EXHIBIT 4.2
P-COM, INC., AS ISSUER
_________________________
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2002
_________________________
INDENTURE
DATED AS OF NOVEMBER 1, 1997
_________________________
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE
CROSS-REFERENCE TABLE/1/
TRUST INDENTURE ACT SECTION INDENTURE SECTION
----------------------------- -----------------
310(a)(1)..................................................... 9.10
(a)(2)..................................................... 9.10
(a)(3)..................................................... N.A.
(a)(4)..................................................... N.A.
(a)(5)..................................................... 9.10
(b).....................................................9.8; 9.10
(c)........................................................ N.A.
311(a)........................................................ 9.11
(b)........................................................ 9.11
(c)........................................................ N.A.
312(a)........................................................ 2.5
(b)........................................................ 12.3
(c)........................................................ 12.3
313(a)........................................................ 9.6
(b)(1)..................................................... N.A.
(b)(2)..................................................... 9.6
(c)....................................................9.6, 12.2
(d)........................................................ 9.6
314(a)...............................................4.3, 4.4, 12.2
(b)........................................................ N.A.
(c)(1)..................................................... 12.4
(c)(2)..................................................... 12.4
(c)(3)..................................................... N.A.
(d)........................................................ N.A.
(e)........................................................ 12.5
(f)........................................................ N.A.
315(a)........................................................ 9.1
(b)........................................................ 9.5
(c)........................................................ 9.1
(d)........................................................ 9.1
(e)........................................................ 8.11
316(a)(last sentence)......................................... 2.9
(a)(1)(A).................................................. 8.5
(a)(1)(B).................................................. 8.4
(a)(2)..................................................... N.A.
(b)........................................................ 8.7
(c)........................................................ 11.4
317(a)(1)..................................................... 8.8
(a)(2)..................................................... 8.9
(b)........................................................ 2.4
318(a)........................................................ 12.1
N.A. means not applicable
________________________
/1/ This Cross-Reference Table is not part of the Indenture.
(i)
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE................ 1
Section 1.1 Definitions........................................... 1
Section 1.2 Other Definitions..................................... 7
Section 1.3 Incorporation by Reference of Trust Indenture Act..... 8
Section 1.4 Rules of Construction................................. 8
ARTICLE 2 THE NOTES................................................. 9
Section 2.1 Form and Dating....................................... 9
Section 2.2 Execution and Authentication.......................... 11
Section 2.3 Registrar, Paying Agent and Conversion Agent.......... 12
Section 2.4 Paying Agent to Hold Money in Trust................... 12
Section 2.5 Noteholder Lists...................................... 12
Section 2.6 Transfer and Exchange................................. 13
Section 2.7 Replacement Notes..................................... 17
Section 2.8 Outstanding Notes..................................... 18
Section 2.9 Treasury Securities................................... 18
Section 2.10 Temporary Notes...................................... 18
Section 2.11 Cancellation......................................... 19
Section 2.12 Defaulted Interest................................... 19
Section 2.13 CUSIP Numbers........................................ 20
ARTICLE 3 REDEMPTION................................................ 20
Section 3.1 Notices to Trustee.................................... 20
Section 3.2 Selection of Notes to Be Redeemed..................... 20
Section 3.3 Notice of Redemption.................................. 21
Section 3.4 Effect of Notice of Redemption........................ 22
Section 3.5 Deposit of Redemption Price........................... 22
Section 3.6 Notes Redeemed in Part................................ 22
Section 3.7 Optional Redemption................................... 22
Section 3.8 Conversion Arrangement on Call for Redemption......... 23
ARTICLE 4 COVENANTS................................................. 23
Section 4.1 Payment of Notes...................................... 23
Section 4.2 Maintenance of Office................................. 24
Section 4.3 SEC Reports........................................... 24
Section 4.4 Compliance Certificate................................ 25
Section 4.5 Corporate Existence................................... 25
Section 4.6 Taxes................................................. 26
Section 4.7 Change of Control..................................... 26
Section 4.8 Stay, Extension and Usury Laws........................ 28
(ii)
TABLE OF CONTENTS
(continued)
Page
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ARTICLE 5 CONVERSION................................................ 28
Section 5.1 Conversion Privilege.................................. 28
Section 5.2 Manner of Exercise of Conversion Privilege............ 29
Section 5.3 Cash Payments in Lieu of Fractional Shares............ 30
Section 5.4 Adjustment of Conversion Price........................ 31
Section 5.5 Notice to Holders Prior to Certain Corporate Actions.. 37
Section 5.6 Reservation of Shares of Common Stock................. 38
Section 5.7 Taxes upon Conversion................................. 38
Section 5.8 Covenants as to Common Stock.......................... 38
Section 5.9 Consolidation or Merger or Sale of Assets............. 39
Section 5.10 Disclaimer of Responsibility for Certain Matters..... 40
Section 5.11 Cancellation of Converted Notes...................... 40
Section 5.12 Voluntary Reduction.................................. 40
ARTICLE 6 SUBORDINATION............................................. 40
Section 6.1 Agreement to Subordinate.............................. 40
Section 6.2 Liquidation; Dissolution; Bankruptcy.................. 41
Section 6.3 Default on Senior Indebtedness........................ 41
Section 6.4 Acceleration of Notes................................. 42
Section 6.5 When Distribution Must Be Paid Over................... 42
Section 6.6 Notice by Company..................................... 43
Section 6.7 Subrogation........................................... 43
Section 6.8 Relative Rights....................................... 43
Section 6.9 Subordination May Not Be Impaired by Company.......... 43
Section 6.10 Distribution or Notice to Representative............. 44
Section 6.11 Rights of Trustee and Paying Agent................... 44
Section 6.12 Authorization to Effect Subordination................ 44
Section 6.13 Article Applicable to Paying Agents.................. 44
Section 6.14 Senior Indebtedness Entitled to Rely................. 45
Section 6.15 Certain Conversions Not Deemed Payment............... 45
ARTICLE 7 SUCCESSORS................................................ 45
Section 7.1 Merger, Consolidation or Sale of Assets............... 45
Section 7.2 Successor Corporation Substituted..................... 46
Section 7.3 Purchase Option on Change of Control.................. 46
ARTICLE 8 DEFAULTS AND REMEDIES..................................... 46
Section 8.1 Events of Default..................................... 46
Section 8.2 Acceleration.......................................... 48
(iii)
TABLE OF CONTENTS
(continued)
Page
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Section 8.3 Other Remedies........................................ 48
Section 8.4 Waiver of Past Defaults............................... 48
Section 8.5 Control by Majority................................... 49
Section 8.6 Limitation on Suits................................... 49
Section 8.7 Rights of Noteholders to Receive Payment.............. 49
Section 8.8 Collection Suit by Trustee............................ 49
Section 8.9 Trustee May File Proofs of Claim...................... 50
Section 8.10 Priorities........................................... 50
Section 8.11 Undertaking for Costs................................ 50
ARTICLE 9 THE TRUSTEE............................................... 51
Section 9.1 Duties of Trustee..................................... 51
Section 9.2 Rights of Trustee..................................... 51
Section 9.3 Individual Rights of Trustee.......................... 52
Section 9.4 Trustee's Disclaimer.................................. 52
Section 9.5 Notice of Defaults.................................... 52
Section 9.6 Reports by Trustee to Noteholders..................... 53
Section 9.7 Compensation and Indemnity............................ 53
Section 9.8 Replacement of Trustee................................ 54
Section 9.9 Successor Trustee by Merger, Etc...................... 55
Section 9.10 Eligibility; Disqualification........................ 55
Section 9.11 Preferential Collection of Claims Against Company.... 55
ARTICLE 10 DISCHARGE OF INDENTURE................................... 55
Section 10.1 Termination of Company's Obligations................. 55
Section 10.2 Repayment to Company................................. 55
ARTICLE 11 AMENDMENTS, SUPPLEMENTS AND WAIVERS...................... 56
Section 11.1 Without Consent of Noteholders....................... 56
Section 11.2 With Consent of Noteholders.......................... 56
Section 11.3 Compliance with Trust Indenture Act.................. 57
Section 11.4 Revocation and Effect of Consents.................... 57
Section 11.5 Notation on or Exchange of Notes..................... 58
Section 11.6 Trustee Protected.................................... 58
ARTICLE 12 MISCELLANEOUS............................................ 58
Section 12.1 Trust Indenture Act Controls......................... 58
Section 12.2 Notices.............................................. 59
Section 12.3 Communication by Noteholders with Other Noteholders.. 59
Section 12.4 Certificate and Opinion as to Conditions Precedent... 59
(iv)
TABLE OF CONTENTS
(continued)
Page
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Section 12.5 Statements Required in Certificate or Opinion........ 60
Section 12.6 Rules by Trustee and Agents.......................... 60
Section 12.7 Legal Holidays....................................... 60
Section 12.8 No Recourse Against Others........................... 60
Section 12.9 Counterparts......................................... 61
Section 12.10 Other Provisions.................................... 61
Section 12.11 Governing Law....................................... 62
Section 12.12 No Adverse Interpretation of Other Agreements....... 62
Section 12.13 Successors.......................................... 62
Section 12.14 Severability........................................ 62
Section 12.15 Table of Contents, Headings, Etc.................... 63
(v)
INDENTURE dated as of November 1, 1997 between P-Com, Inc., a Delaware
corporation (the "Company"), and State Street Bank and Trust Company of
California, N.A., a national banking association organized under the laws of the
United States of America, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of $100,000,000 aggregate principal
amount of the Company's 4 1/4% Convertible Subordinated Notes due 2002, or, if
the Initial Purchasers exercise their over-allotment option granted in the
Purchase Agreement defined below, of up to $115,000,000 aggregate principal
amount of the Company's 4 1/4% Convertible Subordinated Notes due 2002 (in
either case, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
------------------------------------------
Section 1.1 Definitions.
-----------
"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" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person,
whether through the ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.
"Applicable Procedures" means the applicable procedures of the Depositary,
Euroclear or Cedel, as the case may be.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board.
"Board Resolution" means a duly authorized and adopted resolution of the
Board of Directors certified by the Secretary of the Company as in full force
and effect and delivered to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interest, participations, rights or other equivalents (however designated) or
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Change of Control" means the occurrence of one or more of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of shares representing more than 50% of
the combined total voting power of the then outstanding securities entitled to
vote generally in elections of directors of the Company (the "Voting Stock"),
(b) the Company consolidates with or merges into any other person, or conveys,
transfers, or leases, whether directly or indirectly, all or substantially all
of its assets to any person, or any other person merges into the Company, and,
in the case of any such transaction, the outstanding Common Stock of the Company
is changed or exchanged as a result, unless the stockholders of the Company
immediately before such transaction own, directly or indirectly immediately
following such transaction, at least a majority of the combined voting power of
the outstanding voting securities of the corporation resulting from such
transaction in substantially the same proportion as their ownership of the
Voting Stock immediately before such transaction, (c) at any time the Continuing
Directors do not constitute a majority of the Board of Directors of the Company
(or, if applicable, a successor corporation to the Company) or (d) the Common
Stock (or other common stock into which the Notes are then convertible) is
neither listed for trading on a United States national securities exchange nor
approved for trading on an established automated over-the-counter trading market
in the United States for a period of ten consecutive Trading Days; provided a
--------
Change of Control shall not be deemed to have occurred if either (x) the Daily
Market Price of the Common Stock for any five Trading Days during the ten
Trading Days immediately preceding the Change of Control is at least equal to
105% of the Conversion Price in effect on such day or (y) in the case of a
merger or consolidation otherwise constituting a Change of Control, all of the
consideration (excluding cash payments for fractional shares) in such merger or
consolidation constituting the Change of Control consists of common stock traded
on a United States national securities exchange or quoted on the Nasdaq National
Market (or which will be so traded or quoted when issued or exchanged in
connection with such Change of Control) and as a result of such transaction or
transactions such Notes become convertible solely into such common stock.
"Common Stock" means the common stock of the Company as the same exists at
the date of the execution of this Indenture or as such stock may be constituted
from time to time.
"Company" means the party named as such above until a successor replaces it
in accordance with Article 7 and thereafter means the successor.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (i) was a member of such Board of Directors on
November 5, 1997 or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of the Board of Directors at the time of such nomination or election.
"Conversion Price" means the initial conversion price specified in Section
9 of the form of Note, as adjusted in accordance with the provisions of Article
5.
"Custodian" means State Street Bank and Trust Company of California, N.A.,
as custodian with respect to the Global Notes, or any successor entity thereto.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock as reported
2
on the NNM, or if the Common Stock is not then listed on the NNM, as reported on
such national securities exchange upon which the Common Stock is listed, or (b)
if there is no such reported sale on the day in question, on the basis of the
average of the closing bid and asked quotations regular way as so reported, or
(c) if the Common Stock is not listed on the NNM or on any national securities
exchange, on the basis of the average of the high bid and low asked quotations
regular way on the day in question in the over-the-counter market as reported by
the National Association of Securities Dealers Automated Quotation System, or if
not so quoted, as reported by National Quotation Bureau, Incorporated, or a
similar organization.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and their
respective successors.
"Designated Senior Indebtedness" means any particular Senior Indebtedness
having an outstanding principal amount or commitment in excess of $15 million
with respect to 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 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.)
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are in effect from time to time.
"Global Notes" means, individually and collectively, the Regulation S
Global Note and the Rule 144A Global Note.
"Indebtedness" means, with respect to any person, all obligations, whether
or not contingent, of such person (i) (a) for borrowed money (including, but not
limited to, any indebtedness secured by a security interest, mortgage or other
lien on the assets of the Company which is (1) given to secure all or part of
the purchase price of property subject thereto, whether given to the vendor of
such property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note, debenture, bond or other written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the lessee under GAAP, (d) in respect of letters of credit, bank guarantees or
bankers' acceptances (including reimbursement obligations with respect to any of
the foregoing), (e) with respect to Indebtedness secured by a mortgage, pledge,
lien, encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such person are subject, whether
or not the obligation secured thereby shall have been assumed by or shall
otherwise be such person's legal
3
liability, (f) in respect of the balance of deferred and unpaid purchase price
of any property or assets, or (g) under interest rate or currency swap
agreements, cap, floor and collar agreements, spot and forward contracts and
similar agreements and arrangements; (ii) with respect to any obligation of
others of the type described in the preceding clause (i) or under clause (iii)
below assumed by or guaranteed in any manner by such person, contingent or
otherwise (and, without duplication, the obligations of such person under any
such assumptions, guarantees or other such arrangements); and (iii) any and all
deferrals, renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any of the foregoing.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Purchasers" means PaineWebber Incorporated, BancAmerica ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc., and Pacific Growth Equities,
Inc.
"Interest Payment Date" has the meaning set forth in Section 1 of the
Notes.
"Issuance Date" means the date on which the Notes are first authenticated
and issued under this Indenture.
"Liquidated Damages" has the meaning set forth in the Registration Rights
Agreement.
"Maturity Date" means November 1, 2002.
"NNM" means the Nasdaq National Market.
"Noteholder" or "holder" means a person in whose name a Note is registered.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum relating to the Notes
dated November 5, 1997.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, any Vice-President, the Treasurer, the Secretary, any Assistant
Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the Chairman of the Board, the Chief Executive Officer, the
President, the Treasurer or a Vice-President of the Company.
"Opinion of Counsel" means a written opinion that meets the requirements of
Section 12.5 from legal counsel who is acceptable to the Trustee. So long as
such counsel is acceptable to the Trustee, such
4
counsel may be an employee of or counsel to the Company or the Trustee or may be
outside counsel to the Company or the Trustee, except to the extent otherwise
indicated in this Indenture.
"person" or "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" of a debt security means the principal of the security plus the
premium, if any, on the security.
"Record Date" has the meaning set forth in Section 1 of the Notes.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Notes dated as of November 1, 1997, among the Company and the
Initial Purchasers.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a permanent global note that contains the
Global Securities Legend and the Restricted Securities Legend on the face
thereof and the additional schedule referred to in footnote 1 to the form of the
Note attached hereto as Exhibit A, and that is deposited with and registered in
---------
the name of the Depositary or its nominee, representing a series of Notes sold
in reliance on Regulation S.
