Change of 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 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;
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(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.
(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 for payment to the Holder on the Repurchase Date or, if
shares of Common Stock are to be paid, shares of Common Stock, as provided
above, 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 Xxxxxxxxxx
00
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 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.
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(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.
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ARTICLE 12
CONVERSION OF SECURITIES
SECTION 12.1 CONVERSION RIGHT AND CONVERSION PRICE.
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any 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 the
number of duly authorized, fully paid and nonassessable shares of Common Stock
obtained by dividing the aggregate principal amount of such Security (or portion
thereof) surrendered for conversion by 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 March 14, 2007.
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 Business Day immediately 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 in respect of 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 $80.64 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 (l) of Section 12.4
hereof.
SECTION 12.2 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.
Any Holder which surrenders any Security for conversion during the period
between the close of business on any Regular Record Date and ending with the
opening of business on the corresponding 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 (including
Liquidated Damages, if any) to be received on such Interest Payment Date on the
principal amount of the Security being surrendered 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 10.5 hereof (whether the
Redemption Date for such Security is on such Interest Payment Date or
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otherwise), 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.
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.
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.
SECTION 12.3 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.
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SECTION 12.4 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be subject to adjustments, calculated by the
Company, from time to time as follows:
(A) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction:
(I) the numerator of which shall be the number of shares of Common
Stock outstanding at the close of business on the Record Date (as defined
in Section 12.4(g)) fixed for such determination, and
(II) the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution.
Such reduction shall become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution of the
type described in this Section 12.4(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(B) In case the outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(C) In case the Company shall issue rights or warrants (other than any
rights or warrants referred to in Section 12.4(d)) to all holders of its
outstanding shares of Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into Common Stock) at a price
per share (or having a conversion price per share) less than the Current Market
Price (as defined in Section 12.4(g)) on the Record Date fixed for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Price shall be reduced 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
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for subscription or purchase (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Current
Market Price, and
(II) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the Record Date
plus the total number of additional shares of Common Stock so offered
for subscription or purchase (or into which the convertible securities
so offered are convertible).
Such adjustment shall become effective immediately after the opening of business
on the day following the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock (or securities convertible into Common Stock) are not delivered pursuant
to such rights or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall be readjusted to the Conversion Price which
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of the delivery of only the number of
shares of Common Stock (or securities convertible into Common Stock) actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received for such rights or
warrants, the value of such consideration if other than cash, to be determined
by the Board of Directors.
(D) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
(other than any dividends or distributions to which Section 12.4(a) applies) or
evidences of its indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 12.4(c), (2) any
stock, securities or other property or assets (including cash) distributed 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
(determined as provided in Section 12.4(g)) on such date less the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board Resolution)
on such date of the portion of the shares of capital stock, evidences
of indebtedness, cash or other assets, including 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
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(II) the denominator of which shall be such Current Market Price
on such date.
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 shares of capital stock, evidences of indebtedness, cash or other
assets, including 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"):
(III) are deemed to be transferred with such shares of Common Stock;
(IV) are not exercisable; and
(V) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this Section
12.4(d) (and no adjustment to the Conversion Price under this Section 12.4(d)
will be required) until the occurrence of the earliest Trigger Event. If such
right or warrant is subject to subsequent events, upon the occurrence of which
such right or warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the foregoing
at a different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new right or
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price under
this Section 12.4(d):
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(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(b) 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:
(3) 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
(4) 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 determination" and "Record Date" within
the meaning of Section 12.4(a), (y) "the day upon which such
subdivision becomes effective" and "the day upon which such
combination becomes effective" within the meaning of Section 12.4(b),
and (z) as "the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants," such
"Record Date," "the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants" and "such
dated fixed for the determination of stockholders entitled to receive
such rights or warrants" 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 Record 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
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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), as of the expiration
of the tender or exchange offer referred to below, of consideration
payable in respect of any tender or exchange 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:
(II) 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
(III) the denominator of which shall be equal to the Current Market
Price on such 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 or exchange offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange 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:
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(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 the other tender or exchange offer referred to below, of
consideration payable in respect of any other tender or exchange
offers by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the preceding 12 months
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 the
preceding 12 months and in respect of which no adjustment pursuant to
Section 12.4(e) has been made, exceeds 10% of the product of the
Current Market Price (determined as provided in Section 12.4(g)) as of
the last time (the "Expiration Time") tenders could have been made
pursuant to such tender or exchange offer (as it may be amended) times
the number of shares of Common Stock outstanding (including any
tendered or exchanged 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:
(II) the numerator of which shall be (x) the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time
minus (y) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares"), and
(III) the denominator shall be 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 or exchange offer had not been made. If the application of this Section
12.4(f) to any tender or exchange offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender or exchange offer
under this Section 12.4(f).
