Exhibit 10.3
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INDENTURE
between
DDI CORP.
and
STATE STREET BANK AND TRUST COMPANY
AS TRUSTEE
APRIL 2, 2002
6.25% SUBORDINATED CONVERTIBLE NOTES DUE 2007
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TABLE OF CONTENTS
Page
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ARTICLE I
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DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 1
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SECTION 101. Definitions.....................................................................1
SECTION 102. Compliance Certificates and Opinions............................................8
SECTION 103. Form of Documents Delivered to Trustee..........................................9
SECTION 104. Acts of Holders; Record Dates..................................................10
SECTION 105. Notices, Etc., to Trustee and Company..........................................12
SECTION 106. Notice to Holders; Waiver......................................................12
SECTION 107. Conflict With Trust Indenture Act..............................................12
SECTION 108. Effect of Headings and Table of Contents.......................................13
SECTION 109. Successors and Assigns.........................................................13
SECTION 110. Separability Clause............................................................13
SECTION 111. Benefits of Indenture..........................................................13
SECTION 112. Governing Law..................................................................13
SECTION 113. Legal Holidays.................................................................13
SECTION 114. Indenture and Securities Solely Corporate Obligations..........................13
SECTION 115. Indenture May Be Executed in Counterparts......................................14
ARTICLE II
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THE SECURITIES - TITLE, TERMS AND FORMS
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SECTION 201. Title and Terms................................................................14
SECTION 202. Form of Securities.............................................................15
SECTION 203. Legends........................................................................15
SECTION 204. Execution, Authentication, Delivery and Dating of the Securities...............18
SECTION 205. Securities Registrar and Paying Agent..........................................18
SECTION 206. Paying Agent to Hold Assets in Trust...........................................19
SECTION 207. General Provisions Relating to Transfer and Exchange...........................20
SECTION 208. Book-Entry Provisions for the Global Securities................................21
SECTION 209. Special Transfer Provisions....................................................22
SECTION 210. Holder Lists...................................................................24
SECTION 211. Persons Deemed Owners..........................................................24
ARTICLE III
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THE SECURITIES - SECONDARY PROVISIONS
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SECTION 301. Temporary Securities...........................................................24
SECTION 302. Mutilated, Destroyed, Lost and Stolen Securities...............................25
SECTION 303. Payment of Interest; Interest Rights Preserved.................................26
SECTION 304. Persons Deemed Owners..........................................................27
SECTION 305. Cancellation...................................................................27
ARTICLE IV
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SATISFACTION AND DISCHARGE
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SECTION 401. Satisfaction and Discharge of Indenture........................................27
SECTION 402. Application of Trust Money.....................................................28
ARTICLE V
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DEFAULTS AND REMEDIES
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SECTION 501. Events of Default..............................................................29
SECTION 502. Acceleration of Maturity; Rescission and Annulment.............................30
SECTION 503. Collection of Indebtedness and Suits For Enforcement By Trustee. ..............31
SECTION 504. Trustee May File Proofs of Claim...............................................31
SECTION 505. Trustee May Enforce Claims Without Possession of Securities. ..................32
SECTION 506. Application of Money Collected.................................................32
SECTION 507. Limitation on Suits. ..........................................................32
SECTION 508. Unconditional Right of Holders To Receive Principal, Premium and Interest and
To Convert. ................................................................33
SECTION 509. Restoration of Rights and Remedies. ...........................................33
SECTION 510. Rights and Remedies Cumulative.................................................33
SECTION 511. Delay or Omission Not Waiver...................................................34
SECTION 512. Control By Majority............................................................34
SECTION 513. Waiver of Past Defaults........................................................34
SECTION 514. Undertaking For Costs..........................................................35
SECTION 515. Waiver of Usury, Stay or Extension Laws........................................35
ARTICLE VI
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THE TRUSTEE
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SECTION 601. Certain Duties and Responsibilities............................................35
SECTION 602. Notice of Defaults.............................................................36
SECTION 603. Certain Rights of Trustee......................................................36
SECTION 604. Not Responsible For Recitals or Issuance of Securities.........................38
SECTION 605. May Hold Securities and Act as Trustee Under Other Indentures..................38
SECTION 606. Money Held In Trust............................................................38
SECTION 607. Compensation and Reimbursement.................................................38
SECTION 608. Conflicting Interests..........................................................39
SECTION 609. Corporate Trustee Required; Eligibility........................................39
SECTION 610. Resignation and Removal; Appointment of Successor..............................40
SECTION 611. Acceptance of Appointment By Successor.........................................41
SECTION 612. Merger, Conversion, Consolidation or Succession to Business....................41
SECTION 613. Preferential Collection of Claims Against Company..............................42
ARTICLE VII
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HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
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SECTION 701. Company To Furnish Trustee Names and Addresses of Holders......................42
SECTION 702. Preservation of Information; Communications To Holders.........................42
SECTION 703. Reports By Trustee.............................................................42
SECTION 704. Reports By Company.............................................................43
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ARTICLE VIII
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CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
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SECTION 801. Company May Consolidate, Etc., Only on Certain Terms...........................43
SECTION 802. Successor Substituted..........................................................44
ARTICLE IX
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REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE IN CONTROL
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SECTION 901. Purchase of Securities at Option of the Holder Upon Change in Control..........44
SECTION 902. Effect of Change in Control Purchase Notice....................................47
SECTION 903. Deposit of Change in Control Purchase Price....................................48
SECTION 904. Securities Purchased in Part...................................................48
SECTION 905. Compliance With Securities Laws Upon Purchase of Securities....................48
SECTION 906. Repayment to the Company.......................................................49
SECTION 907. Successive Consolidations, Mergers, Etc........................................49
ARTICLE X
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COVENANTS
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SECTION 1001. Payment of Principal, Premium and Interest.....................................49
SECTION 1002. Maintenance of Office or Agency................................................49
SECTION 1003. Money For Securities Payments To Be Held in Trust..............................50
SECTION 1004. Existence......................................................................51
SECTION 1005. Registration and Listing.......................................................51
SECTION 1006. Resale of Certain Securities...................................................51
ARTICLE XI
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REDEMPTION OF SECURITIES
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SECTION 1101. Applicability of Article.......................................................52
SECTION 1102. Election To Redeem; Notice to Trustee..........................................52
SECTION 1103. Selection By Trustee of Securities To Be Redeemed..............................52
SECTION 1104. Notice of Redemption...........................................................53
SECTION 1105. Deposit of Redemption Price....................................................53
SECTION 1106. Securities Payable on Redemption Date..........................................54
SECTION 1107. Securities Redeemed in Part....................................................54
SECTION 1108. Right of Redemption............................................................54
SECTION 1109. Conversion Arrangement on Call for Redemption..................................55
ARTICLE XII
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AMENDMENTS, SUPPLEMENTS AND WAIVERS
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SECTION 1201. Without Consent of Holders of Securities.......................................55
SECTION 1202. With Consent of Holders of Securities..........................................56
SECTION 1203. Compliance With Trust Indenture Act............................................57
SECTION 1204. Revocation of Consents and Effect of Consents or Votes.........................57
SECTION 1205. Notation on or Exchange of Securities..........................................57
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SECTION 1206. Trustee to Sign Amendment, Etc.................................................58
SECTION 1207. Effect of Supplemental Indentures..............................................58
SECTION 1208. Reference in Securities to Supplemental Indentures.............................58
ARTICLE XIII
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DEFEASANCE AND COVENANT DEFEASANCE
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SECTION 1301. Company's Option To Effect Defeasance or Covenant Defeasance...................58
SECTION 1302. Defeasance and Discharge.......................................................58
SECTION 1303. Covenant Defeasance............................................................59
SECTION 1304. Conditions To Defeasance or Covenant Defeasance................................60
SECTION 1305. Deposited Money and U.S. Government Obligations To Be Held In Trust;
Miscellaneous Provisions....................................................62
SECTION 1306. Reinstatement..................................................................62
SECTION 1307. No Defeasance Upon Conversion..................................................63
ARTICLE XIV
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CONVERSION OF SECURITIES
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SECTION 1401. Applicability of Article.......................................................63
SECTION 1402. Exercise of Conversion Privilege...............................................63
SECTION 1403. No Fractional Shares...........................................................64
SECTION 1404. Notice of Certain Corporate Actions............................................65
SECTION 1405. Reservation of Shares of Common Stock..........................................65
SECTION 1406. Payment of Certain Taxes Upon Conversion.......................................66
SECTION 1407. Nonassessability...............................................................66
SECTION 1408. Provision in Case of Consolidation, Merger or Sale of Assets...................66
SECTION 1409. Duties of Trustee Regarding Conversion.........................................67
SECTION 1410. Repayment of Certain Funds Upon Conversion.....................................67
SECTION 1411. Conversion Privilege and Conversion Price......................................68
SECTION 1412. Adjustment of Conversion Price.................................................68
SECTION 1413. No Adjustment..................................................................73
ARTICLE XV
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SUBORDINATION OF SECURITIES
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SECTION 1501. Agreement of Subordination.....................................................74
SECTION 1502. Payments to Holders............................................................74
SECTION 1503. Subrogation of Securities......................................................76
SECTION 1504. Authorization to Effect Subordination..........................................77
SECTION 1505. Notice to Trustee..............................................................78
SECTION 1506. Trustee's Relation to Senior Indebtedness......................................78
SECTION 1507. No Impairment of Subordination.................................................79
SECTION 1508. Certain Conversions Deemed Payment.............................................79
SECTION 1509. Article Applicable to Paying Agents............................................79
SECTION 1510. Senior Indebtedness Entitled To Rely...........................................80
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Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
Section 310 (a)(1)............................................................................609
(a)(2).................................................................................609
(a)(3)......................................................................Not Applicable
(a)(4)......................................................................Not Applicable
(b)...............................................................................608, 610
Section 311 (a)...............................................................................613
(b)....................................................................................613
Section 312 (a)..........................................................................701, 702
(b)....................................................................................702
(c)....................................................................................702
Section 313 (a)...............................................................................703
(b)....................................................................................703
(c)....................................................................................703
(d)....................................................................................703
Section 314 (a)...............................................................................704
(a)(4)............................................................................101, 104
(b).........................................................................Not Applicable
(c)(1).................................................................................102
(c)(2).................................................................................102
(c)(3)......................................................................Not Applicable
(d).........................................................................Not Applicable
(e)....................................................................................102
Section 315 (a)...............................................................................601
(b)....................................................................................602
(c)....................................................................................601
(d)....................................................................................601
(e)....................................................................................514
Section 316 (a)...............................................................................101
(a)(1)(A)..............................................................................512
(a)(1)(B)..............................................................................513
(a)(2)......................................................................Not Applicable
(a)(2)......................................................................Not Applicable
(b)....................................................................................508
(c)....................................................................................104
Section 317 (a)(1)............................................................................503
(a)(2).................................................................................504
(b)...................................................................................1003
Section 318 (a)........................................................................107
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
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INDENTURE, dated as of April 2, 2002 (this "Indenture"), between DDi
Corp., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal executive office at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and State Street Bank and Trust
Company, a Massachusetts trust company duly organized and existing under the
laws of the Commonwealth of Massachusetts, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its 6.25% Convertible Subordinated
Notes due 2007, (herein called the "Securities").
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
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For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and
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(5) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 204 to act on behalf of the Trustee to authenticate the
Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board empowered to act for it
with respect to this Indenture.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Clearstream" means Clearstream Banking, Luxembourg, societe anonyme,
formerly Cedel Bank.
"Commission" means the Securities and Exchange Commission, from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company and which is not subject to redemption by the Company; provided,
however, subject to the provisions of Section 1409, shares issuable upon
conversion of Securities shall include only shares of the class designated as
Common Stock of the Company at the date of this Indenture or shares of any class
or classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided,
further, that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be substantially in the
proportion which
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the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its principal
financial officer, its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Department, or such other office, designated by the
Trustee by written notice to the Company and approved by the Company, at which
at any particular time its corporate trust business shall be administered.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 303.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to the Securities issuable in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities.
"Designated Senior Indebtedness" means (a) the Amended and Restated
Credit Agreement dated as of July 23, 1998, as amended, among Dynamic Details,
Incorporated, DDi Capital Corp., Dynamic Details Incorporated, Silicon Valley,
The Chase Manhattan Bank and the various lenders party thereto; (b) the
Facilities Agreement dated as of May 27, 1999, as amended, between DDi Europe
Limited, the Governor of the Bank of Scotland and the various lenders party
thereto; and (c) the Company's obligations under any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of the Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness). If any payment made to any holder of any
Designated Senior Indebtedness or its Representative with respect to such
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the reinstated Indebtedness of the Company arising
as a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.
3
"DTC" means Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, a "clearing corporation"
within the meaning of the NY UCC and a "clearing agency" registered pursuant to
Section 17A of the Exchange Act.