"Representative" means the (a) 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.
"Restricted Period" shall mean the "40-day restricted period" as defined in
Regulation S.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains the
Global Securities Legend and the Restricted Securities Legend on the face
thereof and the additional schedule referred to in footnote 1 to the form of the
Note attached hereto as Exhibit A, and that is deposited with and registered in
the name of the Depositary, representing a series of Notes sold in reliance on
Rule 144A.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Notes described above issued under this Indenture.
5
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of, premium, if any, and interest
on, rent under, and any other amounts payable on or in respect of any secured
Indebtedness of the Company (including, without limitation, any Obligations in
respect of such secured Indebtedness and any interest accruing after the filing
of a petition by or against the Company under any Bankruptcy Law, whether or not
allowed as a claim after such filing in any proceeding under such Bankruptcy
Law), 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); provided, however, that Senior
-------- -------
Indebtedness does not include (u) unsecured Indebtedness of the Company, (v)
Indebtedness evidenced by the Notes, (w) any liability for federal, state, local
or other taxes owed or owing by the Company, (x) Indebtedness of the Company to
any Subsidiary of the Company, (y) trade payables of the Company, and (z) any
particular 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 Indebtedness shall
not be senior in right of payment to, or is pari passu with, or is subordinated
or junior to, the Notes.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any subsidiary of the Company which is a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act and the Exchange Act (as such Regulation is
in effect on the date hereof).
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Trading Days" means (i) if the Common Stock is quoted on the NNM or any
other system of automated dissemination of quotations of securities prices,
days on which trades may be effected through such system; (ii) if the Common
Stock is listed or admitted for trading on any national securities exchange,
days on which such national securities exchange is open for business; or (iii)
if the Common Stock is not listed or admitted for trading on any national
securities exchange or quoted on the NNM or any other system of automated
dissemination of quotation of securities prices, days on which the Common Stock
is traded regular way in the over-the-counter market and for which a closing bid
and a closing asked price for the Common Stock are available.
6
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) as in effect on the date of execution of this Indenture.
"Time of Determination" means the time and date of the earlier of (i) the
record date for determining stockholders entitled to receive their rights,
warrants or distributions referred to in Section 5.4(b) and (c), or (ii) the
commencement of "ex-dividend" trading on the exchange or market referred to in
the definition of the term "Daily Market Price."
"Transfer Restricted Securities" shall have the meaning set forth in the
Registration Rights Agreement.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
"Trust Officer" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"U.S. Government Obligations" means direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged. In order to have money available on a payment
date to pay principal or interest on the Notes, the U.S. Government Obligations
shall be payable as to principal or interest on or before such payment date in
such amounts as will provide the necessary money. U.S. Government Obligations
shall not be callable at the issuer's option.
"U.S. person" has the meaning specified in Regulation S.
"Vice President," when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
Section 1.2 Other Definitions.
-----------------
DEFINED IN
TERM SECTION
"Agent Members"............................................... 2.1
"Bankruptcy Custodian"........................................ 8.1
"Bankruptcy Law".............................................. 8.1
"Cedel"....................................................... 2.1
"Certificated Notes".......................................... 2.1
"Change of Control Notice".................................... 4.7
"Change of Control Offer"..................................... 4.7
"Change of Control Payment"................................... 4.7
"Change of Control Payment Date".............................. 4.7
"Commencement Date"........................................... 4.7
"Conversion Agent"............................................ 2.3
"Conversion Notice"........................................... 5.2
7
"Euroclear"................................................... 2.1
"Event of Default"............................................ 8.1
"Expiration Time"............................................. 5.4
"Legal Holiday"............................................... 12.7
"Non-Global Purchaser"........................................ 2.1
"Offer Amount"................................................ 4.7
"Paying Agent"................................................ 2.3
"Payment Blockage Notice"..................................... 6.3
"Payment Default"............................................. 8.1
"Purchase Agreement".......................................... 2.1
"Purchased Shares"............................................ 5.4
"QIBs"........................................................ 2.1
"Registrar"................................................... 2.3
"Tender Period"............................................... 4.7
Section 1.3 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Notes;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company or any other obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.4 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
8
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) references to "GAAP" shall mean GAAP in effect as of the time when and
for the period as to which such accounting principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and words in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE 2
THE NOTES
---------
Section 2.1 Form and Dating.
---------------
The Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of Exhibit A hereto, which Exhibit A is
--------- ---------
hereby incorporated in and expressly made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage. The Company
shall furnish any such legend not contained in Exhibit A to the Trustee in
---------
writing. Each Note shall be dated the date of its authentication.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The Notes shall be issued only in denominations of $1,000 and integral
multiples thereof.
(a) Global Notes. Notes offered and sold to qualified institutional buyers
------------
as defined in Rule 144A ("QIBs") in reliance on Rule 144A shall be issued
initially in the form of one or more Rule 144A Global Notes in definitive, fully
registered form, which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Trustee, as Custodian for the Depositary, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Rule 144A Global Notes may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
Notes offered and sold in reliance on Regulation S shall be issued in the
form of one or more Regulation S Global Notes in definitive, fully registered
form, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as Custodian for the Depositary, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company
9
and authenticated by the Trustee as hereinafter provided, for the accounts of
designated agents holding on behalf of the Euroclear System ("Euroclear") or
Cedel Bank, societe anonyme ("Cedel"). The aggregate principal amount of the
Regulation S Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall be made by
the Trustee or the Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel Bank shall be
applicable to interests in the Regulation S Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
Except as set forth in Section 2.6 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
Upon effectiveness of the Shelf Registration Statement, the Notes resold or
transferred pursuant to the prospectus forming part of the Shelf Registration
Statement may be represented by one or more permanent global Notes in
definitive, fully registered form without interest coupons with the Global
Securities Legend but not the Restricted Securities Legend set forth in
Exhibit A hereto, registered in the name of the Depositary or a nominee of the
---------
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of such global Notes may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee to reflect transfers of
beneficial interests from the Regulation S Global Notes and the Rule 144A Global
Notes, subject to the rules and procedures of Euroclear and Cedel, as the case
may be, and the Depositary.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to the
---------------------
Rule 144A Global Note and the Regulation S Global Note deposited with or on
behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially the Global Notes that (a)
shall be registered in the name of the Depositary or the nominee of the
Depositary and (b) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions or held by the Trustee as Custodian
for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights either under this Indenture with respect to any Global Note held on
their behalf by the Depositary or by the Trustee as Custodian for the Depositary
or under such Global Note, and the Depositary may be treated
10
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(c) Certificated Notes. Except as provided in Sections 2.6 and 2.10,
------------------
owners of beneficial interests in Global Notes will not be entitled to receive
physical delivery of certificated Notes. Purchasers of Notes who are
institutional "accredited investors" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) of the Securities Act) who are not QIBs and did not purchase Notes
sold in reliance on Regulation S under the Securities Act (referred to herein as
the "Non-Global Purchasers") will receive certificated Notes bearing the
Restricted Securities Legend set forth in Exhibit A hereto ("Certificated
---------
Notes"). Certificated Notes will bear the Restricted Securities Legend set forth
on Exhibit A unless removed in accordance with Section 2.6(b) hereof. A
Certificated Note may be exchanged for a beneficial interest in a Global Note in
accordance with the provisions of Section 2.6(a)(vii).
After a transfer of any Notes during the period of the effectiveness of a
Shelf Registration Statement with respect to the Notes, all requirements
pertaining to the Restricted Security Legend on such Notes will cease to apply,
the requirements requiring any such Note issued to certain holders be issued in
global form will cease to apply, and a Certificated Note without the Restricted
Securities Legend will be available to the holder of such Notes who transfers
such Notes pursuant to a prospectus which is part of such Shelf Registration
Statement.
Section 2.2 Execution and Authentication.
----------------------------
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced, either manually or by
facsimile, on the Notes.
If an Officer whose signature is on a Note no longer holds that office at
the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of an
authorized signatory of the Trustee. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
Upon a written order of the Company signed by two Officers, the Trustee
shall authenticate the Notes for original issue up to an aggregate principal
amount of $100,000,000 (plus up to $15,000,000 aggregate principal amount of
Notes that may be sold by the Company pursuant to the over-allotment option
granted pursuant to the Purchase Agreement). The aggregate principal amount of
Notes outstanding at any time shall not exceed such amount except as provided in
Section 2.7.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference
11
in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal with
the Company or an Affiliate of the Company.
Section 2.3 Registrar, Paying Agent and Conversion Agent.
--------------------------------------------
The Notes may be presented at the corporate trust office of the Trustee for
(i) registration of transfer or exchange ("Registrar"), (ii) payment ("Paying
Agent") and (iii) conversion ("Conversion Agent"). The Company shall also
maintain in the Borough of Manhattan, City of New York, State of New York an
office or agency where Notes may be presented for (i) registration of transfer
or for exchange, (ii) payment ("Paying Agent") and (iii) conversion ("Conversion
Agent"), which office or agency shall initially be the office of State Street
Bank and Trust Company, N.A., an Affiliate of the Trustee, located at ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Trust Window, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars, one or more
additional Paying Agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional Paying Agent and the term "Conversion Agent" includes any additional
conversion agent. The Company may change any Paying Agent, Registrar, co-
registrar or Conversion Agent without prior notice to any Noteholder; provided
--------
the Company shall maintain an office or agency for payment, conversion and
exchange in the Borough of Manhattan, City of New York, State of New York. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar, Paying Agent or Conversion Agent, the Trustee shall act as
such. The Company or any of its Affiliates may act as Paying Agent, Registrar,
co-registrar or Conversion Agent.
Section 2.4 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal or interest on the Notes, and will notify the Trustee of any default
by the Company in making any such payment. While any such default continues,
the Trustee may require a Paying Agent to pay all money held by it to the
Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any money disbursed by it. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or an
Affiliate of the Company) shall have no further liability for the money. If the
Company or an Affiliate of the Company acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Noteholders all money
held by it as Paying Agent.
Section 2.5 Noteholder 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
Noteholders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee on or before each
Interest Payment Date and at such other times as the Trustee may request in
writing a list in such
12
form and as of such date as the Trustee may reasonably require of the names and
addresses of Noteholders.
Section 2.6 Transfer and Exchange.
---------------------
Where Notes are presented to the Registrar or a co-registrar with a request
to register a transfer or to exchange them for an equal principal amount of
Notes of other denominations, the Registrar shall register the transfer or make
the exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall issue and deliver to
the Trustee and the Trustee shall authenticate Notes at the Registrar's request.
No service charge shall be made to a Noteholder for any registration of transfer
or exchange (except as otherwise expressly permitted herein), but the Company
may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.10, 3.6 or 11.5 hereof).
The Company shall not be required (i) to issue, register the transfer of or
exchange Notes during a period beginning at the opening of business fifteen (15)
days before the day of any selection of Notes for redemption under Section 3.2
and ending at the close of business on the day of selection, (ii) to register
the transfer or exchange of any Notes so selected for redemption in whole or in
part, except the unredeemed portion of any Notes being redeemed in part or (iii)
to register the transfer of any Notes surrendered for repurchase (and not
withdrawn) pursuant to Section 4.7.
All Notes issued upon any transfer or exchange of Notes in accordance with
this Indenture shall be the valid and binding obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Indenture
as the Notes surrendered upon such registration of transfer or exchange.
(a) Notwithstanding any provision to the contrary in this Indenture, so
long as a Global Note remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Note, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Section
2.1(b) and this Section 2.6(a); provided, however, that beneficial interests in
-------- -------
a Global Note may be transferred to persons who take delivery thereof in the
form of a beneficial interest in the same Global Note in accordance with the
transfer restrictions set forth in the Restricted Securities Legend and under
the heading "Notice to Investors" near the end of the Offering Memorandum.
(i) Except for transfers or exchanges made in accordance with any of
clauses (ii) through (iv) of this Section 2.6(a), transfers of a Global
Note shall be limited to transfers of such Global Note in whole, but not in
part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(ii) Rule 144A Global Note to Regulation S Global Note. If, at any
time on or prior to the termination of the Restricted Period, an owner of a
beneficial interest in a Rule 144A Global Note deposited with the
Depositary or the Trustee as Custodian for the Depositary wishes to
transfer its interest in such Rule 144A Global Note to a person who is
required or permitted to take delivery thereof in the form of an interest
in a Regulation S Global Note, such owner shall,
13
subject to the Applicable Procedures, exchange or cause the exchange of
such interest for an equivalent beneficial interest in a Regulation S
Global Note as provided in this Section 2.6(a)(ii). Upon receipt by the
Trustee of (1) instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Trustee to credit or cause to
be credited a beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the Rule 144A Global Note to be
exchanged, (2) a written order given in accordance with the Applicable
Procedures containing information regarding the participant account of the
Depositary and the Euroclear or Cedel account to be credited with such
increase and (3) a certificate in the form of Exhibit B attached hereto
---------
given by the owner of such beneficial interest stating that the transfer of
such interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with Rule
903 or Rule 904 of Regulation S, then the Trustee shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal amount
at maturity of the applicable Rule 144A Global Note and to increase or
cause to be increased the aggregate principal amount at maturity of the
applicable Regulation S Global Note by the principal amount at maturity of
the beneficial interest in the Rule 144A Global Note to be exchanged, to
credit or cause to be credited to the account of the person specified in
such instructions a beneficial interest in the Regulation S Global Note
equal to the reduction in the aggregate principal amount at maturity of the
Rule 144A Global Note, and to debit or cause to be debited from the account
of the person making such exchange or transfer the beneficial interest in
the Rule 144A Global Note that is being exchanged or transferred.
(iii) Regulation S Global Note to Rule 144A Global Note. If, at any
time on or prior to the termination of the Restricted Period, an owner of a
beneficial interest in a Regulation S Global Note deposited with the
Depositary or with the Trustee as Custodian for the Depositary wishes to
transfer its interest in such Regulation S Global Note to a person who is
required or permitted to take delivery thereof in the form of an interest
in a Rule 144A Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Rule 144A Global Note as provided in
this Section 2.6(a)(iii). Upon receipt by the Trustee of (1) instructions
from Euroclear or Cedel, if applicable, and the Depositary, directing the
Trustee, as Registrar, to credit or cause to be credited a beneficial
interest in the Rule 144A Global Note equal to the beneficial interest in
the Regulation S Global Note to be exchanged, such instructions to contain
information regarding the participant account with the Depositary to be
credited with such increase, (2) a written order given in accordance with
the Applicable Procedures containing information regarding the participant
account of the Depositary and (3) a certificate in the form of Exhibit C
---------
attached hereto given by the owner of such beneficial interest and stating
(A) if the transfer is pursuant to Rule 144A, that the person transferring
such interest in a Regulation S Global Note reasonably believes that the
person acquiring such interest in a Rule 144A Global Note is a QIB and is
obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or securities laws of
any state of the United States, (B) that the transfer complies with the
requirements of Rule 144A under the Securities Act and any applicable blue
sky or securities laws of any state of the United States or (C) if the
transfer is pursuant to any other exemption from the registration
requirements of the Securities Act, that the transfer of such interest has
been made in compliance with the transfer restrictions applicable to the
Global Notes
14
and pursuant to and in accordance with the requirements of the exemption
claimed, such statement to be supported by an Opinion of Counsel from the
transferee or the transferor in form reasonably acceptable to the Company
and to the Registrar, then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the Regulation S Global Note
and to increase or cause to be increased the aggregate principal amount at
maturity of the applicable Rule 144A Global Note by the principal amount at
maturity of the beneficial interest in the Regulation S Global Note to be
exchanged, and the Trustee, as Registrar, shall instruct the Depositary,
concurrently with such reduction, to credit or cause to be credited to the
account of the person specified in such instructions a beneficial interest
in the applicable Rule 144A Global Note equal to the reduction in the
aggregate principal amount at maturity of the Regulation S Global Note and
to debit or cause to be debited from the account of the person making such
transfer the beneficial interest in the Regulation S Global Note that is
being transferred.
