EXHIBIT 10.1
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CHARTER COMMUNICATIONS, INC.
and
XXXXX FARGO BANK, N.A.,
as Trustee
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INDENTURE
Dated as of November 22, 2004
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5.875% Convertible Senior Notes due 2009
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions............................................................................ 1
Section 1.02. Other Definitions...................................................................... 11
Section 1.03. Incorporation by Reference of Trust Indenture Act...................................... 12
Section 1.04. Rules of Construction.................................................................. 12
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating........................................................................ 13
Section 2.02. Execution and Authentication........................................................... 13
Section 2.03. Registrar; Conversion Agent; and Paying Agent.......................................... 14
Section 2.04. Paying Agent to Hold Money in Trust.................................................... 14
Section 2.05. Holder Lists........................................................................... 15
Section 2.06. Global Notes; Non-global Notes; Book-Entry Provisions.................................. 15
Section 2.07. Registration; Registration of Transfer and Exchange; Restrictions on Transfer.......... 17
Section 2.08. Replacement Notes...................................................................... 20
Section 2.09. Outstanding Notes...................................................................... 20
Section 2.10. Treasury Notes......................................................................... 21
Section 2.11. Temporary Notes........................................................................ 21
Section 2.12. Cancellation........................................................................... 21
Section 2.13. Defaulted Interest..................................................................... 22
Section 2.14. Computation of Interest................................................................ 22
Section 2.15. CUSIP Numbers.......................................................................... 22
Section 2.16. Accreted Liquidated Damages; Deferred Interest......................................... 22
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee..................................................................... 23
Section 3.02. Selection of Notes to Be Redeemed...................................................... 23
Section 3.03. Notice of Redemption................................................................... 23
Section 3.04. Effect of Notice of Redemption......................................................... 24
Section 3.05. Deposit of Redemption Price............................................................ 25
Section 3.06. Notes Redeemed in Part................................................................. 25
Section 3.07. Optional Redemption.................................................................... 25
Section 3.08. Mandatory Redemption................................................................... 26
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes....................................................................... 26
Section 4.02. Maintenance of Office or Agency........................................................ 26
Section 4.03. Reports................................................................................ 27
Section 4.04. Compliance Certificate................................................................. 27
Section 4.05. Taxes.................................................................................. 28
Section 4.06. Stay, Extension and Usury Laws......................................................... 28
Section 4.07. Corporate Existence.................................................................... 28
Section 4.08. Payments for Consent................................................................... 28
Section 4.09. Registration and Listing............................................................... 28
Section 4.10. Delivery of Certain Information........................................................ 29
Section 4.11. Resale of Certain Notes................................................................ 29
Section 4.12. Registration Rights.................................................................... 29
Section 4.13. Covenant to Redeem 5.75% Convertible Senior Notes Due 2005............................. 30
Section 4.14. Waiver of Certain Covenants............................................................ 30
Section 4.15. Calculation of Tax Original Issue Discount............................................. 31
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets............................................... 31
Section 5.02. Successor Corporation Substituted...................................................... 32
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default...................................................................... 32
Section 6.02. Acceleration........................................................................... 34
Section 6.03. Defaults and Remedies.................................................................. 34
Section 6.04. Waiver of Existing Defaults............................................................ 34
Section 6.05. Control by Majority.................................................................... 35
Section 6.06. Limitation on Suits.................................................................... 35
Section 6.07. Rights of Holders of Notes to Receive Payment and to Convert........................... 35
Section 6.08. Collection Suit by Trustee............................................................. 36
Section 6.09. Trustee May File Proofs of Claim....................................................... 36
Section 6.10. Priorities............................................................................. 36
Section 6.11. Undertaking for Costs.................................................................. 37
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee...................................................................... 37
Section 7.02. Rights of Trustee...................................................................... 38
Section 7.03. Individual Rights of Trustee........................................................... 39
Section 7.04. Trustee's Disclaimer................................................................... 39
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Section 7.05. Notice of Defaults..................................................................... 40
Section 7.06. Reports by Trustee to Holders of the Notes............................................. 40
Section 7.07. Compensation and Indemnity............................................................. 40
Section 7.08. Replacement of Trustee................................................................. 41
Section 7.09. Successor Trustee By Merger, etc....................................................... 42
Section 7.10. Eligibility; Disqualification.......................................................... 42
Section 7.11. Preferential Collection of Claims Against the Company.................................. 42
ARTICLE 8
MEETINGS OF HOLDERS OF NOTES
Section 8.01. Purposes for Which Meetings May be Called.............................................. 43
Section 8.02. Call, Notice and Place of Meetings..................................................... 43
Section 8.03. Persons Entitled to Vote at Meetings................................................... 43
Section 8.04. Quorum; Action......................................................................... 43
Section 8.05. Determination of Voting Rights; Conduct and Adjournment of Meetings.................... 44
Section 8.06. Counting Votes and Recording Action of Meetings........................................ 45
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.................................................... 45
Section 9.02. With Consent of Holders of Notes....................................................... 46
Section 9.03. Compliance with Trust Indenture Act.................................................... 48
Section 9.04. Revocation and Effect of Consents...................................................... 48
Section 9.05. Notation on or Exchange of Notes....................................................... 48
Section 9.06. Trustee to Sign Amendments, etc........................................................ 49
ARTICLE 10
CONVERSION OF NOTES
Section 10.01. Conversion Privilege and Conversion Rate.............................................. 49
Section 10.02. Exercise of Conversion Privilege...................................................... 51
Section 10.03. Limitation on Beneficial Ownership.................................................... 53
Section 10.04. Cash Settlement Option................................................................ 53
Section 10.05. Fractions of Shares................................................................... 53
Section 10.06. Exchange in Lieu of Conversion........................................................ 54
Section 10.07. Adjustment of Conversion Rate......................................................... 54
Section 10.08. Interest Make Whole Upon Conversion................................................... 62
Section 10.09. Notice of Adjustments of Conversion Rate.............................................. 64
Section 10.10. Notice of Certain Corporate Action.................................................... 64
Section 10.11. Company to Reserve Common Stock....................................................... 65
Section 10.12. Taxes on Conversions.................................................................. 65
Section 10.13. Covenant as to Common Stock........................................................... 65
Section 10.14. Cancellation of Converted Notes....................................................... 66
Section 10.15. Provision in Case of Consolidation, Merger or Sale of Assets.......................... 66
Section 10.16. Responsibility of Trustee for Conversion Provisions................................... 67
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ARTICLE 11
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE
Section 11.01. Right to Require Repurchase........................................................... 67
Section 11.02. Notices; Method of Exercising Repurchase Right, etc................................... 68
Section 11.03. Consolidation, Merger, etc............................................................ 70
ARTICLE 12
SECURITY
Section 12.01. Security.............................................................................. 71
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.......................................................... 73
Section 13.02. Notices............................................................................... 73
Section 13.03. Communication by Holders of Notes with Other Holders of Notes......................... 74
Section 13.04. Certificate and Opinion as to Conditions Precedent.................................... 74
Section 13.05. Statements Required in Certificate or Opinion......................................... 75
Section 13.06. Tax Treatment of the Notes............................................................ 75
Section 13.07. Rules by Trustee and Agents........................................................... 76
Section 13.08. No Personal Liability of Directors, Officers, Employees, Members and Stockholders..... 76
Section 13.09. Governing Law......................................................................... 76
Section 13.10. No Adverse Interpretation of Other Agreements......................................... 76
Section 13.11. Successors............................................................................ 76
Section 13.12. Severability.......................................................................... 76
Section 13.13. Counterpart Originals................................................................. 77
Section 13.14. Table of Contents, Headings, etc...................................................... 77
ARTICLE 14
SATISFACTION AND DISCHARGE
Section 14.01. Satisfaction and Discharge of Indenture............................................... 77
Section 14.02. Application of Trust Money............................................................ 78
EXHIBIT A............................................................................................. A-1
Annex A - Form of Restricted Notes Certificate
Annex B - Form of Unrestricted Notes Certificate
Annex C - Form of Surrender Certificate
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INDENTURE dated as of November 22, 2004 among Charter Communications,
Inc., a Delaware corporation (as further defined below, the "Company"), and
Xxxxx Fargo Bank, N.A., as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"ACCRETED LIQUIDATED DAMAGES" means Share Lending Liquidated Damages that
the Company has validly elected pursuant to Section 2.16 hereof and the Share
Lending Registration Rights Agreement to add to the Original Principal Amount of
the Notes rather than pay in cash.
"ACCRETED PRINCIPAL AMOUNT" means, for any Note as of any date of
determination, (i) the Original Principal Amount of such Note, plus (ii) any
Accreted Liquidated Damages for any applicable Damages Payment Date prior such
date of determination.
"ACQUIRER COMMON STOCK" means an acquirer's or Beneficial Owner Entity's
class of common stock traded on a national securities exchange or quoted on the
Nasdaq National Market or which will be so traded or quoted when issued or
exchanged in connection with a Fundamental Change.
"ACQUISITION VALUE" of Common Stock means, for each Trading Day in the
Valuation Period, the value of the consideration paid per share of Common Stock
in connection with such Public Acquirer Change of Control, as follows:
(1) for any cash, 100% of the face amount of such cash,
(2) for any Acquirer Common Stock or any other securities that are
traded on a U.S. national securities exchange or approved for
quotation on the Nasdaq National Market, 100% of the Sale Price of
such Acquirer Common Stock or other traded securities on each such
Trading Day; and
(3) for any other securities, assets or property, 102% of the fair
market value of such security, asset or property on each such
Trading Day, as determined by two independent nationally recognized
investment banks selected by the Trustee for this purpose.
"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 purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock
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of a Person shall be deemed to be control. For purposes of this definition, the
terms "controlling, "controlled by" and "under common control with" shall have
correlative meanings.
"AGENT" means any Registrar, Paying Agent or Conversion Agent.
"AGENT MEMBER" means any member of, or participant in, the Depositary.
"XXXXX AFFILIATE" means any person in which Xx. Xxxxx, directly or
indirectly, owns at least a 50.1% equity interest, provided that the Company,
Charter Holdco or any of its subsidiaries will not be included in such
definition.
"ALLOCABLE COLLATERAL" has the meaning specified in the Pledge Agreement.
"APPLICABLE PROCEDURES" means, with respect to any transfer or transaction
involving a Global Note or beneficial interest therein, the rules and procedures
of DTC, in each case to the extent applicable to such transaction and as in
effect from time to time.
"AVERAGE PRICE" of Common Stock means, with respect to any conversion of
Notes, the average of the Sale Prices of the Common Stock over the 20 Trading
Day period beginning on the third Trading Day immediately following the
applicable Conversion Date for such conversion of Notes.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal or state
law of any jurisdiction relating to bankruptcy, insolvency, winding up,
liquidation, reorganization or relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder, and
the term "BENEFICIAL OWNERSHIP" shall have a correlative meaning.
"BENEFICIAL OWNER ENTITY" means any entity that is a direct or indirect
Beneficial Owner of more than 50% of the total voting power of all shares of an
acquirer's capital stock that are entitled to vote generally in the election of
directors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
authorized committee of the Board of Directors of the Company.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors of the Company and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
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(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited);
and
(4) any other interest (other than any debt obligation) or participation
that confers on a Person the right to receive a share of the profits
and losses of, or distributions of assets of, the issuing Person.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(1)the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" or "group"
within the meaning of Section 13(d) of the Exchange Act (a "SECTION 13 PERSON"),
other than the Principal and Related Parties, becomes the Beneficial Owner,
directly or indirectly, of more than 35% of the Voting Stock of the Company,
measured by voting power rather than number of shares, unless the Principal and
the Related Parties, collectively, beneficially own, directly or indirectly, a
greater percentage of Voting Stock of the Company, measured by voting power
rather than number of shares, than such Section 13 Person;
(2)the consummation of any transaction or event (whether by means of a
liquidation, share exchange, tender offer, consolidation, recapitalization,
reclassification, merger of the Company or any sale, lease or other transfer of
the consolidated assets of the Company and its Subsidiaries) or a series of
related transactions or events pursuant to which the Common Stock is exchanged
for, converted into or constitutes solely the right to receive cash, securities
or other property more than 10% of the fair market value of which consists of
cash, securities or other property that are not, or upon issuance will not be,
traded on any U.S. national securities exchange or quoted on the Nasdaq National
Market;
(3)the sale, transfer, conveyance, lease or other disposition (including
by way of liquidation or dissolution, but excluding by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries, taken as a
whole, to any Section 13 Person;
(4)at any time, (i) the Principal or any Xxxxx Affiliates purchases, in a
transaction or series of transactions, shares of Common Stock and, solely as a
result of such purchases, the aggregate number of shares of Common Stock held by
the Principal and any Xxxxx Affiliates exceeds 70% of the total number of shares
of Common Stock issued and outstanding at such time (including any shares
borrowed pursuant to the Share Lending Agreement) and (ii) the Sale Price of the
Common Stock for any five Trading Days within the period of the 10 consecutive
Trading Days immediately after the later of (x) the last date of such purchases
or (y) the public announcement of such purchases, is less than 100% of the
Conversion Price of the Notes in effect on each of those Trading Days (for
purposes of this clause (4), a purchase will not include any transaction whereby
shares of Common Stock are acquired by the Principal or any Xxxxx Affiliate as a
result of the exchange and conversion of membership units of Charter Holdco for
and into shares of Common Stock or the conversion of shares of the Company's
Class B
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Common Stock, par value $.001 per share, into shares of Common Stock or issued
in exchange (by merger or otherwise) for shares of a Person that holds units of
Charter Holdco; the calculation of the number of shares of Common Stock held by
the Principal and the Xxxxx Affiliates will not include securities exchangeable
or convertible into shares of Common Stock.
(5)after the Issue Date, the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors; or
(6)the adoption of a plan relating to the liquidation or dissolution of
the Company.
"CHARTER HOLDCO" means Charter Communications Holding Company LLC.
"COLLATERAL ACCOUNT" has the meaning specified in the Pledge Agreement.
"COLLATERAL AGENT" means Xxxxx Fargo Bank, N.A., and its permitted
successors and assigns, as collateral agent under the Pledge Agreement.
"COMMISSION" OR "SEC" means the Securities and Exchange Commission.
"COMMON STOCK" includes any stock of any class of capital stock 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 issuer
thereof and which is not subject to redemption by the issuer thereof.
"COMMON STOCK" means the Class A Common Stock, par value $.001 per share,
of the Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 10.15, shares issuable on conversion or
repurchase of Notes shall include only shares of Common Stock or shares of any
class or classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there shall be
more than one such resulting class, the shares so issuable on conversion of
Notes shall include shares of all such classes, and the shares of each such
class then so issuable shall be substantially in the proportion that 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 Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "COMPANY" shall mean
such successor Person.
"CONTINUING DIRECTORS" means a member of the Board of Directors who
either:
(1) was a member of the Board of Directors on the Issue Date; or
(2) becomes a member of the Board of Directors subsequent to the Issue
Date and whose appointment, election or nomination for election by the Company's
shareholders is duly approved by a majority of the Continuing Directors on the
Board of Directors at the time of such
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approval, either by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the Board of Directors in which such individual is
named as nominee for director.
"CONVERSION AGENT" means any Person authorized by the Company to convert
Notes in accordance with Article 10. The Company has initially appointed the
Trustee as its Conversion Agent pursuant to Section 2.03 hereof.
"CONVERSION PRICE" as of any date shall equal U.S. $1,000 divided by the
Conversion Rate in effect on such date (rounded to the nearest cent).
"CONVERSION RATE" has the meaning specified in Section 10.01(a) hereof.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 13.02 or such other address as to which the Trustee
may give notice to the Company.
"DAMAGES PAYMENT DATE" means the 16th day of any month, on which Share
Lending Liquidated Damages are payable pursuant to the Share Lending
Registration Rights Agreement.
"DAMAGES RECORD DATE" means, with respect to any Damages Payment Date, the
first day of the month in which such Damages Payment Date occurs.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEFERRED INTEREST" has the meaning specified in Section 2.16(b).
"DEPOSITARY" means, with respect to any Notes (including any Global
Notes), a clearing agency that is registered under the Exchange Act and is
designated by the Company to act as Depositary for such Notes (or any successor
securities clearing agency so registered).
"DTC" means The Depository Trust Company, a New York corporation.
"EARLY CONVERSION MAKE WHOLE AMOUNT" has the meaning specified in Section
10.08(a).
"EFFECTIVE DATE" means the date of consummation or effectiveness of a
transaction described in clause (2) of the definition of Change of Control.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FUNDAMENTAL CHANGE" means a Change of Control or a Termination of Trading
"GLOBAL NOTE" means a Note that is registered in the Note Register for the
Notes in the name of a Depositary or a nominee thereof.
"GUARANTEE" or "GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or
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reimbursement agreements in respect thereof, of all or any part of any
Indebtedness, measured as the lesser of the aggregate outstanding amount of the
Indebtedness so guaranteed and the face amount of the Guarantee.
"HOLDER" means the Person in whose name the Note is registered in the Note
Register.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments; or
(3) representing capital lease obligations.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and (ii) the principal amount (or portion of the discounted
rental stream attributable to principal in the case of capitalized leases)
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"INTEREST PAYMENT DATE" means the Stated Maturity of an installment of
interest on the Notes.
"ISSUE DATE" means November 22, 2004.
"LEGAL HOLIDAY", when used with respect to any place of payment or Place
of Conversion, as the case may be, means a Saturday, a Sunday or a day on which
banking institutions in The City of New York, at such place of payment or Place
of Conversion, as the case may be, are authorized by law, regulation or
executive order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or
security interest).
"LIQUIDATED DAMAGES" means Resale Liquidated Damages or Share Lending
Liquidated Damages.
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"MATURITY", when used with respect to any Notes, means the date on which
the Accreted Principal Amount of such Notes becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article 11 or otherwise.
"NON-GLOBAL NOTE" means a Note that is in definitive, fully registered
form, without interest coupons, and that is not a Global Note.
"NOTES" means the Company's 5.875% Convertible Senior Notes due 2009 and
more particularly means any Notes authenticated and delivered under this
Indenture.
"OFFERING MEMORANDUM" the final offering memorandum of the Company, dated
November 16, 2004, prepared in connection with the offering of the Notes.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the chief financial officer or the treasurer of the Company
that meets the requirements of Section 13.05.
"OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 13.05. The
counsel may be an employee of or counsel to the Company or any Subsidiary of the
Company.
"ORIGINAL PRINCIPAL AMOUNT" of a Note means the stated Original Principal
Amount as set forth on the face of such Note.