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(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:
(II) the "ex" date (as hereinafter defined) for any
event (other than the issuance or distribution requiring
such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b), (c), (d),
(e) or (f) occurs during such ten consecutive Trading Days,
the Closing Price for each Trading Day prior to the "ex"
date for such other event shall be adjusted by multiplying
such Closing Price by the same fraction by which the
Conversion Price is so required to be adjusted as a result
of such other event;
(III) 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
(IV) 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
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reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. For purposes of this paragraph, the
term "ex" date, when used:
(A) with respect to any issuance or distribution, means the first
date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance or distribution;
(B) with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, and
(C) with respect to any tender or exchange offer, means the first
date on which the Common Stock trades regular way on such exchange or
in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 12.4, such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 12.4 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.
(2) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(3) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract
or otherwise).
(H) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 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 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
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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.
SECTION 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price is adjusted as herein provided (other than in
the case of an adjustment pursuant to the second paragraph of Section 12.4(h)
for which the notice required by such paragraph has been provided), the Company
shall promptly file with the Trustee and any Conversion Agent other than the
Trustee an Officers' Certificate setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based.
Promptly after delivery of such Officers' Certificate, the Company shall prepare
a notice stating that the Conversion Price has been adjusted and setting forth
the adjusted Conversion Price and the date on which each adjustment becomes
effective, and shall mail such notice to each Holder at the address of such
Holder as it appears in the Register within 20 days of the
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effective date of such adjustment. Failure to deliver such notice shall not
effect the legality or validity of any such adjustment.
SECTION 12.6 NOTICE PRIOR TO CERTAIN ACTIONS.
In case at any time after the date hereof:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of its
capital surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class (or of securities convertible into
shares of capital stock of any class) or of any other rights;
(3) there shall occur any reclassification of the Common Stock of
the Company (other than a subdivision or combination of its outstanding
Common Stock, a change in par value, a change from par value to no par
value or a change from no par value to par value), or any merger,
consolidation, statutory share exchange or combination to which the Company
is a party and for which approval of any shareholders of the Company is
required, or the sale, transfer or conveyance of all or substantially all
of the assets of the Company; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of securities pursuant to Section 9.2 hereof, and shall
cause to be provided to the Trustee and all Holders in accordance with Section
14.2 hereof, at least 20 days (or 10 days in any case specified in clause (1) or
(2) above) prior to the applicable record or effective date hereinafter
specified, a notice stating:
(A) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or
(B) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale, transfer,
conveyance, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share
exchange, sale, transfer, dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings or actions described in clauses (1)
through (4) of this Section 12.6.
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SECTION 12.7 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times use its best efforts to reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of Securities, the
full number of shares of fully paid and nonassessable Common Stock then issuable
upon the conversion of all Outstanding Securities.
SECTION 12.8 TAXES ON CONVERSIONS.
Except as provided in the next sentence, the Company will pay any and all
taxes (other than taxes on income) and duties that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. A Holder delivering a Security for conversion shall be liable
for and will be required to pay any tax or duty which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless the Person
requesting such issue has paid to the Company the amount of any such tax or
duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
SECTION 12.9 COVENANT AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and nonassessable
and, except as provided in Section 12.8, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
SECTION 12.10 CANCELLATION OF CONVERTED SECURITIES.