(iv) Global Note to Certificated Note. If an owner of a beneficial
interest in a Global Note deposited with the Depositary or with the Trustee
as Custodian for the Depositary wishes at any time to transfer its interest
in such Global Note to a person who is required or permitted to take
delivery thereof in the form of a Certificated Note, such owner may,
subject to the Applicable Procedures, cause the exchange of such interest
for one or more Certificated Notes of any authorized denomination or
denominations and of the same aggregate principal amount at maturity. Upon
receipt by the Trustee of (1) instructions from Euroclear or Cedel, if
applicable, and the Depositary directing the Trustee, as Registrar, to
authenticate and deliver one or more Certificated Notes of the same
aggregate principal amount at maturity as the beneficial interest in the
Global Note to be exchanged, such instructions to contain the name or names
of the designated transferee or transferees, the authorized denomination or
denominations of the Certificated Notes to be so issued and appropriate
delivery instructions, (2) a certificate in the form of Exhibit D attached
---------
hereto given by the owner of such beneficial interest and stating that the
person transferring such interest in such Global Note reasonably believes
that the person acquiring the Certificated Notes for which such interest is
being exchanged is an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and is acquiring
such Certificated Notes having an aggregate principal amount of not less
than $100,000 for its own account or for one or more accounts as to which
the transferee exercises sole investment discretion, if requested by the
Trustee, (3) a certificate in the form of Exhibit E attached hereto given
---------
by the person acquiring the Certificated Notes for which such interest is
being exchanged, to the effect set forth therein, if requested by the
Trustee, and (4) such other certifications, legal opinions or other
information as the Company or the Trustee may reasonably require to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act, then Euroclear or Cedel, if applicable, or the Trustee, as Registrar,
shall instruct the Depositary to reduce or cause to be reduced such Global
Note by the aggregate principal amount at maturity of the beneficial
interest therein to be exchanged and to debit or cause to be debited from
the account of the person making such transfer the beneficial interest in
the Global Note that is being transferred, and concurrently with such
reduction and debit the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Certificated Notes of the same
aggregate principal amount at maturity in accordance with the instructions
referred to above.
15
(v) reserved.
(vi) Certificated Note to Certificated Note. If a holder of a
Certificated Note wishes at any time to transfer such Certificated Note to
a person who is required to take delivery thereof in the form of a
Certificated Note, such holder may, subject to the restrictions on transfer
set forth herein and in such Certificated Note, cause the exchange of such
Certificated Note for one or more Certificated Notes of any authorized
denomination or denominations and of the same aggregate principal amount at
maturity. Upon receipt by the Trustee, as Registrar, of (1) such
Certificated Note, duly endorsed as provided herein, (2) instructions from
such holder directing the Trustee, as Registrar, to authenticate and
deliver one or more Certificated Notes of the same aggregate principal
amount at maturity as the Certificated Note to be exchanged, such
instructions to contain the name or authorized denomination or
denominations of the Certificated Notes to be so issued and appropriate
delivery instructions, (3) such certificate having the applicable box on
the Assignment Form of the Certificated Note checked by such holder, (4) a
certificate in the form of Exhibit E attached hereto given by the person
---------
acquiring the Certificated Notes for which such interest is being
exchanged, to the effect set forth therein, if requested by the Trustee,
and (5) such other certifications, legal opinions or other information as
the Company may reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then the Trustee, as
Registrar, shall cancel or cause to be canceled such Certificated Note and
concurrently therewith, the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Certificated Notes of the same
aggregate principal amount at maturity, in accordance with the instructions
referred to above.
(vii) Certificated Note to Global Note. A Certificated Note may be
exchanged for a beneficial interest in a Global Note in accordance with the
provisions of this Section. Upon receipt by the Trustee, as Registrar, of
(1) such Certificated Note, duly endorsed as provided herein, (2)
instructions from such holder directing the Trustee, as Registrar, to
exchange such Certificated Note for a beneficial interest in the applicable
Global Note, such instructions to contain the name or authorized
denomination or denominations and appropriate delivery instructions, (3)
such certificate having the applicable box on the Assignment Form of the
Certificated Note checked by such holder, (4) a certificate in the form of
Exhibit E attached hereto given by the person acquiring such interest, to
the effect set forth therein, if requested by the Trustee, and (5) such
other certifications, legal opinions or other information as the Company
may reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, then the Trustee, as Registrar, shall
cancel or cause to be canceled such Certificated Note and concurrently
therewith the Company shall credit the applicable Global Note with the same
aggregate principal amount at maturity, in accordance with the instructions
referred to above.
(viii) Other Exchanges. In the event that a beneficial interest in a
Global Note is exchanged for Notes in definitive registered form pursuant
to Section 2.10, prior to the effectiveness of a Shelf Registration
Statement with respect to such Notes, such Notes may be exchanged only in
accordance with such procedures as are substantially consistent with the
16
provisions of clauses (ii) through (iv) above (including the certification
requirements, if any, intended to ensure that such transfers comply with
Rule 144A or Regulation S under the Securities Act, as the case may be) and
such other procedures as may from time to time be adopted by the Company
and furnished in an Officers' Certificate to the Trustee.
(ix) Restricted Period. Prior to the termination of the Restricted
Period with respect to the issuance of the Notes, transfers of interests in
the Regulation S Global Note to "U.S. persons" (as defined in Regulation S
under the Securities Act) shall be limited to transfers made pursuant to
the provisions of Section 2.6(a)(iii). The Company shall provide an
Officers' Certificate to advise the Trustee as to the termination of the
restricted period and the Trustee may rely conclusively thereon.
(b) Except in connection with a Shelf Registration Statement contemplated
by and in accordance with the terms of the Registration Rights Agreement, if
Notes are issued upon the transfer, exchange or replacement of Notes bearing the
Restricted Securities Legend set forth in Exhibit A hereto, or if a request is
---------
made to remove such Restricted Securities Legend on Notes, the Notes so issued
shall bear the Restricted Securities Legend, or the Restricted Securities Legend
shall not be removed, as the case may be, unless there is delivered to the
Company such satisfactory evidence, which may include an opinion of counsel, as
may be reasonably required by the Company or the Trustee, that neither the
legend nor the restrictions on transfer set forth therein are required to ensure
that transfers thereof comply with the provisions of Rule 144A, Rule 144 or
Regulation S under the Securities Act or, with respect to Certificated Notes,
that such Notes are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Trustee, at
the direction of the Company, shall authenticate and deliver Notes that do not
bear the legend.
(c) Neither the Company nor the Trustee shall have any responsibility for
any actions taken or not taken by the Depositary.
Section 2.7 Replacement Notes.
-----------------
If the holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken or if such Note is mutilated and is surrendered to the Trustee,
the Company shall issue and the Trustee shall authenticate a replacement Note if
the Trustee's and the Company's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be sufficient in the judgment of
both to protect the Company, the Trustee, any Agent or any authenticating agent
from any loss which any of them may suffer if a Note is replaced. The Company
may charge the relevant holder for its expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, or is about to be purchased by the Company
pursuant to Article 3 hereof, the Company in its discretion may, instead of
issuing a new Note, pay or purchase such Note, as the case may be.
Every replacement Note is an additional obligation of the Company.
17
Section 2.8 Outstanding Notes.
-----------------
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
and those described in this Section as not outstanding.
If a Note is replaced, paid or purchased in accordance with the terms of
this Indenture, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced, paid or purchased Note is held by a bona
fide purchaser.
If Notes are considered paid under Section 4.1 hereof or converted under
Article 5 hereof, they cease to be outstanding and interest on them ceases to
accrue.
Subject to Section 2.9 hereof, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
Section 2.9 Treasury Securities.
-------------------
In determining whether the Noteholders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or an Affiliate of the Company shall be considered as though they are
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes identified to the Trustee as so owned shall be so disregarded.
Section 2.10 Temporary Notes.
---------------
(a) Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee, upon receipt of a written order of the Company as set forth in
Section 2.2, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as definitive
Notes.
(b) A Global Note deposited with the Depositary or with the Trustee as
Custodian for the Depositary pursuant to Section 2.1 shall be transferred to the
beneficial owners thereof in the form of Certificated Notes only if such
transfer complies with Section 2.6 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global Note or
if at any time such Depositary ceases to be a "clearing agency" registered under
the Exchange Act and a successor depositary is not appointed by the Company
within 90 days of such notice, or (ii) the Company, at its option, notifies the
Trustee in writing that it elects to cause the issuance of Notes in the form of
Certificated Notes under the Indenture, then upon surrender by the Global Note
holder of its Global Notes, Notes in certificated form will be issued to each
person that the Global Note holder and the Depositary identify as being a
beneficial owner of the related Notes.
18
(c) Any Global Note that is transferable to the beneficial owners thereof
in the form of Certificated Notes pursuant to this Section 2.10 shall be
surrendered by the Depositary to the Trustee to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Note, an equal
aggregate principal amount at maturity of Notes of authorized denominations in
the form of Certificated Notes. Any portion of a Global Note transferred
pursuant to this Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and registered in such
names as the Depositary shall direct. Any Note in the form of Certificated
Notes delivered in exchange for an interest in the Global Note shall, except as
otherwise provided by Section 2.6(b), bear the Restricted Securities Legend set
forth in Exhibit A hereto.
(d) Subject to the provisions of Section 2.10(c), the registered holder of
a Global Note may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a holder is entitled to take under this Indenture or the Notes.
(e) In the event of the occurrence of either of the events specified in
Section 2.10(b), the Company will promptly make available to the Trustee a
reasonable supply of Certificated Notes in definitive, fully registered form
without interest coupons.
Section 2.11 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar, Paying Agent and Conversion Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, redemption,
conversion, exchange or payment. The Trustee shall promptly cancel all Notes
surrendered for registration of transfer, redemption, conversion, exchange,
payment, replacement or cancellation and shall dispose of canceled Notes in
accordance with its standard procedures or as the Company directs. The Company
may not issue new Notes to replace Notes that it has paid or redeemed or that
have been delivered to the Trustee for cancellation or that any holder has
converted.
Section 2.12 Defaulted Interest.
------------------
If the Company fails to make a payment of interest on the Notes, it shall
pay such defaulted interest plus any interest payable on the defaulted interest,
in any lawful manner. It may pay such defaulted interest, plus any such
interest payable on it, to the persons who are holders of Notes on a subsequent
special record date. The Company shall fix any such record date and payment
date. At least 15 days before any such record date, the Company shall mail or
cause to be mailed to Noteholders a notice that states such record date, payment
date and amount of such interest to be paid.
19
Section 2.13 CUSIP Numbers.
-------------
The Company in issuing the Notes may use one or more "CUSIP" numbers, and
if so, such CUSIP number(s) shall be included in notices of redemption,
repurchase or exchange as a convenience to holders of Notes; provided, however,
-------- -------
that any such notice may state that no representation is made as to the
correctness or accuracy of any CUSIP number printed in the notice or on the
Notes and that reliance may be placed only on the other identification numbers
printed on the Notes. The Company will promptly notify the Trustee of any
change in the CUSIP number(s).
ARTICLE 3
REDEMPTION
----------
Section 3.1 Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to the optional redemption
provision of the Notes (Section 5 of the Notes) and Section 3.7 hereof, it shall
furnish to the Trustee at least 35 days but not more than 60 days before the
redemption date (unless a shorter notice period shall be satisfactory to the
Trustee) an Officers' Certificate setting forth (i) the Section of this
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Notes (if less than all) to be redeemed and
(iv) the redemption price.
Section 3.2 Selection of Notes to Be Redeemed.
---------------------------------
If less than all the Notes are to be redeemed, the Trustee shall select the
Notes to be redeemed pro rata, by lot or such other method that the Trustee
considers fair and appropriate (as long as such method complies with the
requirements of the principal national securities exchange or national market
system on which the Notes are listed, if any). The Trustee shall make the
selection not less than 30 days and not more than 60 days before the redemption
date from Notes outstanding and not previously called for redemption. The
Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $1,000. Notes and portions thereof that the Trustee
selects shall be in amounts of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly upon selection by the Trustee of the Notes or portions of Notes
to be called for redemption.
If any Note selected for partial redemption is converted in part after such
selection, the converted portion of such Note shall be deemed (so far as may be)
to be the portion to be selected for redemption. The Notes (or portions thereof)
so selected shall be deemed duly selected for redemption for all purposes
hereof, notwithstanding that any such Note is converted in whole or in part
before the mailing of the notice of redemption. Upon any redemption of less
than all the Notes, the Company and the Trustee may treat as outstanding any
Notes surrendered for conversion during the period 15 days next preceding the
mailing of a notice of redemption and need not treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
20
Section 3.3 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption to each holder whose Notes are to be
redeemed at such holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the amount of accrued interest to be paid to, but excluding, the
redemption date;
(d) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion will be issued;
(e) the name and address of the Paying Agent;
(f) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(g) that interest on Notes called for redemption ceases to accrue on and
after the redemption date (unless the Company defaults in the payment of the
redemption price);
(h) the section of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed;
(i) the aggregate principal amount of Notes (if less than all) that are
being redeemed;
(j) the CUSIP number(s), if any, of the Notes (provided that the disclaimer
permitted by Section 2.13 may be made); and
(k) that Notes called for redemption may be converted at any time prior to
the close of business on the last Business Day immediately preceding the
redemption date and if not converted prior to the close of business on such
date, the right of conversion will be lost.
Such notice shall also state the current Conversion Price and the date on
which the right to convert such Notes or portions thereof into Common Stock of
the Company will expire.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at the Company's expense.
21
Section 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Notes called for redemption become due
and payable by the Company on the redemption date at the price set forth in the
Note.
Section 3.5 Deposit of Redemption Price.
---------------------------
On to prior to the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date unless theretofore converted into Common Stock pursuant to the
provisions hereof; provided if such payment is made on the redemption date it
--------
must be received by the Trustee or Paying Agent, as the case may be, by 10:00
a.m. New York City time, on such date. Promptly after the redemption date, the
Trustee or the Paying Agent shall return to the Company any money not required
for that purpose.
On and after the redemption date, unless the Company shall default in the
payment of the redemption price, interest will cease to accrue on the principal
amount of the Notes or portions thereof called for redemption and for which
funds have been set apart for payment. In the case of Notes or portions thereof
redeemed on a redemption date which is also an Interest Payment Date, the
interest payment due on such date shall be paid to the person in whose name the
Note is registered at the close of business on the relevant Record Date.
Section 3.6 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the holder at the sole expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.7 Optional Redemption.
-------------------
The Notes are not redeemable by the Company prior to November 5, 2000. On
or after November 5, 2000, the Notes are redeemable upon 30 days' notice at the
option of the Company, in whole, or from time to time, in part, at the
redemption prices set forth below (expressed as percentages of the principal
amount), in each case together with accrued and unpaid interest to, but
excluding, the date fixed for redemption.
If redeemed during the 12-month period beginning November 1 (November 5,
2000 through October 31, 2001 in the case of the first such period):
REDEMPTION
YEAR PRICE
---- ----------
2000............................................................. 101.70%
2001............................................................. 100.85
22
and 100% on November 1, 2002; provided any semi-annual payment of interest
--------
becoming due on the date fixed for redemption shall be payable to the holders
of record on the relevant Record Date of the Notes being redeemed.
Notwithstanding the foregoing, the Company may not redeem any Notes unless all
accrued and unpaid interest has been paid on all outstanding Notes for all
interest periods terminating on or prior to the last Interest Payment Date
before the date of redemption. Any redemption pursuant to this Section 3.7
shall be made pursuant to the provisions of Section 3.1 through 3.6 hereof.
Section 3.8 Conversion Arrangement on Call for Redemption.
---------------------------------------------
In connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the holders, on or before the date fixed for redemption, an amount not
less than the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to (but excluding) the date fixed for redemption, 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 date fixed for redemption, any Notes not duly
surrendered for conversion by the holders hereof 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 in Article 5) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the date fixed for redemption (and
the right to convert any such Notes 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 Notes. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Notes shall increase or otherwise affect any of the powers,
duties, responsibilities or obligations of the Trustee as set forth in this
Indenture.