"PERSON" means any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"PLACE OF CONVERSION" means any city in which any Conversion Agent is
located.
"PLEDGE AGREEMENT" means the Collateral Pledge and Security Agreement,
dated as of November 22, 2004, among the Company, the Trustee and the Collateral
Agent, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time.
"PLEDGED SECURITIES" has the meaning specified in the Pledge Agreement.
"PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
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"PRINCIPAL" means Xxxx X. Xxxxx.
"PUBLIC ACQUIRER CHANGE OF CONTROL" means any transaction described in
clause (2) of the definition of Change of Control where the acquirer, or any
entity that is a direct or indirect Beneficial Owner of more than 50% of the
total voting power of all shares of such acquirer's capital stock that are
entitled to vote generally in the election of directors, has a class of common
stock traded on a national securities exchange or quoted on the Nasdaq National
Market or which will be so traded or quoted when issued or exchanged in
connection with such Change of Control.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of November
16, 2004, among the Company and Citigroup Global Markets Inc. and Xxxxxx Xxxxxxx
& Co. Incorporated (the "REPRESENTATIVES"), as representatives of the
Purchasers, as such agreement may be amended from time to time.
"PURCHASERS" means the initial purchasers of the Notes specified in the
Purchase Agreement.
"QUALIFIED INSTITUTIONAL BUYER" shall mean a "qualified institutional
buyer" as defined in Rule 144A.
"RECORD DATE PERIOD" means the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date.
"REDEMPTION DATE", when used with respect to any Note to be redeemed,
means the date fixed for redemption by or pursuant to this Indenture.
"REDEMPTION MAKE WHOLE AMOUNT" has the meaning specified in Section
10.08(b).
"REDEMPTION PRICE" has the meaning specified in Section 3.07.
"REGULAR RECORD DATE" for interest payable in respect of any Note on any
Interest Payment Date means the May 1 or November 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"RELATED PARTY" means:
(1) the spouse or an immediate family member, estate or heir of the
Principal; or
(2)any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of the Principal and/or such other Persons
referred to in the immediately preceding clause (1) or this clause (2).
"RESALE LIQUIDATED DAMAGES" means Liquidated Damages as defined in, and as
payable pursuant to, the Resale Registration Rights Agreement.
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"RESALE REGISTRATION RIGHTS AGREEMENT" means the Resale Registration
Rights Agreement, dated as of November 22, 2004, between the Company and the
Representatives, as such agreement may be amended from time to time.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"RESTRICTED NON-GLOBAL NOTE" means a Restricted Note other than a Global
Note.
"RESTRICTED NOTES" means all Notes required pursuant to Section 2.07(c) to
bear any Restricted Notes Legend. Such term includes the Restricted Global Note.
"RESTRICTED NOTES CERTIFICATE" means a certificate substantially in the
form set forth in Annex A.
"RESTRICTED NOTES LEGEND" means, collectively, the legends substantially
in the forms of the legends required in the form of Note set forth in Exhibit A
to be placed upon each Restricted Note.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"SALE PRICE" of Common Stock or any other security on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in transactions for the principal U.S. securities exchange on which the
Common Stock or such other security is traded, or if the Common Stock or such
other security is not listed on a U.S. national or regional securities exchange,
as reported by the Nasdaq National Market. The Sale Price will be determined
without reference to after-hours or extended market trading. If the Common Stock
or such other security is not listed for trading on a U.S. national or regional
securities exchange and not reported by the Nasdaq National Market on the
relevant date, the Sale Price will be the last quoted bid price for the Common
Stock or such other security in the Nasdaq Small Cap Market or in the
over-the-counter market on the relevant date as reported by Pink Sheets LLC or
any similar organization. If the Common Stock or such other security is not so
quoted, the Sale Price will be the average of the mid-point of the last bid and
asked prices for the Common Stock or such other security on the relevant date
from each of at least three nationally recognized independent investment banking
firms selected by the Company for this purpose.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARE LENDING LIQUIDATED DAMAGES" means Liquidated Damages as defined in,
and as payable pursuant to, the Share Lending Registration Rights Agreement.
9
"SHARE LENDING REGISTRATION RIGHTS AGREEMENT" means the Share Lending
Registration Rights Agreement, dated as of November 22, 2004, between the
Company and Citigroup Global Markets Inc., as such agreement may be amended from
time to time.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Company which is a
Significant Subsidiary as defined in Rule 1-02(w) of Regulation S-X under the
Exchange Act.
"STATED MATURITY", when used with respect to the Accreted Principal Amount
of any Note or the payment of interest on any Note, means the date specified in
such Note as the fixed date on which the Accreted Principal Amount of such Note
or such installment of interest is due and payable.
"STOCK PRICE" means the price per share of Common Stock paid in connection
with a corporate transaction described in clause (2) of the definition of Change
of Control, which shall be equal to (i) if holders of Common Stock receive only
cash in such corporate transaction, the cash amount paid per share of Common
Stock and (ii) in all other cases, the average of the Sale Prices of Common
Stock on the ten Trading Days up to but not including the Effective Date.
"SUBSIDIARY" means, with respect to any Person:
(1)any corporation, association or other business entity of which at least
50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and, in the case of any such entity of
which 50% of the total voting power of shares of Capital Stock is so owned or
controlled by such Person or one or more of the other Subsidiaries of such
Person, such Person and its Subsidiaries also has the right to control the
management of such entity pursuant to contract or otherwise; and
(2)any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"SUCCESSOR NOTE" of any particular Note means every Note issued after, and
evidencing all or a portion of the same debt as that evidenced by, such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"SURRENDER CERTIFICATE" means a certificate substantially in the form set
forth in Annex C.
"TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest income
on a Note that must be accrued as original issue discount for United States
federal income tax purposes pursuant to Treasury regulation section 1.1275-4 or
any successor provision.
10
"TERMINATION OF TRADING" will be deemed to have occurred if the Common
Stock (or other common stock into which the Notes are convertible) is neither
listed for trading on a U.S. national securities exchange nor approved for
trading on the Nasdaq National Market; provided that a Termination of Trading
will not occur so long as the Common Stock is listed for trading on the Nasdaq
Small Cap market or quoted bid prices for the Common Stock in the
over-the-counter market are reported by Pinks Sheets LLC or any similar
organization.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, then "TIA" means, to the extent required by such amendment, the
Trust Indenture Act of 1939 as so amended.
"TRADING DAY" means a day during which trading in securities generally
occurs on the principal U.S. national or regional securities exchange on which
the Common Stock is then listed or, if the Common Stock is not then listed on a
national or regional securities exchange, on the Nasdaq National Market or, if
the Common Stock is not then quoted on the Nasdaq National Market, on the
principal other market on which the Common Stock is traded.
"TRUSTEE" means Xxxxx Fargo Bank, N.A. until a successor replaces Xxxxx
Fargo Bank, N.A. in accordance with the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.
"UNRESTRICTED NOTES CERTIFICATE" means a certificate substantially in the
form set forth in Annex B.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the board of
directors of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Accepted Purchased Shares".......................................... 10.07(g)
"Additional Shares".................................................. 10.01(b)
"Authentication Order"............................................... 2.02
"Constituent Person"................................................. 10.15
"Conversion Date".................................................... 10.02(a)
"Conversion Rate".................................................... 10.01(a)
"Conversion Settlement Date"......................................... 10.02(c)
"Current Market Price"............................................... 10.07(h)
"Event of Default"................................................... 6.01
"Expiration Date".................................................... 10.07(f)
"fair market value".................................................. 10.07(j)
"Non-Electing Share"................................................. 10.15
"Note Register"...................................................... 2.03
"Offer Expiration Date".............................................. 10.07(g)
"Paying Agent"....................................................... 2.03
11
Defined in
Term Section
---- -------
"Accepted Purchased Shares".......................................... 10.07(g)
"Payment Default".................................................... 6.01
"Purchased Shares"................................................... 10.07(f)
"Record Date"........................................................ 10.07(i)
"Registrar".......................................................... 2.03
"Repurchase Date".................................................... 11.02
"Repurchase Price"................................................... 11.01
"Restricted Global Note"............................................. 2.01
"Rule 144A Information".............................................. 4.10
"Specified Percentage" .............................................. 10.03
"Statistical Release"................................................ 10.08(b)
"Trigger Event"...................................................... 10.07(d)
"Valuation Period"................................................... 10.01(e)
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Notes means the Company and any successor obligor upon
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
12
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the Commission from time to time;
(g) references to any statute, law, rule or regulation shall be deemed to
refer to the same as from time to time amended and in effect and to any
successor statute, law, rule or regulation; and
(h) references to any contract, agreement or instrument shall mean the
same as amended, modified, supplemented or amended and restated from time to
time, in each case, in accordance with any applicable restrictions contained in
this Indenture.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Notes, the Trustee's certificate of authentication and the conversion
notices shall be substantially in the form of Exhibit A hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Original
Principal Amount of the Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and 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. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
Upon their original issuance, Notes issued as contemplated by the Purchase
Agreement to Qualified Institutional Buyers in reliance on Rule 144A shall be
issued in the form of one or more Global Notes in definitive, fully registered
form without interest coupons and bearing the Restricted Note Legend. Such
Global Note shall be registered in the name of DTC, as Depositary, or its
nominee and deposited with the Trustee, as custodian for DTC, for credit by DTC
to the respective accounts of beneficial owners of the Notes represented thereby
(or such other accounts as they may direct). Such Global Note, together with its
Successor Notes which are Global Notes, are collectively herein called the
"Restricted Global Notes".
Section 2.02. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
13
A Note shall not be valid until authenticated by the manual signature
(which may be by facsimile) of the Trustee. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver such Notes
upon a written order of the Company signed by an Officer of the Company (an
"Authentication Order"). Such Authentication Order shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated and whether the Notes are to be issued as one or more Global Notes
and such other information as the Company may include or the Trustee may
reasonably request. The aggregate Original Principal Amount of Notes that may be
outstanding under this Indenture at any time may not exceed $862,500,000, except
as provided in Section 2.08.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03. Registrar; Conversion Agent; and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer, exchange, conversion, redemption or
repurchase ("Registrar" and with respect to conversion, "Conversion Agent") and
an office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer, exchange
and conversion (the register maintained in such office, the "Note Register").
The Company may appoint one or more co-registrars or conversion agents and one
or more additional paying agents. The term "Registrar" includes any
co-registrar, the term "Conversion Agent" includes any co-conversion agent and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent, Registrar or Conversion Agent without notice to any
Holder. The Company shall promptly notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent, Registrar or Conversion Agent.
The Company initially appoints DTC to act as Depositary with respect to
the Global Notes.
The Company initially appoints the Trustee to act as the Registrar, Paying
Agent and Conversion Agent, custodian and Collateral Agent with respect to the
Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held
14
by the Paying Agent for the payment of the Accreted Principal Amount, premium,
if any, or interest on the Notes, and shall notify the Trustee of any default by
the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
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 or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. 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
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before 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 the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.06. Global Notes; Non-global Notes; Book-Entry Provisions.
(a) Global Notes
(i) Each Global Note authenticated under this Indenture shall be
registered in the name of the Depositary designated by the Company for
such Global Note or a nominee thereof and delivered to such Depositary or
a nominee thereof or custodian therefor, and each such Global Note shall
constitute a single Note for all purposes of this Indenture.
(ii) Notwithstanding any other provisions of this Indenture or the
Notes, a Global Note shall not be exchanged in whole or in part for a Note
registered in the name of any Person other than the Depositary or one or
more nominees thereof, provided that a Global Note may be exchanged for
Notes registered in the names of any Person designated by the Depositary
in the event that (A) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Note or such
Depositary has ceased to be a "clearing agency" registered under the
Exchange Act, and a successor Depositary is not appointed by the Company
within 90 days, (B) to the extent permitted by the Depositary, the
Company, in its sole discretion, determines at any time that the Notes
shall no longer be represented by Global Notes and shall inform such
Depositary of such determination; or (C) there is a request by or on
behalf of the Depository in accordance with its customary procedures to
exchange an interest in the Global Notes for Non-global Notes. Any Global
Note exchanged pursuant to clause (A) above shall be so exchanged in whole
and not in part, and any Global Note exchanged pursuant to clause (B) or
(C) above may be exchanged in whole or from time to time in part as
directed by the Depositary. Any Note issued in exchange for a Global Note
or any
15
portion thereof shall be a Global Note; provided that any such Note so
issued that is registered in the name of a person other than the
Depositary or a nominee thereof shall not be a Global Note.
(iii) If any Global Note is to be exchanged for other Notes or
canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Note Registrar, for exchange
or cancellation, as provided in this Article 2. If any Global Note is to
be exchanged for other Notes or canceled in part, or if another Note is to
be exchanged in whole or in part for a beneficial interest in any Global
Note, in each case, as provided in Section 2.07, then either (A) such
Global Note shall be so surrendered for exchange or cancellation, as
provided in this Article 2, or (B) the Original Principal Amount thereof
shall be reduced or increased by an amount equal to the portion thereof to
be so exchanged or canceled, or equal to the Original Principal Amount of
such other Note to be so exchanged for a beneficial interest therein, as
the case may be, by means of an appropriate adjustment made on the records
of the Trustee, as Registrar, whereupon the Trustee, in accordance with
the Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any
such surrender or adjustment of a Global Note, the Trustee shall, subject
to Section 2.07(c) and as otherwise provided in this Article 2,
authenticate and deliver any Notes issuable in exchange for such Global
Note (or any portion thereof) to or upon the order of, and registered in
such names as may be directed by, the Depositary or its authorized
representative. Upon the request of the Trustee in connection with the
occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply
of Notes that are not in the form of Global Notes. The Trustee shall be
entitled to rely upon any order, direction or request of the Depositary or
its authorized representative which is given or made pursuant to this
Article 2 if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(iv) Every Note authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Note or any
portion thereof, whether pursuant to this Article 2 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered
Global Note, unless such Note is registered in the name of a Person other
than the Depositary for such Global Note or a nominee thereof, in which
case such Note shall be authenticated and delivered in definitive, fully
registered form, without interest coupons.
(v) The Depositary or its nominee, as registered owner of a Global
Note, shall be the Holder of such Global Note for all purposes under the
Indenture and the Notes, and owners of beneficial interests in a Global
Note shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Note shall
be shown only on, and the transfer of such interest shall be effected only
through, records maintained by the Depositary or its nominee or its Agent
Members and such owners of beneficial interests in a Global Note shall not
be considered the owners or holders thereof.
16
(b) Non-global Notes. Notes issued upon the events described in Section
2.06(a)(ii) shall be in definitive, fully registered form, without interest
coupons, and shall bear the Restricted Notes Legend if and as required by this
Indenture.
Section 2.07. Registration; Registration of Transfer and Exchange;
Restrictions on Transfer.
(a) Upon surrender for registration of transfer of any Note at an office
or agency of the Company designated pursuant to Section 2.03 for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes of
any authorized denominations and of a like aggregate Original Principal Amount
and bearing such restrictive legends as may be required by this Indenture.
At the option of the Holder, and subject to the other provisions of this
Section 2.07, Notes may be exchanged for other Notes of any authorized
denomination and of a like aggregate Original Principal Amount, upon surrender
of the Notes to be exchanged at any such office or agency. Whenever any Notes
are so surrendered for exchange, and subject to the other provisions of this
Section 2.07, the Company shall execute, and the Trustee shall authenticate and
deliver, the Notes which the Holder making the exchange is entitled to receive.
Every Note presented or surrendered for registration of transfer or for exchange
shall (if so required by the Company or the Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Registrar duly executed, by the Holder thereof or
its attorney duly authorized in writing.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the legal, valid and binding obligations of the Company, evidencing the
same debt and entitled to the same benefits under this Indenture as the Notes
surrendered upon such registration of transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes except as provided in Section 2.08, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes, other than exchanges pursuant to Section 2.06,
9.05, 10.02 or 11.02 (other than where the shares of Common Stock are to be
issued or delivered in a name other than that of the Holder of the Note) not
involving any transfer and other than any stamp and other duties, if any, which
may be imposed in connection with any such transfer or exchange by the United
States or any political subdivision thereof or therein, which shall be paid by
the Company.
In the event of a redemption of the Notes, neither the Company nor the
Registrar will be required (a) to register the transfer of or exchange any
Non-global Note for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Notes called for such redemption or
(b) to register the transfer of or exchange any Non-global Note, or portion
thereof, called for redemption.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision
of this Indenture or the Notes, transfers and exchanges of Notes and beneficial
interests in a Global
17
Note of the kinds specified in this Section 2.07(b) shall be made only in
accordance with this Section 2.07(b).
(i) Restricted Global Note to Restricted Non-global Note. In the
event that Non-global Notes are to be issued pursuant to Section
2.06(a)(ii) in connection with any transfer of Notes, such transfer may be
effected only in accordance with the provisions of this Clause (b)(i) and
subject to the Applicable Procedures. Upon receipt by the Trustee, as
Registrar, of (A) an Authentication Order from the Company directing the
Trustee, as Registrar, to (x) authenticate and deliver one or more Notes
of the same aggregate Original Principal Amount as the beneficial interest
in the Restricted Global Note to be transferred, such instructions to
contain the name or names of the designated transferee or transferees, the
authorized denomination or denominations of the Notes to be so issued and
appropriate delivery instructions and (y) decrease the beneficial interest
of a specified Agent Member's account in a Restricted Global Note by a
specified Original Principal Amount not greater than the Original
Principal Amount of such Restricted Global Note, and (B) such other
certifications, legal opinions or other information as the Company or the
Trustee 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, then the Trustee, as
Registrar, shall decrease the Original Principal Amount of the Restricted
Global Note by the specified amount and authenticate and deliver Notes in
accordance with such instructions from the Company as provided in Section
2.06(a)(iii).
(ii) Restricted Non-global Note to Restricted Global Note. If the
Holder of a Restricted Non-global Note wishes at any time to transfer all
or any portion of such Restricted Non-global Note to a Person who wishes
to take delivery thereof in the form of a beneficial interest in the
Restricted Global Note, such transfer may be effected only in accordance
with the provisions of this Clause (b)(ii) and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Registrar, of (A) such
Restricted Non-global Note as provided in Section 2.07(a) and written
instructions from the Company directing that a beneficial interest in the
Restricted Global Note in a specified Original Principal Amount not
greater than the Original Principal Amount of such Restricted Non-global
Note be credited to a specified Agent Member's account and (B) a
Restricted Notes Certificate, satisfactory to the Trustee and duly
executed by such Holder or its attorney duly authorized in writing, then
the Trustee, as Registrar, shall cancel such Restricted Non-global Note
(and issue a new Restricted Non-global Note in respect of any
untransferred portion thereof) as provided in Section 2.07(a) and increase
the Original Principal Amount of the Restricted Global Note by the
specified Original Principal Amount as provided in Section 2.06(a)(iii).