All Securities delivered for conversion shall be delivered to the Trustee
to be canceled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 2.9.
SECTION 12.11 EFFECT OF RECAPITALIZATION, RECLASSIFICATION, CONSOLIDATION,
MERGER OR SALE.
If any of following events occur, namely:
(I) any recapitalization, 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
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(III) any sale, conveyance or lease 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 each
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 recapitalization, reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance had such Securities been converted into Common Stock immediately
prior to such recapitalization, 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
recapitalization, reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance (provided that, if the kind or
amount of securities, cash or other property receivable upon such
recapitalization, reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance is not the same for each share
of Common Stock in respect of which such rights of election shall not have been
exercised ("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
recapitalization, reclassification, change, merger, consolidation, statutory
share exchange, combination, 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
recapitalization, 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
recapitalization, 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 11 hereof.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section shall similarly apply to successive
recapitalizations, reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
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If this Section 12.11 applies to any event or occurrence, Section 12.4
hereof shall not apply.
SECTION 12.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
The Trustee, subject to the provisions of Section 5.1 hereof, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of 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 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.
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ARTICLE 13
SUBORDINATION
SECTION 13.1 SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company covenants and agrees, and each Holder of Securities, by such
Holder's acceptance thereof, likewise covenants and agrees, that the
Indebtedness represented by the Securities and the payment of the principal of
and premium, if any, and interest (including Liquidated Damages, if any) on each
and all of the Securities is hereby expressly 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 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 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
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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 in cash or other payment satisfactory to the holders of such Designated
Senior Debt; 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 following an event of default
thereunder), 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
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,
83
such payment (subject, in each case, to the provisions of Section 13.7 hereof)
shall be held in trust for the benefit of, and shall be immediately paid over
to, the holders of Designated Senior Debt (unless an event described in Section
13.1(a), (b) or (c) has occurred, in which case the payment shall be held in
trust for the benefit of, and shall be immediately paid over to all holders of
Senior Debt) or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of the
Designated Senior Debt or Senior Debt, as the case may be, may have been issued,
as their interests may appear.
SECTION 13.2 SUBROGATION.
Subject to the payment in full of all Senior Debt to which the Indebtedness
evidenced by the 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.
SECTION 13.3 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.
SECTION 13.4 MATURITY OF OR DEFAULT ON SENIOR DEBT.
Upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, all principal of or premium, if any, or interest on, 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.
84
SECTION 13.5 PAYMENTS ON SECURITIES PERMITTED.
Except as expressly provided in this Article, nothing contained in this
Article shall affect the obligation of the Company to make, or prevent the
Company from making, payments of the principal of, or premium, if any, or
interest (including Liquidated Damages, if any) on the Securities in accordance
with the provisions hereof and thereof, or shall prevent the Trustee or any
Paying Agent from applying any moneys deposited with it hereunder to the payment
of the principal of, or premium, if any, or interest (including Liquidated
Damages, if any) on the Securities.
SECTION 13.6 EFFECTUATION OF SUBORDINATION BY TRUSTEE.
Each Holder of Securities, by such Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee or agent or other Person making any payment or distribution,
delivered to the Trustee or to the Holders of the Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, and as to other facts pertinent to the right of such Persons under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Persons pending judicial determination as to the right of such
Persons to receive such payment.
SECTION 13.7 KNOWLEDGE OF TRUSTEE.
Notwithstanding the provision of this Article or any other provisions of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any Senior Debt, of any default in payment of principal of, premium, if any,
or interest on, 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.
85
SECTION 13.8 TRUSTEE'S RELATION TO SENIOR DEBT.