ARTICLE 4
COVENANTS
---------
Section 4.1 Payment of Notes.
----------------
The Company shall pay the principal of, interest and Liquidated Damages (if
any) on, the Notes on the dates and in the manner provided in the Notes.
Principal and interest and Liquidated Damages, if any, shall be considered paid
on the date due if the Paying Agent (other than the Company or a Subsidiary of
the Company) holds as of 10:00 a.m. New York City time on that date money
designated for and sufficient to pay all principal and interest and Liquidated
Damages, if any, then due unless such money is paid to holders of Senior
Indebtedness pursuant to Article 6. To the extent lawful, the Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law, to the extent allowed under such Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace period) at the
rate borne by the Notes, compounded semiannually.
23
Section 4.2 Maintenance of Office.
---------------------
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office or agency of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served, which office or agency shall initially be the office of State Street
Bank and Trust Company, N.A., an Affiliate of the Trustee, located at ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Trust Window, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Administration
Office of the Trustee specified in Section 12.10.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
-------- -------
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company shall 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 4.3 SEC Reports.
-----------
(a) Whether or not required by the rules and regulations of the SEC and
within the applicable time periods that are (or would be) prescribed thereby, so
long as any Notes are outstanding, the Company shall furnish to the Trustee and
all holders if requested by the Trustee or such holders (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, an
audit report thereon by the Company's certified independent accountants and (ii)
all current reports that would be required to be filed with the SEC on Form 8-K
if the Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the SEC, the Company shall file a copy
of all such information with the SEC for public availability (unless the SEC
will not accept such a filing) and shall promptly make such information
available to all prospective investors and Noteholders who request it in
writing. The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Transfer Restricted Securities (as defined in the
Registration Rights Agreement) remain outstanding, the Company shall furnish to
all holders or beneficial holders and prospective purchasers of the Notes
designated by the holders of Transfer Restricted Securities, promptly upon their
written request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
24
Section 4.4 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company, an Officers' Certificate stating that a review
of the activities of the Company and its subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled all of its obligations under, and complied with the covenants and
conditions contained in, this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his knowledge the Company
has kept, observed, performed and fulfilled each and every covenant, and
complied with the covenants and conditions contained in this Indenture and is
not in default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which such Officer may have
knowledge) and that to the best of such Officer's knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of, interest and Liquidated Damages (if any) on, the Notes are
prohibited.
One of the Officers signing such Officers' Certificate shall be either the
Company's principal executive officer, principal financial officer or principal
accounting officer.
The Company will, so long as any of the Notes are outstanding, deliver to
the Trustee, forthwith upon becoming aware of:
(a) any Default or Event of Default; or
(b) any event of default under any other mortgage, indenture or instrument
of the Company or any of its Significant Subsidiaries
an Officers' Certificate specifying such Default, Event of Default or other
default.
Section 4.5 Corporate Existence.
-------------------
Subject to Article 7 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary of the Company in accordance with the respective organizational
documents of each Significant Subsidiary and the rights (charter and statutory),
licenses and franchises of the Company and its Significant Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
-------- -------
right, license or franchise, or the corporate, partnership or other existence of
any subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Noteholders.
25
Section 4.6 Taxes.
-----
The Company shall, and shall cause each of its subsidiaries to, pay prior
to delinquency all taxes, assessments and governmental levies, except as
contested in good faith and by appropriate proceedings and except when the
failure to make such payment will not have a material adverse effect on the
Company and its subsidiaries taken as a whole or be adverse in any material
respect to the Noteholders.
Section 4.7 Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each holder of Notes shall
have the right, in accordance with this Section 4.7, to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such holder's Notes (the "Change of Control Offer") at a cash purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to, but excluding, the Change of Control
Payment Date (the "Change of Control Payment").
(b) The Change of Control Offer shall remain open for a period specified by
the Company which shall be no less than 20 Business Days following the delivery
of a Change of Control Notice (as defined below) (the "Commencement Date"),
except to the extent that a longer period is required by applicable law (the
"Tender Period"). The Change of Control Payment Date and the Tender Period may
be extended to the extent required by law; however, if so extended, it shall
constitute an Event of Default if the Change of Control Payment Date does not
occur within 90 days of the Change of Control. Upon the expiration of the
Tender Period (the "Change of Control Payment Date"), the Company shall purchase
the principal amount of Notes required to be purchased pursuant to this Section
4.7 (the "Offer Amount").
(c) If the Change of Control Payment Date is on or after a Record Date and
on or before the related Interest Payment Date, any accrued interest will be
paid to the person in whose name a Note is registered at the close of business
on such Record Date, and no additional interest will be payable to Noteholders
who tender Notes pursuant to the Change of Control Offer.
(d) The Company shall provide the Trustee with notice of the Change of
Control Offer at least 10 days before the Commencement Date.
(e) Within 30 days following any Change of Control, the Company or the
Trustee (at the expense of the Company) shall send, by first-class mail, a
notice (the "Change of Control Notice") to each of the Noteholders, which shall
govern the terms of the Change of Control Offer and shall state:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.7 hereof and the Tender Period;
(ii) the Offer Amount, the Change of Control Payment (as determined
in accordance with this Section 4.7), the Change of Control Payment Date,
and that all Notes tendered will be accepted for payment;
26
(iii) that Noteholders electing to have a Note or portion thereof
purchased pursuant to any Change of Control Offer will be required to
surrender the Note, with the form entitled "Option of Noteholder To Elect
Purchase" on the reverse of the Note completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice prior to the close of business on the Change of
Control Payment Date;
(iv) that Noteholders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives, not
later than the close of business on the Business Day preceding the Change
of Control Payment Date, or such longer period as may be required by law, a
letter or a telegram, telex, facsimile transmission (receipt of which is
confirmed and promptly followed by a letter) setting forth the name of the
Noteholder, the principal amount of the Note or portion thereof the
Noteholder delivered for purchase and a statement that such Noteholder is
withdrawing his election to have the Note or portion thereof purchased;
(v) that any Note or portion thereof not tendered or accepted for
payment will continue to accrue interest;
(vi) that, unless the Company defaults in the payment of the Change
of Control Payment, any Note or portion thereof accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date; and
(vii) that Noteholders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof.
The Change of Control Notice shall contain all instructions and materials
necessary to enable such Noteholders to tender Notes pursuant to the Change of
Control Offer.
(f) On or prior to the Change of Control Payment Date, the Company shall
irrevocably deposit with the Trustee or a Paying Agent in immediately available
funds an amount equal to the Offer Amount to be held for payment in accordance
with the terms of this Section; provided if such payment is made on the Change
--------
of Control Payment Date it must be received by the Trustee or Paying Agent, as
the case may be by 10:00 a.m. New York City time, on such date. On the Change
of Control Payment Date, the Company shall, to the extent lawful, (i) accept for
payment the Notes or portions thereof tendered pursuant to the Change of Control
Offer, (ii) deliver or cause the depositary or Paying Agent to deliver to the
Trustee Notes so accepted and (iii) deliver to the Trustee an Officers'
Certificate stating such Notes or portions thereof have been accepted for
payment by the Company in accordance with the terms of this Section 4.7. The
depositary, the Paying Agent or the Company, as the case may be, shall promptly
(but in any case not later than 10 calendar days after the Change of Control
Payment Date) mail or deliver to each tendering Noteholder an amount equal to
the purchase price of the Notes tendered by such Noteholder, and the Trustee
shall promptly authenticate and mail or deliver to such Noteholders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered.
Any Notes not so accepted shall be promptly mailed or delivered by or on behalf
of the Company to the holder thereof.
27
The Company will publicly announce in a newspaper of general circulation the
results of the Change of Control Offer on, or as soon as practicable after, the
Change of Control Payment Date.
(g) The Change of Control Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act, and all applicable tender
offer rules promulgated thereunder.
Section 4.8 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture, including, without limitation, the payment
of the Notes; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, 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 has been enacted.
ARTICLE 5
CONVERSION
----------
Section 5.1 Conversion Privilege.
--------------------
Subject to and upon compliance with the provisions of this Article 5, the
holder of any Note shall have the right, at his option, at any time on or prior
to the close of business on the Maturity Date (or, if such Note or portion
thereof is called for redemption pursuant to Article 3, then in respect of such
Note or portion thereof, on or prior to the close of business on the Business
Day immediately preceding the date fixed for redemption, unless the Company
shall default in payment due upon redemption thereof in which case such
conversion right will terminate at the close of business on the date such
default is cured), to convert the principal amount of any such Note, or any
portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and nonassessable whole shares of Common
Stock obtained by dividing the principal amount of the Note or portion thereof
to be converted by the Conversion Price in effect at such time and by surrender
of the Note so to be converted in whole or in part, such surrender to be made in
the manner provided in Section 5.2. A Note in respect of which a holder has
exercised its option to require repurchase upon a Change of Control pursuant to
Section 4.7 may be converted only if such holder withdraws such election to
exercise in accordance with Section 4.7. In case a holder thereof exercises its
right to require the Company to repurchase the Note, such conversion right in
respect of the Note, or portion thereof, shall expire at the close of business
on the Business Day prior to the Change of Control Payment Date unless the
Company defaults in making the payment due upon repurchase.
28
Section 5.2 Manner of Exercise of Conversion Privilege.
------------------------------------------
In order to exercise the conversion privilege, the holder of any Note to be
converted in whole or in part shall surrender such Note, duly endorsed or
assigned to the Company or in blank, at any of the offices or agencies to be
maintained for such purpose by the Company pursuant to Section 4.2, accompanied
by the funds, if any, required by the third from the last paragraph of this
Section, and shall give irrevocable written notice of conversion in the form
provided on the Notes (or such other notice as is acceptable to the Company) to
the Company (a "Conversion Notice") at such office or agency that the holder
elects to convert such Note or the portion thereof specified in said notice.
Such Conversion Notice shall also state the name or names, together with the
address or addresses, in which the certificate or certificates for shares of
Common Stock which shall be issuable in such conversion shall be issued. Each
Note surrendered for conversion shall, unless the shares issuable on conversion
are to be issued in the same name as the name in which such Note is registered,
be accompanied by instruments of transfer, in form satisfactory to the Company,
duly executed by the holder or his duly authorized attorney and in amount
sufficient to pay any transfer or similar tax. As promptly as practicable after
the surrender of such Note and the receipt of such Conversion Notice,
instruments of transfer and funds, if any, as aforesaid, the Company shall issue
and shall deliver at such office or agency to such holder, or on his written
order, a certificate or certificates for the number of whole shares of Common
Stock issuable upon the conversion of such Note or portion thereof in accordance
with the provisions of this Article 5 and a check or cash in respect of any
fractional interest in a share of Common Stock arising upon such conversion, as
provided in Section 5.3. In case any Note of a denomination greater than $1,000
shall be surrendered for partial conversion, the Company shall execute and the
Trustee shall register or cause to be registered and shall authenticate and
deliver to or upon the order of the holder of the Note so surrendered at the
expense of the Company, a new Note or Notes in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Note.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which such Note shall have been surrendered
and such Conversion Notice (and any applicable instruments of transfer and any
required funds) received by the Company as aforesaid, and the Person or Persons
in whose name or names any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of the shares represented thereby at such time on
such date and such conversion shall be at the Conversion Price in effect at such
time on such date, unless the stock transfer books of the Company shall be
closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall have been surrendered and such Conversion Notice received by the
Company.
Any Note or portion thereof surrendered for conversion after the close of
business on a Record Date for payment of interest and prior to the opening of
business on the next succeeding Interest Payment Date shall be accompanied by
payment, in funds acceptable to the Company, of an amount equal to the interest
thereon that is to be paid on such Interest Payment Date on the principal amount
being converted (unless any such Note or portion thereof being converted shall
have been called for redemption on a redemption date occurring between the close
of business on such Record Date and the opening of
29
business on such Interest Payment Date, in which case no such payment shall be
required); provided, however, that no such payment need be made if there shall
-------- -------
exist at the time of conversion a default in the payment of interest on the
Notes. An amount equal to such payment shall be paid by the Company on such
Interest Payment Date to the holder of such Notes at the close of business on
such Record Date; provided, however, that, if the Company shall default in the
-------- -------
payment of interest on such Interest Payment Date, such amount shall be paid to
the Person who made such required payment. Except as provided for above in this
Section, no payments or adjustments shall be made upon conversion on account of
accrued interest on the Notes or for any dividends or distributions on any
shares of Common Stock delivered upon the conversion of such Notes as provided
in this Article.
In order to exercise the conversion privilege with respect to any interest
in a Global Note, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program and follow the other procedures set forth in such program.
Upon the conversion of a Global Note, the Trustee, or the Custodian at the
direction of the Trustee, shall make a notation on such Global Note as to the
reduction in the principal amount represented thereby.
All shares of Common Stock delivered upon such conversion of Notes that
bear the Restricted Securities Legend shall, if required by the Company upon
written notice to the Trustee, bear restrictive legends substantially in the
form of the legends required to be set forth on the Notes hereunder and shall be
subject to the restrictions on transfer provided in such Restricted Securities
Legend. Neither the Trustee nor any Conversion Agent shall have any
responsibility for the inclusion or content of any such Restricted Securities
Legends on such Common Stock; provided, however, that the Trustee or any
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Conversion Agent shall have provided, to the Company or to the Company's
transfer agent for such Common Stock, prior to or concurrently with a request to
the Company to deliver such Common Stock, written notice that the Notes
delivered for conversion are subject to restrictions on transfer.
Section 5.3 Cash Payments in Lieu of Fractional Shares.
------------------------------------------
No fractional shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of the Notes. If more than one Note shall
be surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Notes, or specified portions
thereof to be converted, so surrendered. Instead of any fractional interest in
a share of Common Stock which would otherwise be deliverable upon the conversion
of any Note or Notes, the Company shall pay to the holder of such Note an amount
in cash (computed to the nearest cent) equal to the Daily Market Price thereof
at the close of business on the Business Day next preceding the day of
conversion multiplied by the fractional interest (expressed as a percentage)
that otherwise would have been deliverable to such holder upon such conversion
of the Notes.
30
Section 5.4 Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be as specified in Section 9 of the form of
Note, subject to adjustment as provided below. The Conversion Price shall be
adjusted from time to time by the Company as follows:
(a) In case the Company, after the date of this Indenture, shall (i) pay a
dividend or make a distribution on its Common Stock in shares of Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a greater number of
shares, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, or (iv) issue by reclassification of its Common Stock any
shares of Capital Stock of the Company, the Conversion Price in effect
immediately prior to such action shall be adjusted so that the holder of any
Note thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock or other Capital Stock of the Company that it
would have owned or been entitled to receive immediately following such action
had such Note been converted immediately prior to the occurrence 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, or
immediately after the effective date, in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
subsection (a), the holder of any Note thereafter surrendered for conversion
shall become entitled to receive shares of two or more classes of Capital Stock
or shares of Common Stock and other Capital Stock of the Company, the Board of
Directors (whose determination shall be conclusive and shall be described in a
statement filed by the Company with the Trustee and with any Conversion Agent as
soon as practicable) shall determine the allocation of the adjusted Conversion
Price between or among shares of such classes of Capital Stock or shares of
Common Stock and other Capital Stock.