"Euroclear" means Euroclear Bank S.A/N.V., as operator of the
Euroclear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities described in Section 202 and bears the legend set forth in Section
203.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof) (other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances, (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person or under other leases for facilities equipment or related assets whether
or not capitalized, entered into or leased for financing purposes, as determined
by the Company, and all obligations and other liabilities contingent or
otherwise, or under any lease or related document (including a purchase
agreement) in connection with the lease of real property or improvements thereon
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a third
party to purchase such leased property, (d) all obligations of such Person
(contingent or otherwise) with respect to any interest rate, currency or other
swap, cap, floor or collar agreement, hedge agreement, forward contract, or
other similar instrument or agreement or foreign currency hedge, exchange,
purchase or similar instrument or agreement, (e) all direct or indirect
guaranties or similar agreements by such Person in respect of, and obligations
or liabilities (contingent or otherwise) of such Person to purchase or otherwise
acquire or otherwise assure a creditor against loss in respect of, indebtedness,
obligations or
4
liabilities of another Person of the kind described in clauses (a) through (d),
(f) any indebtedness or other obligations described in clauses (a) through (d)
secured by any mortgage, pledge, lien or other encumbrance existing on property
which is owned or held by such Person, regardless of whether the indebtedness or
other obligation secured thereby shall have been assumed by such Person and (g)
any and all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (f).
"Indenture" means this instrument as originally executed and as it may
from time to time be amended pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this instrument and any
such supplemental indenture, respectively.
"Interest Payment Date," when used with respect to any Security, means
April 1 and October 1.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, repurchase at the option of
the Holder or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(3).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the principal financial officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 102 shall be the principal executive, financial or accounting officer of
the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company, and who shall be reasonably
acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee in trust for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefore satisfactory to the Trustee has been made;
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(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) Securities which have been paid pursuant to Section 305 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Payment Blockage Notice" has the meaning specified in Section 1502.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Securities" means any Securities issued in the form of
certificated Notes in registered form in substantially the form set forth in
Exhibit A.
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"Place of Payment," when used with respect to the Securities, means
the place or places where the principal of and any premium and interest on the
Securities are payable.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date," when used with respect to any Security to be
redeemed, means any date fixed for such redemption by or pursuant to this
Indenture.
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"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities means the date specified in Section 201(c).
"Regulation S" means Regulation S under the Securities Act (including
any successor regulation thereof), as the same may be amended from time to time.
"Representative" means the (a) indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Office 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/her knowledge and familiarity with the
particular subject.
"Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereof), as the same may be amended from time to time.
"Rule 144A" means Rule 144A as promulgated under the Securities Act
(including any successor rule thereof), as the same may be amended from time to
time.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under or pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 205.
"Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and all other amounts accrued
or due on or in connection with, Indebtedness of the Company, whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee
7
thereof expressly provides that such Indebtedness shall not be senior in right
of payment to the Securities or expressly provides that such Indebtedness is
"pari passu" or "junior" to the Securities. If any payment made to any holder of
any Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 303.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a corporation of which at least a majority of the
outstanding voting stock having the power to elect a majority of the board of
directors of such corporation is at the time owned, directly or indirectly, by
the Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries, and the accounts of which are consolidated with those
of the Company in its most recent consolidated financial statements in
accordance with generally accepted accounting principles. For the purposes of
this definition, "voting stock" means stock which ordinarily has voting power
for the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person.
"U.S. Government Obligation" has the meaning specified in Section
1304.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior closing
of stock has such voting power by reason of any contingency.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
8
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officer's Certificate in form and substance reasonably acceptable
to the Trustee stating that all conditions precedent, if any, provided for in
this Indenture (including any covenant compliance with which constitutes a
condition precedent) relating to the proposed action have been complied with and
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by the provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate or opinion of counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the
9
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
-----------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. The
Trustee shall promptly deliver to the Company copies of all such instrument or
instruments delivered to the Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Where such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, vote, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities, provided that the Company may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to in
the next
10
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Company from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in ▇▇▇▇▇▇▇ ▇▇▇, (▇▇▇) any request to institute proceedings referred
to in Section 507(2) or (iv) any direction referred to in Section 512. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Company in writing and to
each Holder of Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
106, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
11
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
(or by facsimile transmissions, provided that oral confirmation of receipt
shall have been received) to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Chief
Financial Officer.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid or delivered by hand or
overnight courier, to each Holder affected by such event, at its address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail or deliver by hand or overnight courier such notice, nor any
defect in any notice so mailed or delivered by hand or overnight courier, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict With Trust Indenture Act.
---------------------------------
12
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
SECTION 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
SUCH STATE'S CONFLICTS OF LAWS PRINCIPLES.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert a Security at a particular conversion price shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities payment of interest or principal (and premium, if
any) or, conversion need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or Redemption
Date, at the Stated Maturity or on such last day for conversion, as the case may
be.
SECTION 114. Indenture and Securities Solely Corporate Obligations.
-----------------------------------------------------
13
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer, or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
SECTION 115. Indenture May Be Executed in Counterparts.
-----------------------------------------
This instrument may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instruments.
ARTICLE II
THE SECURITIES - TITLE, TERMS AND FORMS
SECTION 201. Title and Terms.
---------------
(a) The Securities shall be known and designated the "6.25%
Convertible Subordinated Notes due 2007" of the Company. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is limited to $115,000,000, except for Securities authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of
other Securities pursuant to Section 207, 208 & 209. The Securities shall be
issuable in denominations of $1,000 or integral multiples thereof. The notes
will mature on April 1, 2007, unless earlier redeemed at the option of the
Company or purchased by the Company at the option of the Holder upon a change in
control as provided in Article IX.
(b) The Securities shall bear interest at an annual rate of 6.25%.
Interest shall be payable on April 1 and October 1 of each year, beginning on
October 1, 2002. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
(c) The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, be paid to the Person in whose name a
Security is registered at the close of business on March 1 and September 1 the
"Regular Record Date" for such interest (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
(d) Payment of the principal of (and premium, if any) and any interest
on the Securities shall be made at the Corporate Trust Office of the Trustee 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; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address appears in the
Security Register; provided that a Holder with an aggregate principal amount in
excess of
14
$2,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder.
The Company hereby initially designates the Trustee as Paying Agent,
Security Registrar, Custodian and conversion agent.
(e) Principal of, (and premium, if any) and interest on, Global
Securities shall be payable to the Depositary in immediately available funds.
(f) The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article IX.
SECTION 202. Form of Securities.
------------------
(a) Except as otherwise provided pursuant to this Section 202, the
Securities are issuable in fully registered form without coupons in
substantially the form of Exhibit A hereto, with such applicable legends as are
---------
provided for in Section 203. The Securities are not issuable in bearer form. The
terms and provisions contained in the form of Security shall constitute, and are
hereby expressly made, a part of this Indenture and to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. Any of the
Securities may have such letters, numbers or other marks of identification and
such notations, legends and endorsements as the officers executing the same may
approve (execution thereof to be conclusive evidence of such approval) and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange or automated
quotation system on which the Securities may be listed or designated for
issuance, or to conform to usage.
(b) Securities offered and sold (i) to QIBs in accordance with Rule
144A and (ii) in reliance on Regulation S, shall be issued initially in the form
of one or more permanent global Securities in fully registered form without
interest coupons, substantially in the form of Exhibit A hereto, with the
---------
applicable legends as provided in Section 203 (each a "Global Security" and
collectively the "Global Securities"). Each Global Security shall be duly
executed by the Company and authenticated and delivered by the Trustee, and
shall be registered in the name of the Depositary or its nominee and retained by
the Trustee, as Custodian, at its Corporate Trust Office, for credit to the
accounts of the Agent Members holding the Securities evidenced thereby (or in
the case of Securities held for purchasers who acquired such Securities in
accordance with Regulation S, registered with the Depositary for credit to the
accounts of the Agent Members then holding such Securities on behalf of
Euroclear and Clearstream). The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as Custodian, and of the Depositary or its
nominee, as hereinafter provided.
Physical Securities acquired by QIBs in accordance with Rule 144A or
in reliance on Regulation S may be exchanged for interests in Global Securities
pursuant to Section 209(a).
SECTION 203. Legends.
-------
15
(a) Restricted Securities Legends.
Each Security issued hereunder shall, upon issuance, bear the legend
set forth in Section 203(a)(i) ("Restricted Securities Legend"), and such legend
shall not be removed except as provided in Section 203(a)(ii). Each Security
that bears or is required to bear the Restricted Securities Legend set forth in
Section 203(a)(i) (a "Restricted Security") shall be subject to the restrictions
on transfer set forth in the Restricted Securities Legend set forth below, and
the Holder of each such Restricted Security, by such Holder's acceptance
thereof, shall be deemed to have agreed to be bound by all such restrictions on
transfer.
As used in Section 203(a), the term "transfer" encompasses any sale,
pledge, transfer or other disposition whatsoever of any Restricted Security.
(i) Restricted Securities Legend for Securities.
Until two years after the original issuance date of any Security, any
certificate evidencing such Security (and all Securities issued in exchange
therefor or substitution thereof shall bear a Restricted Securities Legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF PARAGRAPH (K)(2) OF RULE 902 OF REGULATION S
OF THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO DDI CORP. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT (IF
AVAILABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF DDI CORP SO REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND DDI CORP. SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
16
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(ii) Removal of the Restricted Securities Legends.
Each Security shall bear the applicable Restricted Securities Legend
set forth in Section 203(a)(i) until the date which is two years after the
original issuance date of such Security. The Holder must give notice thereof to
the Trustee.
In the event Rule 144(k) as promulgated under the Securities Act is
amended to shorten the two-year period under Rule 144(k), then, the references
in the restrictive legends set forth above to "TWO YEARS", and in the
corresponding transfer restrictions described above, the Securities will be
deemed to refer to such shorter period, from and after receipt by the Trustee of
both an Officers' Certificate and an Opinion of Counsel in accordance with the
sentence immediately following. As soon as practicable after the Company knows
of the effectiveness of any such amendment to shorten the two-year period under
Rule 144(k), unless such changes would otherwise be prohibited by, or would
cause a violation of, the federal securities laws applicable at the time, the
Company will provide to the Trustee an Officers' Certificate and an Opinion of
Counsel as to the effectiveness of such amendment and the effectiveness of such
change to the restrictive legends and transfer restrictions.
Notwithstanding the foregoing, the Restricted Securities Legend may be
removed from any Security if there is delivered to the Company such satisfactory
evidence, which may include an opinion of independent counsel, as may be
reasonably required by the Company, that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
of such Security, will not violate the registration requirements of the
Securities Act. Upon provision of such satisfactory evidence, at the written
direction of the Company, the Trustee shall authenticate and deliver in exchange
for such Security another Security or Securities having an equal aggregate
principal amount that does not bear such legend. If the Restricted Securities
Legend has been removed from a Security, no other Security issued in exchange
for all or any part of such Security shall bear such legend, unless the Company
has reasonable cause to believe that such other Security is a "restricted
security" within the meaning of Rule 144 or Regulation S and instructs the
Trustee in writing to cause a Restricted Securities Legend to appear thereon.
Any Security (or Security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the Restricted
Securities Legend set forth in Section 203(a)(i) as set forth therein have been
satisfied may, upon surrender of such Security for exchange to the Securities
Registrar in accordance with the provisions of Section 207, be exchanged for a
new Security or Securities, of like tenor and aggregate principal amount, which
shall not bear the Restricted Securities Legend required by Section 203(a)(i).
(b) Global Security Legend.
17
Each Global Security shall also bear the following legend on the face
thereof:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED
TO HEREIN. BENEFICIAL INTERESTS IN THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO DDI CORP., 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 IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 204. Execution, Authentication, Delivery and Dating of the Securities.
----------------------------------------------------------------
An Officer of the Company shall execute the Securities on behalf of
the Company by manual or facsimile signature. If the Officer whose signature is
on a Security no longer holds that office at the time the Security is
authenticated, the Security shall be valid nevertheless.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture, or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by or on behalf of the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee may appoint an authenticating agent or agents reasonably
acceptable to the Company with respect to the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
SECTION 205. Securities Registrar and Paying Agent.
-------------------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Securities
Registrar") and an office or agency where Securities may be presented for
payment (the "Paying Agent"). The Securities
18
Registrar shall keep a register of the Securities (the "Securities Register")
and of their transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional Paying Agents for the Securities. The
term "Paying Agent" includes any additional paying agent and the term
"Securities Registrar" includes any additional securities registrar. The Company
may change any Paying Agent or Securities Registrar without prior notice to any
Holder.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of and
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as provided in this Indenture;
(2) give the Trustee notice of any Default by the Company in the
making of any payment of principal and premium, if any, or interest; and
(3) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company shall give prompt written notice to the Trustee of the
name and address of any Agent who is not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Securities Registrar or
the Paying Agent shall act as such. The Company or any Affiliate of the Company
may act as Paying Agent or Securities Registrar; provided, however, that none of
the Company, its subsidiaries or the Affiliates of the foregoing shall act:
(1) as Paying Agent in connection with redemptions, offers to purchase
and discharges, except as otherwise specified in this Indenture, and
(2) as Paying Agent or Securities Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby initially appoints the Trustee as Securities
Registrar and Paying Agent for the Securities.
SECTION 206. Paying Agent to Hold Assets in Trust.
------------------------------------
Not later than 10:00 a.m. (New York City time) on each due date of the
principal of and interest on any Securities, the Company shall deposit with one
or more Paying Agents money in immediately available funds in an aggregate
amount sufficient to pay the principal and interest due on such date. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company) shall have no further liability for the money so paid over to the
Trustee.
19
If the Company shall act as a Paying Agent, it shall, prior to or on
each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Holders a sum sufficient with
monies held by all other Paying Agents, to pay the principal and premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as provided in this Indenture, and shall promptly
notify the Trustee of its action or failure to act.