(iii) Exchanges Between Global Note and Non-global Note. A
beneficial interest in a Global Note may be exchanged for a Non-global
Note only as provided in Section 2.07 or only if such exchange occurs in
connection with a transfer effected in accordance with Clause b(i) above,
provided that, if such interest is a beneficial interest in the Restricted
Global Note, then such interest shall be exchanged for a Restricted
Non-global Note (subject in each case to Section 2.07(c)). A Restricted
Non-global Note may
18
be exchanged for a beneficial interest in a Global Note only if such
exchange occurs in connection with a transfer effected in accordance with
Clause (b)(ii) above.
(c) Securities Act Legends. All Notes issued pursuant to this Indenture,
and all Successor Notes, shall bear the Restricted Notes Legend, subject to the
following:
(i) subject to the following Clauses of this Section 2.07(c), a Note
or any portion thereof which is exchanged, upon transfer or otherwise, for
a Global Note or any portion thereof shall bear the Restricted Notes
Legend borne by such Global Note for which the Note was exchanged;
(ii) subject to the following Clauses of this Section 2.07(c), a new
Note which is not a Global Note and is issued in exchange for another Note
(including a Global Note) or any portion thereof, upon transfer or
otherwise, shall bear the Restricted Notes Legend borne by the Note for
which the new Note was exchanged;
(iii) any Notes which are sold or otherwise disposed of pursuant to
an effective registration statement under the Securities Act (including
the Shelf Registration Statement), together with their Successor Notes
shall not bear a Restricted Notes Legend; the Company shall inform the
Trustee in writing of the effective date of any such registration
statement registering the Notes under the Securities Act and shall notify
the Trustee at any time when prospectuses must be delivered with respect
to Notes to be sold pursuant to such registration statement. The Trustee
shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the aforementioned registration statement;
(iv) at any time after the Notes may be freely transferred without
registration under the Securities Act or without being subject to transfer
restrictions pursuant to the Securities Act, a new Note which does not
bear a Restricted Notes Legend may be issued in exchange for or in lieu of
a Note (other than a Global Note) or any portion thereof which bears such
a legend if the Trustee has received an Unrestricted Notes Certificate,
satisfactory to the Trustee and duly executed by the Holder of such Note
bearing a Restricted Notes Legend or its attorney duly authorized in
writing, and after such date and receipt of such certificate, the Trustee
shall authenticate and deliver such new Note in exchange for or in lieu of
such other Note as provided in this Article 2
(v) a new Note which does not bear a Restricted Notes Legend may be
issued in exchange for or in lieu of a Note or any portion thereof which
bears such a legend if, in the Company's judgment, placing such a legend
upon such new Note is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at the
direction of the Company, shall authenticate and deliver such a new Note
as provided in this Article 2; and
(vi) notwithstanding the foregoing provisions of this Section
2.07(c), a Successor Note of a Note that does not bear a Restricted Notes
Legend shall not bear such legend unless the Company has reasonable cause
to believe that such Successor Note is a "restricted security" within the
meaning of Rule 144, in which case the Trustee,
19
at the direction of the Company, shall authenticate and deliver a new Note
bearing a Restricted Notes Legend in exchange for such Successor Note as
provided in this Article 2.
(d) Any stock certificate representing shares of Common Stock issued upon
conversion of the Notes shall bear a legend substantially in the form of the
Restricted Notes Legend borne by such Notes, to the extent required by this
Indenture, unless such shares of Common Stock 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 transfer) or sold
pursuant to Rule 144(k) of the Securities Act, or unless otherwise agreed by the
Company in writing with written notice thereof to the transfer agent for the
Common Stock. With respect to the transfer of shares of Common Stock issued upon
conversion of the Notes that are restricted hereunder, any deliveries of
certificates, legal opinions or other instruments that would be required to be
made to the Registrar in the case of a transfer of Notes, as described above,
shall instead be made to the transfer agent for the Common Stock.
(e) Neither the Trustee, the Paying Agent nor any of their agents shall
(i) have any duty to monitor compliance with or with respect to any federal or
state or other securities or tax laws or (ii) have any duty to obtain
documentation on any transfers or exchanges other than as specifically required
hereunder.
Section 2.08. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company and the Trustee may charge for their expenses in replacing
a Note. Every replacement Note is an additional legally binding obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
Section 2.09. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions of this Indenture, and those described in this
Section as not outstanding. Except as set forth in Section 2.10, a Note does not
cease to be outstanding because either of the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
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If the Accreted Principal Amount of any Note is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a Redemption Date, Repurchase Date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
If a Note is converted into Common Stock pursuant to Article 10, it ceases
to be outstanding and interest on it ceases to accrue on the day of surrender of
such Note or conversion.
Section 2.10. Treasury Notes.
In determining whether the Holders of the required Original Principal
Amount of Notes have concurred in any direction, waiver or consent, or whether
the Holders of the requisite Original Principal Amount of outstanding Notes are
present at a meeting of Holders of Notes for quorum purposes, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
or any such determination as to the presence of a quorum, only Notes that a
Responsible Officer of the Trustee knows are so owned shall be so disregarded.
Section 2.11. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.12. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar, Conversion Agent and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange, conversion
or payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, conversion, payment, replacement or
cancellation and shall dispose of such canceled Notes in its customary manner.
The Company may not issue new Notes to replace Notes that they have paid or that
have been delivered to the Trustee for cancellation.
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Section 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.14. Computation of Interest.
Interest on the Notes (including any Liquidated Damages) shall be computed
on the basis of a 360-day year of twelve 30-day months.
Section 2.15. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed in the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
Section 2.16. Accreted Liquidated Damages; Deferred Interest.
(a) If Share Lending Liquidated Damages are accruing pursuant to the Share
Lending Registration Rights Agreement, the Company may elect to add such Share
Lending Liquidated Damages to the Original Principal Amount of the Notes by
notifying the Trustee and the Holders at least ten Business Days prior to the
Damages Record Date for the Damages Payment Date on which such Share Lending
Liquidated Damages would otherwise be payable. Any such Accreted Liquidated
Damages shall be added to the Original Principal Amount of the Notes on the
applicable Damages Payment Date.
(b) If the Company has made the election described in Section 2.16(a) to
have Accreted Liquidated Damages, the Company shall also be entitled to defer
any interest that accrues with respect to the excess of the Accreted Principal
Amount over the Original Principal Amount of any Note (the "DEFERRED INTEREST")
until May 16, 2008, or any earlier Redemption Date, Repurchase Date or date of
acceleration of the Accreted Principal Amount of the Notes and shall not be
required to pay any additional interest or overdue interest on any accrued
Deferred Interest for any period ending on May 16, 2008 or any earlier such
date. The Company may elect to pay any accrued Deferred Interest on any Interest
Payment Date prior to May 16, 2008
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by notifying the Trustee and the Holders at least 10 days prior to the Regular
Record Date for such Interest Payment Date.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07, it shall furnish to the Trustee, at least 30 days
but not more than 60 days before a Redemption Date, an Officers' Certificate
setting forth (i) the Redemption Date, (ii) the Original Principal Amount of
Notes to be redeemed, (iii) whether the Company will deliver shares of Common
Stock, or cash in lieu thereof, upon conversion of Notes called for redemption,
(v) if the Company elects to deliver cash upon any such conversion, the
percentage of the Conversion Rate with respect to which the Company will pay
cash and (vi) whether the Company will deliver cash or shares of Common Stock
with respect to the Redemption Make Whole Amount owed upon conversion.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes on a pro
rata basis, by lot or in accordance with any other method the Trustee considers
fair and appropriate. In the event of partial redemption by lot, the particular
Notes to be redeemed shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the Redemption Date by the Trustee
from the outstanding Notes not previously called for redemption. If any Note
selected for partial redemption is converted in part before termination of the
conversion right with respect to the portion of the Note so selected, the
converted portion of such Note shall be deemed (so far as may be) to be the
portion selected for redemption. Notes which have been converted during a
selection of Notes to be redeemed may be treated by the Trustee as outstanding
for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the Original Principal Amount thereof to be redeemed. The Original
Principal Amount of Notes and portions of Notes selected shall be in amounts of
$1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder
are to be redeemed, the entire outstanding Original Principal Amount of Notes
held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption also apply to portions of Notes called for
redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at its registered
address.
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The notice shall identify the Notes (including applicable CUSIP numbers)
to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) whether the Company will deliver shares of Common Stock or cash in
lieu thereof upon conversion of any Notes called for redemption;
(d) if the Company elects to deliver cash upon any such conversion, the
percentage of the Conversion Rate with respect to which the Company will pay
cash;
(e) whether the Company will deliver cash or shares of Common Stock with
respect to any Redemption Make Whole Amount owed upon conversion;
(f) if any Note is being redeemed in part, the portion of the Original
Principal Amount of such Note to be redeemed and that, after the Redemption Date
upon surrender of such Note, a new Note or Notes in Original Principal Amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(g) the name and address of the Paying Agent;
(h) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(i) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
(j) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes; and
(k) the Conversion Rate, the date on which the right to convert the Notes
to be redeemed will terminate (which shall be the Business Day immediately
preceding the Redemption Date) and the places where Notes may be surrendered for
conversion or the procedures for surrendering Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the Redemption
Date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become irrevocably due and payable on the Redemption Date
at the Redemption Price. A notice of redemption may not be conditional.
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Section 3.05. Deposit of Redemption Price.
At or prior to 10:00 a.m., New York City time, on the Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the Redemption Price of all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts, including but not limited to any amounts in respect of Notes that are
converted (subject to Section 10.02), necessary to pay the Redemption Price of
all Notes to be redeemed. If the Company complies with the provisions of the
first sentence of this Section 3.05, on and after the Redemption Date interest
shall cease to accrue on the Notes or the portions of Notes called for
redemption. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
this paragraph, interest shall be paid on the unpaid Accreted Principal Amount
from the Redemption Date and such Note shall remain convertible until such
Accreted Principal Amount is paid, and to the extent lawful on any interest not
paid on such unpaid Accreted Principal Amount, in each case at the rate provided
in the Notes and in Section 4.01.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in Original Principal
Amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) The Company shall not have the option to redeem any Notes pursuant to
this Section 3.07 prior to the earlier of (1) the sale of any Notes pursuant to
the effective Shelf Registration Statement (as defined in the Resale
Registration Rights Agreement) or (2) the date two years following the Issue
Date. Following such date, the Company may redeem for cash the Notes (or in the
case of clause (1) above, any such Notes that have been sold pursuant to the
Shelf Registration Statement), in whole or in part, upon not less than 30 nor
more than 60 days' notice, at a price in cash (the "REDEMPTION PRICE") equal to
100% of the Accreted Principal Amount of such Notes plus accrued and unpaid
interest, Deferred Interest and Liquidated Damages, if any, on such Notes to,
but excluding, the Redemption Date, if the Sale Price of the Common Stock has
exceeded, for at least 20 Trading Days in any consecutive 30 Trading Day period,
180% of the Conversion Price if such 30 Trading Day period begins prior to
November 16, 2007 and 150% of the Conversion Price if such 30 day Trading Day
period begins thereafter. Notwithstanding the foregoing, if a Note is redeemed
on an Interest Payment Date or during the Record Date Period, then any accrued
and unpaid interest (including Liquidated Damages, but excluding any Deferred
Interest) shall be paid to the Person in whose name such Note was registered at
the close of business on the applicable Regular Record Date and the amount of
any such interest to be paid shall be excluded from the Redemption Price.
(b) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06.
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Section 3.08. Mandatory Redemption.
Except as otherwise provided in Article 11, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the Accreted Principal Amount,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. The Accreted Principal Amount, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City
time on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay the Accreted Principal Amount,
premium, if any, and interest then due. Except as set forth in Section 2.16(a),
the Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Resale Registration Rights Agreement
and the Share Lending Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on the overdue Accreted Principal Amount
and premium, if any, at the rate equal to 1% per annum in excess of the rate
then in effect to the extent lawful; the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
or agent of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for conversion, redemption, repurchase, registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of their obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall give
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prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the office of the Trustee located at Xxxxx
Fargo Corporate Trust, x/x Xxx Xxxxxxxxxx Xxxxx Xxxxxxx, 0xx Xxxxx -- TADS
Dept., 00 Xxxxx Xxxxxx, XX, XX 00000, as one such office or agency of the
Company in accordance with Section 2.03.
Section 4.03. Reports.
After this Indenture has been qualified under the TIA, the Company shall
file with the Trustee and the Commission, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be
required pursuant to the TIA at the times and in the manner provided pursuant to
the TIA; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the trustee within 15 days after the same is so required to
be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
have been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the Accreted Principal Amount of or interest, if any, on
the Notes is prohibited or if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
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Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that 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 shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07. Corporate Existence.
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Significant Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Significant Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Significant Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Significant Subsidiaries, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Significant Subsidiaries, taken
as a whole, and that the loss thereof is not adverse in any material respect to
the Holders of the Notes.
Section 4.08. Payments for Consent.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.09. Registration and Listing.
The Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Notes are issued and delivered, and
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qualified or listed as contemplated by clause (ii); and (ii) will qualify the
shares of Common Stock required to be issued and delivered upon conversion of
Notes, prior to such issuance or delivery, for quotation on the Nasdaq National
Market or, if the Common Stock is not then quoted on the Nasdaq National Market,
list the Common Stock on each national securities exchange or quotation system
on which outstanding Common Stock is listed or quoted at the time of such
delivery (it being understood that the Company shall not be required to register
the Notes and the shares of Common Stock under the Securities Act except
pursuant to the Resale Registration Rights Agreement).
Nothing in this Section will limit the application of the Resale
Registration Rights Agreement.
Section 4.10. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d) of the
Exchange Act, upon the request of a Holder of a Restricted Note or the holder of
shares of Common Stock issued upon conversion thereof, the Company shall
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder of Restricted Notes or such holder of shares of Common
Stock issued upon conversion of Restricted Notes, or to a prospective purchaser
of any such security designated by any such Holder or holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act (or any successor provision thereto) in
connection with the resale of any 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 (i) the
date such a security (or any such predecessor security) was last acquired from
the Company or (ii) the date such a security (or any such predecessor security)
was last acquired from an "affiliate" of the Company within the meaning of Rule
144 under the Securities Act (or any successor provision thereto). "Rule 144A
Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).
Section 4.11. Resale of Certain Notes.
During the period beginning on the last date of original issuance of the
Notes and ending on the date that is two years from such date (or such shortened
period under Rule 144(k) under the Securities Act or any successor rule), the
Company will not, and will not permit any of its Subsidiaries or other
"affiliates" (as defined under Rule 144 under the Securities Act or any
successor provision thereto) to, resell (i) any Notes that constitute
"restricted securities" under Rule 144 or (ii) any securities into which the
Notes have been converted under this Indenture that constitute "restricted
securities" under Rule 144, that in either case have been reacquired by any of
them. The Trustee shall have no responsibility in respect of the Company's
performance of its agreement in the preceding sentence.
Section 4.12. Registration Rights.
The Company agrees that all Holders are entitled to the benefits of the
Share Lending Registration Rights Agreement and the Holders from time to time of
Registrable Securities (as
29
defined in the Resale Registration Rights Agreement) are entitled to the
benefits of the Resale Registration Rights Agreement
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of, premium, if any, or interest on, or in respect of, any
Note, such mention shall be deemed to include mention of the payment of
"Liquidated Damages" provided for in this Section to the extent that, in such
context, Liquidated Damages are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
Liquidated Damages (if applicable) in any provisions hereof shall not be
construed as excluding Liquidated Damages in those provisions hereof where such
express mention is not made.
If a Note, or the shares of Common Stock issuable upon conversion of a
Note, constitutes Registrable Securities (which is defined herein as defined in
the Resale Registration Rights Agreement), and the Holder thereof elects to sell
such Registrable Securities pursuant to the Shelf Registration Statement (which
is defined herein as defined in the Registration Rights Agreement) then, by its
acceptance thereof, the Holder of such Registrable Securities will have agreed
to be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities that are the subject of such election.
If Liquidated Damages are payable by the Company pursuant to either the
Share Lending Registration Rights Agreement or the Resale Registration Rights
Agreement, the Company shall deliver to the Trustee an Officers' Certificate to
that effect stating (i) the amount of such Liquidated Damages that are payable,
(ii) the reason why such Liquidated Damages are payable and (iii) the date on
which such damages are payable. Unless and until a Responsible Officer of the
Trustee receives such an Officers' Certificate, the Trustee may assume without
inquiry that no Liquidated Damages are payable. If the Company has paid
Liquidated Damages directly to the persons entitled to such amounts, the Company
shall deliver to the Trustee a certificate setting forth the particulars of such
payment.
Section 4.13. Covenant to Redeem 5.75% Convertible Senior Notes Due 2005
The Company will redeem its outstanding 5.75% convertible senior notes due
2005 pursuant to the indenture governing such notes to the extent of the
proceeds from the sale of the Notes, net of the purchase price of the Pledged
Securities and expenses of the offering. The Company will issue a notice of
redemption pursuant to the terms of such indenture no later than the close of
business on the Business Day immediately following the Issue Date.
Section 4.14. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 4.05 and 4.07 (other than with
respect to the existence of the Company (subject to Article 5)) (other than a
covenant or condition which under Article 9 cannot be modified or amended
without the consent of the Holder of each outstanding Note affected), if before
the time for such compliance the Holders shall either (i) through the written
consent (or as otherwise in accordance with the Applicable Procedures) of the
Holders of at least a majority in aggregate Original Principal Amount of the
Notes then outstanding or (ii) by the adoption of a resolution, at a meeting of
Holders of the outstanding Notes at which a quorum is present, by the
30
Holders of at least a majority in Original Principal Amount of the outstanding
Notes represented at such meeting, either waive such compliance in such instance
or generally waive compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condition except to the extent
so expressly waived and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee or any Paying or
Conversion Agent in respect of any such covenant or condition shall remain in
full force and effect.
Section 4.15. Calculation of Tax Original Issue Discount.