(b) In case the Company, after the date of this Indenture, shall issue
rights, warrants or options to all or substantially all holders of its
outstanding shares of Common Stock entitling them (for a period expiring within
45 days after the date fixed for determination for shareholders entitled to
receive such rights, warrants or options) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share (as determined pursuant to
subsection (h) of this Section 5.4) of the Common Stock, the Conversion Price in
effect immediately prior thereto shall be adjusted so that it shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the date of issuance of such rights, warrants or options by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights, warrants or options (immediately prior to
such issuance), plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase (or the aggregate conversion price of the convertible
securities so offered for subscription or purchase) would purchase at such
current market price, and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights, warrants or
options (immediately prior to such issuance) plus the number of additional
shares of Common Stock so offered for subscription or purchase (or into which
the convertible securities so offered for subscription or purchase are
convertible). Such adjustment shall be made successively whenever any such
rights, warrants or options are issued, and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights, warrants or options. In determining whether any rights, warrants
or options entitle the holders to
31
subscribe for or purchase shares of Common Stock (or securities convertible into
Common Stock) at less than such current market price, and in determining the
aggregate offering price of such shares of Common Stock (or conversion price of
such convertible securities), there shall be taken into account any
consideration received by the Company for such rights, warrants or options (and
for such convertible securities), the value of such consideration, if other than
cash, to be determined by the Board of Directors (whose determination shall be
conclusive and shall be described in a certificate filed with the Trustee and
with any Conversion Agent by the Company as soon as practicable). If at the end
of the period during which such warrants, rights or options are exercisable not
all such warrants, rights or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been
based on 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, after the date of this Indenture, shall distribute
to all or substantially all holders of its outstanding Common Stock any shares
of Capital Stock (other than Common Stock), evidences of its indebtedness or
assets (excluding dividends payable exclusively in cash and any issuance of
Capital Stock pursuant to reclassifications for which adjustment is required
pursuant to subsection (a) of this Section 5.4) or rights, warrants or options
to subscribe for or purchase Capital Stock of the Company (excluding those
referred to in subsection (b) of this Section 5.4) entitling them to subscribe
for or purchase Capital Stock at a price per share less than the fair market
value of such Capital Stock (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), then in
each such case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the record date of such distribution by a fraction of which
the numerator shall be the current market price per share (as determined
pursuant to subsection (h) of this Section 5.4) of the Common Stock less the
fair market value on such record date (as determined by the Board of Directors,
whose determination shall be conclusive and shall be described in a certificate
filed with the Trustee and with any Conversion Agent by the Company as soon as
practicable) of the portion of the Capital Stock or the evidences of
indebtedness or the assets so distributed to the holder of one share of Common
Stock or of such subscription rights, warrants or options applicable to one
share of Common Stock and of which the denominator shall be such current market
price per share of Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such distribution. If at the end of the period during which
warrants, rights or options described in this subsection (c) are exercisable not
all such warrants, rights or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been
based on the number of warrants, rights or options actually exercised.
Notwithstanding the foregoing, in the event that the fair market value of the
Capital Stock, evidences of indebtedness, assets, subscription rights, warrants
or options so distributed exceeds the current market price per share of Common
Stock, or such current market price exceeds such fair market value by less than
$0.10 per share, the Company may, in lieu of making an adjustment in the
Conversion Price pursuant to this subsection (c), make adequate provision so
that each Noteholder who converts such Note after the record date for such
distribution will be entitled to receive upon such conversion, in addition to
shares of Common Stock, the amount of Capital Stock, evidences of indebtedness,
assets, subscription rights, warrants or options such Noteholder would have
received had such Note been converted immediately prior to the record date for
such distribution.
32
(d) Notwithstanding anything in subsection (b) or (c) of this Section 5.4
to the contrary, with respect to any rights, warrants or options covered by
subsection (b) or (c) of this Section 5.4, if such rights, warrants or options
are only exercisable upon the occurrence of certain triggering events, then for
purposes of this Section 5.4 such rights, warrants or options shall not be
deemed issued or distributed, and any adjustment to the Conversion Price
required by subsection (b) or (c) of this Section 5.4 shall not be made until
such triggering events occur and such rights, warrants or options become
exercisable.
(e) In case the Company, after the date of this Indenture, shall (i) issue
shares of its Common Stock (excluding those issuances referred to in subsection
(a) or (b) to this Section 5.4) at a price per share less than the current
market price per share (as determined pursuant to subsection (h) of this Section
5.4) on the date the Company fixes the offering price of such additional shares
or (ii) issue any options, warrants or other securities convertible into or
exchangeable or exercisable for Common Stock (such options, warrants or other
securities being collectively referred to herein as "Equity Interests") for a
consideration per share of Common Stock initially deliverable upon conversion,
exchange or exercise of such securities less than the current market price per
share (as determined pursuant to subsection (h) of this Section 5.4) then, in
either case, the Conversion Price shall be reduced immediately thereafter so
that it shall equal the price determined by multiplying such Conversion Price in
effect immediately prior thereto by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding immediately prior to the
issuance of such additional shares plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered, or, in the case of clause (ii) above, the aggregate consideration
for the issuance of such Equity Interests, would purchase at the current market
price and the denominator shall be the number of shares of Common Stock that
would be outstanding immediately after the issuance of such additional shares,
or, in the case of clause (ii) above, such number of outstanding shares plus the
maximum number of shares of Common Stock deliverable upon conversion or in
exchange for or upon exercise of such Equity Interests at the initial
conversion, exchange or exercise price. Such adjustment shall be made
successively whenever such an issuance is made.
This subsection (e) does not apply to:
(1) any transaction described in subsections (a), (b) or (c) of this
Section 5.4; or
(2) the issuance of the Notes or the issuance of Common Stock upon
conversion of the Notes; or
(3) the issuance of Common Stock upon (i) the exercise of any Equity
Interests issued after the date of the Indenture, to the extent that any
required adjustment to the Conversion Price has been made pursuant to this
subsection (e); (ii) the issuance of Common Stock pursuant to the exercise of
any Equity Interest outstanding on the date of this issuance, or pursuant to any
contract or other arrangement described in the Offering Memorandum; or
(4) any Common Stock or Equity Interests issued to the Company's (or
any Subsidiary's) employees, consultants or directors pursuant to any plan or
agreement approved by either the stockholders of the Company or a majority of
the Company's independent directors; or
33
(5) the issuance of any Common Stock or Equity Interests in any bona
fide underwritten public offering.
(f) In case the Company, after the date of this Indenture, shall, by
dividend or otherwise, at any time distribute to all holders of its Common Stock
cash (including any cash that is distributed as part of a distribution referred
to in subsection (c) of this Section) in an aggregate amount that, together with
(i) the aggregate amount of any other distributions to all holders of its Common
Stock made exclusively in cash within the 12 months preceding the date fixed for
determining the stockholders entitled to such distribution and in respect of
which no Conversion Price adjustment pursuant to this subsection (f) has been
made and (ii) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), as of such date of determination, of
consideration payable in respect of any tender offer by the Company or a
subsidiary for all or any portion of the Common Stock consummated within 12
months preceding the date fixed for determining the stockholders entitled to
such distribution and in respect of which no Conversion Price adjustment
pursuant to subsection (g) of this Section has been made, exceeds 15% of the
product of the current market price per share (determined as provided in
subsection (h) of this Section) on the date fixed for the determination of
stockholders entitled to receive such distribution times the number of shares of
Common Stock outstanding on such date, the Conversion Price shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator shall be
the current market price per share (determined as provided in subsection (h) of
this Section) on the date fixed for such determination less the amount of cash
so distributed during such period applicable to one share of Common Stock and
the denominator shall be such current market price, such reduction to become
effective immediately prior to the opening of business on the date after the
date fixed for such determination. Notwithstanding the foregoing, in the event
that the amount of cash and the fair market value of such consideration so
distributed exceeds the current market price per share of Common Stock, or such
current market price exceeds such fair market value by less than $0.10 per
share, the Company may, in lieu of making an adjustment in the Conversion Price
pursuant to this subsection (f), make adequate provision so that each Noteholder
who converts such Note after the record date for such distribution will be
entitled to receive upon such conversion, in addition to shares of Common Stock,
the amount of cash or other consideration such Noteholder would have received
had such Note been converted immediately prior to the record date for such
distribution.
(g) In case a tender offer made by the Company or any subsidiary, after the
date of this Indenture, for all or any portion of the Common Stock shall be
consummated and such tender offer shall involve an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) as of the
last time (the "Expiration Time") that tenders may be made pursuant to such
tender offer (as it may be amended) that, together with (i) aggregate of the
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as of
the consummation of such tender offer, of other consideration paid or payable in
respect of any tender offer by the Company or a subsidiary for all or any
portion of the Common Stock consummated within the 12 months preceding
34
the consummation of such tender offer and in respect of which no Conversion
Price adjustment pursuant to this subsection (g) has been made and (ii) the
aggregate amount of any distributions to all holders of Common Stock made
exclusively in cash within the 12 months preceding the consummation of such
tender offer and in respect of which no Conversion Price adjustment pursuant to
subsection (f) of this Section has been made, exceeds 15% of the product of the
current market price per share (determined as provided in subsection (h) of this
Section) immediately prior to the Expiration Time times the number of shares of
Common Stock outstanding (including any tendered shares) at the Expiration Time,
the Conversion Price shall be reduced by multiplying the Conversion Price in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be (i) the product of the current market price per share
(determined as provided in subsection (h) of this Section) immediately prior to
the Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time minus (ii) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders upon consummation of such tender offer (the shares accepted for
payment in the tender offer being referred to as the "Purchased Shares") and the
denominator shall be the product of (x) such current market price per share
times (y) such number of outstanding shares at the Expiration Time minus the
number of Purchased Shares, such reduction to become effective immediately prior
to the opening of business on the day following the Expiration Time; provided,
--------
if the number of Purchased Shares or the aggregate consideration payable
therefor have not been finally determined by such opening of business, the
adjustment required by this subsection (g) shall, pending such final
determination, be made based upon the preliminary announced results of such
tender offer, and, after such final determination shall have been made, the
adjustment required by this subsection (g) shall be made based upon the number
of Purchased Shares and the aggregate consideration payable therefor as so
finally determined.
(h) For the purpose of any computation under subsections (b) through (g) of
this Section 5.4, the current market price per share of Common Stock on any date
shall be deemed to be the average of the Daily Market Prices for the shorter of
(i) 30 consecutive Business Days ending on the last full trading day on the
exchange or market referred to in determining such Daily Market Prices prior to
the Time of Determination or (ii) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights or
warrants or such distribution through such last full trading day prior to the
Time of Determination.
(i) In any case in which this Section 5.4 shall require that an adjustment
be made immediately following a record date or an effective date, the Company
may elect to defer (but only until five business days following the filing by
the Company with the Trustee and any Conversion Agent of the certificate
required by subsection (k) of this Section 5.4) issuing to the holder of any
Note converted after such record date or effective date the shares of Common
Stock issuable upon such conversion over and above the shares of Common Stock
issuable upon such conversion on the basis of the Conversion Price prior to
adjustment, and paying to such holder any amount of cash in lieu of a fractional
share.
(j) No adjustment in the Conversion Price shall be required to be made
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
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subsection (j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
5.4 shall be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be. No adjustment to the Conversion Price need be made if only the
par value of the Common Stock is changed (including any change to no par value
Common Stock). To the extent that the Notes become convertible into cash,
35
no adjustment need be made thereafter as to such cash and interest will not
accrue on such cash. Anything in this Section 5.4 to the contrary
notwithstanding, the Company shall be entitled to make such reduction in the
Conversion Price, in addition to those required by this Section 5.4, as it in
its discretion shall determine to be advisable in order that any stock dividend,
subdivision of shares, distribution of rights to purchase stock or securities,
or distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable to the
recipients.
(k) Whenever the Conversion Price is adjusted as herein provided, (i) the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee a certificate signed by the President, any Vice President or the
Treasurer of the Company setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment and the manner of computing the same, which certificate shall be
conclusive evidence of the correctness of such adjustment, and (ii) a notice
stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price shall forthwith be given by the Company to the holders
of Notes in the manner provided in Section 12.2. The Company may correct any
previous certificate and notice given pursuant to this subsection (k) by (i)
promptly filing with the Trustee and any Conversion Agent other than the Trustee
a new certificate in the form required by this subsection (k) and (ii) giving a
new notice to the holders of Notes in the form and manner required by this
subsection (k). Such new certificate and notice shall state that such
certificate and notice are being provided to correct the previous certificate
and notice. Except as otherwise provided in Section 9.1, neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect to
the certificate required by this subsection (k) except to exhibit the same to
any holder of Notes who requests to inspect it. Unless and until the Trustee or
any Conversion Agent shall receive such certificate, it shall not be deemed to
have knowledge of any adjustment of the Conversion Price, and may assume,
without inquiry, that the last Conversion Price of which it has knowledge
remains in effect. The certificate required by this subsection (k) shall be
filed at each office or agency maintained for the purposes of conversion of
Notes pursuant to Section 2.3.
(l) In the event that at any time, as a result of an adjustment made
pursuant to subsection (a) of this Section 5.4, the holder of any Note
thereafter surrendered for conversion shall become entitled to receive any
shares of the Company other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any Note
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in this Article 5 and the other provisions of this Article 5
applicable to Common Stock shall apply to such other shares.
(m) Consideration Received
For purposes of any computation respecting consideration received pursuant
to subsection (e) of this Section 5.4, the following shall apply:
(1) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided in no case
--------
shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
36
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof (irrespective
of the accounting treatment thereof) as determined in good faith by the
Board of Directors; and
(3) in the case of the issuance of Equity Interests, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such Equity Interests plus the
additional minimum consideration, if any, to be received by the Company
upon the conversion, exchange or exercise thereof (the consideration in
each case to be determined in the same manner as provided in clauses (1)
and (2) of this subsection).
Section 5.5 Notice to Holders Prior to Certain Corporate Actions.
----------------------------------------------------
In case:
(a) the Company shall take any action that would require an adjustment in
the Conversion Price pursuant to Section 5.4(c); or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock rights, warrants or options to subscribe
for or purchase any shares of stock of any class or of any other rights; or
(c) there shall be any reorganization or reclassification of the Common
Stock (other than a subdivision or combination of the outstanding Common Stock
and other than a change in the par value of the Common Stock), or any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company is required, or any conveyance, transfer,
sale or lease of the Company's properties and assets as, or substantially as, an
entirety; or
(d) the Company takes any action which would require a supplemental
indenture pursuant to Section 5.9; or
(e) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee and any Conversion
Agent, and shall cause to be given to the holders of Notes, in the manner
provided in Section 12.2, as promptly as possible, but in any event at least 10
days prior to the applicable date hereinafter specified, a notice stating (i)
the date on which a record is to be taken for the purpose of such dividend, or
distribution or rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
distribution or rights are to be determined, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance, transfer,
sale, lease, dissolution, liquidation or winding up is expected to become
effective or occur, and, if applicable, 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
reorganization, reclassification, consolidation,
37
merger, conveyance, transfer, sale, lease, liquidation or winding up. Failure to
give such notice or any defect therein shall not affect the legality or validity
of the proceedings described in subsection (a), (b), (c) or (d) of this Section
5.5.
Section 5.6 Reservation of Shares of Common Stock.
-------------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares of
Common Stock or its issued shares of Common Stock held in its treasury, or both,
for the purpose of effecting conversions of Notes, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding Notes not
theretofore converted.
Before taking any action that would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Notes, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Conversion Price.
Section 5.7 Taxes upon Conversion.
---------------------
The Company shall pay any and all documentary, stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of Common
Stock on conversions of Notes pursuant hereto; provided, however, that the
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Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the holder of the Note or Notes to be converted and no
such issue or delivery shall be made unless and until the Person requesting such
issue or delivery 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. The
Company may make such reductions in the Conversion Price, in addition to those
required by Sections 5.4 (a), (b), (c), (d), (e), (f) or (g) as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock 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.
Section 5.8 Covenants as to Common Stock.
----------------------------
The Company covenants that all shares of Common Stock which may be
delivered upon conversions of Notes will upon delivery be duly and validly
issued and fully paid and nonassessable, free of all liens, encumbrances and
charges and not subject to any preemptive rights. Shares of Common Stock
issuable upon conversion of a Transfer Restricted Security shall bear such
restrictive legends as the Company shall provide in accordance with applicable
law. If shares of Common Stock are to be issued upon conversion of a Transfer
Restricted Security and they are to be registered in a name other than that of
the holder of such Transfer Restricted Security, then the person in whose name
such shares of Common Stock are to be registered must deliver to the Trustee a
certificate satisfactory to the Company and signed by such person as to
compliance with the restrictions on transfer contained in such restrictive
legends.
38
The Company further covenants that, for so long as the Common Stock shall
be listed on the Nasdaq National Market or any national securities exchange, the
Company will, if permitted by the rules of Nasdaq National Market or such
national securities exchange, list and keep listed all Common Stock issuable
upon conversion of the Notes.