SECTION 207. General Provisions Relating to Transfer and Exchange.
----------------------------------------------------
The Securities are issuable only in registered form. A Holder may
transfer a Security only by written application to the Securities Registrar
stating the name of the proposed transferee and otherwise complying with the
terms of this Indenture. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance
and registration of the transfer by the Securities Registrar in the Securities
Register. Furthermore, any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Holder of such Global Security (or its agent) and that ownership of a
beneficial interest in the Global Security shall be required to be reflected in
a book-entry. Notwithstanding the foregoing, in the case of a Restricted
Security, a beneficial interest in a Global Security being transferred in
reliance on an exemption from the registration requirements of the Securities
Act other than in accordance with Rule 144, Regulation S or Rule 144A may be
transferred only for a Physical Security.
When Securities are presented to the Securities Registrar with a
request to register the transfer or to exchange them for an equal aggregate
principal amount of Securities of other authorized denominations, the Securities
Registrar shall register the transfer or make the exchange as requested if the
requirements hereunder for such transactions are met (including that such
Securities are duly endorsed or accompanied by a written instrument of transfer
duly executed by the Holder thereof or by an attorney who is authorized in
writing to act on behalf of the Holder). Subject to Section 202, to permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Securities Registrar's request.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy of the books or records,
or the acts or omissions, of the Depository or its nominee or of any participant
or member thereof, with respect to any ownership interest in the Securities or,
so long as the Trustee has complied with its obligations under this Indenture,
with respect to the
20
delivery to any participant, member, beneficial owner or other Person (other
than the Depository) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Securities.
SECTION 208. Book-Entry Provisions for the Global Securities.
-----------------------------------------------
(a) The Global Securities initially shall:
(1) be registered in the name of the Depositary (or a nominee
thereof);
(2) be delivered to the Trustee as custodian for such Depositary;
and
(3) bear the Restricted Securities Legend set forth in Section
203(a)(i); and
(4) bear the Global Security Legend set forth in Section 203(b).
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
contained herein shall prevent the Company, the Trustee or any agent of the
Company or Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and the Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security. With respect to any
Global Security deposited on behalf of the subscribers for the Securities
represented thereby with the Trustee as custodian for the Depositary for credit
to their respective accounts (or to such other accounts as they may direct) at
Euroclear and Clearstream, the provisions of the "Operating Procedures of the
Euroclear System" and the "Terms and Conditions Governing Use of Euroclear"
shall be applicable to the Global Securities.
(b) The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including DTC Participants and Persons that may hold
interests through DTC Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(c) A Global Security may not be transferred, in whole or in part, to
any Person other than the Depositary (or a nominee thereof), and no such
transfer to any such other Person may be registered. Beneficial interests in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 209.
(d) If at any time:
(1) the Depositary notifies the Company in writing that it is no
longer willing or able to continue to act as Depositary for the Global
21
Securities, or the Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary for the
Global Securities is not appointed by the Company within 90 days of
such notice or cessation;
(2) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of the Physical Securities under
this Indenture in exchange for all or any part of the Securities
represented by a Global Security or Global Securities; or
(3) an Event of Default has occurred and is continuing and the
Securities Registrar has received a request from the Depositary for
the issuance of Physical Securities in exchange for such Global
Security or Global Securities;
the Depositary shall surrender such Global Security or Global Securities to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate and Company Order for the authentication and
delivery of Securities, shall authenticate and deliver in exchange for such
Global Security or Global Securities, Physical Securities in an aggregate
principal amount equal to the aggregate principal amount of such Global Security
or Global Securities. Such Physical Securities shall be registered in such names
as the Depositary shall identify in writing as the beneficial owners of the
Securities represented by such Global Security or Global Securities (or any
nominee thereof).
(e) Notwithstanding the foregoing, in connection with any transfer of
beneficial interests in a Global Security to the beneficial owners thereof
pursuant to Section 208(d), the Securities Registrar shall reflect on its books
and records the date and a decrease in the principal amount of such Global
Security in an amount equal to the principal amount of the beneficial interests
in such Global Security to be transferred.
SECTION 209. Special Transfer Provisions.
---------------------------
Unless a Security is (i) transferred after the time period referred to
in Rule 144(k) under the Securities Act or (ii) sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such sale), the following provisions
shall apply to any sale, pledge or other transfer of Securities:
(a) Transfer of Securities to a QIB or to a Non-U.S. Person in
----------------------------------------------------------
Accordance with Regulation S.
----------------------------
The following provisions shall apply with respect to the registration
of any proposed transfer of Securities to (x) a QIB or (y) a Non-U.S. Person in
accordance with Regulation S:
(i) If the Securities to be transferred consist of a beneficial
interest in the Global Securities, the transfer of such interest may be effected
only through the book-entry systems maintained by Euroclear or Clearstream, as
applicable, and the Depositary.
22
(ii) If the Securities to be transferred consist of Physical
Securities, the Securities Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box provided
for on the form of Security stating (or has otherwise advised the Company and
the Securities Registrar in writing) that the sale has been made:
(A) in compliance with the provisions of Rule 144A to a transferee who
has signed the certification provided for on the form of Security stating
or has otherwise advised the Company and the Securities Registrar in
writing that:
(1) it is purchasing the Securities for its own account or an account
with respect to which it exercises sole investment discretion, in each case
for investment and not with a view to distribution;
(2) it and any such account is a QIB within the meaning of Rule 144A;
(3) it is aware that the sale to it is being made in reliance on Rule
144A;
(4) it acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not
to request such information; and
(5) it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A, or
(B) in compliance with Regulation S to a transferee who has signed a
certification provided for on the form of Security stating (or has
otherwise advised the Company and the Securities Registrar in writing) that
it is not a "U.S. person" as defined in Regulation S.
In addition, the Securities Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global
Securities in an amount equal to the aggregate principal amount of the Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred.
(b) Other Exchanges.
---------------
In the event that Global Securities are exchanged for Securities in
definitive registered form pursuant to Section 208 prior to the effectiveness of
a shelf registration statement with respect to such Securities, such Securities
may be exchanged only in accordance with the provisions of clause (a) above
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(c) General.
-------
23
By its acceptance of any Security bearing the Restricted Securities
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and agrees that it will transfer
such Security only as provided in this Indenture. The Securities Registrar shall
not register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The
Securities Registrar shall be entitled to receive and conclusively rely on
written instructions from the Company verifying that such transfer complies with
such restrictions on transfer. In connection with any transfer of Securities,
each Holder agrees by its acceptance of the Securities to furnish the Securities
Registrar or the Company such certifications, legal opinions or other
information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
the Securities Registrar shall not be required to determine (but may
conclusively rely on a determination made by the Company with respect to) the
sufficiency of any such certifications, legal opinions or other information.
The Securities Registrar shall retain copies of all certifications,
letters, notices and other written communications received pursuant to Section
208 hereof or this Section 209 in accordance with its customary procedures for
the retention of records relating to the transfer of securities. The Company
shall have the right to inspect and make copies of all such certifications,
letters, notices or other written communications at any reasonable time upon the
giving of reasonable prior written notice to the Securities Registrar.
SECTION 210. Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with Section 312(a) of the Trust Indenture
Act. If the Trustee is not the Securities Registrar, the Company shall furnish
to the Trustee prior to or on each Interest Payment Date and at such other times
as the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders
relating to such Interest Payment Date or request, as the case may be.
SECTION 211. Persons Deemed Owners.
---------------------
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Holder as the owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and notwithstanding any
notice of ownership or writing thereon, or any notice of previous loss or theft
or other interest therein.
ARTICLE III
THE SECURITIES - SECONDARY PROVISIONS
SECTION 301. Temporary Securities.
--------------------
24
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company in a Place of Payment, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Securities, of any authorized denominations and
of like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities and tenor.
SECTION 302. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security and of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
25
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 303. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given to each Holder of Securities
in the manner set forth in Section 106, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
26
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Subject to the provisions of Section 1402, in the case of any Security
(or any part thereof) which is converted after any Regular Record Date and on or
prior to the next succeeding Interest Payment Date (other than any Security the
principal of (and any premium, on) which shall become due and payable, whether
at Stated Maturity or by declaration of acceleration or otherwise prior to such
Interest Payment Date), interest whose Stated Maturity is on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Security (or any one or more
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence or in Section 1402, in the case of any Security (or any part thereof)
which is converted, interest whose Stated Maturity is after the date of
conversion of such Security (or such part thereof) shall not be payable.
SECTION 304. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, any premium on,
and (subject to Section 303) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 305. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be disposed of as
directed by a Company Order.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
27
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either:
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 302 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Trustee or the Company
and thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company, and the Company,
in the case of (i) or (ii) above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose money in an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) 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, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 204 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
28
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed or assessed against the Trustee with respect to the
money deposited with the Trustee pursuant to Section 401.
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default," means any one of the following events (whatever
the reason for such Event of Default and whether it shall be occasioned by the
provisions of Article XV or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of the principal of or any premium on any
Security at its Maturity, whether or not prohibited by the subordination
provisions of the Indenture; or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of 30
days, whether or not prohibited by the subordination provisions of the
Indenture; or
(3) default in the performance, or breach, of any covenant of the
Company in this Indenture (other than a covenant a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of the Outstanding Securities a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(4) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestration or
29
other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 90 consecutive days; or
(5) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestration or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 501(4) or 501(5)) with respect to Outstanding Securities occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in aggregate principal amount of the Outstanding Securities may declare the
principal amount of all the Securities to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable. If an Event of Default specified in Section
501(4) or 501(5) with respect to the Outstanding Securities occurs, the
principal amount of all the Securities shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable. Any payments by the Company on the Securities
following any such acceleration will be subject to the subordination provisions
of Article XV to the extent provided therein.
At any time after such a declaration of acceleration with respect to
the Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue interest on all Securities,
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(B) the principal of (and premium, if any, on) any Securities
which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities, other than the
non-payment of the principal of Securities which have become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 513. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits For Enforcement By Trustee.
---------------------------------------------------------------
The Company covenants that if:
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal and any premium and interest and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to file such proofs of claim and other papers or
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documents as may be necessary or advisable in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestration or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607. No provision of this Indenture shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607; and
SECOND: Subject to Article XV, to the payment of the amounts then due
and unpaid for principal of and any premium, if any, and interest on the
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any premium, if
any, and interest, respectively.
THIRD: Subject to Article XV, to the Company.
SECTION 507. Limitation on Suits.
-------------------
32
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities; it being understood and
intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other of such
Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all
of such Holders.
SECTION 508. Unconditional Right of Holders To Receive Principal, Premium and
----------------------------------------------------------------
Interest and To Convert.
-----------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 303)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date), to convert
such Securities in accordance with Article XIV and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
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Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 302, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee (subject to the limitations
contained in this Indenture) or by the Holders, as the case may be.
SECTION 512. Control By Majority.
-------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture and the Trustee shall not have determined that the
action so directed would be unjustly prejudicial to Holders of Securities,
not taking part in such direction or would involve the Trustee in personal
liability; and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction or this Indenture.
SECTION 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder with respect to the Securities and its consequences,
except a default
(1) in the payment of the principal of or any premium or interest on
any Security, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no
34
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 514. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs
including reasonable attorney's fees and expenses against any such party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant, provided that this Section shall
not be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company to any suit instituted
by the Trustee, to any suit by a Holder pursuant to Section 508, to any suit by
Holders of more than 10% in principal amount of Outstanding Securities or in any
suit for the enforcement of the right to convert any Security in accordance with
Article XIV.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture, but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture, but not to verify the
contents thereof.
35
(b) In case 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 their exercise, as
a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (1) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has actual knowledge, the Trustee shall give to all Holders of
Securities, in the manner provided in Section 106, notice of such default,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of, premium, if
any, or interest on any Security the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; provided, however, that in the case of any default of the character
specified in Section 501(3), no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to the Securities.
SECTION 603. Certain Rights of Trustee.
-------------------------
36
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) is entitled to and may, in the
absence of bad faith on its part, rely upon an Officers' Certificate or
Opinion of Counsel;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default or Event of Default is received by the Trustee at the
Corporate Trust Office, and such notice references the Securities in this
Indenture;
37
(9) the rights, privileges, immunities and benefits given to the
Trustee hereunder, including without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed by the Trustee consistent with the terms of this Indenture
to act hereunder; and
(10) any permissive right or authority granted to the Trustee shall
not be construed as a mandatory duty.
SECTION 604. Not Responsible For Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity, sufficiency or priority of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities and Act as Trustee Under Other Indentures.
-------------------------------------------------------------
The Trustee, any Authenticating Agent, any Paying Agent, any
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.
Nothing in this Indenture shall prohibit the Trustee from becoming and
acting as trustee under other indentures under which other securities, or
certificates of interest of participation in other securities, of the Company
are outstanding in the same manner as if it were not Trustee hereunder.
SECTION 606. Money Held In Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the
38
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith and
(3) to indemnify the Trustee (and its directors, officers, employees
and agents) for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs, expenses and reasonable attorney's
fees of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities on all money or
property held or controlled by the Trustee to secure the Company's payment
obligations in this Section 607, except with respect to funds held in trust to
pay principal and interest on the Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(4) or Section 501(5), the
expenses (including the reasonable charges of its counsel) and the compensation
for the services are intended to constitute expenses of the administration under
any applicable Federal or state bankruptcy, insolvency or other similar law.