The Trustee shall be entitled to all the rights set forth in this Article
with respect to any Senior Debt at the time held by it, to the same extent as
any other holder of Senior Debt and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
Nothing contained in this Article shall apply to claims of or payments to
the Trustee under or pursuant to Section 5.8 hereof.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt and the Trustee shall not be liable to any holder
of Senior Debt if it shall pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 13.9 RIGHTS OF HOLDERS OF SENIOR DEBT NOT IMPAIRED.
No right of any present or future holder of any Senior Debt to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
SECTION 13.10 MODIFICATION OF TERMS OF SENIOR DEBT.
Any renewal or extension of the time of payment of any Senior Debt or the
exercise by the holders of Senior Debt of any of their rights under any
instrument creating or evidencing Senior Debt, including without limitation the
waiver of default thereunder, may be made or done all without notice to or
assent from the Holders of the 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.
SECTION 13.11 CERTAIN CONVERSIONS NOT DEEMED PAYMENT.
For the purposes of this Article 13 only:
(1) the issuance and delivery of junior securities upon
conversion of 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
86
(2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 12.3 hereof),
property or securities (other than junior securities) upon conversion
of a 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:
(B) shares of any common stock of the Company or
(C) 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 than, 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.
87
ARTICLE 14
OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 14.1 TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA which are required
to be part of this Indenture, and shall, to the extent applicable, be governed
by such provisions.
SECTION 14.2 NOTICES.
Any notice or communication to the Company or the Trustee is duly given if
in writing and delivered in person or mailed by first-class mail to the address
set forth below:
(A) if to the Company:
Vertex Pharmaceuticals Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx Xxxxx, Esq.
(B) if to the Trustee:
State Street Bank and Trust Company
0 Xxxxxx xx Xxxxxxxxx
0xx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Corporate Trust Dept.
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.
88
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee at the same time.
SECTION 14.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to Section 312(b) of the TIA with other
Holders with respect to their rights under the Securities or this Indenture. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
Section 312(c) of the TIA.
SECTION 14.4 ACTS OF HOLDERS OF SECURITIES.
(A) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders of
Securities may be embodied in and evidenced by:
(1) one or more instruments of substantially similar tenor signed by
such Holders in person or by agent or proxy duly appointed in writing;
(2) the record of Holders of Securities voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities duly called and held in accordance with the
provisions of Article 8; or
(3) a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
of Securities signing such instrument or instruments and so voting at such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 5.1 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.
89
SECTION 14.5 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
Opinion of Counsel with respect to the matters upon which such certificate or
opinion is based is erroneous. Any such Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
Counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
SECTION 14.6 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion on behalf of the Company has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
90
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 14.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 14.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 14.9 SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 14.10 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.
SECTION 14.11 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14.12 COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original but all such
counterparts shall together constitute but one and the same instrument.
SECTION 14.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last day on which a Holder of a Security has a
right to convert such Security shall not be a Business Day at any Place of
Payment or Place of Conversion, then (notwithstanding any other provision of
this Indenture or of the Securities) payment of interest (including Liquidated
Damages, if any) or principal or premium, if any, or conversion of the
Securities, need not be made at such Place of Payment or Place of Conversion on
such day, but may be made on the next succeeding Business Day at such Place of
Payment or Place of Conversion with the same force and effect as if made on the
Interest Payment Date or Redemption Date or at the Stated Maturity or on such
last day for conversion, provided, that in the case that payment is
91
made on such succeeding Business Day, no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
SECTION 14.14 RECOURSE AGAINST OTHERS.
No recourse for the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any) on any 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.
92
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
VERTEX PHARMACEUTICALS INCORPORATED
By:
------------------------------------------
Name: Xx. Xxxxxx X. Xxxxx
Title: Chairman, President &
Chief Executive Officer
STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE
By:
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
93
EXHIBIT A
FORM OF SECURITY
[FACE OF SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO VERTEX PHARMACEUTICALS INCORPORATED (OR ITS
SUCCESSOR) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT); (2)
AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE 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 THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF SUCH NOTE (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK
AND TRUST COMPANY, AS TRUSTEE (OR ANY SUCCESSOR
--------------------
(1) This legend should be included only if the Security is issued in global
form.
TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C)
ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND
TRUST COMPANY, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS AND 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 NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D)
ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
EVIDENCED HEREBY.
A-2
VERTEX PHARMACEUTICALS INCORPORATED
5% Convertible Subordinated Note due 2007
CUSIP NO.
-----------
No. $
------------- -----------
VERTEX PHARMACEUTICALS INCORPORATED, a Massachusetts corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co., or its registered assigns, the principal sum of One Hundred Seventy-Five
Million U.S. Dollars ($175,000,000) on March 14, 2007.
Interest Payment Dates: March 14 and September 14, commencing September 14,
2000.
Regular Record Dates: March 1 and September 1.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed manually or by facsimile by its duly authorized officers.
Dated: VERTEX PHARMACEUTICALS INCORPORATED
By:
Name:
Title:
By:
Name:
Title:
Trustee's Certificate of Authentication
This is one of the 5% Convertible Subordinated
Notes due 2007 described in the within-named
Indenture.
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
Authorized Signatory
Dated:
A-4
[REVERSE OF SECURITY]
VERTEX PHARMACEUTICALS INCORPORATED
5% Convertible Subordinated Note due 2007
Capitalized terms used herein but not defined shall have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.
1. Principal and Interest.
Vertex Pharmaceuticals Incorporated, a Massachusetts 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 March 14 and September 14 of each year (each an
"Interest Payment Date"), commencing September 14, 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 10.5 of the Indenture
(whether the Redemption Date for such Security is on such Interest Payment Date
or otherwise) 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 March 14, 2000, between the Company and Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Bear, Xxxxxxx & Co. Inc., Credit
Suisse First Boston Corporation, FleetBoston Xxxxxxxxx Xxxxxxxx Inc. and XX
Xxxxx Securities Corporation, during the first 90
A-5
days following a Registration Default (as defined in the Registration Rights
Agreement), the Interest Rate borne by the Securities shall be increased by
0.25% on:
(A) June 13, 2000, if the shelf registration statement (the "Shelf
Registration Statement") is not filed with the SEC prior to or on June 12,
2000;
(B) August 12, 2000, if the Shelf Registration Statement is not
declared effective by the SEC prior to or on August 11, 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 SEC during such five Business Day period; or
(D) the day after 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 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 located in the city where the
Corporate Trust Office of the Trustee is located, 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.
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3. Paying Agent and Registrar.
Initially, State Street Bank and Trust Company, 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 March 14,
2000 (the "Indenture"), between the Company and State Street Bank and Trust
Company, 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. Provisional Redemption.
The Securities may be redeemed at the election of the Company, as a whole
or from time to time in part on any date, at any time prior to March 17, 2003 (a
"Provisional Redemption"), at a Redemption Price equal to $1,000 per $1,000
principal amount of the Securities plus accrued and unpaid interest, if any, to
but excluding the date of redemption (the "Provisional Redemption Date") if (i)
the Closing Price of the Common Stock has exceeded 150% of the Conversion Price
(as may be adjusted from time to time) then in effect for at least 20 Trading
Days in any consecutive 30-Trading Day period ending on the Trading Day prior to
the date of mailing of the provisional notice of redemption upon not less than
20 nor more than 60 days' notice (the "Notice Date"), and (ii) a registration
statement covering resales of the Securities and Common Stock issuable upon the
conversion thereof is effective and available for use and is expected to remain
effective for the 30 days following the Provisional Redemption Date.
Upon any such Provisional Redemption, the Company shall make an additional
payment in cash (the "Make-Whole Payment") with respect to the Securities called
for redemption to Holders on the Notice Date in an amount equal to $107.14 per
$1,000 principal amount of the Securities, less the amount of any interest
actually paid on such Securities prior to the Notice Date. The Company shall
make the Make-Whole Payment on all Securities called for Provisional Redemption,
including those Securities converted into Common Stock between the Notice Date
and the Provisional Redemption Date.