At the request of the Trustee, the Company shall file with the Trustee
promptly at the end of each calendar year (i) a written notice specifying the
amount of Tax Original Issue Discount (including daily rates and accrual
periods) accrued on the Notes as of the end of such year and (ii) such other
specific information relating to such Tax Original Issue Discount as may then be
reasonably requested by the Trustee and relevant under the Internal Revenue Code
of 1986, as amended from time to time, or the Treasury regulations promulgated
thereunder.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company may not, directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, lease or otherwise transfer in one transaction or a
series of related transactions the consolidated assets of the Company and its
Subsidiaries substantially as an entirety to any corporation, limited liability
company, partnership or trust organized under the laws of the United States or
any of its political subdivisions; unless:
(a) either: (i) the Company is the surviving corporation; or (ii) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a Person organized or existing under the
laws of the United States, any state thereof or the District of Columbia
(provided that if the Person formed by or surviving any such consolidation or
merger with the Company is not a corporation, a corporate co-issuer shall also
be an obligor with respect to the Notes);
(b) the surviving entity assumes all the obligations of the Company under
the Notes and this Indenture pursuant to agreements reasonably satisfactory to
the Trustee;
(c) if as a result of such transaction the Notes become convertible into
common stock or other securities issued by a third party that is not the
successor under the Notes and this Indenture, such third party fully and
unconditionally guarantees all obligations of the Company or such successor
under the Notes and this Indenture;
(d) at the time of such transaction, no Default or Event of Default shall
have happened and be continuing; and
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(e) an Officer's Certificate and an Opinion of Counsel, each stating that
the consolidation, merger or transfer complies with the provisions herein, have
been delivered to the Trustee.
This Section 5.01 shall not apply to a sale, lease, assignment, conveyance
or other transfer of assets between or among (i) the Company and Charter Holdco
or (ii) the Company and any wholly-owned Subsidiary of Charter Holdco.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation, merger, sale, lease or other transfer of the
consolidated assets of the Company and its Subsidiaries substantially as an
entirety in accordance with Section 5.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such transfer is
made shall succeed to and (except in the case of a lease) 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 therein as the
Company, and (except in the case of a lease) the Company shall be released from
the obligations under the Notes and this Indenture, except with respect to any
obligations that arise from, or are related to, such transaction.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest, including
any Liquidated Damages, other than any Deferred Interest, on the Notes and such
default continues for a period of 30 days; provided that a failure to make any
of the first six scheduled interest payments on the Original Principal Amount of
the Notes on the applicable Interest Payment Date will constitute an Event of
Default with no grace or cure period (unless the failure to make such payment
results from the failure by the Trustee to release such proceeds from the
Collateral Account (as defined in the Pledge Agreement), provided that such
failure is not caused by any act or omission by the Company);
(b) the Company defaults in payment when due, whether at Maturity, on a
Redemption Date, a Repurchase Date or otherwise, of the Accreted Principal
Amount of or premium, if any, on the Notes;
(c) the Company fails to give timely notice of (i) the anticipated
effective date of a transaction described in clause (2) of the definition of
Change of Control pursuant to Section 10.01 or (ii) a Fundamental Change
pursuant to Article 11;
(d) the Company fails to comply with any of its other covenants or
agreements in this Indenture for 30 days after written notice thereof has been
given to the Company by the Trustee
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or to the Company and the Trustee by Holders of at least 25% of the aggregate
Original Principal Amount of the Notes then outstanding;
(e) the Company or any of its Significant Subsidiaries fails to make a
payment under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed (or the payment of which is guaranteed by the Company or any of its
Significant Subsidiaries) whether such Indebtedness or guarantee now exists or
is created after the Issue Date, if that default:
(1) is caused by a failure to pay at final stated maturity the
principal amount on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
(2) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in the case of each of (1) and (2) above, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $100 million or more;
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors; or
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or for all or substantially all of the property of the
Company or any of its Significant Subsidiaries; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries; and the order or decree remains unstayed and in
effect for 60 consecutive days;
(h) the Company fails to comply with its obligations pursuant to Section
4.13 and such failure continues for five days; and
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(i) the Company fails to deliver shares of Common Stock, or cash in lieu
thereof, when due upon conversion of any Notes, together with cash in respect of
any fractional shares and any Early Conversion Make Whole Amount and Redemption
Make Whole Amount due pursuant to Section 10.08, and such failure continues for
ten days.
The Company shall deliver to the Trustee, within five business days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
Section 6.02. Acceleration.
In the case of an Event of Default arising from clause (f) or (g) of
Section 6.01 with respect to the Company, all outstanding Notes shall become due
and payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee by notice to the Company or the
Holders of at least 25% in aggregate Original Principal Amount of the then
outstanding Notes may declare all the Notes to be due and payable at their
Accreted Principal Amount together with accrued and unpaid interest (including
Deferred Interest and Liquidated Damages, if any), and thereupon the Trustee
may, at its discretion, proceed to protect and enforce the rights of the Holders
of Notes by appropriate judicial proceedings.
Section 6.03. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of Accreted Principal Amount,
premium, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture. The Trustee may maintain a proceeding
even if it does not possess any of the Notes or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any Holder of a Note in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Existing Defaults.
Holders, either (i) through the written consent (or as otherwise in
accordance with the Applicable Procedures) of the Holders of at least a majority
in aggregate Original Principal Amount of the then outstanding Notes by notice
to the Trustee or (ii) by the adoption of a written resolution, at a meeting of
Holders of the outstanding Notes at which a quorum is present, by the Holders of
at least a majority in Original Principal Amount of the outstanding Notes
represented at such meeting, may on behalf of the Holders of all of the Notes
waive an existing Default or Event of Default and its consequences hereunder,
except (x) a continuing Default or Event of Default in the payment of the
Accreted Principal Amount of, premium, if any, or interest on, the Notes
(whether at Stated Maturity, a Redemption Date, a Repurchase Date or otherwise);
(y) in respect of the failure to convert the Notes; or (z) in respect of a
covenant or provision hereof which under Article 9 cannot be modified or amended
without the consent of each Holder of each outstanding Note affected (provided,
however, that the Holders of a majority in aggregate Original Principal Amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon
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any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in aggregate Original Principal Amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee determines
may be prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability. The Trustee may take any other action which
it deems proper that is not inconsistent with any such directive.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in Original Principal Amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in Original
Principal Amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment and to
Convert.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of the Accreted Principal Amount, premium,
if any, and interest (including Deferred Interest and Liquidated Damages, if
any) on the Note, on or after the Stated Maturity dates (including in connection
with a redemption and/or an offer to purchase), or to convert such Note in
accordance with Article 10, or to bring suit for the enforcement of any such
payment on or after such respective dates or of such right to convert, shall be
absolute and unconditional and shall not be impaired or affected without the
consent of such Holder.
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Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or 6.01(b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole Accreted
Principal Amount of, premium, if any, and interest remaining unpaid on the Notes
and interest on overdue Accreted Principal Amount and, to the extent lawful,
interest and 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.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and 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 the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), their creditors or their property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay 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 7.07. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. Priorities.
If the Trustee collects any money or other property pursuant to this
Article, it shall pay out the money or other property in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
Accreted Principal Amount, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
36
payable on the Notes for Accreted Principal Amount, premium, if any and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct. The Trustee may fix a record date and payment
date for any payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07, or a suit by Holders of more than 10%
in Original Principal Amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default 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 its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) 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 required
to be furnished to the Trustee hereunder and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of any mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own gross
negligent action, its own gross negligent failure to act, or its own willful
misconduct, except that:
37
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was grossly negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability, claim,
damage or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money 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 or
other paper or documents.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document (whether in its
original or facsimile form) 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.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its own selection and the written advice or opinion of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
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(e) 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.
(f) Subject to the duty of the Trustee during an Event of Default to act
with the required standard of care, the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders unless such Holders shall have
offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless either (i) a Responsible Officer of the Trustee shall
have actual knowledge of such Default or Event of Default or (ii) written notice
of such Default or Event of Default shall have been given to and received by a
Responsible Officer of the Trustee by the Company or any Holder and such notice
refers to the Notes and this Indenture.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes 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 it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections Section 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, the Notes or the Pledge Agreement,
it shall not be accountable for the Company's use of the proceeds from the Notes
or any money paid to the Company or upon the Company's direction under any
provision of this Indenture or the Pledge Agreement, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee, and it shall not be responsible for any statement or recital herein
or any statement in the Notes, the Pledge Agreement or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.
The Trustee makes no representations as to and shall not be responsible
for the existence, genuineness, value, sufficiency or condition of any of the
Collateral (as such term is defined in the Pledge Agreement) or as to the
security afforded or intended to be afforded thereby, hereby or by any pledge
agreement (including the Pledge Agreement and the Mirror Pledge Agreement (as
such term is defined in the Pledge Agreement)), or for the validity, perfection,
priority or enforceability of the liens or security interests in any of the
Collateral created or intended to be created by the Pledge Agreement or the
Mirror Pledge Agreement, whether impaired by operation of law or by reason of
any action or omission to act on its part hereunder, except to the extent such
action or omission constitutes gross negligence or willful misconduct on the
part of the Trustee, for the validity or sufficiency of the Collateral, the
Pledge Agreement, the Mirror Pledge Agreement or any agreement or assignment
contained in any thereof, for the validity of
39
the title of the Company to the Collateral, for insuring the Collateral or
for the payment of taxes, charges, assessments or liens upon the collateral or
otherwise as to the maintenance of the Collateral.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after the
Trustee acquires knowledge thereof. Except in the case of a Default or Event of
Default in payment of Accreted Principal Amount of, premium, if any, or interest
on any Note or in the payment of any obligation in connection with conversion,
redemption or repurchase, the Trustee may withhold the notice if and so long as
it, in good faith, determines that withholding the notice is in the interests of
the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange or delisted therefrom.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and the Pledge Agreement and
services hereunder and thereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall fully indemnify the Trustee against any and all losses,
liabilities, claims, damages or expenses (including reasonable legal fees and
expenses) incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture and the Pledge Agreement,
including the costs and expenses of enforcing this Indenture and the Pledge
Agreement against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder or thereunder, except to the extent any such
loss, liability or expense may be attributable to its gross negligence or
willful misconduct. The Trustee shall notify the Company promptly of any
40
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without their consent, which consent shall not be unreasonably withheld.
The obligations of the Company in this Section 7.07 shall survive
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay Accreted Principal Amount and
interest on particular Notes. Such lien shall survive the resignation or removal
of the Trustee and the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the
extent applicable.
Section 7.08. 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.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in Original Principal Amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) 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;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in Original Principal Amount of the
41
then outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in Original Principal Amount of the then outstanding
Notes may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been a Holder
for at least six months, fails to comply with Section 7.10, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
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 successor Trustee shall mail a notice of its succession to
Holders property held by it as Trustee to the successor Trustee; provided all
sums owing to the Trustee hereunder have been paid and subject to the lien
provided for in Section 7.07. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee By Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition. This
Indenture shall always have a Trustee who satisfies the requirements of TIA ss.
310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
Section 7.11. Preferential Collection of Claims Against the Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8
MEETINGS OF HOLDERS OF NOTES
Section 8.01. Purposes for Which Meetings May be Called.
A meeting of Holders of Notes 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 Notes.
Section 8.02. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Notes for any
purpose specified in Section 8.01, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of Holders of Notes, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be given, in the manner provided in Section 13.02, 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 Original Principal Amount of the outstanding
Notes shall have requested the Trustee to call a meeting of the Holders of Notes
for any purpose specified in Section 8.01, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed 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 Notes in the
amount specified, as the case may be, may determine the time and the place in
the Borough of Manhattan, 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 8.03. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Notes, a Person shall
be (i) a Holder of one or more outstanding Notes, or (ii) a Person appointed by
an instrument in writing as proxy for a Holder or Holders of one or more
outstanding Notes 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. In determining Holders entitled to vote at any meeting of Holders of
Notes, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding,
Section 8.04. Quorum; Action.
The Persons entitled to vote a majority in aggregate Original Principal
Amount of the outstanding Notes 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
43
Notes, 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
not less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting (subject to repeated applications of this
sentence). Notice of the reconvening of any adjourned meeting shall be given as
provided in Section 8.02(a), except that such notice need be given only once not
less than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the aggregate Original Principal Amount of the
outstanding Notes which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned for
a lack of a quorum, the Persons entitled to vote 25% in aggregate Original
Principal Amount of the outstanding Notes at the time shall constitute a quorum
for the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a quorum
is present as aforesaid, any resolution and all matters (other than a covenant
or condition which under Section 9.02 cannot be modified or amended without the
consent of the Holder of each outstanding Note affected) shall be effectively
passed and decided if passed or decided by the lesser of (i) the Holders of not
less than a majority in aggregate Original Principal Amount of outstanding Notes
and (ii) the Persons entitled to vote not less than 66-2/3% in aggregate
Original Principal Amount of outstanding Notes represented and entitled to vote
at such meeting.
Any resolution passed or decisions taken at any meeting of Holders of
Notes duly held in accordance with this Section shall be binding on all the
Holders of Notes whether or not present or represented at the meeting. The
Trustee shall, in the name and at the expense of the Company, notify all the
Holders of Notes of any such resolutions or decisions pursuant to Section 13.02.
Section 2.09 shall determine which Notes are considered to be
"outstanding" for purposes of this Section 8.04.
Section 8.05. 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 Notes in regard to proof of the holding of Notes 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 Notes as provided in Section
8.02(b), in which case the Company or the Holders of Notes 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
44
elected by vote of the Persons entitled to vote a majority in aggregate Original
Principal Amount of the outstanding Notes represented at the meeting.
(c) At any meeting, each Holder of a Note or proxy shall be entitled to
one vote for each U.S. $1,000 Original Principal Amount of Notes held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Note 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 Note or proxy.
(d) Any meeting of Holders of Notes duly called pursuant to Section 8.02
at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in aggregate Original Principal Amount of the
outstanding Notes represented at the meeting, and the meeting may be held as so
adjourned without further notice.
Section 8.06. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of Notes
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Notes or of their representatives by proxy and the Original Principal
Amounts and serial numbers of the outstanding Notes 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 Notes 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 8.02 and, if applicable, Section 8.04.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity or correct or supplement any defective provision
contained in the Indenture; provided that such modification or amendment does
not, in the good faith opinion of the Board of Directors, adversely affect the
interests of the Holders of Notes in any material respect; provided further that
any amendment made solely to conform the provisions of
45
the Indenture to the description of the Notes in the Offering Memorandum will
not be deemed to adversely affect the interests of the Holders;
(b) to add covenants for the benefit of the Holders;
(c) to add additional dates on which Holders may require the Company to
repurchase their Notes;
(d) to surrender any rights or powers conferred upon the Company;
(e) to provide for the assumption of the Company's obligations to Holders
in the case of a merger, consolidation, sale, transfer or lease pursuant to
Article 5;
(f) to increase the conversion rate in the manner described in Section
10.07, provided that the increase will not adversely affect the interests of
Holders in any material respect;
(g) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA or otherwise as
necessary to comply with applicable law;
(h) to make provision with respect to the conversion rights of Holders
pursuant to Section 10.15 or to make provision with respect to the repurchase
rights of Holders of Notes pursuant to Section 11.03;
(i) to change or modify any other provision of this Indenture necessary in
connection with the registration of the Notes under the Securities Act as
contemplated by the Resale Registration Rights Agreement; provided that such
change or modification does not adversely affect the interests of the Holders in
any material respect.
(j) Adding or modifying any other provision of this Indenture that the
Company and the Trustee may deem necessary or desirable and that will not
adversely affect the interests of the Holders.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02, the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, this Indenture or the Notes
may be amended or supplemented with either (i) the written consent (or as
otherwise in accordance with the Applicable Procedures) of the Holders of at
least a majority in aggregate Original Principal
46
Amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or a tender offer or exchange offer
for, Notes), or (ii) by the adoption of a resolution, at a meeting of Holders of
the outstanding Notes at which a quorum is present, by the Holders of at least a
majority in aggregate Original Principal Amount of the outstanding Notes
represented at such meeting. Section 2.09 shall determine which Notes are
considered to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02, the Trustee shall join
with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment or supplement under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment or supplement. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amended or supplemental Indenture.
However, without the consent or affirmative vote of each Holder affected,
an amendment or supplement under this Section 9.02 may not (with respect to any
Notes held by a non-consenting Holder):
(a) change the Stated Maturity of the Accreted Principal Amount of, or any
installment of interest on, any Note;
(b) reduce the Accreted Principal Amount of, or the premium, if any, on
any Note;
(c) reduce the interest rate or amount of interest (including any
Liquidated Damages) on any Note;
(d) other than as contemplated by the terms of the Indenture, change the
currency of payment of the Accreted Principal Amount of, premium, if any, or
interest on any Note (including any payment of Liquidated Damages or Redemption
Price or Repurchase Price in respect of such Note);
(e) impair the right to institute suit for the enforcement of any payment
in respect of any Note on or after the Stated Maturity thereof (or, in the case
of redemption or any repurchase, on or after the Redemption Date or Repurchase
Date, as the case may be);
47
(f) except as permitted by Section 10.15 adversely affect the right of
Holders to convert any Note as provided in Article 10;
(g) reduce the Early Conversion Make Whole Amount or the Redemption Make
Whole Amount or otherwise modify Section 10.08 of the Indenture in a manner
adverse to the Holders;
(h) modify the provisions of Article 12 of the Indenture relating to the
Pledged Securities in a manner adverse to the Holders;
(i) modify the provisions of Article 11 relating to notice and repurchase
(including, without limitation, those relating to the Repurchase Date and the
Repurchase Price) in a manner adverse to the Holders;
(j) modify the provisions of Article 3 in a manner adverse to the Holders;
(k) reduce the requirements of Section 8.04 for quorum or voting, or
reduce the percentage in aggregate Original Principal Amount of the outstanding
Notes the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture; or
(l) modify any of the provisions of this Section or Section 4.14 or 6.04,
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 Note affected thereby.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment or supplement becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the supplement or amendment becomes effective. An
amendment or supplement becomes effective in accordance with its terms and
thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment or
supplement on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment or supplement.
48
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or supplement.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, in addition to the documents required by Section
13.04, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.
ARTICLE 10
CONVERSION OF NOTES
Section 10.01. Conversion Privilege and Conversion Rate.