All rights, protections and benefits of the Trustee shall extend to
the Trustee acting as conversion agent, Trustee or Securities Registrar with
respect thereto.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.
SECTION 608. Conflicting Interests.
---------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to the
Securities and any other securities of the Company.
SECTION 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities, which may be Trustee hereunder for other Securities
of the Company. The Trustee shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has (or if the Trustee is a member of a
bank holding company system, its bank holding company shall have) a combined
capital and surplus of at least $50,000,000. If any such Person or bank holding
company publishes reports of condition at least annually, pursuant to law or to
the requirements of its supervising or examining authority, then for the
purposes of this Section and the combined capital and surplus of such Person or
bank holding company shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
39
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611. The Trustee may resign at any time by
giving written notice thereof to the Company. If the instrument of acceptance by
a successor Trustee required by Section 611 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee
within 60 days after the giving of such notice of removal, the removed Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (A)
the Company by a Board Resolution may remove the Trustee with respect to
all Securities, or (B) subject to Section 514, any Holder who has been a
bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities
and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
and shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities shall be appointed
by Act of the Holders of a majority in principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee and to that extent supersede the
40
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 611, the retiring Trustee
may petition, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment By Successor.
--------------------------------------
In case of the appointment hereunder of a successor Trustee the
successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
A retiring Trustee shall not be liable for the acts or omissions of
any successor Trustee after its succession.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 607 shall continue for the
benefit of the retiring Trustee.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee
41
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company To Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than 15 days after the Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders of Securities as of such Regular Record
Date, as the case may be, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished; provided that no such list need be furnished
by the Company to the Trustee so long as the Trustee is acting as
Securities Registrar.
SECTION 702. Preservation of Information; Communications To Holders.
------------------------------------------------------
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701, if any, and the names
and addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act. Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
SECTION 703. Reports By Trustee.
------------------
42
The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than July 1 in each calendar year,
commencing with the first July 1 after the first issuance of Securities pursuant
to this Indenture.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports By Company.
------------------
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 Trust Indenture Act at the
times and in the manner provided pursuant to the Trust Indenture Act; 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.
The Trustee shall not be under a duty to review or evaluate such
reports and information, delivery to the Trustee being for the purposes of
making such reports and information available to it and to Holders of Securities
who may request such information.
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).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any other Person
(in any transaction in which the Company is not the surviving corporation) or
convey, transfer or lease its properties and assets substantially as an entirety
(determined on a consolidated basis) to any Person, unless:
(1) the Company shall consolidate with or merge into another Person
(in an transaction in which the Company is not the surviving corporation)
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, which is a corporation, limited liability company,
partnership or trust, organized and validly
43
existing under the laws of the United States of America, any State thereof
or the District of Columbia and expressly assumes, by an amended indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of and any premium and
interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and the conversion rights shall be provided for in accordance with
Article XIV, if applicable, by the Person (if other than the Company)
formed by such consolidation or into which the Company shall have been
merged or by the Person which shall have acquired the Company's assets;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if an amended indenture is required in
connection with such transaction, such amended indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with, together with any documents
required under Article XII.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture, and the Securities.
ARTICLE IX
REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE IN CONTROL
SECTION 901. Purchase of Securities at Option of the Holder Upon Change in
-------------------------------------------------------------
Control.
-------
(a) If at any time that Securities remain outstanding there shall
occur a Change in Control, Notes shall be purchased by the Company at the option
of the Holders thereof as of the date that is 30 Business Days after the notice
of the occurrence of the Change in Control (the "Change in Control Purchase
Date") at a purchase price equal to the principal amount of the Securities, plus
accrued and unpaid interest to, but excluding, the Change in
44
Control Purchase Date (the "Change in Control Purchase Price"), subject to
satisfaction by or on behalf of any Holder of the requirements set forth in
subsection (c) of this Section 901.
A "Change in Control" shall be deemed to have occurred if any of the
following occurs after the date hereof:
(1) any "person" or "group" (as such terms are defined below) is or
becomes the "beneficial owner" (as defined below), directly or indirectly,
of shares of Voting Stock of the Company representing 50% or more of the
total voting power of all outstanding classes of Voting Stock of the
Company or has the power, directly or indirectly, to elect a majority of
the members of the Board of Directors; or
(2) the Company consolidates with, or merges with or into, another
Person or the Company sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of the assets of the Company
(on a consolidated basis), or any Person consolidates with, or merges with
or into, the Company, in any such event other than pursuant to a
transaction in which the Persons that "beneficially owned" (as defined
below), directly or indirectly, shares of Voting Stock of the Company
immediately prior to such transaction "beneficially own" (as defined
below), directly or indirectly, shares of Voting Stock of the Company,
representing at least a majority of the total voting power of all
outstanding classes of Voting Stock of the surviving or transferee Person;
or
(3) there shall occur the liquidation or dissolution of the Company.
For the purpose of the definition of "Change in Control", (i) "person"
and "group" shall have the meanings given such terms under Section 13(d) and
14(d) of the Exchange Act or any successor provision to either of the foregoing,
and the term "group" includes any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d- 5(b)(1) under
the Exchange Act (or any successor provision thereto), (ii) a "beneficial owner"
shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in
effect on the date of this Indenture, except that the number of shares of Voting
Stock of the Company shall be deemed to include, in addition to all outstanding
shares of Voting Stock of the Company and Unissued Shares deemed to be held by
the "person" or "group" (as such terms are defined above) or other Person with
respect to which the Change in Control determination is being made, all Unissued
Shares deemed to be held by all other Persons, (iii) the terms "beneficially
owned" and "beneficially own" shall have meanings correlative to that of
"beneficial owner," and (iv) the term "Unissued Shares" means shares of Voting
Stock not outstanding that are subject to options, warrants, rights to purchase
or conversion privileges exercisable within 60 days of the date of determination
of a Change in Control.
Notwithstanding anything to the contrary in this Section 901, a Change
in Control shall not be deemed to have occurred if either (i) the closing price
(as defined in Section 1413(e)) of the Common Stock for any five Trading Days
during the ten Trading Days immediately preceding the Change in Control is at
least equal to 105% of the Conversion Price in effect on such day; or (ii) in
the case of a merger or consolidation, all of the consideration excluding cash
payments for fractional shares in such merger or consolidation constituting the
Change in
45
Control consists of common stock traded on a United States national securities
exchange or quoted on the Nasdaq (or which will be so traded or quoted when
issued or ex changed in connection with such Change in Control) and as a result
of such transaction or transactions the Notes become convertible solely into
such common stock.
(b) Within 10 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control to the
Trustee and to each Holder (and to beneficial owners as required by applicable
law) and shall cause a copy of such notice to be published in a daily newspaper
of national circulation. The notice shall include the form of a Change in
Control Purchase Notice to be completed by the Holder and shall state:
(1) the date of such Change in Control and, briefly, the events
causing such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 901 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) briefly, the conversion rights of the Securities;
(6) the name and address of each Paying Agent and Conversion Agent;
(7) the Conversion Price and any adjustments thereto;
(8) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock pursuant to Article XIV
of the Indenture only to the extent that the Change in Control Purchase
Notice has been withdrawn in accordance with the terms of the Indenture;
(9) the procedures that the Holder must follow to exercise rights
under this Section 901;
(10) the procedures for withdrawing a Change in Control Purchase
Notice, including a form of notice of withdrawal; and
(11) that the Holder must satisfy the requirements set forth in the
Securities in order to convert the Securities.
If any of the Securities is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to the repurchase of Global Securities.
(c) A Holder may exercise its rights specified in subsection (a) of
this Section 901 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A hereto and which may be delivered
by letter, overnight courier, hand delivery,
46
facsimile transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance with
the Depositary's customary procedures) of the exercise of such rights (a "Change
in Control Purchase Notice") to the Trustee at any time prior to the close of
business on the Business Day next preceding the Change in Control Purchase Date.
The delivery of such Security to the Trustee (together with all
necessary endorsements) at the office of the Trustee shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor.
The Company shall purchase from the Holder thereof, pursuant to this
Section 901, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security pursuant to Sections 901 through 906
of this Indenture also apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Trustee the Change in Control Purchase Notice contemplated by this
subsection (c) shall have the right to withdraw such Change in Control Purchase
Notice in whole or in a portion thereof that is a Principal Amount of $1,000 or
in an integral multiple thereof at any time prior to the close of business on
the Business Day next preceding the Change in Control Purchase Date by delivery
of a written notice of withdrawal to the Paying Agent in accordance with Section
902.
The Trustee shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Change in Control Purchase Notice may be delivered or withdrawn
and such Securities may be surrendered or delivered for purchase in accordance
with the applicable procedures of the Depositary as in effect from time to time.
SECTION 902. Effect of Change in Control Purchase Notice.
-------------------------------------------
Upon receipt by the Trustee of the Change in Control Purchase Notice
specified in Section 901(c) of this Indenture, the Holder of the Securities in
respect of which such Change in Control Purchase Notice was given shall (unless
such Change in Control Purchase Notice is withdrawn as specified below)
thereafter be entitled to receive the Change in Control Purchase Price with
respect to such Securities. Such Change in Control Purchase Price shall be paid
to such Holder promptly following the later of (a) the Change in Control
Purchase Date with respect to such Securities (provided the conditions in
Section 901(c) of this Indenture have been satisfied) and (b) the time of
delivery of such Security to the Trustee by the Holder thereof in the manner
required by Section 901(c). Securities in respect of which a Change in Control
Purchase Notice has been given by the Holder thereof may not be converted into
shares of Common Stock on or after the date of the delivery of such Change in
Control Purchase Notice unless such Change in Control Purchase Notice has first
been validly withdrawn.
47
A Change in Control Purchase Notice may be withdrawn by means of a
written notice (which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered electronically or by other means in
accordance with the Depositary's customary procedures) of withdrawal delivered
by the Holder and received by the Trustee at any time prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date, specifying the Principal Amount of the Security or portion
thereof (which must be a Principal Amount of $1,000 or an integral multiple of
$1,000 in excess thereof) with respect to which such notice of withdrawal is
being submitted.
SECTION 903. Deposit of Change in Control Purchase Price.
-------------------------------------------
On or before 11:00 a.m. New York City time on the Change in Control
Purchase Date, the Company shall deposit with the Trustee an amount of money (in
immediately available funds if deposited on such Business Day) sufficient to pay
the aggregate Change in Control Purchase Price of all the Securities or portions
thereof that are to be purchased as of such Change in Control Purchase Date. The
manner in which the deposit required by this Section 903 is made by the Company
shall be at the option of the Company, provided that such deposit shall be made
in a manner such that the Trustee shall have immediately available funds on the
Change in Control Purchase Date.
If the Trustee holds, in accordance with the terms hereof, money
sufficient to pay the Change in Control Purchase Price of any Security for which
a Change in Control Purchase Notice has been tendered and not withdrawn in
accordance with this Indenture then, on the Change in Control Purchase Date,
such Security will cease to be outstanding and the rights of the Holder in
respect thereof shall terminate (other than the right to receive the Change in
Control Purchase Price as aforesaid). The Company shall publicly announce the
Principal Amount of Securities purchased as a result of such Change in Control
on or as soon as practicable after the Change in Control Purchase Date.
SECTION 904. Securities Purchased in Part.
----------------------------
Any Note that is to be purchased only in part shall be surrendered at
the office of a Trustee and promptly after the Change in Control Purchase Date
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or Securities,
of such authorized denomination or denominations as may be requested by such
Holder, in aggregate Principal Amount equal to, and in exchange for, the portion
of the Principal Amount of the Securities so surrendered that is not purchased.
SECTION 905. Compliance With Securities Laws Upon Purchase of Securities.
-----------------------------------------------------------
In connection with any offer to purchase or purchase of Securities
under Section 901 of this Indenture, the Company shall (a) comply with Rule
13e-4 and Rule 14e-1 (or any successor to either such Rule), if applicable,
under the Exchange Act, (b) file the related Schedule TO (or any successor or
similar schedule, form or report) if required under the Exchange Act, and (c)
otherwise comply with all federal and state securities laws in connection with
such offer, all so as to permit the rights of the Holders and obligations of the
Company
48
under Sections 901 through 904 of this Indenture to be exercised in the time and
in the manner specified therein.
SECTION 906. Repayment to the Company.
------------------------
To the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 903 of this Indenture exceeds the aggregate Change
in Control Purchase Price together with interest, if any, thereon of the
Securities or portions thereof that the Company is obligated to purchase, then
promptly after the Change in Control Purchase Date the Trustee, shall return any
such excess to the Company.
SECTION 907. Successive Consolidations, Mergers, Etc.
---------------------------------------
In the case of consolidation, merger, conveyance, transfer or lease to
which Section 1409 of this Indenture applies, in which the Common Stock of the
Company is changed or exchanged as a result into the right to receive equity
securities, cash or other property which includes shares of common stock of the
Company or 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 securities, cash and other
property (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 which acquires such assets, as the case may be, shall execute and
deliver to the Trustee an amended indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such amended indenture)
modifying the provisions of this Indenture, relating to the right of the Holders
of the Securities to cause the Company to redeem the Securities following a
Change in Control, including without limitation the applicable provisions of
this Article IX, as determined in good faith by the Company (which determination
shall be conclusive and binding), to make such provisions apply to the common
stock of the issuer thereof if different from the Company and the Common Stock
of the Company (in lieu of Common Stock of the Company).