6. Optional Redemption.
Except as provided above, this Security is not redeemable prior to March
17, 2003. 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 March 17, 2003, at the
option of the Company, at the redemption price (expressed as percentages of the
principal amount) set forth below if redeemed during the 12-month period
beginning March 14 or 17, as the case may be, of the years indicated and ending
March 13 of the following years, plus any interest accrued but not paid prior to
the Optional Redemption Date.
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During the Twelve Months
COMMENCING REDEMPTION PRICES
------------------------ -----------------
March 17, 2003, through March 13, 2004............ 102.857%
March 14, 2004, through March 13, 2005............ 102.143%
March 14, 2005, through March 13, 2006............ 101.429%
March 14, 2006 and thereafter..................... 100.714%
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 the methods as provided in the Indenture. 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 and accrued and unpaid interest.
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
7. Repurchase Right Upon a Change of Control.
If a Change of 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, 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.
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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.
8. 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 March 14, 2007 to convert the Holder's Securities (or
any portion of the principal amount hereof which is $1,000 or an integral
multiple thereof), at the principal amount thereof or of such portion, into duly
authorized, fully paid and nonassessable shares of Common Stock of the Company
at the Conversion Price in effect at the time of conversion.
In the case of a Security (or a portion thereof) is 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 Business Day immediately
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 in respect of 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 immediately preceding the
Repurchase Date.
The Conversion Price shall be initially equal to $80.64 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
between 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 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
by the Company on the principal amount of the Security being surrendered 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 10.5 hereof
(whether the Redemption Date for such Security is on such Interest Payment Date
or otherwise) 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.
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.
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9. 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.
10. 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.
11. Persons Deemed Owners.
The registered Holder of this Security shall be treated as its owner for
all purposes.
12. 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.
13. 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
A-10
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.
14. 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.
15. 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 deliver shares of Common Stock, together with
cash instead of fractional shares, when those shares of Common Stock or
cash instead of fractional shares are required to be delivered following
conversion of a Security in accordance with the provisions of Article 12 of
the Indenture;
A-11
(D) 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;
(E) (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, 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
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
(F) 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.
16. 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.
17. 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).
18. 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.
19. 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.
A-12
20. Governing Law.
The Indenture and this Security shall be governed by, and construed in
accordance with, the law of the State of New York.
21. Successor Corporation.
In the event a successor corporation assumes all the obligations of the
Company under this Security, pursuant to the terms hereof and of the Indenture,
the Company will be released from all such obligations.
A-13
ASSIGNMENT FORM
To assign this Security, fill in the form below and have your signature
guaranteed: (I) or (we) assign and transfer this Security to:
---------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: Your Name:
--- ---
(Print your name exactly as it appears on
the face of this Security)
Your Signature:
-----------------------------------
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee*:
---
* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR
OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).
A-14
In connection with any transfer of this Security occurring prior to 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.
A-15
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion, in each case for investment and not with a view to
distribution, and that it and any such account is a "Qualified Institutional
Buyer" within the meaning of Rule 144A under the Securities Act of 1933 and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
--- ----
NOTICE: To be executed by an executive officer
A-16
CONVERSION NOTICE
TO: VERTEX PHARMACEUTICALS INCORPORATED
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 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).
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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)
A-18
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: VERTEX PHARMACEUTICALS INCORPORATED
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Vertex Pharmaceuticals Incorporated (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).
A-19
SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES(2)
The following exchanges of a part of this Global Security for Physical
Securities have been made:
Principal Amount of
Amount of decrease this Global Security
in Principal Amount Amount of increase in following such Signature of
of this Global Principal Amount of decrease (or authorized officer
Date of Exchange Security this Global Security increase) of Trustee
------------------------ ------------------- ---------------------- --------------------- -------------------
-----------------------------
(2) This schedule should be included only if the Security is issued in global
form.
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