(a) Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Note may be converted into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100th of
a share) of Common Stock of the Company at the Conversion Rate, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall commence on the initial issuance date of the Notes and expire at the close
of business on the Business Day prior to the date of Maturity of the Notes,
subject, in the case of conversion of any Global Note, to any Applicable
Procedures. In case a Note or portion thereof is called for redemption at the
election of the Company or the Holder thereof exercises its right to require the
Company to repurchase the Note, such conversion right in respect of the Note, or
portion thereof so called, shall expire at the close of business on the Business
Day prior to the Redemption Date or the Repurchase Date, as the case may be,
unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be (in each case subject as aforesaid to any
Applicable Procedures with respect to any Global Note); provided that, if a
Holder has delivered notice of the exercise of its right to have its Note
repurchased pursuant to Section 11.02(b) , such Holder may not surrender such
Note for conversion until such Holder has withdrawn its election to have its
Note repurchased in accordance with Section 11.02.
The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "CONVERSION RATE") shall be initially 413.2231
shares of Common Stock for each U.S. $1,000 Original Principal Amount of Notes.
The Conversion Rate shall be adjusted in certain instances as provided in this
Article 10. In addition, if the Company elects pursuant to Section 2.16(a) to
have Accreted Liquidated Damages, the Conversion Rate shall be increased on each
Damages Payment Date at the same rate and in the same manner as such Accreted
Liquidated Damages are added to the Accreted Principal Amount of $1,000 Original
Principal Amount of Notes
49
(b) If a transaction described in clause (2) of the definition of Change
of Control occurs, the Company shall give notice to the Trustee and all Holders
(i) at least ten Trading Days prior to the anticipated Effective Date of such
transaction and (ii) within 15 days after the actual Effective Date of such
Change of Control. If a Holder elects to convert Notes at any time following the
notice described in clause (i) of the preceding sentence, such Holder shall be
entitled to receive for each $1,000 Original Principal Amount of Notes
converted, in addition to a number of shares of Common Stock equal to the
Conversion Rate, an additional number of shares of Common Stock (the "ADDITIONAL
SHARES") as described below; provided that if the Stock Price is greater than
$5.00 per share (subject in each case to adjustment as described below) or if
the Stock Price is less than $2.16 per share (subject to adjustment), the number
of Additional Shares shall be zero. The number of Additional Shares shall be
determined by reference to the table attached as Schedule A hereto, based on the
Effective Date and the Stock Price; provided that if the Stock Price is between
two Stock Price amounts in the table or the Effective Date is between two
Effective Dates in the table, the number of Additional Shares shall be
determined by a straight-line interpolation between the number of Additional
Shares set forth for the higher and lower Stock Price amounts and the two dates,
as applicable, based on a 365-day year. The Additional Shares will be delivered
to Holders who elect to convert their Notes in connection with an applicable
Change of Control on the later of (i) five Business Days following the Effective
Date or (ii) the Conversion Settlement Date for those Notes.
The Stock Prices set forth in the first row of the table in Schedule A
hereto and set forth in the proviso in the first sentence of the preceding
paragraph shall be adjusted as of any date on which the Conversion Rate of the
Notes is adjusted. The adjusted Stock Prices shall equal the Stock Prices
applicable immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the Conversion Rate immediately prior to the adjustment
giving rise to the Stock Price adjustment and the denominator of which is the
Conversion Rate as so adjusted. The Company's obligation to deliver Additional
Shares shall be subject to adjustment in the same manner as the Conversion Rate
as set forth Section 10.07 and Section 10.15.
(c) Notwithstanding the foregoing, the total number of shares of Common
Stock issuable upon conversion shall not exceed 462 shares per $1,000 Original
Principal Amount of Notes, subject to adjustments in the same manner as the
Conversion Rate as set forth in Section 10.01(e), Section 10.07 and Section
10.15.
(d) Promptly following the Effective Date, the Company shall calculate the
Stock Price and the number of Additional Shares based on the applicable Stock
Price and Effective Date. No less than five Business Days following the
Effective Date, the Company shall notify the Trustee of the results of such
calculations and notify the Holders of the Stock Price and the number of
Additional Shares per $1,000 Original Principal Amount of Notes. The Company
shall issue a press release containing the information described in this
paragraph and publish such information on its website.
(e) Notwithstanding the foregoing, and in lieu of delivering the
Additional Shares as set forth above, in the case of a Public Acquirer Change of
Control, the Company may elect that, from and after the Effective Date of such
Public Acquirer Change of Control, the right to convert a Note will be changed
into a right to convert a Note into a number of shares of Acquirer
50
Common Stock. The Conversion Rate following the Effective Date of such
transaction will be a number of shares of Acquirer Common Stock equal to the
product of:
(i) the Conversion Rate in effect immediately prior to the Effective
Date of such Change of Control, multiplied by
(ii) the average of the quotients obtained, for each Trading Day in the
10 consecutive Trading Day period commencing on the Trading Day next
succeeding the Effective Date of such Public Acquirer Change of
Control (the "VALUATION PERIOD"), of:
(1) the Acquisition Value of the Common Stock on each such
Trading Day in the Valuation Period, divided by
(2) the Sale Price of the Acquirer Common Stock on each such
Trading Day in the Valuation Period.
After the adjustment of the Conversion Rate in connection with a Public
Acquirer Change of Control, the Conversion Rate will be subject to further
similar adjustments in the event that any of the events described above occur
thereafter and will also be subject to adjustment pursuant to Section 10.07 and
Section 10.15.
Section 10.02. Exercise of Conversion Privilege.
(a) In order to exercise the conversion privilege, the Holder of any Note
to be converted shall surrender such Note, duly endorsed in blank, at any office
or agency of the Company maintained for that purpose pursuant to Section 4.02,
accompanied by a duly signed conversion notice substantially in the form set
forth in Exhibit A stating that the Holder elects to convert such Note or, if
less than the entire Original Principal Amount thereof is to be converted, the
portion thereof to be converted. The date a Holder complies with these
requirements for any Notes shall be the "CONVERSION DATE" with respect to such
Notes.
(b) Notes surrendered for conversion by a Holder after the close of
business on any Regular Record Date but prior to the next Interest Payment Date
must be accompanied by payment in an amount equal to the interest that the
Holder is to receive on the Notes on such Interest Payment Date; provided,
however, that no such payment need be made (1) if the Conversion Date is prior
to November 16, 2007, (2) the Company has specified a Redemption Date that is
after a Record Date and on or prior to the next Interest Payment Date, (3) the
Company has specified a Repurchase Date that is after a Record Date and on or
prior to the next Interest Payment Date or (4) only to the extent of overdue
interest, if any overdue interest exists at the time of conversion with respect
to such Note.
(c) Notes shall be deemed to have been converted immediately prior to the
close of business on the Conversion Date, and at such time the rights of the
Holders of such Notes 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. The
Company shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, or cash in lieu thereof pursuant to Section 10.04,
together with payment in lieu of
51
any fraction of a share, as provided in Section 10.05 and any Early Conversion
Make Whole Amount or Redemption Make Whole Amount as required by Section 10.08
on the "CONVERSION SETTLEMENT DATE," which shall be as promptly as practicable,
but no later than the fifth Business Day following the Conversion Date; provided
that if the Company elects cash settlement pursuant to Section 10.04, the
Conversion Settlement Date shall be the third Business Day following the
determination of the Average Price.
(d) Delivery to Holders of the full number of shares of Common Stock, or
cash in lieu thereof, into which the Notes are convertible pursuant to this
Article 10, together with payment in lieu of any fraction of a share, as
provided in Section 10.05 and any Early Conversion Make Whole Amount or
Redemption Make Whole Amount as required by Section 10.08 shall be deemed to
satisfy the Company's obligations with respect to such Notes. Accordingly,
except to the extent of any such Early Conversion Make Whole Amount or
Redemption Make Whole Amount, any accrued but unpaid interest shall be deemed to
be paid in full upon conversion, rather than cancelled, extinguished or
forfeited.
(e) All shares of Common Stock delivered upon such conversion of
Restricted Notes shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Restricted Notes pursuant to Section
2.07 and shall be subject to the restrictions on transfer provided in such
legends. Neither the Trustee nor any agent maintained for the purpose of such
conversion shall have any responsibility for the inclusion or content of any
such restrictive legends on such Common Stock; provided, however, that the
Trustee or any agent maintained for the purpose of such conversion shall have
provided, to the Company or to the Company's transfer agent for such Common
Stock, prior to or concurrently with a request to the Company to deliver such
Common Stock, written notice that the Notes delivered for conversion are
Restricted Notes.
(f) In the case of any Note 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 Note or
Notes of authorized denominations in an aggregate Original Principal Amount
equal to the unconverted portion of the Original Principal Amount of such Note.
A Note may be converted in part, but only if the Original Principal Amount of
such Note to be converted is any integral multiple of U.S. $1,000 and the
Original Principal Amount of such Note to remain outstanding after such
conversion is equal to U.S. $1,000 or any integral multiple of $1,000 in excess
thereof.
(g) If shares of Common Stock to be issued upon conversion of a Restricted
Note, or Notes to be issued upon conversion of a Restricted Note in part only,
are to be registered in a name other than that of the Beneficial Owner of such
Restricted Note, then such Holder must deliver to the Conversion Agent a
Surrender Certificate, dated the date of surrender of such Restricted Note and
signed by such Beneficial Owner, as to compliance with the restrictions on
transfer applicable to such Restricted Note. Neither the Trustee nor any
Conversion Agent, Registrar or Transfer Agent shall be required to register in a
name other than that of the Beneficial Owner, shares of Common Stock or Notes
issued upon conversion of any such Restricted Note not so accompanied by a
properly completed Surrender Certificate.
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Section 10.03. Limitation on Beneficial Ownership
Notwithstanding the foregoing, no Person will be entitled to acquire
Beneficial Ownership of shares of Common Stock delivered upon conversion to the
extent (but only to the extent) that such receipt would cause any Person to
become, directly or indirectly, a Beneficial Owner of more than the Specified
Percentage of the shares of Common Stock outstanding at such time. With respect
to any conversion prior to November 16, 2008, the "SPECIFIED PERCENTAGE" shall
be 4.9%, and with respect to any conversion thereafter until Stated Maturity,
the Specified Percentage shall be 9.9%. Any purported delivery of shares of
Common Stock upon conversion of Notes shall be void and have no effect to the
extent (but only to the extent) that such delivery would result in any Person
becoming the Beneficial Owner of more than the Specified Percentage of the
shares of Common Stock outstanding at such time. If any delivery of shares of
Common Stock owed to any Person upon conversion is not made, in whole or in
part, as a result of this limitation, the Company's obligation to make such
delivery shall not be extinguished and it shall deliver such shares as promptly
as practicable after, but in no event later than two Trading Days after, any
such Person gives notice to the Company that such delivery would not result in
any Person being the Beneficial Owner of more than the Specified Percentage of
the shares of Common Stock outstanding at such time. For the avoidance of doubt,
the term "Beneficial Owner" as used in this Section 10.03 shall not include (i)
with respect to any Global Note, the nominee of the Depositary or any Person
having an account with the Depositary or its nominee or (ii) with respect to any
Non-global Note, the Holder of such Non-global Note unless, in each case, such
nominee, account holder or Holder shall also be a Beneficial Owner with respect
to such Note.
Section 10.04. Cash Settlement Option
Upon conversion, the Company shall have the right to deliver, in lieu of
shares of Common Stock, cash or a combination of cash and Common Stock. The
Company shall inform converting Holders through the Trustee no later than two
Business Days following the Conversion Date if it elects to pay cash in lieu of
delivering shares of Common Stock and shall specify in such notice the
percentage of the shares of Common Stock that would otherwise be deliverable for
which it will pay cash, unless it has already informed the Holders of its
election in a notice of redemption pursuant to Section 3.03.
If the Company elects to pay cash upon conversion, such payment will be
based on the Average Price of the Common Stock. If the Company elects cash
settlement, the Conversion Settlement Date on which it will deliver to
converting Holders the cash and shares of Common Stock, if any, together with
the cash or shares, if applicable, with respect to any Early Conversion Make
Whole Amount or Redemption Make Whole Amount, shall be the third Business Day
following the determination of the Average Price. The Company shall also deliver
cash in lieu of any fractional shares of Common Stock issuable in connection
with any conversion of Notes based upon the Average Price.
Section 10.05. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion of
any Note or Notes. If more than one Note shall be surrendered for conversion at
one time by the same
53
Holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate Original Principal
Amount of the Notes (or specified portions thereof) so surrendered. Instead of
any fractional share of Common Stock which would otherwise be issuable upon
conversion of any Note or Notes (or specified portions thereof), unless Section
10.04 shall apply, the Company shall calculate and pay a cash adjustment in
respect of such fraction (calculated to the nearest 1/100th of a share) in an
amount equal to the same fraction of the Sale Price at the close of business on
the Conversion Date (or round up the number of shares of Common Stock issuable
upon conversion of any Note or Notes to the nearest whole share).
Section 10.06. Exchange in Lieu of Conversion
When a Holder surrenders Notes for conversion, the Company may, unless it
has called the relevant Notes for redemption, direct the Conversion Agent to
surrender, on or prior to the date two Business Days following the Conversion
Date, such Notes to a financial institution designated by the Company for
exchange in lieu of conversion. The Company must notify such financial
institution of the applicable Conversion Date. In order to accept any such
Notes, the designated institution must agree to deliver, in exchange for such
Notes, a number of shares of Common Stock equal to the Conversion Rate in effect
at such time, or at its option, cash or a combination of cash and shares of
Common Stock in lieu thereof, calculated based on the Average Price, plus cash
for any fractional shares and any Early Conversion Make Whole Amount the Company
would have been required to pay pursuant to Section 10.08 if it had converted
such Notes.
If the designated institution accepts any such Notes, it will deliver the
appropriate number of shares of Common Stock (and cash, if any), or cash in lieu
thereof, to the Conversion Agent and the Conversion Agent will deliver those
shares or cash to the Holder. Such designated institution will also deliver cash
equal to any Early Conversion Make Whole Amount the Company would have been
required to pay such Holder pursuant to Section 10.08 if it had converted its
Notes. Any Notes exchanged by the designated institution will remain
outstanding. If the designated institution agrees to accept any Notes for
exchange but does not timely deliver the related consideration, the Company
will, as promptly as practical thereafter, but not later than the third Business
Day following (1) the Conversion Date, or (2) if the designated institution
elects to deliver cash or a combination of cash and shares of Common Stock, the
determination of the Average Price, convert the Notes and deliver shares of
Common Stock, or, at the Company's option cash in lieu thereof based on such
Average Price, along with any applicable Early Conversion Make Whole Amount.
If the designated institution declines to accept any Notes surrendered for
exchange, the Company will convert those Notes into shares of Common Stock, or
cash in lieu thereof at the option of the Company.
Section 10.07. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time to time as
follows:
54
(a) In case the Company shall pay or make a dividend or other distribution
in shares of Common Stock, subdivide outstanding shares of Common Stock into a
greater number of shares of Common Stock or combine the outstanding shares of
Common Stock into a lesser number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the Record Date fixed
for the determination of shareholders entitled to receive such dividend or other
distribution, or the Record Date for such subdivision or combination, as the
case may be, shall be adjusted based on the following formula:
OS(1)
CR(1) = CR(0) X ----
OS(0)
where,
CR(0) = the Conversion Rate in effect at the close of business on the
Record Date
CR(1) = the Conversion Rate in effect immediately after the Record Date
OS(0) = the number of shares of Common Stock outstanding at the close
of business on the Record Date
OS(1) = the number of shares of Common Stock that would be outstanding
immediately after such event
If, after any such Record Date, any dividend or distribution is not in
fact paid or the outstanding shares of Common Stock are not subdivided or
combined, as the case may be, the Conversion Rate shall be immediately
readjusted, effective as of the date the Board of Directors determines not to
pay such dividend or distribution, or subdivide or combine the outstanding
shares of Common Stock, as the case may be, to the Conversion Rate that would
have been in effect if such Record Date had not been fixed.
(b) In case the Company shall issue rights or warrants to all holders of
its Common Stock entitling them to subscribe for or purchase shares of Common
Stock for a period expiring 45 days or less from the date of issuance of such
rights or warrants at a price per share less than (or having a conversion price
per share less than) the Current Market Price of the Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
Record Date shall be adjusted based on the following formula:
OS(0) + X
CR(1) = CR(0) X ---------
0S(0) + Y
where,
CR(0) = the Conversion Rate in effect at the close of business on the
Record Date
CR(1) = the Conversion Rate in effect immediately after the Record Date
OS(0) = the number of shares of Common Stock outstanding at the close of
business on the Record Date
X = the total number of shares of Common Stock issuable pursuant to
such rights
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Y = the number of shares of Common Stock equal to the aggregate price
payable to exercise such rights divided by the average of the Sale
Prices of the Common Stock for the ten consecutive Trading Days
prior to the Business Day immediately preceding the announcement
of the issuance of such rights
If, after any such Record Date, any such rights or warrants are not in
fact issued, or are not exercised prior to the expiration thereof, the
Conversion Rate shall be immediately readjusted, effective as of the date such
rights or warrants expire, or the date the Board of Directors determines not to
issue such rights or warrants, to the Conversion Rate that would have been in
effect if the unexercised rights or warrants had never been granted or such
Record Date had not been fixed, as the case may be.
(c) In case the Company shall pay a dividend or distribution consisting
exclusively of cash to all holders of its Common Stock, the Conversion Rate in
effect at the opening of business on the day following the Record Date for such
dividend or distribution shall be adjusted based on the following formula:
SP(0)
CR(1) = CR(0) X ---------
SP(0) - C
where,
CR0 = the Conversion Rate in effect at the close of business on the Record
Date
CR1 = the Conversion Rate in effect immediately after the Record Date
SP0 = the Current Market Price
C = the amount in cash per share distributed by the Company to holders
of Common Stock
In the event that C is greater than or equal to SP0, in lieu of the
adjustment contemplated, Holders will be entitled to participate ratably in the
cash distribution as though their Notes had been converted to shares of Common
Stock on the applicable date of calculation for the amounts to be received by
holders of Common Stock. If after any such Record Date, any such dividend or
distribution is not in fact made, the Conversion Rate shall be immediately
readjusted, effective as of the date of the Board of Directors determines not to
make such dividend or distribution, to the Conversion Rate that would have been
in effect if such Record Date had not been fixed.