Section 5.9 Consolidation or Merger or Sale of Assets.
-----------------------------------------
Notwithstanding any other provision herein to the contrary, in case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation which does not result in any reclassification, conversion,
exchange or cancellation of the outstanding shares of Common Stock of the
Company), or in case of any conveyance, transfer, sale or lease to another
corporation of the properties and assets of the Company as, or substantially as,
an entirety, the corporation formed by such consolidation, or the corporation
whose securities, cash or other property will immediately after the merger or
consolidation be owned, by virtue of the merger or consolidation, by the holders
of Common Stock of the Company immediately prior to the merger or the
corporation which shall have acquired such properties and assets of the Company,
as the case may be, shall promptly execute and deliver to the Trustee a
supplemental indenture providing that the holder of each Security then
outstanding shall have the right thereafter to convert such Note, during the
period such Note is convertible as specified in this Article 5, into the kind
and amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock into which such Note might have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease, assuming such holder of Common Stock (i) is not a Person with which the
Company consolidated or into which the Company merged or was merged or to which
such conveyance, transfer, sale or lease was made or an Affiliate of such Person
and (ii) did not exercise statutory rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease is not the same for
each share of Common Stock in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purposes of this
Section 5.9 the kind and amount of securities, cash or other property receivable
upon such consolidation, merger, conveyance, transfer, sale or lease for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by the holders of a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 5 in relation to any shares of stock or other securities or property
thereafter deliverable on the conversion of the Notes.
The above provisions of this Section 5.9 shall similarly apply to
successive consolidations, mergers, conveyances, transfers, sales or leases.
The Company shall give notice of the execution of such a supplemental
indenture to the holders of Notes in the manner provided in Section 12.2 within
30 days after the execution thereof; provided, however, that such notice need
-------- -------
not be given if such information has been provided prospectively in the notice
given pursuant to Section 5.5. Failure to give such notice, or any defects
therein, shall not affect
39
the legality or validity of any such supplemental indenture or any transaction
contemplated in this Section 5.9.
Section 5.10 Disclaimer of Responsibility for Certain Matters.
------------------------------------------------
Neither the Trustee nor any Conversion Agent shall at any time be under any
duty or responsibility to any holder of Notes to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee nor any Conversion Agent
shall be accountable with respect to the listing or registration referred to in
Section 5.8 or the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities, cash or other property, which may at any
time be issued or delivered upon the conversion of any Note; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or to make any cash
payment upon the surrender of any Note for the purpose of conversion or, subject
to the provisions of Section 9.1, to comply with any of the covenants of the
Company contained in this Article 5.
Section 5.11 Cancellation of Converted Notes.
-------------------------------
All Notes delivered for conversion shall be delivered to the Trustee to be
cancelled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 2.11.
Section 5.12 Voluntary Reduction.
-------------------
The Company from time to time may reduce the Conversion Price by any amount
for any period of time if the period is at least 20 days or such longer period
as may be required by law and if the reduction is irrevocable during such
period; provided the Company shall give 15 days' prior notice to the Trustee and
--------
each holder of Notes of such decrease and the Board of Directors has made a
determination that such decrease would be in the best interests of the Company,
which determination shall be conclusive.
ARTICLE 6
SUBORDINATION
-------------
Section 6.1 Agreement to Subordinate.
------------------------
The Company agrees, and each holder of Notes by accepting a Note agrees,
that the indebtedness evidenced by the Note is subordinated in right of payment,
to the extent and in the manner provided in this Article 6, to the prior payment
in full of all Senior Indebtedness (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Indebtedness.
40
Section 6.2 Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of all Obligations due in respect of such Senior
Indebtedness in cash or U.S. Government Obligations or other payment
satisfactory to the holders of the Senior Indebtedness before holders of
Notes shall be entitled to receive any payment with respect to the Notes;
and
(2) until all Senior Indebtedness then due and payable is paid in full
in cash or U.S. Government Obligations or other payment satisfactory to the
holders of the Senior Indebtedness, any distribution to which holders of
Notes would be entitled but for this Article 6 shall be made to holders of
Senior Indebtedness, as their interests may appear.
Section 6.3 Default on Senior Indebtedness.
------------------------------
The Company may not make any payment or distribution to the Trustee, any
Paying Agent or any holder of Notes in respect of Obligations with respect to
the Notes and may not acquire from the Trustee or any holder of Notes any Notes
until all Senior Indebtedness has been paid in full in cash or U.S. Government
Obligations or other payment satisfactory to the holders of the Senior
Indebtedness if:
(i) a default in the payment of any principal of, premium, if any,
interest, rent or other Obligations in respect of Senior Indebtedness
occurs and is continuing beyond any applicable grace period in the
agreement, indenture or other document governing such Senior Indebtedness;
or
(ii) a default, other than a payment default, on 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 default (a "Payment Blockage Notice") from the
Company or a Representative or holder of Designated Senior Indebtedness.
If the Trustee receives any Payment Blockage Notice pursuant to this
Section 6.3, no subsequent Payment Blockage Notice shall be effective for
purposes of such Section unless and until (i) at least 365 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage Notice
and (ii) all scheduled payments of principal, premium, if any, and interest on
the Notes that have come due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee 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 Notes and may acquire them upon the earlier of:
41
(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 Section 6.3(ii) hereof,
179 days pass after notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated, if this Article otherwise permits the
payment, distribution or acquisition at the time of such payment, distribution
or acquisition.
Section 6.4 Acceleration of Notes.
---------------------
In the event of the acceleration of the Notes because of an Event of
Default, the Company may not make any payment or distribution to the Trustee or
any holder of Notes in respect of Obligations with respect to Notes and may not
acquire or purchase any Notes from the Trustee or any holder of Notes until all
Senior Indebtedness then due and payable has been paid in full in cash or U.S.
Government Obligations or other payment satisfactory to the holders of Senior
Indebtedness or such acceleration is rescinded in accordance with the terms of
this Indenture. If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.
Section 6.5 When Distribution Must Be Paid Over.
-----------------------------------
In the event the Company shall have made distributions of assets of the
Company of any kind for any Obligations with respect to the Notes to the
Trustee, Paying Agent or directly to any holder of Notes whether in cash,
property or securities, including without limitation by way of set-off or
otherwise, at a time when such payment or distribution is prohibited by this
Indenture, such payment shall be held by the Trustee, Paying Agent or such
holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, to the extent necessary to make payment in full of any Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness; provided the
--------
foregoing shall apply to the Trustee and any Paying Agent only if the Trustee or
such Paying Agent has actual knowledge (as determined in accordance with Section
6.11) that such payment or distribution is prohibited by this Indenture.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 6, 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 shall not be liable to any such
holders if the Trustee shall pay over or distribute to or on behalf of holders
of Notes or the Company or any other person money or assets to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article 6, except if
such payment is made as a result of the wilful misconduct or gross negligence of
the Trustee.
42
Section 6.6 Notice by Company.
-----------------
The Company shall promptly notify the Trustee of any facts known to the
Company that would cause a payment of any Obligations with respect to the Notes
or the purchase of any Notes by the Company to violate this Article, but failure
to give such notice shall not affect the subordination of the Notes to the
Senior Indebtedness as provided in this Article.
Section 6.7 Subrogation.
-----------
After all Senior Indebtedness is paid in full and until the Notes are paid
in full, holders of Notes shall be subrogated (equally and ratably with all
other indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the holders of Notes have been
applied to the payment of Senior Indebtedness. A distribution made under this
Article to holders of Senior Indebtedness that otherwise would have been made to
holders of Notes is not, as between the Company and holders of Notes, a payment
by the Company on the Notes.
Section 6.8 Relative Rights.
---------------
This Article defines the relative rights of holders of Notes and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and holders of Notes, the obligation of
the Company, which is absolute and unconditional, to pay principal of, and
interest and Liquidated Damages (if any) on, the Notes in accordance with their
terms;
(b) affect the relative rights of holders of Notes and creditors (other
than with respect to Senior Indebtedness) of the Company other than their rights
in relation to holders of Senior Indebtedness; or
(c) prevent the Trustee or any holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Indebtedness to receive distributions and payments
otherwise payable to holders of Notes.
If the Company fails because of this Article to pay principal of, or
interest or Liquidated Damages (if any) on, a Note on the due date, the failure
is still a Default or Event of Default.
Section 6.9 Subordination May Not Be Impaired by Company.
--------------------------------------------
No right of any holder of Senior Indebtedness to enforce the subordination
of the indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or any holder of Notes or by the failure of the
Company or any such holder to comply with this Indenture.
43
Section 6.10 Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 6, the Trustee and the holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the holders of Notes
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, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
6.
Section 6.11 Rights of Trustee and Paying Agent.
----------------------------------
Notwithstanding the provisions of this Article 6 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment or distribution by
the Trustee (other than pursuant to Section 6.5), and the Trustee may continue
to make payments on the Notes, unless the Trustee shall have received at least
two Business Days prior to the date of such payment or distribution written
notice directing that such payment or distribution not be made and setting forth
the facts that would cause such payment or distribution with respect to the
Notes to violate this Article. Only the Company or a Representative may give
the notice.
Nothing in this Article 6 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 9.7 hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 6.12 Authorization to Effect Subordination.
-------------------------------------
Each holder of a Note 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 6, 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
6.2 hereof at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
Section 6.13 Article Applicable to Paying Agents.
-----------------------------------
In case 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 6 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent
44
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
--------
however, that the second and third paragraphs of Section 6.11 shall not apply to
-------
the Company or any subsidiary of the Company if it or such subsidiary acts as
Paying Agent.
Section 6.14 Senior Indebtedness Entitled to Rely.
------------------------------------
The holders of Senior Indebtedness shall have the right to rely upon this
Article 6, 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.
Section 6.15 Certain Conversions Not Deemed Payment.
--------------------------------------
For purposes of this Article 6 only, (1) the issuance and delivery of
junior securities upon conversion of Notes in accordance with Article 5 shall
not be deemed to constitute a payment or distribution on account of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on Notes or on account of the purchase or other acquisition of Notes, and
(2) the payment, issuance or delivery of cash (except in satisfaction of
fractional shares pursuant to Section 5.3), property or securities (other than
junior securities) upon conversion of a Note shall be deemed to constitute
payment on account of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on such Note. For the purposes of this Section
6.15, the term "junior securities" means (a) shares of any stock of any class of
the Company or (b) securities of the Company that are subordinated in right of
payment to all Senior Indebtedness that may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Notes are so subordinated as provided in this
Article. Nothing contained in this Article 6 or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
(other than holders of Senior Indebtedness) and the Noteholders, the right,
which is absolute and unconditional, of the holder of any Note to convert such
Note in accordance with Article 5.
ARTICLE 7
SUCCESSORS
----------
Section 7.1 Merger, Consolidation or Sale of Assets.
---------------------------------------
The Company may not consolidate or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another
corporation, person or entity unless:
(a) the Company is the surviving corporation or the entity or the person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
45
(b) the entity or person formed by or surviving any such consolidation or
merger (if other than the Company) or the entity or person to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been made
expressly assumes all the Obligations of the Company, pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under the Notes and
the Indenture;
(c) immediately after such transaction no Default or Event of Default
exists; and
(d) the Company or such person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with this provision of this Indenture and that all conditions
precedent in this Indenture relating to such transaction have been satisfied.
Section 7.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 7.1 hereof, the successor corporation formed
by such consolidation or into or with which the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition 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 has been named as the Company herein; and the Company shall be released
from its obligations under this Indenture and the Securities, except as to any
obligation that arises from or as a result of such transaction.
Section 7.3 Purchase Option on Change of Control.
------------------------------------
This Article 7 does not affect the obligations of the Company (including
without limitation any successor to the Company) under Section 4.7.
ARTICLE 8
DEFAULTS AND REMEDIES
---------------------
Section 8.1 Events of Default.
-----------------
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest or Liquidated Damages,
if any on any Note when the same becomes due and payable and the Default
continues for a period of 30 days after the date due and payable; or
(b) the Company defaults in the payment of the principal of any Note when
the same becomes due and payable at maturity, upon redemption or otherwise; or
46
(c) the Company fails to observe or perform any covenant or agreement
contained in Section 4.7; or
(d) the Company fails to observe or perform any other covenant or agreement
contained in this Indenture or the Notes required by any of them to be performed
and the Default continues for a period of 60 days after notice from the Trustee
to the Company or from the holders of 25% in aggregate principal amount of the
outstanding Notes to the Company and the Trustee stating that such notice is a
"Notice of Default"; or
(e) there is a default under any mortgage, indenture or instrument under
which there is issued or by which there is secured or evidenced any indebtedness
for money borrowed by the Company or any of its Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Subsidiaries), whether such
indebtedness or guarantee now exists or is created after the Issuance Date,
which default (i) is caused by a failure to pay when due principal of or
interest on such indebtedness within the grace period provided for in such
indebtedness (which failure continues beyond any applicable grace period) (a
"Payment Default") or (ii) results in the acceleration of such indebtedness
prior to its express maturity and, in each case, the principal amount of any
such indebtedness, together with the principal amount of any other such
indebtedness under which there is a Payment Default or the maturity of which has
been so accelerated, aggregates $15 million or more, and such indebtedness is
not discharged or such Payment Default is not cured or waived, or such
acceleration is not rescinded or annulled, within a period of 30 days after
there shall have 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
principal amount of the Notes then outstanding a written notice specifying such
default and requiring the Company to cause such indebtedness to be discharged or
cause such Payment Default to be cured or waived or such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder; or
(f) a final judgment or judgments for the payment of money are entered by a
court or courts of competent jurisdiction against the Company or any Subsidiary
of the Company which remains undischarged for a period (during which such
judgment (s) shall not be bonded or execution shall not be effectively stayed)
of 60 days, provided the aggregate of all such judgments which are not fully
--------
insured by a reputable insurance company exceeds $15 million; or
(g) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law; (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case in which it
is the debtor, (iii) consents to the appointment of a Bankruptcy Custodian of it
or for all or substantially all of its property, (iv) makes a general assignment
for the benefit of its creditors, or (v) generally is unable to pay its debts as
the same become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (i) is for relief against the Company or any Significant
Subsidiary in an involuntary case, (ii) appoints a Bankruptcy Custodian of the
Company or any Significant Subsidiary or for all or substantially all of its
property, or (iii) orders the liquidation of the Company or any Significant
Subsidiary, and the order or decree remains unstayed and in effect for 60 days.
47
The term "Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law. The term "Bankruptcy
Law" means Title 11, U.S. Code or any similar federal or state law for the
relief of debtors.
Section 8.2 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in clauses
(g) and (h) of Section 8.1 hereof with respect to the Company) occurs and is
continuing, the Trustee by notice to the Company, or the Noteholders of at least
25% in principal amount of the then outstanding Notes by notice to the Company
and the Trustee, may declare all the Notes to be due and payable. Upon such
declaration, the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes shall be due and payable immediately. If an Event
of Default specified in clause (g) or (h) of Section 8.1 hereof occurs with
respect to the Company, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Noteholder. The Noteholders of a majority in aggregate
principal amount of the then outstanding Notes by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration.
Section 8.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of, or interest or
Liquidated Damages (if any) on, the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 8.4 Waiver of Past Defaults.
-----------------------
The holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may waive an existing Default or
Event of Default and its consequences except a continuing Default or Event of
Default in the payment of the principal of, or interest or Liquidated Damages
(if any) on, any Note (other than the non-payment of principal of the Notes
which has become due solely by virtue of an acceleration which has been duly
rescinded as provided above), or in respect of a covenant or provision of this
Indenture which cannot be modified or amended without the consent of all holders
of Notes. When a Default or Event of Default is waived, it is cured and ceases;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
48
Section 8.5 Control by Majority.
-------------------
The holders of a majority in principal amount of the then outstanding Notes
may 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
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, is unduly prejudicial to the rights of other Noteholders,
or would involve the Trustee in personal liability.
Section 8.6 Limitation on Suits.