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of the Holders
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities in accordance with the terms of the Securities
and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment for the Securities
an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange, where Securities may be surrendered for
49
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. Such office shall initially be
State Street Bank and Trust Company, N.A., located at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇. The Company will 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, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands. Unless
otherwise provided, the Place of Payment for Securities shall be 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 Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in any
Place of Payment for Securities. The Company will give 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.
SECTION 1003. Money For Securities Payments To Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Trustee with respect
to the Securities, it will, on or before each due date of the principal of or
any premium or interest on the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any premium and interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Trustees for the
Securities, it will, on or prior to each due date of the principal of or any
premium or interest on any Securities, deposit with a Trustee a sum sufficient
to pay such amount, such sum to be held as provided by the Trust Indenture Act,
and (unless such Trustee is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any Securities other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will (1) hold all sums held by it for the
payment of the principal of, premium, if any or interest on the Securities for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided; (2) give the Trustee
notice of any default by the Company (or any other obligor upon the Securities)
in the making of any payment of principal, premium, if any, or interest; and (3)
during the continuance of any default by the Company (or any other obligor upon
the Securities in the making of any payment in respect of the Securities of that
series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the
Securities.
50
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security and remaining unclaimed for a period ending on the
earlier of the date that is ten Business Days prior to the date such money would
escheat to the State or two years after such principal, premium or interest has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
SECTION 1004. Existence.
---------
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence.
SECTION 1005. Registration and Listing.
------------------------
The following covenant shall be applicable to the Company until the
earlier of (a) the Final Conversion Date (as hereinafter defined) and (b) the
date on which no Securities are outstanding. 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 Securities may be
lawfully issued and delivered, and thereafter publicly traded, and qualified or
listed as contemplated by clause (ii); and (ii) will list the shares of Common
Stock required to be issued and delivered upon conversion of the Securities
prior to such issuance or delivery on The Nasdaq Stock Market's National Market
(the "Nasdaq") or such other exchange or automated quotation as the Common Stock
is then listed at such date of conversion. The provisions of Section 1004 of the
Indenture shall not apply to this Section 1005.
SECTION 1006. Resale of Certain Securities.
----------------------------
During the period of two years after the last date of original
issuance of any Securities, the Company shall not, and shall not permit any of
its Affiliates (as defined under Rule 144 under the Securities Act) to resell
any Securities which constitute "restricted securities" under Rule 144, that are
acquired by any of them, within the United States or to "U.S. Persons" (as
defined in Regulation S) except pursuant to an effective registration statement
under the Securities Act or an applicable exemption therefrom. The Trustee shall
have no responsibility or liability in respect of the Company's performance of
its agreement in the preceding sentence.
51
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
------------------------
Securities which are redeemable before their Stated Maturity shall be
redeemable in accordance with their terms and in accordance with this Article.
SECTION 1102. Election To Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities, the Company shall, at least 45 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities to be redeemed and, if applicable, of the
tenor of the Securities to be redeemed.
SECTION 1103. Selection By Trustee of Securities To Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot, or in the Trustee's discretion, on a pro-rata
basis, provided that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities and of a specified tenor are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities and specified
tenor not previously called for redemption in accordance with the preceding
sentence.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities
52
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, unless a shorter period is specified in the Securities to be redeemed, to
each Holder of Securities to be redeemed, at its address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price (including accrued interest, if any),
(3) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities are to be
redeemed, the principal amount of the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and
(6) the conversion price, that the date on which the right to convert
the principal of the Securities or the portions thereof to be redeemed will
terminate will be the Redemption Date and the place or places where such
Securities may be surrendered for conversion.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such
53
Security shall (subject to the right of any Holder of such Security to receive
interest as provided in the last paragraph of Section 303) be paid to the
Company on Company Request, or if then held by the Company, shall be discharged
from such trust.
SECTION 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, installments of interest whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 303.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 1107. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (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 deliver to the Holder of such Security without service
charge, a new Security or Securities of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 1108. Right of Redemption.
-------------------
The Securities will not be subject to redemption prior to April 4,
2005 and will be redeemable on and after such date at the option of the Company,
in whole or in part, upon not less than 30 nor more than 60 days' notice to the
Holders, at the Redemption Prices (expressed as a percentage of principal
amount) set forth below.
The Redemption Price (expressed as a percentage of principal amount)
is as follows:
Redemption Year Price
--------------- -------
Beginning on April 4, 2005 and ending on April 3, 2006............... 102.50%
Beginning on April 4, 2006 and thereafter............................ 101.25%
in each case together with accrued and unpaid interest to, but excluding, the
Redemption Date; provided, however, that interest installments whose Stated
Maturity is on such Redemption Date
54
will be payable to the Holders of such Securities of record at the close of
business on the relevant Record Dates referred to on the face thereof, all as
provided in the Indenture.
SECTION 1109. Conversion Arrangement on Call for Redemption.
---------------------------------------------
In connection with any redemption of Securities on or prior to the
Final Conversion Date, the Company may arrange for the purchase and conversion
of any Securities by an agreement with one or more investment bankers or other
purchasers to purchase such Securities by paying to the Trustee in trust for the
Holders, on or before any designated Redemption Date, an amount not less than
the applicable Redemption Price, together with interest accrued to (but
excluding) the Redemption Date, of such Securities. Notwithstanding anything to
the contrary contained herein, the obligation of the Company to pay the
Redemption Price of such Securities, together with interest accrued to (but
excluding) the Redemption Date, shall be deemed to be satisfied and discharged
to the extent such amount is so paid by such purchasers. If such an agreement is
entered into, a copy of which will be filed with the Trustee prior to the
Redemption Date, any Securities not duly surrendered for conversion by the
Holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained herein) surrendered by such
purchasers for conversion, all as of immediately prior to the close of business
on the Redemption Date (and the right to convert any such Securities shall be
extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Securities. Without the Trustee's
prior written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Securities shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the Trustee
as set forth in this Indenture, and the Company agrees to indemnify the Trustee
from, and hold it harmless against, any loss, liability or expense arising out
of or in connection with any such arrangement for the purchase and conversion of
any Securities between the Company and such purchasers to which the Trustee has
not consented in writing, including the costs and expenses, including reasonable
legal fees, incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
ARTICLE XII
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 1201. Without Consent of Holders of Securities.
----------------------------------------
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may jointly amend this Indenture and the Securities to:
(a) add to the covenants of the Company for the benefit of the Holders
of Securities;
55
(b) surrender any right or power herein conferred upon the Company;
(c) cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under this Indenture which the Company and the Trustee may deem
necessary or desirable and which shall not be inconsistent with the provisions
of this Indenture; provided, however, that such action pursuant to this clause
(d) does not, in the good faith opinion of the Board of Directors of the Company
(as evidenced by a Board Resolution) and the Trustee, adversely affect the
interests of the Holders of Securities in any material respect;
(d) add or modify any other provisions with respect to matters or
questions arising under this Indenture which the Company and the Trustee may
deem necessary or desirable and which shall not be inconsistent with the
provisions of this Indenture; provided, however, that such action pursuant to
this clause (d) does not, in the good faith opinion of the Board of Directors of
the Company (as evidenced by a Board Resolution) and the Trustee, adversely
affect the interests of the Holders of Securities in any material respect; or
(e) comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act.
Upon Company Request, accompanied by a Board Resolution authorizing
the execution of any such supplemental indenture, and subject to and upon
receipt by the Trustee of the documents described in Section 1201 hereof, the
Trustee shall join with the Company in the execution of any 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.
SECTION 1202. With Consent of Holders of Securities.
-------------------------------------
Except as provided below in this Section 1202, this Indenture or the
Securities may be amended or supplemented, and noncompliance in any particular
instance with any provision of this Indenture or the Securities may be waived,
in each case (i) with the written consent of the Holders of at least a majority
in aggregate principal amount of the Outstanding Securities or (ii) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of a majority in aggregate
principal amount of the Outstanding Securities represented at such meeting.
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment or waiver under this Section 1202 may
not:
(A) reduce the principal amount of, or premium, if any, on any
Security;
(B) reduce the Interest Rate or interest on any Security;
(C) make any Security payable in money other than that stated in the
Security;
(D) impair the right of any Holder to institute suit for the
enforcement of any payment on or with respect to any Security;
56
(E) modify any provision of this Indenture with respect to
modification and waiver;
(F) modify the subordination provisions of the Security in a manner
adverse to any Holder; or
(G) adversely affect the right of any Holder to convert the Security
other than as provided herein.
It shall not be necessary for any Act of Holders under this Section
1202 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 1203. Compliance With Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Securities shall be set forth
in a supplemental indenture that complies with the Trust Indenture Act as then
in effect.
SECTION 1204. Revocation of Consents and Effect of Consents or Votes.
------------------------------------------------------
Until an amendment, supplement or waiver becomes effective, a written
consent to it by a Holder is a continuing consent by such Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security; provided, however, that unless a record date shall have
been established, any such Holder or subsequent Holder may revoke the consent as
to its Security or portion of a Security if the Trustee receives written notice
of revocation before the date the amendment, supplement or waiver becomes
effective.
An amendment, supplement or waiver becomes effective on receipt by the
Trustee of written consents from or affirmative votes by, as the case may be,
the Holders of the requisite percentage of aggregate principal amount of the
Outstanding Securities, and thereafter shall bind every Holder; provided,
however, if the amendment, supplement or waiver makes a change described in any
of the clauses (a) through (e) of Section 1202, the amendment, supplement or
waiver shall bind only each Holder which has consented to it or voted for it, as
the case may be, and every subsequent Holder or portion of a Security that
evidences the same Indebtedness as the Security of the consenting or
affirmatively voting Holder, as the case may be.
SECTION 1205. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security:
(A) the Trustee may require the Holder to deliver its Securities to
the Trustee, the Trustee may place an appropriate notation on the Security
about the changed terms and return it to the Holder and the Trustee may
place an appropriate notation on any Security thereafter authenticated; or
57
(B) if the Company so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 1206. Trustee to Sign Amendment, Etc.
------------------------------
The Trustee shall sign any amendment authorized pursuant to this
Article VI if the amendment does not adversely affect in any material respect
the rights, duties, liabilities or immunities of the Trustee. If the amendment
does adversely affect in any material respect the rights, duties, liabilities or
immunities of the Trustee, the Trustee may but need not sign the amendment. In
signing or refusing to sign such amendment, the Trustee shall be entitled to
receive and shall be fully protected in relying upon an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that such amendment is
authorized or permitted by this Indenture.
SECTION 1207. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities therefore or thereafter authenticated and delivered appertaining
thereto shall be bound thereby.
SECTION 1208. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE XIII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option To Effect Defeasance or Covenant Defeasance.
------------------------------------------------------------
The Company may elect, at its option at any time, to have Section 1302
or Section 1303 applied to any Securities and upon compliance with the
conditions set forth below in this Article. Any such election shall be evidenced
by a Board Resolution.
SECTION 1302. Defeasance and Discharge.
------------------------
58
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities, the Company shall be deemed to have been
discharged from its obligations, and the provisions of Article XV shall cease to
be effective, with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), subject to
the following which shall survive until otherwise terminated or discharged
hereunder:
(1) the rights of Holders of such Securities to receive, solely from
the trust fund described in Section 1304 and as more fully set forth in
such Section, payments in respect of the principal of and any premium and
interest on such Securities when payments are due,
(2) the Company's obligations with respect to such Securities under
Sections 301, 302, 1002 and 1003, and, if applicable, Article XIV,
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and
(4) this Article, subject to compliance with this Article, the Company
may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to
have Section 1303 applied to such Securities.
SECTION 1303. Covenant Defeasance.
-------------------
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities,
(1) the Company shall be released from its obligations under Article X
for the benefit of the Holders of such Securities,
(2) the occurrence of any event specified in Sections 501(3), shall be
deemed not to be or result in an Event of Default, and
the provisions of Article XV shall cease to be effective, in each case with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
501(3)) or Article XV, whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or Article or by reason of any reference in
any such Section or Article to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.
59
SECTION 1304. Conditions To Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to the application of Section
1302 or Section 1303 to any Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities,
(A) money in an amount, or
(B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due
date of any payment, money in an amount, or
(C) a combination hereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge, and which shall be applied by the Trustee (or
any such other qualifying trustee) to pay and discharge, the principal
of and any premium and interest on such Securities on the respective
Stated Maturities, in accordance with the terms of this Indenture and
such Securities. As used herein, "U.S. Government Obligation" means
(x) any security which is (i) a direct obligation of the United States
of America for the payment of which the full faith and credit of the
United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality
of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case (i) or (ii), is
not callable or redeemable at the option of the issuer thereof, and
(y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any U.S.