(d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of its capital stock (other than Common
Stock) or evidences of its indebtedness or assets (including cash or securities,
but excluding (i) any rights or warrants referred to in Section 10.07(b), (ii)
any dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in Section 10.07(a) or 10.07(e), and (iv) mergers or
consolidations to which Section 10.15 applies), the Conversion Rate in effect at
the opening of business on the day following the Record Date for such dividend
or distribution shall be adjusted based on the following formula:
56
SP(0)
CR(1) = CR(0) X -----------
SP(0) - FMV
where,
CR(0) = the Conversion Rate in effect at the close of business on
the Record Date
CR(1) = the Conversion Rate in effect immediately after the Record
Date
SP(0) = the Current Market Price
FMV = the fair market value (as determined by the Board of
Directors) of the shares of capital stock, evidences of
indebtedness, assets or property distributed with respect to
each outstanding share of Common Stock on the Record Date for
such distribution
In the event that FMV is greater than or equal to SP0, in lieu of the
adjustment contemplated, Holders will be entitled to participate ratably in the
relevant distribution as though their Notes had been converted to shares of
Common Stock on the applicable date of calculation for the amounts to be
received by holders of Common Stock. If after any such Record Date, any such
dividend or distribution is not in fact made, the Conversion Rate shall be
immediately readjusted, effective as of the date of the Board of Directors
determines not to make such dividend or distribution, to the Conversion Rate
that would have been in effect if such Record Date had not been fixed.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's Capital Stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("TRIGGER EVENT"):
(i) are deemed to be transferred with such shares of Common Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of Common Stock
shall be deemed not to have been distributed for purposes of this Section
10.07(d) (and no adjustment to the Conversion Rate under this Section 10.07(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 Rate under
this Section 10.07(d):
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(1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder 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 Rate shall be
readjusted as if such rights and warrants had never been issued.
For purposes of this Section 10.07(d) and Section 10.07(a) and 10.07(b),
any dividend or distribution to which this Section 10.07(d) applies that also
includes shares of Common Stock or a subdivision or combination of Common Stock
to which Section 10.07(a) applies, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 10.07(b) applies (or any
combination thereof), shall be deemed instead to be:
(1) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such shares
of Common Stock, such subdivision or combination or such rights or
warrants to which Section 10.07(a) and 10.07(b) apply, respectively (and
any Conversion Rate increase required by this 10.07(d) with respect to
such dividend or distribution shall then be made), immediately followed by
(2) a dividend or distribution of such shares of Common Stock, such
subdivision or combination or such rights or warrants (and any further
Conversion Rate increase required by Section 10.07(a) and 10.07(b) with
respect to such dividend or distribution shall then be made), except that
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"
within the meaning of Section 10.07(a) and any reduction or increase in
the number of shares of Common Stock resulting from such subdivision or
combination shall be disregarded in connection with such dividend or
distribution.
(e) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of Capital Stock of, or similar equity
interests in, a Subsidiary or other business unit of the Company, the Conversion
Rate shall be adjusted based on the following formula:
FMV(0) + MP(0)
CR(1) = CR(0) X --------------
MP(0)
where,
CR(0) = the Conversion Rate in effect at the close of business on
the Record Date
CR(1) = the Conversion Rate in effect immediately after the
Record Date
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FMV(0) = the average of the Sale Prices of the Capital Stock or
similar equity interest distributed to holders of Common
Stock applicable to one share of Common Stock over the 10
Trading Days commencing on and including the fifth Trading
Day after the date on which "ex-distribution trading"
commences for such dividend or distribution on the Nasdaq
National Market or such other national or regional
exchange or market on which the Common Stock is then
listed or quoted
MP(0) = the average of the Sale Prices of the Common Stock over
the 10 Trading Days commencing on and including the fifth
Trading Day after the date on which "ex-distribution
trading" commences for such dividend or distribution on the
Nasdaq National Market or such other national or regional
exchange or market on which the Common Stock is then listed
or quoted
If after any such Record Date, any such distribution is not in fact made,
the Conversion Rate shall be immediately readjusted, effective as of the date
the Board of Directors determines not to make such distribution, to the
Conversion Rate that would have been in effect if such Record Date had not been
fixed.
(f) In case the Company or any Subsidiary of the Company purchases all or
any portion of the Common Stock pursuant to a tender offer or exchange offer by
the Company or any Subsidiary of the Company for the Common Stock and the cash
and value of any other consideration included in the payment per share of the
Common Stock exceeds the Current Market Price per share on the Trading Day next
succeeding the last date on which tenders or exchanges may be made pursuant to
such tender or exchange offer (the "EXPIRATION DATE"), the Conversion Rate shall
be will be adjusted based on the following formula:
FMV = (SP(1) X OS(1))
CR(1) = CR(0) X ---------------------
OS(0) + SP(1)
where,
CR(0) = the Conversion Rate in effect on the Expiration Date
CR(1) = the Conversion Rate in effect immediately after the
Expiration Date
FMV = the fair market value (as determined by the Board of
Directors) of the aggregate value of all cash and any other
consideration paid or payable for shares of Common Stock
validly tendered or exchanged and not withdrawn as of the
Expiration Date (the "PURCHASED SHARES")
OS(1) = the number of shares of Common Stock outstanding
immediately after the Expiration Date less any Purchased
Shares
OS(0) = the number of shares of Common Stock outstanding
immediately after the Expiration Date, including any
Purchased Shares
59
SP(1) = the Sale Price of the Common Stock on the Trading Day
next succeeding the Expiration Date
Such increase (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 Rate shall
again be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. If the application of this Section
10.07(f) to any tender or exchange offer would result in a decrease in the
Conversion Rate, no adjustment shall be made for such tender or exchange offer
under this Section 10.07(f).
(g) In case of a tender or exchange offer made by a Person other than the
Company or any Subsidiary for an amount that increases the offeror's ownership
of Common Stock to more than twenty-five percent (25%) of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last date (the "OFFER
EXPIRATION DATE") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) exceeds the Sale Price per share
of the Common Stock on the Trading Day next succeeding the Offer Expiration
Date, and in which, as of the Offer Expiration Date the Board of Directors is
not recommending rejection of the offer, the Conversation Rate shall be adjusted
based on the following formula:
FMV + (SP(1) X OS(1))
CR(1) = CR(0) X ---------------------
OS(0) X SP(1)
where,
CR(0) = the Conversion Rate in effect on the Offer Expiration
Date
CR(1) = the Conversion Rate in effect immediately after the Offer
Expiration Date
FMV = the fair market value (as determined by the Board of
Directors) of the aggregate consideration payable to
holders of Common Stock 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 Date (the shares deemed so
accepted, up to any such maximum, being referred to as the
"ACCEPTED PURCHASED SHARES")
OS(1) = the number of shares of Common Stock outstanding
immediately after the Offer Expiration Date less any
Accepted Purchased Shares
OS(0) = the number of shares of Common Stock outstanding
immediately after the Offer Expiration Date, including any
Accepted Purchased Shares
SP(1) = the Sale Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Date
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Such adjustment shall become effective immediately prior to the opening of
business on the day following the Offer Expiration Date. In the event that such
Person is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 10.07(g) shall not be made
if, as of the Offer Expiration Date, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Section 10.15.
(h) "CURRENT MARKET PRICE" of the Common Stock on any day means the
average of the Sale Price of the Common Stock for each of the 10 consecutive
Trading Days ending on the earlier of the day in question and the day before the
"ex-date" with respect to the issuance or distribution requiring such
computation.
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 shares of the Common Stock trade on the
applicable exchange or in the applicable market, regular way,
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 Date or Offer
Expiration Date of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Rate are called for pursuant to this Section 10.07, such adjustments
shall be made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 10.07 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
(i) "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).
(j) "FAIR MARKET VALUE" shall mean the amount that a willing buyer would
pay a willing seller in an arm's length transaction.
61
(k) For purposes of this Section 10.07, 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) All calculations under this Section 10.07 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
(m) The Company may make such increases in the Conversion Rate by any
amount for any period of at least 20 days. The Company may make such increases
in the Conversion Rate, to the extent permitted by law and subject to applicable
rules of The Nasdaq Stock Market, as the Board of Directors deems advisable to
avoid or diminish any income tax to holders of 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. Whenever the Conversion Rate is
increased pursuant to the preceding sentence, the Company shall give notice of
the increase to the Holders in the manner provided in Section 13.02 at least
fifteen (15) days prior to the date the increased Conversion Rate takes effect,
and such notice shall state the increased Conversion Rate and the period during
which it will be in effect.
(n) To the extent that the Company has a rights plan in effect upon
conversion of the Notes into Common Stock, each converting Holder shall receive,
in addition to shares of Common Stock, the rights under the rights plan
corresponding to the shares of Common Stock received upon conversion, unless
prior to any conversion, the rights shall have separated from the shares of
Common Stock, in which case the Conversion Rate shall be adjusted as of the date
of such separation as if the Company had distributed to all holders of Common
Stock shares of the Company's Capital Stock, evidences of indebtedness or other
property as provided in Section 10.07(d) , subject to readjustment in the event
of the expiration, termination or redemption of such rights.
Section 10.08. Interest Make Whole Upon Conversion.
(a) Early Conversion Make Whole Amount. Holders who convert Notes prior to
November 16, 2007 will receive for each $1,000 Original Principal Amount of
Notes converted, in addition to a number of shares of Common Stock determined
pursuant to Section 10.01, or cash in lieu thereof pursuant to Section 10.04,
the cash proceeds, subject to the limitation described below, of the sale by the
Trustee pursuant to Section 6(c) of the Pledge Agreement of the Allocable
Collateral for each $1,000 Original Principal Amount of Notes being converted
(such cash proceeds, the "EARLY CONVERSION MAKE WHOLE AMOUNT"); provided that,
as set forth in the Pledge Agreement, if a Holder converts Notes after the close
of business on any Regular Record Date but prior to the next Interest Payment
Date, Pledged Securities that will mature immediately prior to the applicable
Interest Payment Date shall be excluded from such Allocable Collateral and from
the Early Conversion Make Whole Amount.
If a Holder converts any Notes prior to the earlier of (1) the sale of
such Notes pursuant to an effective registration statement or (2) the date two
years following the last original issue date of the Notes, the Early Conversion
Make Whole Amount such Holder will receive upon
62
conversion of each $1,000 Original Principal Amount of Notes will not exceed
$18.18; provided that the Early Conversion Make Whole Amount of any Holder that
converts Notes that have been called for redemption will not be subject to such
limitation.
(b) Redemption Make Whole Amount. Any holders who convert Notes that have
been called for redemption pursuant to the terms of Article 3 shall receive, for
each $1,000 Original Principal Amount of Notes converted, in addition to a
number of shares of Common Stock determined pursuant to Section 10.01, or cash
in lieu thereof pursuant to Section 10.04, and the Early Conversion Make Whole
Amount, if applicable, the Redemption Make Whole Amount. The "REDEMPTION MAKE
WHOLE AMOUNT" shall equal the present value of the interest on the Notes
converted that would have been payable for the period from and including
November 16, 2007, or if later, the Redemption Date, to but excluding November
16, 2009, plus any accrued and unpaid Deferred Interest.
The Redemption Make Whole Amount shall be calculated by discounting the
amount of such interest, other than any Deferred Interest, on a semi-annual
basis using a discount rate equal to 3.0% plus the arithmetic mean of the yields
under the respective headings "This Week" and "Last Week" published in the
Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the period from and
including the Redemption Date to but excluding November 16, 2009. If no maturity
exactly corresponds to such maturity, yields for the two published maturities
most closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the applicable rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For the purpose of calculating the
applicable rate, the most recent Statistical Release published prior to the date
of determination of the Redemption Make Whole Amount shall be used.
The term "STATISTICAL RELEASE" shall mean the statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Federal Reserve System and which establishes yields on actively traded U.S.
government securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination under this Section
10.08(b) , then such other reasonably comparable index that the Company shall
designate.
The Company may pay the Redemption Make Whole Amount in cash or in shares
of Common Stock, with the number of such shares determined based on the average
of the Sale Prices of the Common Stock over the ten Trading Days immediately
preceding the applicable Conversion Date. If the Company elects to pay the
Redemption Make Whole Amount in shares of Common Stock, the number of shares
deliverable by the Company, together with the shares of Common Stock deliverable
upon conversion pursuant to Section 10.01, shall not exceed 462 shares of Common
Stock per $1,000 Original Principal Amount of Notes, subject to the same
adjustments as the Conversion Rate pursuant to Section 10.07 and Section 10.15,
and the Company shall deliver cash with respect to the remainder of the
Redemption Make Whole Amount, if any.
63
Section 10.09. Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Rate in accordance
with Section 10.07 and shall prepare a certificate signed by the Chief Financial
Officer of the Company setting forth the adjusted Conversion Rate and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with each Conversion
Agent; and
(b) upon each such adjustment, a notice stating that the Conversion Rate
has been adjusted and setting forth the adjusted Conversion Rate shall be
required, and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 13.02. Neither
the Trustee nor any Conversion Agent shall be under any duty or responsibility
with respect to any such certificate or the information and calculations
contained therein, except to exhibit the same to any Holder of Notes desiring
inspection thereof at its office during normal business hours, and shall not be
deemed to have knowledge of any adjustment in the Conversion Rate unless and
until a Responsible Officer of the Trustee shall have received such a
certificate. Until a Responsible Officer of the Trustee receives such a
certificate, the Trustee and each Conversion Agent may assume without inquiry
that the last Conversion Rate of which the Trustee has knowledge of remains in
effect.
Section 10.10. Notice of Certain Corporate Action.
In case:
(1) the Company shall declare a dividend (or any other distribution) on
its Common Stock; or
(2) the Company shall authorize the granting to all or substantially all
of the holders of its Common Stock of rights, options or warrants to subscribe
for or purchase any shares of capital stock of any class or of any other rights;
or
(3) of any reclassification of the Common Stock, or of any consolidation,
merger or share exchange to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the conveyance, sale,
transfer or lease of all or substantially all of the assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Notes pursuant to Section 4.02, and
shall cause to be provided to all Holders in accordance with Section 13.02, 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 (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights, options or warrants, or, if a record is not to
be taken, the date as of which the
64
holders of Common Stock of record to be entitled to such dividend, distribution,
rights, options or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up.
Neither the failure to give such notice or the notice referred to in the
following paragraph nor any defect therein shall affect the legality or validity
of the proceedings described in clauses (1) through (4) of this Section 10.10.
If at the time the Trustee shall not be the conversion agent, a copy of such
notice shall also forthwith be filed by the Company with the Trustee.
The Company shall cause to be filed at the Corporate Trust Office and each
office or agency maintained for the purpose of conversion of Notes pursuant to
Section 4.02, and shall cause to be provided to all Holders in accordance with
Section 13.02, notice of any tender offer by the Company or any Subsidiary for
all or any portion of the Common Stock at or about the time that such notice of
tender offer is provided to the public generally.
Section 10.11. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Notes, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding Notes.
Section 10.12. Taxes on Conversions.
Except as provided in the next sentence, the Company will pay any and all
taxes and duties, excluding any taxes relating to the net or gross income or
gain to the Holder on conversion, that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Notes pursuant hereto. The
Company shall not, however, 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 Note or Notes to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax
or duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.
Section 10.13. Covenant as to Common Stock.
The Company agrees that all shares of Common Stock which may be delivered
upon conversion of Notes, upon such delivery, will have been duly authorized and
validly issued and will be fully paid and nonassessable and, except as provided
in Section 10.12, the Company will pay all taxes, liens and charges with respect
to the issue thereof.
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Section 10.14. Cancellation of Converted Notes.
All Notes delivered for conversion shall be delivered to the Trustee or
its agent to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.12.
Section 10.15. Provision in Case of Consolidation, Merger or Sale of
Assets.
In case of any recapitalization, reclassification or change in the Common
Stock (other than changes resulting from a subdivision or combination), a
consolidation, merger or combination of the Company with or into any other
Person, any merger of another Person with or into the Company (other than a
merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of the consolidated assets of the Company
and its Subsidiaries substantially as an entirety, or any statutory share
exchange, in each case as a result of which holders of Common Stock are entitled
to receive stock, other securities, other property or assets (including cash or
any combination thereof) with respect to or in exchange for the Common Stock,
the Person formed by such consolidation or resulting from such merger or which
acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Note then
outstanding shall have the right thereafter, during the period such Note shall
be convertible as specified in Section 10.01, to convert such Note only into the
kind and amount of securities, cash and other property receivable upon such
recapitalization, reclassification, change, consolidation, merger, combination,
sale, lease, transfer or statutory share exchange by a holder of the number of
shares of Common Stock of the Company into which such Note might have been
converted immediately prior to such recapitalization, reclassification, change,
consolidation, merger, combination, sale, lease, transfer or statutory share
exchange, assuming such holder of Common Stock of the Company (i) is not (A) a
Person with which the Company consolidated or merged with or into or which
merged into or with the Company or to which such conveyance, sale, transfer or
lease was made, as the case may be (a "CONSTITUENT PERSON"), or (B) an Affiliate
of a Constituent Person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such recapitalization, reclassification, change, consolidation, merger,
combination, sale, lease, transfer or statutory share exchange (provided that if
the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer, or lease is not the same for
each share of Common Stock of the Company held immediately prior to such
recapitalization, reclassification, change, consolidation, merger, combination,
sale, lease, transfer or statutory share exchange by others than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of
this Section 10.15 the kind and amount of securities, cash and other property
receivable upon such recapitalization, reclassification, change, consolidation,
merger, combination, sale, lease, transfer or statutory share exchange by the
holders of 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, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 10.
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The above provisions of this Section 10.15 shall similarly apply to
successive consolidations, mergers, conveyances, sales, transfers or leases.
Notice of the execution of such a supplemental indenture shall be given by the
Company to the Holder of each Note as provided in Section 13.02 within 20 days
after execution thereof. Neither the Trustee nor any Conversion Agent shall be
under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property or cash receivable by
Holders of Notes upon the conversion of their Notes after any such
consolidation, merger, conveyance, transfer, sale or lease or to any such
adjustment, but may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Opinion of Counsel with
respect thereto, which the Company shall cause to be furnished to the Trustee.
Section 10.16. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 7.01, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Notes to determine whether any facts exist which may require any adjustment of
the Conversion Rate, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, herein or in any
supplemental indenture provided to be employed, in making the same, or whether a
supplemental indenture need be entered into. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the validity or value (or
the kind or amount) of any Common Stock, or of any other Notes or property or
cash, which may at any time be issued or delivered upon the conversion of any
Note; and it or they do not make any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to make or calculate any cash payment or to issue,
transfer or deliver any shares of Common Stock or share certificates or other
Notes or property or cash upon the surrender of any Note for the purpose of
conversion. Neither the Trustee nor any Conversion Agent shall be responsible
for any failure of the Company to comply with any of the covenants of the
Company contained in this Article.
ARTICLE 11
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE
Section 11.01. Right to Require Repurchase.