-------------------
A Noteholder may pursue a remedy with respect to this Indenture or the
Notes only if:
(a) the Noteholder gives to the Trustee notice of a continuing Event of
Default;
(b) the Noteholders of at least 25% in principal amount of the then
outstanding Notes make a request to the Trustee to pursue the remedy;
(c) such Noteholder or Noteholders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Noteholders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
Section 8.7 Rights of Noteholders to Receive Payment.
----------------------------------------
Subject to the provisions of Article 6 hereof, the right of any Noteholder
of a Note to receive payment of principal of, and interest and Liquidated
Damages (if any) on, the Note, on or after the respective due dates expressed in
the Note, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Noteholder made pursuant to this Section.
Section 8.8 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 8.1(a) or (b) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal of, and
interest and Liquidated Damages (if any) on, on the Notes remaining unpaid and,
to the extent lawful, interest on overdue principal and interest and Liquidated
Damages, if any, and
49
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 8.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Noteholders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder thereof, or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any
such proceeding.
Section 8.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for all amounts due under Section 9.7 hereof;
Second: to the holders of Senior Indebtedness to the extent required
by Article 6;
Third: to Noteholders for amounts due and unpaid on the Notes for
principal and interest and Liquidated Damages, if any, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal and interest and Liquidated Damages, if
any, respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders made pursuant to this Section.
Section 8.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a holder pursuant to Section 8.7
hereof, or a suit by Noteholders of more than 10% in principal amount of the
then outstanding Notes.
50
ARTICLE 9
THE TRUSTEE
-----------
Section 9.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default of which the
Trustee has been charged with knowledge pursuant to Section 9.2(e): (i) the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others and (ii) the Trustee may in good faith 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. However, the Trustee shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct, except
that: (i) this paragraph does not limit the effect of paragraph (b) of this
Section 9.1; (ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts and (iii) the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 8.5 hereof.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 9.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 9.2 Rights of Trustee.
-----------------
(a) The Trustee may rely, and shall be protected in acting or refraining
from acting, on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
51
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed by the Trustee with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee shall not be charged with knowledge of any Event of Default
under subsection (c), (d), (e), (f), (g) or (h) of Section 8.1 unless either (1)
a Trust Officer assigned to Corporate Trust Administration shall have actual
knowledge thereof, or (2) the Trustee shall have received notice thereof in
accordance with Section 12.2 hereof from the Company or any holder.
(f) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
Section 9.3 Individual Rights of Trustee.
----------------------------
Subject to Sections 9.10 and 9.11 hereof, the Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Company or an Affiliate of the Company with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
Section 9.4 Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes, and it shall
not be responsible (i) for any statement of the Company in the Indenture or any
statement in the Notes other than its authentication or (ii) for compliance by
the Company with the Registration Rights Agreement.
Section 9.5 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if the
Trustee is charged with knowledge thereof pursuant to Section 9.2(e), the
Trustee shall mail to Noteholders a notice of the Default or Event of Default
within 60 days after it occurs. Except in the case of a Default or Event of
Default in payment on any Note, the Trustee may withhold the notice if and so
long as the Trustee in good faith determines that withholding the notice is in
the interests of Noteholders.
52
Section 9.6 Reports by Trustee to Noteholders.
---------------------------------
Within 60 days after the reporting date stated in Section 12.10, the
Trustee shall mail to Noteholders a brief report dated as of such reporting date
that complies with TIA Section 313(a) if and to the extent required by such
Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
A copy of each report at the time of its mailing to Noteholders shall be
filed with the SEC and each stock exchange or securities market on which the
Notes are listed. The Company shall timely notify the Trustee when the Notes
are listed or quoted on any stock exchange or securities market.
Section 9.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time compensation for its
services hereunder in accordance with a written agreement between the Company
and the Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such disbursements and expenses may include the
reasonable disbursements, compensation and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee against any loss, liability or
reasonable expense incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture and the trusts
hereunder, including the reasonable costs and expenses of defending itself
against or investigating any claim of liability in the premises, except as set
forth in the next paragraph. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim with counsel designated by the Company, who may
be outside counsel to the Company but shall in all events be reasonably
satisfactory to the Trustee, and the Trustee shall cooperate in the defense. In
addition, the Trustee may retain separate counsel and, if the Trustee shall have
been advised by such counsel that there may be one or more legal defenses
available to the Trustee which are different from or in addition to those
available to the Company and which the counsel designated by the Company would
be precluded from asserting or that the Trustee has one or more interests that
conflict with those of the Company, the Company shall pay the reasonable fees
and expenses of such separate counsel. The indemnification herein extends to
any settlement, provided the Company will not be liable for any settlement made
--------
without its consent, provided, further, that such consent will not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its negligence, lack of good faith or
wilful misconduct.
The obligations of the Company under this Section 9.7 shall survive the
satisfaction and discharge of this Indenture.
53
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.1(g) or (h) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 9.8 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the
Noteholders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Noteholders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b), any
Noteholder who has been a bona fide holder of a Note for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee. Notwithstanding
54
replacement of the Trustee pursuant to this Section 9.8, the Company's
obligations under Section 9.7 hereof shall continue for the benefit of the
retiring trustee with respect to expenses and liabilities incurred by it prior
to such replacement.
Section 9.9 Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business (including the trust created
by this Indenture) to, another corporation, the successor corporation without
any further act shall be the successor Trustee.
Section 9.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1) and (5). The Trustee or its parent shall always have a
combined capital and surplus as stated in Section 12.10 hereof. The Trustee is
subject to TIA Section 310(b).
Section 9.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 10
DISCHARGE OF INDENTURE
----------------------
Section 10.1 Termination of Company's Obligations.
------------------------------------
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 9.7 and 10.2 hereof shall survive) when all
outstanding Notes theretofore authenticated and issued have been delivered to
the Trustee for cancellation and the Company has paid all sums payable
hereunder.
Thereupon, the Trustee upon request of the Company, shall acknowledge in
writing the discharge of the Company's obligations under this Indenture, except
for those surviving obligations specified above.
Section 10.2 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
Upon the earlier of (i) two years after the date upon which such payment
shall have become due and (ii) such money would escheat to the state, the
Trustee and the Paying Agent shall pay to the Company any money held by them for
the payment of principal of, or interest or Liquidated Damages (if
55
any) on, the Notes; provided, however, that the Company shall have first caused
-------- -------
notice of such payment to the Company to be mailed to each Noteholder entitled
thereto no less than 30 days prior to such payment, if practicable. After
payment to the Company, the Trustee and the Paying Agent shall have no further
liability with respect to such money and Noteholders entitled to the money must
look to the Company for payment as general creditors unless any applicable
abandoned property law designates another person.
ARTICLE 11
AMENDMENTS, SUPPLEMENTS AND WAIVERS
-----------------------------------
Section 11.1 Without Consent of Noteholders.
------------------------------
The Company and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Noteholder:
(a) to cure any ambiguity, defect or inconsistency in a manner not adverse
to the interests of any Noteholder;
(b) to comply with Sections 5.12 and 7.1 hereof;
(c) to provide for uncertificated Notes in addition to certificated Notes;
(d) to make any change that does not adversely affect the interests
hereunder of any Noteholder;
(e) to make any changes to or add to the covenants of the Company for the
benefit of the holders of Notes; or
(f) to qualify this Indenture under the TIA or to comply with the
requirements of the SEC in order to maintain the qualification of the Indenture
under the TIA.
Section 11.2 With Consent of Noteholders.
---------------------------
Subject to Section 8.7 hereof, the Company and the Trustee may amend or
supplement this Indenture or the Notes with the written consent (including
consents obtained in connection with any tender offer) of the Noteholders of at
least a majority in principal amount of the then outstanding Notes. Subject to
Sections 8.4 and 8.7 hereof, the Noteholders of a majority in principal amount
of the Notes then outstanding may also waive compliance in a particular instance
by the Company with any provision of this Indenture or the Notes. However,
without the consent of each Noteholder affected, an amendment, supplement or
waiver under this Section may not:
(a) reduce the principal amount of Notes whose holders must consent to an
amendment, supplement or waiver;
56
(b) reduce the rate of or change the time for payment of interest on any
Note;
(c) reduce the principal of or change the fixed maturity of any Note or
alter the redemption provisions of Sections 5 and 6 of the Notes or alter the
repurchase provisions of Section 7 of the Notes.
(d) make any Note payable in money other than that stated in the Note;
(e) make any change in Section 8.4, 8.7 or 11.2 hereof (including this
sentence);
(f) waive a default in the payment of the principal of, or interest or
Liquidated Damages (if any) on, any Note (except a rescission of acceleration of
the Notes by the holders of at least a majority in aggregate principal amount of
the outstanding Notes and a waiver of the payment default that resulted from
such acceleration);
(g) waive a redemption payment or repurchase payment payable on any Note;
or
(h) make any change in Articles 5 and 6 hereof that adversely affects the
interests of the Noteholders.
To secure a consent of the Noteholders under this Section 11.2, it shall
not be necessary for the Noteholders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of Notes or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid or agreed to be
paid to all holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing the
amendment or waiver.
Section 11.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 11.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Noteholder of a Note is a continuing consent by the Noteholder and every
subsequent Noteholder of a Note or portion of a Note that evidences the same
debt as the consenting Noteholder's Note, even if notation of the consent is not
made on any Note. However, any such Noteholder or subsequent Noteholder may
revoke
57
the consent as to such Noteholder's Note or portion of a Note if the Trustee
receives the notice of revocation before the date on which the Trustee receives
an Officers' Certificate certifying that the Noteholders of the requisite
principal amount of Notes have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Noteholders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Noteholders of the principal amount of Notes required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall bind
every Noteholder, unless it is of the type described in any of clauses (a)
through (h) of Section 11.2 hereof. In such case, the amendment or waiver shall
bind each Noteholder who has consented to it and every subsequent Noteholder
that evidences the same debt as the consenting Noteholder's Note.
Section 11.5 Notation on or Exchange of Notes.
--------------------------------
The Trustee may place an appropriate notation about an amendment or waiver
on any Note thereafter authenticated. The Company in exchange for all Notes may
issue, and the Trustee shall authenticate, new Notes that reflect the amendment
or waiver.
Section 11.6 Trustee Protected.
-----------------
The Trustee shall sign all supplemental indentures, except that the Trustee
may, but need not, sign any supplemental indenture that adversely affects its
rights.
ARTICLE 12
MISCELLANEOUS
-------------
Section 12.1 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is automatically deemed to be incorporated in this
Indenture by the TIA, the incorporated provision shall control.
58
Section 12.2 Notices.
-------
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person or mailed by first-class mail
with postage prepaid (registered or certified, return receipt requested) to the
other's address stated in Section 12.10 hereof. The Company or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication to a Noteholder shall be mailed by first-class
mail, with postage prepaid, to his address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its validity or sufficiency with respect to other
Noteholders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
Notwithstanding the foregoing, notices to the Trustee shall be effective only
upon receipt.
If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice as required by the
Indenture, then such method of notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of such notice.
Section 12.3 Communication by Noteholders with Other Noteholders.
---------------------------------------------------
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 12.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate, in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.5),
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
59
(b) an Opinion of Counsel, in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.5),
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.
Section 12.5 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Section 4.3)
shall include:
(a) a statement that the person signing such certificate or rendering such
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such person, such person has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been satisfied.
Section 12.6 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by, or a meeting of,
Noteholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.7 Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York or the place of payment are not required
to be open. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If any other
operative date for purposes of this Indenture shall occur on a Legal Holiday
then for all purposes the next succeeding day that is not a Legal Holiday shall
be such operative date.
Section 12.8 No Recourse Against Others.
--------------------------
No director, officer, employee or shareholder, as such, of the Company
shall have any liability for any obligations of the Company under the Notes or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Noteholder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
60
Section 12.9 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
Section 12.10 Other Provisions.
----------------
The Company initially appoints the Trustee as Paying Agent, Registrar,
Conversion Agent and authenticating agent, as provided in Section 2.2.
The first certificate pursuant to Section 4.3 hereof shall be for the
fiscal year ending on December 31, 1997.
The reporting date for Section 9.6 hereof is May 15 of each year. The
first reporting date is May 15, 1998.
The Trustee (or, if it is a subsidiary of a bank holding company, its
parent) shall always have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
The Company's address is:
P-Com, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to Company's counsel:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
Two Embarcadero Place
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
61
The Trustee's address is:
State Street Bank and Trust Company of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration -- P-Com, Inc.
4 1/4% Convertible Subordinated Notes due 2002
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to Trustee's counsel:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 12.11 Governing Law.
-------------
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND
THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 12.12 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or an Affiliate. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.13 Successors.
----------
All agreements of the Company in this Indenture and the Notes shall bind
its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
Section 12.14 Severability.
------------
In case any provision in this Indenture or in the Notes 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.
62
Section 12.15 Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table, and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
63
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
P-COM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Sophie
----------------------
Name: ▇▇▇▇▇▇▇ ▇. Sophie
Title:
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
64
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
P-COM, INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
AND ANY SHARES OF COMMON STOCK ISSUED UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (a) SUCH SECURITY AND ANY SHARES OF COMMON STOCK ISSUED UPON
CONVERSION HEREOF MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE, AS REGISTRAR FOR THE NOTES (OR IN THE CASE OF THE COMMON STOCK, THE
TRANSFER AGENT FOR THE COMMON STOCK (THE "TRANSFER AGENT")), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON
1
TRANSFER OF THE NOTES (OR THE COMMON STOCK, AS THE CASE MAY BE) (THE FORM OF
WHICH LETTER OF WHICH CAN BE OBTAINED FROM THE TRUSTEE FOR THE NOTES OR THE
TRANSFER AGENT FOR THE COMMON STOCK), (c) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OR
ANY COMMON STOCK ISSUED UPON CONVERSION HEREOF OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE.
2
CUSIP No. ________________
[ISIN No._______________]
No. __________ $_________
P-COM, INC.
4 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2002
P-Com, Inc., a Delaware corporation (the "Company"), promises to pay to
________________________________________________________________ or registered
assigns, the principal sum of $________ [(or such lesser or greater amounts as
indicated on Schedule A hereof)]/(1)/ on November 1, 2002, subject to the
further provisions of this Note set forth on the reverse hereof which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Interest Payment Dates: May 1 and November 1, commencing May 1, 1998
Interest Record Dates: April 15 and October 15
IN WITNESS WHEREOF, P-Com, Inc. has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.
Dated: P-COM, INC.
By:_________________________________________
By:_________________________________________
[Seal]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 4 1/4% Convertible Subordinated
Notes due 2002 described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., as Trustee
By:______________________________________
Authorized Signatory
___________________
(1) Applicable to Global Securities only.
P-COM, INC.
1. INTEREST. P-Com, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate of 4
1/4% per annum. The Company will pay interest semiannually on each May 1 and
November 1 (each an "Interest Payment Date"), commencing on May 1, 1998, to
holders of record on the immediately preceding April 15 and October 15 (each a
"Record Date").
Interest on the Notes will accrue from the most recent date to which
interest has been paid, or if no interest has been paid, from November 10, 1997.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. To the extent lawful, the Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law, to the extent
allowed under such Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace period) at the rate borne by the Notes,
compounded semiannually.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered holders of the Notes at
the close of business on the Record Date immediately preceding the relevant
Interest Payment Date (other than with respect to a Note or portion thereof
called for redemption on a redemption date, or repurchased in connection with a
Change of Control on a Change of Control Payment Date, during the period from
the close of business on a Record Date to (but excluding) the next succeeding
Interest Payment Date (in which case accrued interest shall be payable, unless
such Note is converted, to the holder of the Note or portion thereof redeemed or
repurchased in accordance with the applicable redemption or repurchase
provisions of the Indenture)). Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Company may pay principal and interest
by check payable in such money, and may mail such check to the holder's
registered address; provided all payments with respect to Notes the holders of
--------
which have given wire transfer instructions to the Company and to the Trustee at
least five Business Days prior to the applicable Interest Payment Date will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the holders thereof.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, the Trustee
will act as Paying Agent, Registrar and Conversion Agent. The Company may
change any Paying Agent, Registrar, co-registrar or Conversion Agent without
prior notice. The Company or any of its Affiliates may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an indenture, dated as
of November 1, 1997 (the "Indenture"), between the Company and State Street Bank
and Trust Company of California, N.A., as Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
the Trust Indenture Act of 1939, as amended (15 U.S. Code Section 77aaa-77bbbb)
as in effect on the date of the Indenture. The Notes are subject to, and
qualified by, all such terms, certain of which are summarized hereon, and
holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured general obligations of the Company limited in
aggregate principal amount to $100,000,000 (or, if the Initial Purchasers' over-
allotment option is exercised in full, $115,000,000) and subordinated in right
of payment to all existing and future Senior
Indebtedness of the Company. Capitalized terms not defined herein have the same
meaning as is given to them in the Indenture.