Government Obligation which is specified in Clause (x) above and held
by such bank for the account of the holder of such depositary receipt,
or with respect to any specific payment of principal of or interest on
any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depositary receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities, as the case may be, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that
60
(A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or
(B) since the date of this instrument, there has been a change in
the applicable Federal income tax law, in either case (A) or (B) to
the effect that, and based thereon such opinion shall confirm that,
the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner
and at the same times as would be the case if such deposit, Defeasance
and discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities, as the case may be, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize gain or loss for Federal income tax purposes
as a result of the deposit and Covenant Defeasance to be effected with
respect to such Securities and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case
if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities, if then listed on
any securities exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities shall have
occurred and be continuing at the time of such deposit or, with regard to
any such event specified in Sections 501(4) and (5), at any time on or
prior to the 90th day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 90th
day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) At the time of such deposit,
(A) no default in the payment of any principal of or premium or
interest on any Senior Indebtedness shall have occurred and be
continuing,
61
(B) no event of default with respect to any Senior Indebtedness
shall have resulted in such Senior Indebtedness becoming, and
continuing to be, due and payable prior to the date on which it would
otherwise have become due and payable (unless payment of such Senior
Indebtedness has been made or duly provided for), and
(C) no other event of default with respect to any Senior
Indebtedness shall have occurred and be continuing permitting (after
notice or lapse of time or both) the holders of such Senior
Indebtedness (or a trustee on behalf of such holders) to declare such
Senior Indebtedness due and payable prior to the date on which it
would otherwise have become due and payable.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations To Be Held In
-------------------------------------------------------------
Trust; Miscellaneous Provisions.
-------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section and Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law. Money and U.S. Government
Obligations so held in trust shall not be subject to the provisions of Article
XV.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 1306. Reinstatement.
-------------
If the Trustee is unable to apply any money in accordance with this
Article with respect to any Securities by reason of any order or judgment of any
court or governmental
62
authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Company
has been discharged or released pursuant to Section 1302 or 1303 shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article with respect to such Securities, until such time as the Trustee is
permitted to apply all money held in trust pursuant to Section 1305 with respect
to such Securities in accordance with this Article; provided, however, that if
the Company makes any payment of principal of or any premium or interest on any
such Security following such reinstatement of its obligations, the Company shall
be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
SECTION 1307. No Defeasance Upon Conversion
-----------------------------
Notwithstanding anything herein to the contrary, the Company will not
be able to defease the right of the Holders to convert the securities pursuant
to Article XIV of this Indenture.
ARTICLE XIV
CONVERSION OF SECURITIES
SECTION 1401. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to the Securities
and to the issuance of Common Stock upon the conversion of such Securities.
SECTION 1402. Exercise of Conversion Privilege.
--------------------------------
In order to exercise a conversion privilege, the Holder of a Security
with such a privilege shall surrender such Security to the Company at the office
or agency maintained for that purpose pursuant to Section 1002, accompanied by a
duly executed conversion notice to the Company substantially in the form set
forth in Exhibit A stating that the Holder elects to convert such Security or a
specified portion thereof. Such notice shall also state, if different from the
name and address of such Holder, the name or names (with address) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued. Securities surrendered for conversion shall
(if so required by the Company or the Trustee) be duly endorsed by or
accompanied by instruments of transfer in forms satisfactory to the Company and
the Trustee duly executed by the registered Holder or its attorney duly
authorized in writing; and Securities so surrendered for conversion (in whole or
in part) during the period from the close of business on any Regular Record Date
to the opening of business on the next succeeding Interest Payment Date
(excluding Securities or portions thereof called for redemption during the
period beginning at the close of business on a Regular Record Date and ending at
the opening of business on the first Business Day after the next succeeding
Interest Payment Date, or if such Interest Payment Date is not a Business Day,
the second such Business Day) shall also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Security then being
converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Security, subject to the provisions of
Section 303 relating
63
to the payment of Defaulted Interest by the Company. As promptly as practicable
after the receipt of such notice and of any payment required pursuant to a Board
Resolution and, subject to Section 303, the surrender of such Security in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon the
conversion of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate, and cash as
provided therein in respect of any fractional share of such Common Stock
otherwise issuable upon such conversion. Such conversion shall be deemed to have
been effected immediately prior to the close of business on the date on which
such notice and such payment, if required, shall have been received in proper
order for conversion by the Company and such Security shall have been
surrendered as aforesaid (unless such Holder shall have so surrendered such
Security and shall have instructed the Company to effect the conversion on a
particular date following such surrender and such Holder shall be entitled to
convert such Security on such date, in which case such conversion shall be
deemed to be effected immediately prior to the close of business on such date)
and at such time the rights of the Holder of such Security as such Security
Holder shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock of the Company shall be
issuable upon such conversion shall be deemed to have become the Holder or
Holders of record of the shares represented thereby. Except as set forth above
and subject to the final paragraph of Section 303, no payment or adjustment
shall be made upon any conversion on account of any interest accrued on the
Securities (or any part thereof) surrendered for conversion or on account of any
dividends on the Common Stock of the Company issued upon such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Company,
a new Security or Securities, of authorized denominations, in aggregate
principal amount equal to the unconverted portion of such Security.
SECTION 1403. No Fractional Shares.
--------------------
No fractional share of Common Stock of the Company shall be issued
upon conversions of Securities. If more than one Security shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted hereby) so surrendered. If, except for the provisions of
this Section, any Holder of a Security or Securities would be entitled to a
fractional share of Common Stock of the Company upon the conversion of such
Security or Securities, or specified portions thereof, the Company shall pay to
such Holder an amount in cash equal to the current market value of such
fractional share computed, (i) if such Common Stock is listed or admitted to
unlisted trading privileges on a national securities exchange or market, on the
basis of the last reported sale price regular way on such exchange or market on
the last trading day prior to the date of conversion upon which such a sale
shall have been effected, or (ii) if such Common Stock is not at the time so
listed or admitted to unlisted trading privileges on a national securities
exchange or market, on the basis of the average of the bid and asked prices of
such Common Stock in the over-the-counter market, on the last trading day prior
to the date of conversion, as
64
reported by the National Quotation Bureau, Incorporated or similar organization
if the National Quotation Bureau, Incorporated is no longer reporting such
information, or if not so available, the fair market price as determined by the
Board of Directors. For purposes of this Section, "trading day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday other than any day on which the
Common Stock is not traded on the Nasdaq National Market, or if the Common Stock
is not traded on the Nasdaq National Market, on the principal exchange or market
on which the Common Stock is traded or quoted.
SECTION 1404. Notice of Certain Corporate Actions.
-----------------------------------
In case:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings (other than a dividend for which approval of any shareholders of
the Company is required) that would require an adjustment pursuant to
Section 1412; 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 (other than any such grant for which approval of any
shareholders of the Company is required); or
(3) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common
Stock, or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any shareholders of the
Company is required), or of the sale 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 with
the Trustee, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, at least 20 days
(or 10 days in any case specified in Clause (1) or (2) above) prior to the
applicable record date hereinafter specified, a notice stating (i) 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 holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to
be determined, or (ii) the date on which such reclassification,
consolidation, merger, share exchange, sale, 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,
share exchange, sale, dissolution, liquidation or winding up. If at any
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.
SECTION 1405. Reservation of Shares of Common Stock.
-------------------------------------
65
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 Securities, the full number of shares of
Common Stock of the Company then issuable upon the conversion of all outstanding
Securities that has conversion rights.
SECTION 1406. Payment of Certain Taxes Upon Conversion.
----------------------------------------
Except as provided in the next sentence, the Company will pay any and
all documentary, stamp or similar taxes that may be payable in respect of the
issue or delivery of shares of its Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of its Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid. Nothing herein shall preclude any tax
withholding required by law or regulation.
SECTION 1407. Nonassessability.
----------------
The Company covenants that all shares of its Common Stock which may be
issued upon conversion of Securities will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.
SECTION 1408. Provision in Case of Consolidation, Merger or Sale of Assets.
------------------------------------------------------------
In case of any consolidation or merger 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 all or substantially all of the assets of
the Company, 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 an amended and restated indenture providing that the
Holder of each Security then Outstanding that is convertible into Common Stock
of the Company shall have the right thereafter (which right shall be the
exclusive conversion right thereafter available to said Holder), during the
period such Security shall be convertible, to convert such Security only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by a holder of the
number of shares of Common Stock of the Company into which such Security might
have been converted immediately prior to such consolidation, merger, conveyance,
sale, transfer or lease, assuming such holder of Common Stock of the Company (i)
is not 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 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 consolidation, merger,
66
conveyance, sale, transfer or lease (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 consolidation, merger,
conveyance, sale, transfer or lease 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, the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease 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 an amended and
restated indenture shall provide for adjustments which, for events subsequent to
the effective date of such an amended and restated indenture, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
or in accordance with the terms of the an amended and restated indenture or
Board Resolutions setting forth the terms of such adjustments. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, conveyances, sales, transfers or leases. Notice of the execution of
such a an amended and restated indenture shall be given by the Company to the
Holder of each Security that is convertible into Common Stock of the Company as
provided in Section 106 promptly upon such execution.
Neither the Trustee nor any conversion agent, if any, shall be under
any responsibility to determine the correctness of any provisions contained in
any such an amended and restated indenture relating either to the kind or amount
of shares of stock or other securities or property or cash receivable by Holders
of Securities convertible into Common Stock of the Company upon the conversion
of their Securities 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 upon request.
SECTION 1409. Duties of Trustee Regarding Conversion.
--------------------------------------
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Securities that is convertible
into Common Stock of the Company to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed,
whether herein or in any resolutions of the Board of Directors or written
instrument executed by one or more officers of the Company provided to be
employed in making the same. Neither the Trustee nor any conversion agent shall
be accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock of the Company, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Securities and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Subject to the provisions of Section 601,
neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to make or calculate only cash payment or to issue,
transfer or deliver any shares of its Common Stock or stock certificates or
other securities or property upon the surrender of any Security for the purpose
of conversion or to comply with any of the covenants of the Company contained in
this Article or in the applicable, resolutions of the Board of Directors or
written instrument executed by one or more duly authorized officers of the
Company.
SECTION 1410. Repayment of Certain Funds Upon Conversion.
------------------------------------------
67
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee for the purpose of paying the principal of,
and premium, if any, and interest, if any, on any of the Securities (including,
but not limited to, funds deposited pursuant to Article XIII hereof) and which
shall not be required for such purposes because of the conversion of such
Securities as provided in this Article shall after such conversion be repaid to
the Company by the Trustee upon a Company Request.
SECTION 1411. Conversion Privilege and Conversion Price.
-----------------------------------------
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 of Common Stock of the Company at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall commence as of the date hereof and expire at the close of
business on the Business Day before April 1, 2007 (the "Final Conversion Date"),
unless previously redeemed or purchased, subject, in the case of the conversion
of any Global Security, to any applicable book-entry procedures of the
Depositary therefor. In case a Note is called for redemption at the election of
the Company, such conversion right in respect of the Note shall expire at the
close of business on the Business Day next preceding the Redemption Date. A Note
in respect of which a Holder is exercising its option to require repurchase upon
a Change in Control may be converted only if such Holder withdraws its election
to exercise its option in accordance with Article VI of this Indenture.
The initial Conversion Price of the Securities is $11.04 per share of
Common Stock, and shall be adjusted in certain instances as provided in this
Article XIV. Securities may only be converted in denominations of $1,000 or
integral multiples of $1,000.
SECTION 1412. Adjustment of Conversion Price.
------------------------------
In accordance with Section 1404 of this Indenture, the Conversion
Price shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend on its Common Stock
in shares of Common Stock, (ii) make a distribution on its Common Stock in
shares of Common Stock, (iii) subdivide its outstanding Common Stock into a
greater number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive that number of shares of
Common Stock which it would have owned had such Note been converted immediately
prior to the happening of such event. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of subdivision or combination. The Company will
not pay any dividend on or make any distribution on shares of its Common Stock
held in the treasury of the Company.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to
68
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price per share (or having a conversion price per share) less
than the current market price per share of Common Stock (as determined in
accordance with subsection (e) of this Section 1412) on the record date for the
determination of shareholders entitled to receive such rights or warrants, the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares which the aggregate offering price of the
total number of shares of Common Stock so offered (or the aggregate conversion
price of the convertible securities so offered, which shall be determined by
multiplying the number of shares of Common Stock issuable upon conversion of
such convertible securities by the conversion price per share of Common Stock
pursuant to the terms of such convertible securities) would purchase at the
current market price per share (as defined in subsection (e) of this Section
1412) of Common Stock on such record date and of which the denominator shall be
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock offered (or into which the
convertible securities so offered are convertible). Such adjustment shall be
made successively whenever any such rights or warrants are issued, and shall
become effective immediately after such record date. If at the end of the period
during which such rights or warrants are exercisable not all rights or warrants
shall have been exercised, the adjusted Conversion Price shall be immediately
readjusted to what it would have been based upon the number of additional shares
of Common Stock actually issued (or the number of shares of Common Stock
issuable upon conversion of convertible securities actually issued).