If a Fundamental Change occurs, each Holder shall have the right, at the
Holder's option, to require the Company to repurchase, and upon the exercise of
such right the Company shall repurchase, for cash some or all of such Holder's
Notes not theretofore called for redemption, or any portion of the Original
Principal Amount thereof that is equal to U.S. $1,000 or any integral multiple
of U.S. $1,000 in excess thereof (provided that no single Note may be
repurchased in part unless the portion of the Original Principal Amount of such
Note to be outstanding after such repurchase is equal to U.S. $1,000 or integral
multiples of U.S. $1,000 in excess thereof). The Company shall offer a payment
(the "REPURCHASE PRICE") equal to 100% of the Accreted Principal Amount of the
Notes to be repurchased plus any accrued and unpaid interest (including Deferred
Interest and Liquidated Damages, if any) to but excluding the Repurchase Date,
unless
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such Repurchase Date falls after a Regular Record Date and on or prior to the
corresponding Interest Payment Date, in which case the Company will pay the full
amount of accrued and unpaid interest (including Liquidated Damages, if any, but
excluding any Deferred Interest) payable on such Interest Payment Date to the
holder of record at the close of business on the corresponding Regular Record
Date, but any accrued Deferred Interest shall be paid to the Holder tendering
Notes for repurchase. Whenever in this Indenture there is a reference, in any
context, to the Accreted Principal Amount of any Note as of any time, such
reference shall be deemed to include reference to the Repurchase Price payable
in respect of such Note 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.
Section 11.02. Notices; Method of Exercising Repurchase Right, etc.
(a) Within 20 days following any Fundamental Change, the Company shall
mail a notice to each Holder (with a copy to the Trustee) describing the
transaction or transactions that constitute the Fundamental Change and stating:
(i) the Repurchase Date, which shall be a date specified by the
Company that is not less than 20 nor more than 35 Business Days from the
date such notice is mailed (the "REPURCHASE DATE");
(ii) the time by which the repurchase right must be exercised, which
shall be the close of business on the Repurchase Date;
(iii) the Repurchase Price;
(iv) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where, or procedures
by which, such Notes are to be surrendered for payment of the Repurchase
Price;
(v) that on the Repurchase Date the Repurchase Price, will become
due and payable upon each such Note designated by the Holder to be
repurchased, and that interest thereon shall cease to accrue on and after
said date;
(vi) the Conversion Rate then in effect, the date on which the right
to convert the Notes to be repurchased will terminate (which shall be the
close of business on the Business Day immediately preceding the Repurchase
Date) and the place or places where, or procedures by which, such Notes
may be surrendered for conversion;
(vii) the place or places that the Note with the "Option of Holder
to Purchase" as specified on the reverse of the Note shall be delivered;
(viii) that any Note not tendered shall continue to accrue interest;
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(ix) that Holders shall be entitled to withdraw their election if
the Paying Agent receives, prior to the close of business on the
Repurchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the Original Principal Amount of
Notes delivered for purchase, and a written statement that (a) states such
Holder is withdrawing its election to have the Notes purchased, (b) if
certificated Notes have been issued, states the certificate number of the
withdrawn Notes, (c) if the Notes are not certificated, contains such
statements as required by the Depositary and (d) states the Original
Principal Amount, if any, that remains subject to the repurchase notice;
and
(x) that Holders whose Notes are being purchased only in part shall
be issued new Notes equal in Original Principal Amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal
to $1,000 in Original Principal Amount or an integral multiple thereof.
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 Notes.
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
on or before the Repurchase Date (i) written notice of the Holder's exercise of
such right, which notice shall set forth the name of the Holder, the Original
Principal Amount of the Notes to be repurchased (and, if any Note is to
repurchased in part, the serial number thereof, the portion of the Original
Principal Amount thereof to be repurchased and the name of the Person in which
the portion thereof to remain outstanding after such repurchase is to be
registered) and a statement that an election to exercise the repurchase right is
being made thereby and (ii) the Notes with respect to which the repurchase right
is being exercised. Holders may withdraw such election at any time prior to the
close of business on the Repurchase Date. The right of the Holder to convert the
Notes with respect to which the repurchase right is being exercised shall
continue until the close of business on the Business Day prior to the Repurchase
Date.
(c) In the event a repurchase right shall be exercised in accordance with
the terms hereof, on the Repurchase Date, the Company shall accept for payment
all Notes or portions thereof properly tendered, deposit with or pay or cause to
be paid to the Trustee the Repurchase Price in cash for payment by the Trustee
to the Holder on the Repurchase Date; provided, however, that installments of
interest that mature on or prior to the Repurchase Date shall be payable in cash
to the Holders of such Notes, or one or more Predecessor Notes, registered as
such at the close of business on the relevant Regular Record Date; and deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate Original Principal Amount of Notes
or portions thereof being purchased by the Company.
(d) If any Note (or portion thereof) surrendered for repurchase shall not
be so paid on the Repurchase Date, the Accreted Principal Amount of such Note
(or portion thereof, as the
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case may be) shall, until paid, bear interest to the extent permitted by
applicable law from the Repurchase Date at the rate specified therein, and each
Note shall remain convertible into Common Stock until the Accreted Principal
Amount of such Note (or portion thereof, as the case may be) shall have been
paid or duly provided for.
(e) Any Note which is to be repurchased only in part shall be surrendered
to the Trustee (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or its attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and mail (or cause to be transferred by book entry) to the Holder of such Note
without service charge, a new Note or Notes, containing identical terms and
conditions, each in an authorized denomination in aggregate Original Principal
Amount equal to and in exchange for the unrepurchased portion of the Original
Principal Amount of the Note so surrendered; provided that each such new Note
shall be in Original Principal Amount of $1,000 or an integral multiple thereof.
(f) All Notes 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 2.12.
(g) In connection with any purchase of Notes pursuant to this Section
11.02, the Company will comply with Rule 13e-4 under the Exchange Act to the
extent applicable at that time.
(h) No Notes may be purchased by the Company pursuant to this Section
11.02 if the Accreted Principal Amount of the Notes has been accelerated, and
such acceleration has not been rescinded on or prior to such date.
Section 11.03. Consolidation, Merger, etc.
In the case of any consolidation, merger or combination of the Company
with or into any other Person, any merger of another Person with or into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company) or any conveyance, sale, transfer or lease of the consolidated
assets of the Company and its Subsidiaries substantially as an entirety to which
Section 10.15 applies, in which the Common Stock of the Company is changed or
exchanged as a result into the right to receive shares of stock and other
property or assets (including cash) that includes shares of Common Stock of the
Company or common stock of another Person that are, or upon issuance will be,
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United States
and such shares constitute at the time such change or exchange becomes effective
in excess of 50% of the aggregate fair market value of such shares of stock and
other securities, property and assets (including cash) (as determined by the
Company, which determination shall be conclusive and binding), then the Person
formed by such consolidation or resulting from such merger or combination or
which acquires the properties or assets (including cash) of the Company, as the
case may be, shall execute and deliver to the Trustee a supplemental indenture
(which shall comply with the Trust Indenture Act as in force at the date of
execution of such supplemental indenture) modifying the provisions of this
Indenture relating to the right of Holders to cause the
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Company to repurchase the Notes following a Fundamental Change, including
without limitation the applicable provisions of this Article 11 and the
definitions of the Common Stock and Change of Control, as appropriate, and such
other related definitions set forth herein as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply in the event of a subsequent Fundamental Change to the common
stock and the issuer thereof if different from the Company and Common Stock of
the Company (in lieu of the Company and the Common Stock of the Company).
ARTICLE 12
SECURITY
Section 12.01. Security.
(a) On the Issue Date, the Company shall (i) enter into the Pledge
Agreement and comply with the terms and provisions thereof and (ii) pledge its
interest in the Pledged Securities to the Collateral Agent for the benefit of
the Trustee and the ratable benefit of the Holders in such amount as will be
sufficient upon receipt of scheduled payments of such Pledged Securities to
provide for payment in full of the first six scheduled interest payments
(excluding any Liquidated Damages) due on the Original Principal Amount of the
Notes. The Pledged Securities shall be pledged by the Company to the Collateral
Agent for the benefit of the Trustee and the ratable benefit of the Holders and
shall be held by the Collateral Agent in the Collateral Account pending
disposition pursuant to the Pledge Agreement.
(b) Each Holder, by its acceptance of a Note or a beneficial interest
therein, consents and agrees to the terms of the Pledge Agreement (including,
without limitation, the provisions providing for foreclosure and release of the
Pledged Securities) as the same may be in effect or may be amended from time to
time in writing by the parties thereto (provided that no amendment that would
adversely affect the rights of the Holders may be effected without the consent
of each Holder affected thereby), and authorizes and directs the Trustee and the
Collateral Agent to enter into the Pledge Agreement and to perform its
respective obligations and exercise its respective rights thereunder in
accordance therewith. The Company will do or cause to be done all such acts and
things as may be necessary or proper, or as may be required by the provisions of
the Pledge Agreement, to assure and confirm to the Trustee and the Collateral
Agent the security interest in the Pledged Securities contemplated hereby, by
the Pledge Agreement or any part thereof, as from time to time constituted, so
as to render the same available for the security and benefit of this Indenture
and of the Notes secured hereby, according to the intent and purpose herein
expressed. The Company shall take, or shall cause to be taken, upon request of
the Trustee or the Collateral Agent, any and all actions reasonably required to
cause the Pledge Agreement to create and maintain, as security for the
obligations of the Company under this Indenture and the Notes as provided in the
Pledge Agreement, valid and enforceable first priority Liens in and on all the
Pledged Securities, in favor of the Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders, superior to and prior to the
rights of third Persons and subject to no other Liens, other than Liens
permitted by the Pledge Agreement.
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(c) Subject to the terms and conditions of Section 10.08 and the Pledge
Agreement, upon any conversion of Notes prior to November 16, 2007, a portion of
the Pledged Securities shall be liquidated and the proceeds used to pay the
Early Conversion Make Whole Amount.
(d) The release of any Pledged Securities pursuant to the Pledge Agreement
will not be deemed to impair the security under this Indenture in contravention
of the provisions hereof if and to the extent the Pledged Securities are
released pursuant to this Indenture and the Pledge Agreement. To the extent
applicable, the Company shall cause Section 314(d) of the TIA relating to the
release of property or securities from the Lien and security interest of the
Pledge Agreement and relating to the substitution therefor of any property or
securities to be subjected to the Lien and security interest of the Pledge
Agreement to be complied with. Any certificate or opinion required by Section
314(d) of the TIA may be made by an Officer of the Company, except in cases
where Section 314(d) of the TIA requires that such certificate or opinion be
made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected by the Company.
(e) The Company shall cause Section 314(b) of the TIA, relating to
Opinions of Counsel regarding the Lien under the Pledge Agreement, to be
complied with. The Trustee may, to the extent permitted by Section 7.01 and 7.02
hereof, accept as conclusive evidence of compliance of the foregoing provisions
the appropriate statements contained in such Opinions of Counsel.
(f) The Trustee and the Collateral Agent may, in their sole discretion and
without the consent of the Holders, on behalf of the Holders, take all actions
they deem necessary or appropriate in order to (i) enforce any of the terms of
the Pledge Agreement and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company thereunder. The Trustee and the
Collateral Agent shall have the authority necessary in order to institute and
maintain such suits and proceedings as the Trustee and the Collateral Agent may
deem expedient to preserve or protect their interests and the interests of the
Holders in the Pledged Securities (including the authority to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders, the Collateral Agent or the
Trustee).
(g) Beyond the exercise of reasonable care in the custody and preservation
thereof, the Trustee and the Collateral Agent shall have no duty as to any
Pledged Securities in their possession or any income thereon or as to
preservation of rights against prior parties or any other rights pertaining
thereto, and the Trustee and the Collateral Agent shall not be responsible for
filing any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Pledged Securities.
The Trustee and the Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Securities in
their possession if the Pledged Securities are accorded treatment substantially
equal to that which they accord their own property or property held in similar
accounts and shall not be liable or responsible for any loss or diminution in
the value of any of the Pledged Securities, by reason of
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the act or omission of the Collateral Agent, any carrier, forwarding agency or
other agent or bailee selected by the Trustee in good faith.
(h) The Trustee shall not be responsible for the existence, genuineness or
value of any of the Pledged Securities or for the validity, perfection, priority
or enforceability of the Liens in any of the Pledged Securities, whether
impaired by operation of law or otherwise, for the validity or sufficiency of
the Pledged Securities or any agreement or assignment contained therein, for the
validity of the title of the Company to the Pledged Securities, for insuring the
Pledged Securities or for the payment of taxes, charges, assessments or Liens
upon the Pledged Securities or otherwise as to the maintenance of the Pledged
Securities. The Trustee shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Indenture or the Pledge
Agreement by the Company or the Collateral Agent.
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss. 318(c), the imposed duties shall control.
Section 13.02. Notices.
Any notice or communication by the Company or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
c/o Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Secretary
With a copy to:
Irell & Xxxxxxx
1800 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxx, Esq.
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If to the Trustee:
Xxxxx Fargo Bank, N.A.
Corporate Trust Services
Sixth & Marquette; X0000-000
Xxxxxxxxxxx, XX 00000
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 13.03. Communication by Holders of Notes with Other Holders of
Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 13.05)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
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(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 13.05)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.
Section 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she 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
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 13.06. Tax Treatment of the Notes.
The Company agrees, and by acceptance of a beneficial interest in a Note
each Holder and any Beneficial Owner of a Note shall be deemed to agree, to
treat, for United States federal income tax purposes, the Notes as debt
instruments that are subject to Treasury regulation section 1.1275-4 or any
successor provision (the "contingent payment regulations"). For United States
federal income tax purposes, the Company further agrees, and by acceptance of a
beneficial interest in a Note each Holder and any Beneficial Owner of a Note
shall be deemed to agree (i) to treat the fair market value of the Common Stock
received upon the conversion of a Note as a contingent payment for purposes of
the contingent payment regulations, (ii) to accrue interest with respect to
outstanding Notes as original issue discount for United States federal income
tax purposes (i.e., Tax Original Issue Discount) according to the "noncontingent
bond method," set forth in the contingent payment regulations, using the
comparable yield of 15% compounded semi-annually, and (iii) to be bound by the
projected payment schedule determined by the Company pursuant to the contingent
payment regulations. Holders or Beneficial Owners may obtain the issue price,
amount of Tax Original Issue Discount, issue date, comparable yield and
projected payment schedule, by submitting a written request for it to the
Company at the following address: Charter Communications, Inc., 00000
Xxxxxxxxxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Director of Investor
Relations.
The Company acknowledges and agrees, and by acceptance of a beneficial
interest in a Note each Holder and any Beneficial Owner of a Note shall be
deemed to acknowledge and agree, that (i) the comparable yield means the annual
yield the Company would pay, as of the Issue Date, on a noncontingent,
nonconvertible, fixed-rate debt instrument with terms and
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conditions otherwise similar to those of the Notes and (ii) the comparable yield
and the projected payment schedule that a Holder or Beneficial Owner may obtain
as described above do not constitute a representation by the Company regarding
the actual amounts that will be paid on the Notes or the value of the Common
Stock into which the Notes may be converted.
Section 13.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.08. No Personal Liability of Directors, Officers, Employees,
Members and Stockholders.
No director, officer, employee, incorporator, member or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes.
Section 13.09. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE
NOTES.
Section 13.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.11. Successors.
All agreements of the Company in this Indenture and the Notes, as the case
may be, shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
Section 13.12. Severability.
In case any provision in this Indenture or the Notes, as the case may be,
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.
76
Section 13.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 13.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions.
ARTICLE 14
SATISFACTION AND DISCHARGE
Section 14.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange or conversion of Notes
herein expressly provided for), and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(i) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.08 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust,) have been delivered to the Trustee for
cancellation; or
(ii) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Trustee for cancellation,
for the Accreted Principal Amount (and premium, if any) and interest
(including Liquidated Damages, if any) to the date of such deposit;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with. Notwithstanding the satisfaction and discharge of this
Indenture pursuant to this Article 14, the obligations of the Company to the
Trustee, and the obligations of the Trustee under Section 14.02 shall survive
such satisfaction and discharge.
77
Section 14.02. Application of Trust Money.
All money deposited with the Trustee pursuant to Section 14.01 shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying Agent
as the Trustee may determine, to the Persons entitled thereto, of the Accreted
Principal Amount (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee.
(Signatures on following page)
78
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
CHARTER COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxx
---------------------------------------------------
Name: Xxxxx Xxxxx
Title: Executive Vice President
XXXXX FARGO BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Vice President
79
SCHEDULE A
EFFECTIVE DATE STOCK PRICE
-------------- -----------
$2.16 $2.25 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00
November 16, 2004............ 37.5 32.2 20.2 4.9 0.0 0.0 0.0 0.0
November 16, 2005............ 54.7 48.2 33.6 14.6 3.5 0.0 0.0 0.0
November 16, 2006............ 74.2 66.2 48.5 25.4 12.1 4.1 0.0 0.0
November 16, 2007............ 95.1 85.5 64.0 36.5 20.9 11.7 6.3 3.0
November 16, 2008............ 85.6 75.0 52.0 24.5 10.7 3.8 0.8 0.0
November 16, 2009............ 49.7 31.2 0.0 0.0 0.0 0.0 0.0 0.0
1
EXHIBIT A
(FACE OF NOTE)
(THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED NOTE:
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE"), THIS SECURITY IS BEING ISSUED WITH TAX
ORIGINAL ISSUE DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS NOVEMBER 22,
2004. IN ADDITION, THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX
REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE CODE, THE COMPARABLE YIELD OF THIS SECURITY
IS 15.00%, COMPOUNDED semi-annually (WHICH WILL BE TREATED AS THE YIELD TO
MATURITY FOR UNITED STATES FEDERAL INCOME TAX PURPOSES).