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock (i) any shares of Capital Stock (other than
dividends or distributions of Common Stock on Common Stock to which Section
1412(a) applies) of the Company, or (ii) evidences of indebtedness or (iii)
other assets (including securities of any person other than the Company, but
excluding (A) all-cash distributions to which 1412(d) applies, (B) any rights or
warrants referred to in 1412(b) or (C) any dividends or distributions
exclusively in cash in an aggregate amount that, together with all other all-
cash distributions to all or substantially all holders of the Company's Common
Stock made within the preceding 12 months in respect of which no Conversion
Price adjustment pursuant to this Section 1412 has been made, does not exceed an
amount equal to 10% of the Company's market capitalization on the Business Day
immediately preceding the day on which the Company declares such distribution),
then in each such case the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the current Conversion Price by
a fraction of which the numerator shall be the current market price per share
(as defined in subsection (e) of this Section 1412) of the Common Stock on the
record date mentioned below less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be conclusive
evidence of such fair market value and which shall be evidenced by an Officers'
Certificate delivered to the Trustee) of the portion of the Capital Stock,
evidences of indebtedness or other non-cash assets so distributed or of such
rights or warrants applicable to one share of Common Stock (determined on the
basis of the number of shares of Common Stock outstanding on the record date)
and of which the denominator shall be the current market price per share (as
defined in subsection (e) of this Section 1412) of the Common Stock on such
record date. Such adjustment shall be made successively whenever any such
distribution is made and shall become effective
69
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
In the event that the Company implements a stockholder rights plan,
such rights plan shall provide, subject to customary exceptions, that upon
conversion of the Securities the Holders will receive, in addition to the Common
Stock issuable upon such conversion, the rights issued under such rights plan
(notwithstanding the occurrence of an event causing such rights to separate from
the Common Stock at or prior to the time of conversion). Any distribution of
rights or warrants pursuant to a stockholder rights plan complying with the
requirements set forth in the immediately preceding sentence of this paragraph
shall not constitute a distribution of rights or warrants for the purposes of
this Section 1412(c).
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 1412(c) (and no adjustment to the Conversion Price
under this Section 1412(c) will be required) until the occurrence of the
earliest Trigger Event. If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different securities, evidences of indebtedness or other
assets or entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed to be the date of
issuance and record date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 1412(c), (1) in the
case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
such rights or warrants all of which shall have expired or been terminated
without exercise, the Conversion Price shall be readjusted as if such rights and
warrants had never been issued.
(d) (1) In case the Company shall, by dividend or otherwise, at any
time distribute (a "Triggering Distribution") to all or substantially all
holders of its Common Stock all-cash distributions in an aggregate amount that,
together with the aggregate amount of (A) any cash and the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers' Certificate
delivered to the Trustee) of any other consideration payable in respect of any
tender offer by the Company or a Subsidiary of the Company for Common Stock
consummated within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no
70
Conversion Price adjustment pursuant to this Section 1412 has been made and (B)
all other cash distributions to all or substantially all holders of its Common
Stock made within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no Conversion Price adjustment pursuant to
this Section 1412 has been made, exceeds an amount equal to 10% of the product
of the current market price per share of Common Stock (as determined in
accordance with subsection (e) of this Section 1412) on the Business Day (the
"Determination Date") immediately preceding the day on which such Triggering
Distribution is declared by the Company multiplied by the number of shares of
Common Stock outstanding on the Determination Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying such Conversion Price in effect
immediately prior to the Determination Date by a fraction of which the numerator
shall be the current market price per share of the Common Stock (as determined
in accordance with subsection (e) of this Section 1412) on the Determination
Date less the sum of the aggregate amount of cash and the aggregate fair market
value (deter mined as aforesaid) of any such other consideration so distributed,
paid or payable within such 12 months (including, without limitation, the
Triggering Distribution) applicable to one share of Common Stock (determined on
the basis of the number of shares of Common Stock outstanding on the
Determination Date), and of which the denominator shall be such current market
price per share of the Common Stock (as determined in accordance with subsection
(e) of this Section 1412) on the Determination Date, such reduction to become
effective immediately prior to the opening of business on the day following the
date on which the Triggering Distribution is paid; provided that, in the event
the portion of the cash so distributed applicable to one share of Common Stock
is equal to or greater than such current market price per share of the Common
Stock, in lieu of the foregoing, an adequate adjustment provision shall be made
so that each holder of Securities shall have the right to receive upon
conversion the amount of cash such holder would have received had such holder
converted each Note immediately prior to such distribution.
(2) In case any tender offer made by the Company or any of its
Subsidiaries for Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall involve the payment of aggregate
consideration in an amount (determined as the sum of the aggregate amount
of cash consideration and the aggregate fair market value (as determined by
the Board of Directors, whose determination shall be conclusive evidence
thereof and which shall be evidenced by an Officers' Certificate delivered
to the Trustee thereof ) of any other consideration) that, together with
the aggregate amount of (A) any cash and the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive evidence thereof and which shall be evidenced by an Officers'
Certificate delivered to the Trustee) of any other consideration payable in
respect of any other tender offers by the Company or any Subsidiary of the
Company for Common Stock consummated within the 12 months preceding the
date of the Expiration Date (as defined below) and in respect of which no
Conversion Price adjustment pursuant to this Section 1412 has been made and
(B) all cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the Expiration Date and in
respect of which no Conversion Price adjustment pursuant to this Section
1412 has been made, exceeds an amount equal to 10% of the product of the
current market price per share of Common Stock (as determined in accordance
with subsection (e) of this Section 1412) as of the last date (the
"Expiration Date") tenders could have been made pursuant to such tender
offer (as
71
it may be amended) (the last time at which such tenders could have been
made on the Expiration Date is hereinafter sometimes called the "Expiration
Time") multiplied by the number of shares of Common Stock outstanding
(including tendered shares but excluding any shares held in the treasury of
the Company) at the Expiration Time, then, immediately prior to the opening
of business on the day after the Expiration Date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to close of
business on the Expiration Date by a fraction of which the numerator shall
be the product of the number of shares of Common Stock outstanding
(including tendered shares but excluding any shares held in the treasury of
the Company) at the Expiration Time multiplied by the current market price
per share of the Common Stock (as determined in accordance with subsection
(e) of this Section 1412) on the Trading Day next succeeding the Expiration
Date, and of which the denominator shall be the sum of (x) the aggregate
consideration (determined as aforesaid) payable to stockholders based on
the acceptance (up to any maximum specified in the terms of the tender
offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares and
excluding any shares held in the treasury of the Company) at the Expiration
Time and the current market price per share of Common Stock (as determined
in accordance with subsection (e) of this Section 1412) on the Trading Day
next succeeding the Expiration Date, such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Date. 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 or all such purchases or any
or all such purchases are rescinded, the Conversion Price shall again be
adjusted to be the Conversion Price which would have been in effect based
upon the number of shares actually purchased. If the application of this
Section 1412(d)(2) to any tender offer would result in a decrease in the
Conversion Price, no adjustment shall be made for such tender offer under
this Section 1412(d)(2).
(3) For purposes of this Section 1412(d), the term "tender offer"
shall mean and include both tender offers and exchange offers, all
references to "purchases" of shares in tender offers (and all similar
references) shall mean and include both the purchase of shares in tender
offers and the acquisition of shares pursuant to exchange offers, and all
references to "tendered shares" (and all similar references) shall mean and
include shares tendered in both tender offers and ex change offers.
(e) For the purpose of any computation under subsections (b), (c) and
(d) of this Section 1412, the current market price per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices for the
30 consecutive Trading Days ending on the last full Trading Day before (i) the
Determination Date or the Expiration Date, as the case may be, with respect to
distributions or tender offers under subsection (d) of this Section 1412 or (ii)
the record date with respect to distributions, issuances or other events
requiring such computation under subsection (b) or (c) of this Section 1412. The
closing price for each day shall be the last reported sales price or, in case no
such reported sale takes place on such date, the average of the reported closing
bid and asked prices in either case on the Nasdaq, or if the
72
Common Stock is not quoted on the Nasdaq, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, the closing
sales price or, in case no reported sale takes place, the average of the closing
bid and asked prices, as furnished by any two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If no such prices are available, the current market
price per share shall be the fair value of a share of Common Stock as determined
by the Board of Directors (which shall be evidenced by an Officers' Certificate
delivered to the Trustee).
(f) In any case in which this Section 1412 shall require that an
adjustment be made following a record date or a Determination Date or Expiration
Date, as the case may be, established for purposes of this Section 1412, the
Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee of the certificate described in Section
1405 of the Indenture) issuing to the Holder of any Note converted after such
record date or Determination Date or Expiration Date the shares of Common Stock
and other capital stock of the Company issuable upon such conversion over and
above the shares of Common Stock and other capital stock of the Company issuable
upon such conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so deferred, the
Company shall issue or cause its transfer agents to issue due bills or other
appropriate evidence prepared by the Company of the right to receive such
shares. If any distribution in respect of which an adjustment to the Conversion
Price is required to be made as of the record date or Determination Date or
Expiration Date therefor is not thereafter made or paid by the Company for any
reason, the Conversion Price shall be readjusted to the Conversion Price which
would then be in effect if such record date had not been fixed or such effective
date or Determination Date or Expiration Date had not occurred.
(g) The Company may make such reductions to the Conversion Price, as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company may from time
to time reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during the period and
the board of directors of the Company shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the holders of record of the
Securities a notice of reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
SECTION 1413. No Adjustment.
-------------
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 1413 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
73
calculations under this Article V shall be made to the nearest cent or to the
nearest 1/1000th of a share, as the case may be. Except as expressly provided in
this Article XIV, the Company will not adjust the Conversion Price of its Common
Stock or any securities convertible into or exchangeable for the Common Stock of
the Company or the right to purchase the Common Stock of the Company or such
convertible or exchangeable securities.
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 1501. Agreement of Subordination.
--------------------------
The Company covenants and agrees, and each Holder of Securities issued
hereunder by his acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article; and each
Person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of, premium, if any, and interest on all
Securities (including, but not limited to, the redemption price with respect to
the Securities called for redemption in accordance with Article XI as provided
in this Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full in cash or payment satisfactory to the holders of Senior
Indebtedness of all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 1502. Payments to Holders.
-------------------
The Company shall not redeem, purchase, otherwise acquire or make a
payment with respect to the principal of, or premium, if any, or interest on the
Securities (including, but not limited to, the redemption price with respect to
the Securities to be called for redemption in accordance with Article XI as
provided in this Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 1505, if:
(i) a default in the payment of principal, premium, interest, rent or
other obligations due on any Designated Senior Indebtedness occurs and is
continuing (or, in the case of Designated Senior Indebtedness for which there is
a period of grace, in the event of such a default that continues beyond the
period of grace, if any, specified in the instrument or lease evidencing such
Designated Senior Indebtedness), unless and until such default shall have been
cured or waived or shall have ceased to exist; or
(ii) a default, other than a payment default, on a Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of the
74
default (a "Payment Blockage Notice") from a Representative or holder of
Designated Senior Indebtedness or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (unless such default was
waived, cured or otherwise ceased to exist and thereafter subsequently
reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:
(1) the date upon which the default is cured or waived or ceases to
exist, or
(2) in the case of a default referred to in clause (ii) above, 179
days pass after notice is received if the maturity of such Designated
Senior Indebtedness has not been accelerated, unless this Article otherwise
prohibits the payment or distribution at the time of such payment or
distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company (whether voluntary or involuntary) or in bankruptcy, insolvency,
receivership or similar proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash before any payment of
cash, property or securities is made on account of the principal of, premium, if
any, or interest on the Securities (except payments made pursuant to Article IV
from monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding-up, liquidation or reorganization);
and upon any such dissolution or winding-up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee would be entitled, except for the provision of this
Article, shall (except as aforesaid) be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders of the Securities or by the Trustee
under this Indenture if received by them or it, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, or as otherwise required by
law or a court order) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Indebtedness in
full in cash after giving effect to any concurrent payment or distribution to or
for the holders of Senior Indebtedness, before any payment or distribution of
cash, property or securities is made to the Holders of the Securities or to the
Trustee.
75
The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article VIII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article VIII.
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution of cash, property or securities shall be
made to the Trustee or any Holder of Securities in respect of the principal of,
premium, if any, or interest on the Securities (including, but not limited to,
the redemption price with respect to the Securities called for redemption in
accordance with Article XI as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 1505, until all Senior Indebtedness has been paid in full in cash or
such acceleration is rescinded in accordance with the terms of this Indenture.
If payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness of such
acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full in cash, or provision is made for such payment thereof in accordance
with its terms in cash, such payment or distribution shall be held in trust for
the benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
Nothing in this Section 1502 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607. This Section 1502 shall be subject
to the further provisions of Section 1505.
SECTION 1503. Subrogation of Securities.
-------------------------
Subject to the payment in full in cash or other payment satisfactory
to the holders of Senior Indebtedness of all Senior Indebtedness, the rights of
the Holders of the Securities shall be subrogated to the extent of the payments
or distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to other
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights of
the holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior
76
Indebtedness until the principal, premium, if any, and interest on the
Securities shall be paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payment over
pursuant to the provisions of this Article, to or for the benefit of the holders
of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness,
and the Holders of the Securities, be deemed to be a payment by the Company to
or on account of the Senior Indebtedness; and no payments or distributions of
cash, property or securities to or for the benefit of the Holders of the
Securities pursuant to the subrogation provisions of this Article, which would
otherwise have been paid to the holders of Senior Indebtedness shall be deemed
to be a payment by the Company to or for the account of the Securities. It is
understood that the provisions of this Article are and are intended solely for
the purposes of defining the relative rights of the Holders of the Securities,
on the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Indebtedness
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article.
SECTION 1504. Authorization to Effect Subordination.
-------------------------------------
Each Holder of a Security by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 503 hereof at least 30 days before the expiration of the time to file
such claim, the holders of any
77
Senior Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.
SECTION 1505. Notice to Trustee.
-----------------
The Company shall give prompt written notice in the form of an
Officers' Certificate to a Responsible Officer of the Trustee of any fact known
to the Company which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article. Notwithstanding the provisions of this Article or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
to or by the Trustee in respect of the Securities pursuant to the provisions of
this Article, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office from the Company
(in the form of an Officers' Certificate) or a Representative or a Holder or
Holders of Senior Indebtedness or from any trustee thereof; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 601, shall be entitled in all respects to assume that no such facts
exist; provided that if on a date not fewer than one Business Day prior to the
date upon which by the terms hereof any such monies may become payable for any
purpose (including, without limitation, the payment of the principal of, or
premium, if any, or interest on any Security) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
1505, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such prior
date. Notwithstanding anything in this Article to the contrary, nothing shall
prevent any payment by the Trustee to the Holders of monies deposited with it
pursuant to Section 401, and any such payment shall not be subject to the
provisions of Section 1501 or 1502.
The Trustee, subject to the provisions of Section 601, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 1506. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article in respect of any Senior Indebtedness at any
time held by it, to the same extent as any
78
other holder of Senior Indebtedness, and nothing in Section 613 or elsewhere in
this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 601, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to Holders of Securities,
the Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1507. No Impairment of Subordination.
------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
SECTION 1508. Certain Conversions Deemed Payment.
----------------------------------
For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
XIV shall not be deemed to constitute a payment or distribution on account of
the principal of (or premium, if any) or interest on Securities or on account of
the purchase or other acquisition of Securities, and (2) the payment, issuance
or delivery of cash (except in satisfaction of fractional shares pursuant to
Section 1403), property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section 1508, the term
"junior securities" means (a) shares of any stock of any class of the Company,
or (b) securities of the Company which are subordinated in right of payment to
all Senior Indebtedness which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this Article.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article XIV.
SECTION 1509. Article Applicable to Paying Agents.
-----------------------------------
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were
79
named in this Article in addition to or in place of the Trustee; provided,
however, that the first paragraph of Section 1505 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 1510. Senior Indebtedness Entitled To Rely.
------------------------------------
The holders of Senior Indebtedness (including, without limitation,
Designated Senior Indebtedness) shall have the right to rely upon this Article,
and no amendment or modification of the provisions contained herein shall
diminish the rights of such holders unless such holders shall have agreed in
writing thereto.
80
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
DDI CORP.
By:
------------------------------------
Title:
------------------------------------
STATE STREET BANK AND TRUST COMPANY
As Trustee
By:
------------------------------------
Title:
------------------------------------
81
EXHIBIT A
---------
FORM OF SECURITY
[FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF PARAGRAPH (K)(2) OF RULE 902 OF REGULATION S
OF THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO DDI CORP. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT (IF
AVAILABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF DDI CORP SO REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND DDI CORP. SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
A-1
Annex 1
[Form of Face of Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED
TO HEREIN. BENEFICIAL INTERESTS IN THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT IN ACCORDANCE WITH THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO DDI CORP., 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 IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
DDi CORP.
[____]% Convertible Subordinated Note due 2007 No. [_____]
$[________] CUSIP: [________]
DDi Corp., a corporation duly organized and existing under the laws of
Delaware (herein called the "Company," which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of
[________ ] on [_______] and to pay interest thereon from [__________] or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on [________] and [________] in each year,
commencing [___________], at the rate of [________]% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the [________] or
[_________] (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any interest on
this Security will be made at the Corporate Trust Office, 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; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register; provided, further, that a Holder with an aggregate principal
amount in excess of $2,000,000 will be paid by wire transfer in immediately
available funds at the election of such Holder. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by their duly authorized officers and by its
corporate seal to be affixed or imported hereon.
Dated: April , 2002
--
DDi CORP.
By:
-----------------------------------------
Title:
Attest:
By:
---------------------------------
Title:
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities designated herein referred to in the
within-mentioned Indenture.
STATE STREET BANK AND
TRUST COMPANY
As Trustee
By:
-----------------------------------------
Authorized Signatory
A-3
Form of Reverse of Security
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued under an
Indenture, dated as of April , 2002 (herein called the "Indenture," which term
---
shall have the meaning assigned to it in such instrument), between the Company
and State Street Bank and Trust Company, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), and
reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Indebtedness and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
[The Securities will not be subject to redemption prior to ,
------
2005 and will be redeemable on and after such date at the option of the Company,
in whole or in part, upon not less than 30 nor more than 60 days' notice to the
Holders, at the Redemption Prices (expressed as a percentage of principal
amount) set forth below.]
The Redemption Price (expressed as a percentage of principal amount)
is as follows:
Redemption Year Price
--------------- -----
Beginning on [_____________] and ending on [____________]............ [________]
Beginning on [_____________] and thereafter.......................... [________]
in each case together with accrued and unpaid interest to, but excluding, the
Redemption Date; provided, however, that interest installments whose Stated
Maturity is on such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities and of like tenor for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
If a Change in Control occurs at any time, the Securities will be
redeemable on the 30th day after notice thereof at the option of the Holder.
Such payment shall be made at a purchase price equal to the principal amount of
the Security plus accrued and unpaid interest to, but excluding, the Change in
Control Purchase Date. The Company shall mail to all Holders a notice of the
occurrence of a Change in Control and of the redemption right arising as a
result thereof on or before the 10th Business Day after the occurrence of such
Change in Control. For a Security to be so repaid at the option of the Holder,
the Company must receive at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, the City of New York, or, at the
option of the Holder, the Corporate Trust Office of the Trustee, such Security
with the form entitled "Option to Elect Redemption Upon a Change in Control" on
the reverse thereof duly completed, together with such Securities duly endorsed
for transfer, on or
A-4
before the 30th day after the date of such notice (or if such 30th day is not a
Business Day, the immediately succeeding Business Day).
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
and this Security is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his or her behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee as his or
her attorney-in-fact for any and all such purposes.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture, except that the Company will not
be able to defease the right of the Holders to convert this Security pursuant to
Article XIII of the Indenture.
Subject to the provisions of the Indenture, the Holder of this
Security is entitled, at its option, at any time on or before [______] (except
that, in case this Security or any portion hereof shall be redeemed, such right
shall terminate with respect to this Security or portion hereof, as the case may
be, so redeemed at the close of business on the first Business Day next
preceding the date fixed for redemption as provided in the Indenture, unless the
Company defaults in making the payment due upon redemption or except as
otherwise provided in the Indenture), to convert the principal amount of this
Security (or any portion hereof which is $1,000 or an integral multiple thereof)
into fully paid and non-assessable shares of the Common Stock of the Company, as
said shares shall be constituted at the date of conversion, at the initial
Conversion Price of $[_______] or at the adjusted Conversion Price in effect at
the date of conversion determined as provided in the Indenture, upon surrender
of this Security, together with the conversion notice hereon duly executed, to
be accompanied (if so required by the Company) by instruments of transfer, in
form satisfactory to the Company and to the Trustee, duly executed by the Holder
or by its duly authorized attorney in writing. Such surrender shall, if made
during any period beginning at the close of business on a Regular Record Date
and ending at the opening of business on the Interest Payment Date next
following such Regular Record Date (unless this Security or the portion being
converted shall have been called for redemption on a Redemption Date during the
period beginning at the close of business on a Regular Record Date and ending at
the opening of business on the first Business Day after the next succeeding
Interest Payment Date, or if such Interest Payment Date is not a Business Day,
the second such Business Day), also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in
the Indenture), no adjustment is to be made on conversion for interest accrued
hereon or for dividends on shares of Common Stock issued on conversion. The
Company is not required to issue fractional shares upon any such
A-5
conversion, but shall make adjustment therefor as provided in the Indenture. The
Conversion Price is subject to adjustment as provided in the Indenture. In the
event of conversion of this Security in part only, a new Security or Securities
for the unconverted portion hereof shall be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default with respect to Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of more than 50% in principal amount of the Outstanding Securities to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all Securities , to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities, the Holders of not less than 25% in principal amount of the
Securities at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities at the
time Outstanding a direction inconsistent with such request, and shall have
failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar duly executed by, the Holder hereof or its
attorney duly authorized in
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writing, and thereupon one or more new Securities and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security shall be deemed to be a contract made under the laws of
New York and for all purposes shall be construed in accordance with the laws of
New York, without regard to principles of conflicts of laws.
In addition to the rights provided to Holders of the Securities under
the Indenture, Holders of the Securities shall have all the rights set forth in
the Registration Rights Agreement dated as of, April 2, 2002, between the
Company and the parties named on the signature page thereof.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
A-7
Conversion Notice
To DDi Corp.:
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of the
Company in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered Holder hereof unless a different name has been
indicated below. If this Notice is being delivered on a date after the close of
business on a Regular Record Date and prior to the opening of business on the
related Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date after the close of
business on a Regular Record Date and prior to the opening of business on the
first Business Day after the next succeeding Interest Payment Date, or if such
Interest Payment Date is not a Business Day, the next such Business Day), this
Notice is accompanied by payment, in funds acceptable to the Company, of an
amount equal to the interest payable on such Interest Payment Date of the
principal of this Security to be converted. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect hereto. Any amount required to be paid by
the undersigned on account of interest accompanies this Security.
A-8
Principal Amount to be Converted
(in an integral multiple of $1,000, if less than all)
$
-------------
Dated:
--------------------
Owner:
---------------------------------------
---------------------------------------
Signature(s) must be guaranteed by a
qualified guarantor institution with
membership in an approved signature
guarantee program pursuant to Rule 17Ad- 15
under the Securities Exchange Act of 1934 if
shares of Common Stock are to be delivered,
or Securities to be issued, other than to
and in the name of the registered owner.
---------------------------------------
Signature Guaranty
Fill in for registration of shares of Common Stock and Security if to
be issued otherwise than to the registered Holder.
----------------------------------------
(Name)
----------------------------------------
Social Security or Other Taxpayer
Identification Number
----------------------------------------
(Address)
----------------------------------------
A-9
OPTION TO ELECT REPURCHASE
UPON A CHANGE IN CONTROL
To: DDi Corp.
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from DDi Corp. (the "Company") as to the
occurrence of a Change in Control with respect to the Company and requests and
instructs the Company to repurchase the entire principal amount of this
Security, or the portion thereof (which is $1,000 or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Security at the redemption price, together with accrued
interest to, but excluding, such date, to the registered Holder hereof.
Dated:
------------------
---------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
qualified guarantor institution with
membership in an approved signature
guarantee program pursuant to Rule 17Ad- 15
under the Securities Exchange Act of 1934.
---------------------------------------
Signature Guaranty
Principal amount to be repurchased
(in an integral multiple of $1,000, if less than all):
---------------------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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ASSIGNMENT FORM
To assign this Security, fill in the form below and have your
signature guaranteed: (I) or (we) assign and transfer this Security
to:
-----------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: Your Name:
------------ ---------------------------------------------
Print your name exactly as it appears on the face of this
Security)
Your Signature:
-----------------------------------------
(Sign exactly as your name appears on the face of this
Security)
Signature Guarantee*:
------------------------------------
* Participant in a recognized Signature Guarantee Medallion Program
(or other signature guarantor acceptable to the Trustee).
A-11
In connection with any transfer of this Security occurring prior to the date
which is the earlier of the end of the period referred to in Rule 144(k) under
the Securities Act of 1933, as amended (the "Securities Act"), the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[_](a) this Security is being transferred in compliance with the exemption from
registration under the Securities Act provided by Rule 144A thereunder,
and that the transfer has been effected pursuant to and in accordance
with Rule 144A under the Securities Act and, accordingly, the
undersigned does hereby further certify that the Securities are being
transferred to a transferee that the undersigned reasonably believes is
purchasing the Securities for its own account, or for one or more
accounts with respect to which such transferee exercises sole investment
discretion, and such transferee and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A and in accordance with
any applicable securities laws of any state of the United States.
or
[_](b) this Security is being transferred in compliance with the exemption from
registration under the Securities Act provided by Regulation S
thereunder, and (A) the offer of the Securities was not made to a person
in the United States; (B) either: (i) at the time the buy order was
originated, the transferee was outside the United States or the
Transferor and any person acting on its behalf reasonably believed that
the transferee was outside the United States, or (ii) the transaction
was executed in, on or through the facilities of a designated offshore
securities market and neither the Transferor nor any person acting on
its behalf knows that the transaction was pre-arranged with a buyer in
the United States; (C) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of Regulation
S, as applicable; and (D) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act.
or
[_](c) this Security is being transferred other than in accordance with (a) or
(b) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
A-12
If none of the foregoing boxes is checked, the Trustee or other Securities
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless the conditions to any such transfer
of registration set forth herein and in Sections 2.7, 2.8 and 2.9 of the
Indenture shall have been satisfied.
Dated:
---------------- -----------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee:
------------------------------------------------
Signature must be guaranteed by a participant in
a recognized signature guaranty medallion
program or other signature guarantor acceptable
to the Trustee.
A-13
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that: (a) it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion, in each case for investment and not with a
view to distribution; (b) it and any such account is a "Qualified Institutional
Buyer" within the meaning of Rule 144A under the Securities Act of 1933; (c) it
is aware that the sale to it is being made in reliance on Rule 144A; (d) it
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information; and (e) it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
---------------- -----------------------------------------------
NOTICE: To be executed by an executive officer
TO BE COMPLETED BY PURCHASER IF (b) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing the
Securities for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account are not "U.S.
persons" as defined in Regulation S under the Securities Act.
Dated:
--------------- -----------------------------------------------
NOTICE: To be executed by an executive officer
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