CHARTER COMMUNICATIONS, INC. (THE "COMPANY") AGREES, AND BY ACCEPTING A
BENEFICIAL OWNERSHIP INTEREST IN THIS SECURITY EACH HOLDER AND ANY BENEFICIAL
OWNER OF THIS SECURITY WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES (1) TO TREAT THIS SECURITY AS A DEBT INSTRUMENT THAT IS
SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT REGULATIONS"), (2)
TO TREAT THE FAIR MARKET VALUE OF ANY COMMON STOCK RECEIVED UPON ANY CONVERSION
OF THIS SECURITY AS A CONTINGENT PAYMENT FOR PURPOSES OF THE CONTINGENT PAYMENT
REGULATIONS, AND (3) TO ACCRUE INTEREST WITH RESPECT TO THE SECURITY AS TAX
ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES ACCORDING
TO THE "NONCONTINGENT BOND METHOD," SET FORTH IN THE CONTINGENT PAYMENT
REGULATIONS, USING THE COMPARABLE YIELD OF 15.00% COMPOUNDED SEMI-ANNUALLY AND
THE PROJECTED PAYMENT SCHEDULE DETERMINED BY THE COMPANY. THE COMPANY AGREES TO
PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN REQUEST, THE ISSUE
PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE, COMPARABLE YIELD AND
PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE
COMPANY AT THE FOLLOWING ADDRESS: CHARTER COMMUNICATIONS, INC, 00000 XXXXXXXXXXX
XXXXX, XX. XXXXX, XXXXXXXX 00000, ATTENTION: DIRECTOR OF INVESTOR RELATIONS.
THIS SECURITY AND THE SHARES OF CLASS A COMMON STOCK OF CHARTER
COMMUNICATIONS, INC. (THE "COMPANY") ISSUABLE UPON CONVERSION OF THIS SECURITY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE ") WHICH IS TWO YEARS AFTER THE LAST ORIGINAL ISSUE DATE
HEREOF, ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A "), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.
(THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL NOTE:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE
DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT
THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-2
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.)
A-3
CHARTER COMMUNICATIONS, INC.
5.875% Convertible Senior Notes due 2009
CUSIP NO. 00000XXX0
No. R-
Original Principal Amount: $( )
CHARTER COMMUNICATIONS, INC., a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to) promises to pay to _______ or registered assigns, the Accreted Principal
Amount (as defined in the Indenture referred to on the reverse side of this
Note) on November 16, 2009.
Interest Payment Dates: May 16 and November 16
Regular Record Dates: May 1 and November 1
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Dated: November 22, 2004
CHARTER COMMUNICATIONS, INC.
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
This is one of the 5.875% Convertible Senior Notes due 2009 referred to in
the within-mentioned Indenture:
XXXXX FARGO BANK, N.A.,
as Trustee
By: _____________________________
Authorized Signatory:
(BACK OF NOTE)
5.875% Convertible Senior Notes due 2009
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. The Company promises to pay interest on the Accreted
Principal Amount of this Note at the rate of 5.875% per annum from November 22,
2004 until Maturity. The Company will pay interest semi-annually in arrears on
May 16 and November 16 of each year (each an "Interest Payment Date"), or if any
such day is not a Business Day, on the next succeeding Business Day; subject to
the right of the Company as set forth in the Indenture to pay Deferred Interest
on May 16, 2008 or such earlier Interest Payment Date selected by the Company
upon notice to the Trustee and the Holders. Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated between a
Regular Record Date referred to on the face and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided that no interest shall accrue with respect to any Deferred
Interest. The first Interest Payment Date shall be May 16, 2005. The Company
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on the overdue Accreted Principal Amount and premium, if any, at
a rate equal to 1% per annum in excess of the rate then in effect to the extent
lawful; and it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The company shall pay interest on the Notes to the
Persons who are registered Holders of Notes at the close of business on the May
1 or November 1 immediately preceding the Interest Payment Date, even if such
Notes are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.13 of the Indenture with respect to
defaulted interest and except as provided in the Indenture with respect to
Deferred Interest. The Notes will be payable as to Accreted Principal Amount,
premium, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest may be made by check mailed to the
Holders at their addresses set forth in the Note Register, and provided that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest and premium on all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, Xxxxx Fargo
Bank, N.A., the Trustee under the Indenture, will act as Paying Agent,
Registrar, Conversion Agent and Collateral Agent. The Company may change any
Paying Agent,
A-R-5
Registrar, Conversion Agent or Collateral Agent without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
November 22, 2004 (the "Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the TIA. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $862,500,000,
except as provided in Section 2.08 and Section 2.16 of the Indenture.
5. OPTIONAL REDEMPTION. The Company shall not have the option to redeem
any Notes pursuant to the Indenture prior to the earlier of (1) the sale of any
Notes pursuant to the effective Shelf Registration Statement (as defined in the
Resale Registration Rights Agreement) or (2) the date two years following the
Issue Date. Following such date, the Company may redeem for cash the Notes (or
in the case of clause (1) above, any such Notes that have been sold pursuant to
the Shelf Registration Statement), in whole or in part, upon not less than 30
nor more than 60 days' notice, at a price in cash (the "REDEMPTION PRICE") equal
to 100% of the Accreted Principal Amount of such Notes plus accrued and unpaid
interest, Deferred Interest and Liquidated Damages, if any, on such Notes to,
but excluding, the Redemption Date, if the Sale Price of the Common Stock has
exceeded, for at least 20 Trading Days in any consecutive 30 Trading Day period,
180% of the Conversion Price if such 30 Trading Day period begins prior to
November 16, 2007 and 150% of the Conversion Price if such 30 day Trading Day
period begins thereafter.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first
class mail at least 30 days but not more than 60 days before the Redemption Date
to each Holder whose Notes are to be redeemed at its registered address. Notices
of redemption may not be conditional. No Notes of $1,000 Original Principal
Amount or less may be redeemed in part. Notes in denominations larger than
$1,000 Original Principal Amount may be redeemed in part but only in whole
multiples of $1,000 Original Principal Amount, unless all of the Notes held by a
Holder are to be redeemed. On and after the Redemption Date, interest ceases to
accrue on Notes or portions thereof called for redemption.
7. MANDATORY REDEMPTION. Except as otherwise provided in Article 11 of the
Indenture, the Company shall not be required to make mandatory redemption
payments with respect to the Notes.
8. REPURCHASE AT OPTION OF HOLDER. If a Fundamental Change occurs, the
Company shall, in accordance with the terms of the Indenture, make an offer to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
each Holder's Notes not theretofore called for redemption at a purchase price
equal to 100% of the Accreted Principal Amount of the Notes to be purchased,
plus any accrued and unpaid interest (including Deferred Interest and Liquated
Damages, if any) to but excluding the Repurchase Date, unless such Repurchase
Date falls after a Record Date and on or prior to the corresponding Interest
Payment Date, in which case the Company will pay the full amount of accrued and
unpaid interest (including Liquated
A-R-6
Damages, if any, but excluding any Deferred Interest) payable on such Interest
Payment Date to the holder of record at the close of business on the
corresponding Regular Record Date, but any accrued Deferred Interest shall be
paid to the Holder tendering Notes for repurchase. The Repurchase Price must be
paid in cash. Within 20 days following any Fundamental Change, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Fundamental Change and offering to repurchase Notes on the
Repurchase Date specified in such notice, pursuant to the procedures required by
the Indenture and described in such notice.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 Original Principal Amount and
integral multiples of $1,000 Original Principal Amount. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee 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.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT AND SUPPLEMENT. The Indenture or the Notes may be amended or
supplemented only as set forth in Article 9 of the Indenture.
12. DEFAULTS AND REMEDIES. The Notes shall have the Events of Default set
forth in Section 6.01 of the Indenture. In the case of an Event of Default set
forth in Section 6.01(f) or (g), the Accreted Principal Amount of all
outstanding Notes will become due and payable without further action or notice.
If any other Event of Default occurs and is continuing, the Trustee by notice to
the Company or the Holders of at least 25% in Original Principal Amount of the
then outstanding Notes by notice to the Company and the Trustee may declare the
Accreted Principal Amount of all the Notes to be due and payable immediately.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Holders shall have such other rights as set forth in Article 6 of the
Indenture.
13. CONVERSION. Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Note is entitled, at its option, to convert this
Note (or any portion of the Original Principal Amount hereof that is an integral
multiple of U.S.$1,000, provided that the unconverted portion of such Original
Principal Amount is U.S.$1,000 or any integral multiple of U.S.$1,000 in excess
thereof) into fully paid and nonassessable shares of Common Stock of the Company
at an initial Conversion Rate of 413.2231 shares of Common Stock for each
U.S.$1,000 Original Principal Amount of Notes (or at the current adjusted
Conversion Rate if an adjustment has been made as provided in the Indenture),
plus the Early Conversion Make Whole Amount and Redemption Make Whole Amount if
required pursuant to the terms of the Indenture.
The Conversion Rate is subject to adjustment as provided in the Indenture.
A-R-7
14. SECURITY. Holders are entitled to the benefits of the Pledge Agreement
and the pledge of the Pledged Securities as set forth in the Pledge Agreement
and Article 12 of the Indenture.
15. REGISTRATION RIGHTS AGREEMENT AND LIQUIDATED DAMAGES. Holders of this
Note, including any Person that has a beneficial interest in this Note, are
entitled to the benefits of the Resale Registration Rights Agreement and the
Share Lending Registration Rights Agreement, including the right to receive
Liquidated Damages under the circumstances, in the amount and subject to the
terms set forth therein.
16. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
17. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator, member or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes
18. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS NOTE AND THE INDENTURE WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR
THIS NOTE.
19. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature (which may be by facsimile) of the Trustee or an
authenticating agent.
20. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TENANT (= 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).
21. CUSIP NUMBERS. No representation is made as to the accuracy of any
CUSIP numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture, the Resale Registration Rights Agreement or the
Share Lending Registration Rights Agreement. Requests may be made to:
A-R-8
Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Secretary
Telecopier No.: (000) 000-0000
A-R-9
Schedule I
[Include Schedule I only for a Global Note]
CHARTER COMMUNICATIONS, INC.
5.875% Convertible Senior Note Due 2009
No.
The initial Original Principal Amount of this Global Note is $_________.
Notation Explaining Original Authorized Signature of
Date Original Principal Amount Principal Amount Recorded Trustee or Custodian
A-R-10
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(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 Note on the books of the Company. The agent may substitute another
to act for him.
Date:_______________
Your Signature:____________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*: _____________________________________________________
_________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-R-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Article 11 of the Indenture, check below:
| | Purchase pursuant to Article 11
If you want to elect to have only part of the Note purchased by the
Company pursuant to Article 11 of the Indenture, state the Original Principal
Amount you elect to have purchased:
$ ______________________________
Date: __________________________
Your Signature: ____________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: ____________________________________________________
Signature Guarantee*: ______________________________________________________
____________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-R-12
CONVERSION NOTICE
The undersigned Holder of this Note hereby irrevocably exercises the
option to convert this Note, or any portion of the Original Principal Amount
hereof (which is U.S.$1,000 or an integral multiple of U.S.$1,000 in excess
thereof, provided that the unconverted portion of such Original Principal Amount
is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof) below
designated, into shares of Common Stock in accordance with the terms of the
Indenture referred to in this Note, and directs that such shares, together with
a check in payment for any fractional share, any other amounts payable to the
Holder in connection with such conversion and any Notes representing any
unconverted Original Principal Amount hereof, be delivered to and be registered
in the name of the undersigned unless a different name has been indicated below.
If shares of Common Stock or Notes are to be registered in the name of a Person
other than the undersigned, (a) the undersigned will pay all transfer taxes
payable with respect thereto and (b) signature(s) must be guaranteed by an
Eligible Guarantor Institution with membership in an approved signature
guarantee program pursuant to Rule 17Ad-15 under the Notes Exchange Act of 1934.
Any amount required to be paid by the undersigned on account of interest
accompanies this Note.
Dated:______________________ _______________________________________
Signature(s)
If shares or Notes are to be registered in the name of a Person other than the
Holder, please print such Person's name and address:
__________________________________________________
Name
__________________________________________________
__________________________________________________
(Address)
__________________________________________________
Social Security or other Identification Number,
if any
__________________________________________________
(Signature Guaranteed)
If only a portion of the Notes is to be converted, please indicate:
1. Original Principal Amount to be converted: U.S. $__________
A-R-13
2. Original Principal Amount and denomination of Notes representing
unconverted principal amount to be issued:
Amount: U.S. _________________$ Denominations: U.S. $________________
(U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof, provided
that the unconverted portion of such Original Principal Amount is U.S. $1,000 or
any integral multiple of U.S. $1,000 in excess thereof)
A-R-14
ANNEX A - FORM OF RESTRICTED NOTES CERTIFICATE
RESTRICTED NOTES CERTIFICATE
(For transfers pursuant to Section 2.07(b)(ii) and 2.07(b)(iii)
of the Indenture)
Xxxxx Fargo Bank, N.A.
Sixth & Marquette; X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
Fax: 000-000-0000
Re: 5.875% CONVERTIBLE SENIOR NOTES DUE 2009 OF CHARTER COMMUNICATIONS,
INC. (THE "NOTES")
Reference is made to the Indenture, dated as of November 22, 2004 (the
"INDENTURE"), from Charter Communications, Inc. (the "COMPANY") to Xxxxx Fargo
Bank, N.A., as Trustee. Terms used herein and defined in the Indenture or Rule
144 under the U.S. Securities Act of 1933 (the "SECURITIES ACT") are used herein
as so defined.
This certificate relates to U.S. $ Original Principal Amount of Notes,
which are evidenced by the following certificate(s) (the "SPECIFIED NOTES"):
CUSIP No. 00000XXX0
CERTIFICATE No(s). ________________
The person in whose name this certificate is executed below (the
"UNDERSIGNED") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Notes are represented by a Global Note, they are held through
the Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Notes are not represented by a Global
Note, they are registered in the name of the Undersigned, as or on behalf of the
Owner.
The Owner has requested that the Specified Notes be transferred to a
person (the "TRANSFEREE") who will take delivery in the form of a Restricted
Note. In connection with such transfer, the Owner hereby certifies that such
transfer is being effected pursuant to an effective registration statement under
the Securities Act or it is being effected in accordance with Rule 144A, or
pursuant to another exemption from registration under the Securities Act (if
available) or Rule 144 under the Securities Act and all applicable laws of the
states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in accordance
with Rule 144A:
(A) the Specified Notes are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring
for its own account or for the account of a qualified institutional buyer;
and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may
be relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant to Rule
144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the date the Specified Notes were acquired from the Company or from
an affiliate (as such term is defined in Rule 144) of the Company,
whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of paragraphs
(e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a period of at least two years
has elapsed since the date the Specified Notes were acquired from the
Company or from an affiliate (as such term is defined in Rule 144) of the
Company, whichever is later, and the Owner is not, and during the
preceding three months has not been, an affiliate of the Company.
(3) Transfers Pursuant to Other Securities Act Exemptions. If the transfer
is being effected pursuant to a Securities Act exemption other than ones set
forth in (1) or (2) above, there shall be delivered to the Company an opinion of
counsel with respect to such Owners.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated: __________________________
Print the name of the Undersigned, as such term is defined in the second
paragraph of this certificate.)
Dated: ___________________________
Name: ___________________________
Title: ___________________________
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
2
ANNEX B - FORM OF UNRESTRICTED NOTES CERTIFICATE
UNRESTRICTED NOTES CERTIFICATE
(For removal of Restricted Notes Legend pursuant to Section 2.07(c))
Xxxxx Fargo Bank, N.A.
Sixth & Marquette; X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Services
Fax: 000-000-0000
RE: 5.875% CONVERTIBLE SENIOR NOTES DUE 2009 OF CHARTER COMMUNICATIONS,
INC. (THE "NOTES")
Reference is made to the Indenture, dated as of November 22, 2004 (the
"INDENTURE"), from Charter Communications, Inc. (the "COMPANY") to Xxxxx Fargo
Bank, N.A., as Trustee. Terms used herein and defined in the Indenture or in
Rule 144 under the U.S. Securities Act of 1933 (the "SECURITIES ACT") are used
herein as so defined.
This certificate relates to U.S.$ Original Principal Amount of Notes,
which are evidenced by the following certificate(s) (the "SPECIFIED NOTES"):
CUSIP No. 00000XXX0
CERTIFICATE No(s).____________________
The person in whose name this certificate is executed below (the
"UNDERSIGNED") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Notes or (ii) it is acting on behalf of all the beneficial
owners of the Specified Notes and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Notes are represented by a Global Note, they are held through
the Depositary or an Agent Member in the name of the Undersigned, as or on
behalf of the Owner. If the Specified Notes are not represented by a Global
Note, they are registered in the name of the Undersigned, as or on behalf of the
Owner.
The Owner has requested that the Specified Notes be exchanged for Notes
bearing no Restricted Notes Legend pursuant to Section 2.07(c) of the Indenture.
In connection with such exchange, the Owner hereby certifies that the exchange
is occurring (i) pursuant to an effective registration statement under the
Securities Act, or (ii) after a period of at least two years has elapsed since
the date the Specified Notes were acquired from the Company or from an
"affiliate" (as such term is defined in Rule 144) of the Company, whichever is
later, and the Owner is not, and during the preceding three months has not been,
an affiliate of the Company. The Owner also acknowledges that any future
transfers of the Specified Notes must comply with all applicable Notes laws of
the states of the United States and other jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated: ___________________________
Print the name of the Undersigned, as such term is defined in the second
paragraph of this certificate.)
Dated: ___________________________
Name: ___________________________
Title: ___________________________
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the person signing on behalf of the Undersigned must be stated.)
2
ANNEX C - FORM OF SURRENDER CERTIFICATE
In connection with the certification contemplated by Section 10.02
relating to compliance with certain restrictions relating to transfers of
Restricted Notes, such certification shall be provided substantially in the form
of the following certificate, with only such changes thereto as shall be
approved by the Company:
CERTIFICATE
CHARTER COMMUNICATIONS, INC.
5.875% CONVERTIBLE SENIOR NOTES DUE 2009
This is to certify that as of the date hereof with respect to U.S.$
Accreted Principal Amount of the above-captioned Notes surrendered on the date
hereof (the "SURRENDERED NOTES") for registration of transfer, or for conversion
or repurchase where the Notes issuable upon such conversion or repurchase are to
be registered in a name other than that of the undersigned Holder (each such
transaction being a "transfer"), the undersigned Holder (as defined in the
Indenture) certifies that the transfer of Surrendered Notes associated with such
transfer complies with the restrictive legend set forth on the face of the
Surrendered Notes for the reason checked below:
__________ The transfer of the Surrendered Notes is being made
pursuant to an effective registration statement under
the Securities Act; or
__________ The transfer of the Surrendered Notes complies with Rule
144A under the Securities Act; or
__________ The transfer of the Surrendered Notes complies with Rule
144 under the United States Securities Act of 1933, as
amended (the "Securities Act"); or
__________ The transfer of the Surrendered Notes has been made
pursuant to an exemption from registration under the
Securities Act and an opinion of counsel has been
delivered to the Company with respect to such transfer.
{Name of Holder}
Dated: ___________________________
*To be dated the date of surrender