5. OPTIONAL REDEMPTION. The Notes are not redeemable by the Company
prior to November 5, 2000. On or after November 5, 2000, the Notes are
redeemable upon 30 days' notice at the option of the Company, in whole, or from
time to time, in part, at the redemption prices set forth below, in each case
together with accrued and unpaid interest to, but excluding, the date fixed for
redemption.
If redeemed during the 12-month period beginning November 1 (November 5,
2000 through October 31, 2001 in the case of the first such period):
REDEMPTION
YEAR PRICE
---- ----------
2000........................................................ 101.70%
2001........................................................ 100.85
and 100% on November 1, 2002; provided any semi-annual payment of interest
--------
becoming due on the date fixed for redemption shall be payable to the holders
of record on the relevant Record Date of the Notes being redeemed.
Notwithstanding the foregoing, the Company may not redeem any Notes unless all
accrued and unpaid interest has been paid on all outstanding Notes for all
interest periods terminating on or prior to the last Interest Payment Date
before the date of redemption.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed, by first-
class mail, at least 30 days but not more than 60 days prior to the date fixed
for redemption to the holder of each Note to be redeemed at such holder's last
address of record on the books of the Registrar. The Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000. In the event of a redemption of less than all of the Notes, the Notes
will be chosen for redemption by the Trustee in accordance with the Indenture.
If this Note is redeemed subsequent to a Record Date with respect to any
Interest Payment Date specified above and on or prior to such Interest Payment
Date, then any accrued interest will be paid to the person in whose name this
Note is registered at the close of business on such Record Date.
7. REPURCHASE AT OPTION OF HOLDER. If there is a Change of Control, the
Company shall be required to offer to purchase on the Change of Control Payment
Date all outstanding Notes at a cash purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the Change of Control Payment Date. Holders of Notes that
are subject to an offer to purchase will receive a Change of Control Offer from
the Company at least 20 Business Days prior to any related Change of Control
Payment Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder To
Elect Purchase" appearing below. Holders have the right to withdraw their
election by delivering a written notice of withdrawal to the Company or the
Paying Agent in accordance with the terms of the Indenture.
2
8. SUBORDINATION. The payment of the principal of, interest on or any
other amounts due on the Notes is subordinated in right of payment to all
existing and future Senior Indebtedness of the Company, as described in the
Indenture. Each holder, by accepting a Note, agrees to such subordination and
authorizes and directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee as its attorney-in-fact for such purpose.
9. CONVERSION. The holder of any Note has the right, exercisable at any
time prior to the close of business (New York time) on the date of the Note's
maturity, to convert the principal amount thereof (or any portion thereof that
is an integral multiple of $1,000) into fully paid and nonassessable whole
shares of Common Stock at the initial Conversion Price of $27.46 per share,
subject to adjustment under certain circumstances, except that if a Note is
called for redemption or repurchase, as the case may be, the conversion right
will terminate at the close of business on the Business Day immediately
preceding the date fixed for redemption or repurchase, as the case may be. A
Note in respect of which a holder has delivered an "Option of Holder to Elect
Purchase" form appearing below exercising the option of such holder to require
the Company to purchase such Note may be converted only if the notice of
exercise is withdrawn as provided above and in accordance with the terms of the
Indenture.
To convert a Note, a holder must (1) complete and sign a conversion notice
substantially in the form set forth below, (2) surrender the Note to a
Conversion Agent, (3) furnish appropriate endorsements or transfer documents if
required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax, if required. The number of shares issuable upon conversion of a
Note is determined by dividing the principal amount of the Note converted by the
Conversion Price in effect on the Conversion Date. No fractional shares will be
issued upon conversion but a cash adjustment will be made for any fractional
interest.
Any Note or portion thereof surrendered for conversion after the close of
business on a Record Date for payment of interest and prior to the opening of
business on the next succeeding Interest Payment Date shall be accompanied by
payment, in funds acceptable to the Company, of an amount equal to the interest
thereon that is to be paid on such Interest Payment Date on the principal amount
being converted (unless any such Note or portion thereof being converted shall
have been called for redemption on a redemption date occurring between the close
of business on such Record Date and the opening of business on such Interest
Payment Date, in which case no such payment shall be required); provided,
--------
however, that no such payment need be made if there shall exist at the time of
-------
conversion a default in the payment of interest on the Notes. An amount equal
to such payment shall be paid by the Company on such Interest Payment Date to
the holder of such Notes at the close of business on such Record Date; provided,
--------
however, that, if the Company shall default in the payment of interest on such
-------
Interest Payment Date, such amount shall be paid to the Person who made such
required payment. Except as provided in the Indenture, no payments or
adjustments shall be made upon conversion on account of accrued interest on the
Notes or for any dividends or distributions on any shares of Common Stock
delivered upon the conversion of such Notes.
The above description of conversion of the Notes is qualified by reference
to, and is subject in its entirety by, the more complete description thereof
contained in the Indenture.
3
In order to exercise the conversion privilege with respect to any interest
in a Global Note, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program and follow the other procedures set forth in such program.
Upon the conversion of a Global Note, the Trustee, or the Custodian at the
direction of the Trustee, shall make a notation on such Global Note as to the
reduction in the principal amount represented thereby.
10. REGISTRATION RIGHTS. The holder of this Note is entitled to the
benefits of a Registration Rights Agreement, dated as of November 1, 1997, among
the Company and the Initial Purchasers (the "Registration Rights Agreement").
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered, and Notes may be exchanged, as provided
in the Indenture. The Registrar may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption (except the unredeemed portion of any Note being redeemed in part).
Also, it need not exchange or register the transfer of any Note for a period of
15 days before a selection of Notes to be redeemed.
12. PERSONS DEEMED OWNERS. The registered holder of a Note may be treated
as its owner for all purposes.
13. UNCLAIMED MONEY. Upon the earlier of (i) two years after the date
such payment became due and (ii) when such monies would escheat to the state,
money for the payment of principal of, or interest or Liquidated Damages, if
any, on the Notes shall be paid back to the Company by the Trustee and the
Paying Agent. After that, holders of Notes entitled to the money must look to
the Company for payment unless the applicable abandoned property law designates
another Person and, in either case, all liability of the Trustee and the Paying
Agent with respect to such money shall cease.
14. DEFAULTS AND REMEDIES. The Notes shall have the Events of Default as
set forth in Section 8.1 of the Indenture. Subject to certain limitations in
the Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company, or the holders of at least 25% in aggregate principal
amount of the then outstanding Notes by notice to the Company and the Trustee,
may declare all the Notes to be due and payable immediately, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all Notes shall become due and payable immediately without further
action or notice.
The holders of a majority in principal amount of the Notes then outstanding
by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Notes issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates
4
to the Trustee. The above description of Events of Default and remedies is
qualified by reference to, and subject in its entirety by, the more complete
description thereof contained in the Indenture.
15. AMENDMENTS, SUPPLEMENTS AND WAIVERS. Subject to certain exceptions
set forth in Section 11.2, the Indenture or the Notes may be amended or
supplemented with the consent of the holders of at least a majority in principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for Notes), and any existing default may
be waived with the consent of the holders of a majority in principal amount of
the then outstanding Notes. The Indenture and the Notes may be amended without
the consent of any holder under certain circumstances set forth in Section 11.1
of the Indenture.
16. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may become the owner or pledgee of the Notes and may
otherwise deal with the Company or an Affiliate of the Company with the same
rights it would have, as if it were not Trustee, subject to certain limitations
provided for in the Indenture and in the TIA. Any Agent may do the same with
like rights.
17. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
shareholder of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
18. GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
19. AUTHENTICATION. The Notes shall not be valid until authenticated by
the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
20. ABBREVIATIONS. Customary abbreviations may be used in the name of a
holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
one or more CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company will furnish to any holder of the Notes upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Request may be made to:
5
P-Com, Inc.
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
or to Company's counsel:
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▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
Two Embarcadero Place
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▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
6
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Date:____________________________________
In connection with any transfer of any of the Notes evidenced by this
certificate (other than pursuant to any transfer pursuant to a Shelf
Registration Statement that is effective at such time of transfer) occurring
prior to the date that is two years after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were owned
by the Company or any Affiliate of the Company, the undersigned confirms, to the
best of his or her knowledge, that such Notes are being transferred:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [_] pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) [_] to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933 that has furnished to
the Trustee a signed letter containing certain
representations and agreements (the form of
which letter is attached as Exhibit E to the
Indenture); or
(5) [_] pursuant to another available exemption from the
registration requirements of the Securities Act
of 1933; or
(6) [_] pursuant to an effective registration statement
under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (2),
-------- -------
(3), (4) or (5) is checked, the Trustee may require, prior to registering
any such transfer of the Notes such legal opinions, certifications and
other information as the Company has reasonably requested 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 of 1933, such as the exemption provided by Rule 144 under such Act.
__________________________________________________
__________________________________________________
Signature(s)
Signature must be guaranteed by an eligible
Guarantor Institution (banks, stock brokers,
savings and loan associations and credit unions)
with membership in an approved signature guarantee
medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15.
__________________________________________________
Signature Guarantee
2
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE A
The initial principal amount of this Global Note shall be $_______. The
following increases or decreases in the principal amount of this Global Note
have been made:
Amount of increase in
Principal Amount of this Principal Amount of Signature of
global Note including upon Amount of decrease this Global Note authorized signatory
exercise of over-allotment in Principal Amount following such of Trustee or
Date Made option of this Global Note decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof repurchased by
the Company pursuant to Section 4.7 of the Indenture, check the box: [_]
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased:_______________________
Your Signature:____________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Date:______________________________________________________________________
Signature Guarantee:/(1)/__________________________________________________
___________________
/(1)/ Signature must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.
ELECTION TO CONVERT
To P-Com, Inc.:
The undersigned owner of this Note hereby irrevocably exercises the option
to convert this Note, or the portion below designated, into Common Stock of P-
Com, Inc. in accordance with the terms of the Indenture referred to in this
Note, and directs that the shares issuable and deliverable upon conversion,
together with any check in payment for fractional shares, be issued in the name
of and delivered to the undersigned, unless a different name has been indicated
in the assignment below. 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 thereto.
Date:
Convert in whole:____________________
Portions of Note to be converted ($1,000 or
integral multiples thereof):
$________________________
_________________________________________________
Signature (for conversion only)
_________________________________________________
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
_________________________________________________
_________________________________________________
_________________________________________________
Signature Guarantee:/(1)/________________________
__________________
/(1)/ Signature must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.
EXHIBIT B
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER FROM
RULE 144A GLOBAL NOTE
TO REGULATION S GLOBAL NOTE
(TRANSFERS PURSUANT TO SECTION 2.6(a)(ii)
OF THE INDENTURE)
State Street Bank and Trust Company of California, N.A., as Trustee
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: P-Com, Inc. 4 1/4% Convertible Subordinated Notes due 2002 (the
"Notes")
Reference is hereby made to the Indenture dated as of October 15, 1997 (the
"Indenture") between P-Com, Inc., as Issuer, and State Street Bank and Trust
Company of California, N.A., as Trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $____________ aggregate principal amount of
Notes which are held in the form of the Rule 144A Global Note (CUSIP No.
___________) with the Depositary in the name of _______________________ [name of
transferor] (the "Transferor") to effect the transfer of the Notes in exchange
for an equivalent beneficial interest in the Regulation S Global Note.
In connection with such request, the Transferor does hereby certify that
such transfer has been effected in accordance with the transfer restrictions set
forth in the Notes and (i) with respect to transfers made in reliance on
Regulation S, does certify that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) 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;
(3) 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
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933 (the
"Securities Act");
B-1
(ii) with respect to transfers made in reliance on Rule 144 certify that
the Notes are being transferred in a transaction permitted by Rule 144 under the
Securities Act; and (iii) with respect to transfers made in reliance on Rule
144A, that such Notes are being transferred in accordance with Rule 144A under
the Securities Act to a transferee that the Transferor reasonably believes is
purchasing the Notes for its own account or an account with respect to which the
transferee exercises sole investment discretion and the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1), as the
case may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
[Name of Transferor]
By:_______________________________________________
Name:
Title:
Date:
B-2
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL NOTE
TO RULE 144A GLOBAL NOTE
(TRANSFERS PURSUANT TO SECTION 2.6(a)(iii)OF THE INDENTURE)
State Street Bank and Trust Company of California, N.A., as Trustee
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Attention: Corporate Trust Department
Re: P-Com, Inc. 4 1/4% Convertible Subordinated Notes due 2002 (the
"Notes")
Reference is hereby made to the Indenture dated as of October 15, 1997 (the
"Indenture") between P-Com, Inc., as Issuer, and State Street Bank and Trust
Company of California, N.A., as Trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $__________ aggregate principal amount of Notes
which are held in the form of the Regulation S Global Note with the Depositary
(ISIN No.__________) in the name of ____________________ [name of transferor]
(the "Transferor") to effect the transfer of the Notes in exchange for an
equivalent beneficial interest in the Rule 144A Global Note.
In connection with such request, and in respect of such Notes the
Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933 to a transferee that
the Transferor reasonably believes is purchasing the Notes for its own account
or an account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with applicable securities laws of
any state of the United States or any other jurisdiction.
[Name of Transferor],
By:______________________________________________
Name:
Title:
Dated:
C-1
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL NOTE OR CERTIFICATED
SECURITY TO CERTIFICATED SECURITY
(TRANSFERS PURSUANT TO SECTION 2.6(a)(iv)
OR SECTION 2.6(a)(vi) OF THE INDENTURE)
State Street Bank and Trust Company of California, N.A., as Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: P-Com, Inc. 4 1/4% Convertible Subordinated Notes due 2002 (the
"Notes")
Reference is hereby made to the Indenture dated as of October 15, 1997 (the
"Indenture") between P-Com, Inc., as Issuer, and State Street Bank and Trust
Company of California, N.A., as Trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $___________ aggregate principal amount of
Notes which are held [in the form of the [Rule 144A/Regulation S] [Global] Note
(CUSIP No. __________ (_________)/ISIN No. _________) with the Depositary](1) in
the name of ________________ [name of transferor] (the "Transferor") to effect
the transfer of the Notes.
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii) to
a transferee that the Transferor reasonably believes is an institutional
"accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act of 1933) and is acquiring at least
$100,000 principal amount of Notes for its own account or for one or more
accounts as to which the transferee exercises sole investment discretion and
(iii) in accordance with applicable securities laws of any state of the United
States or any other jurisdiction.
[Name of Transferor],
By:______________________________________________
Name:
Title:
Dated:
________________
/(1)/ Insert, if appropriate.
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EXHIBIT E
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(TRANSFERS PURSUANT TO SECTION 2.6(a)(iv), SECTION 2.6(a)(vi) AND SECTION
2.6(a)(vii))
State Street Bank and Trust Company of California, N.A., as Trustee
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Re: P-Com, Inc. 4 1/4% Convertible Subordinated Notes due 2002 (the
"Notes")
Reference is hereby made to the Indenture dated as of October 15, 1997 (the
"Indenture") between P-Com, Inc., as Issuer, and State Street Bank and Trust
Company of California, N.A., as Trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
This letter relates to U.S. $____________ aggregate principal amount of
Notes which are held [in the form of the [Rule 144A/Regulation S] Global Note
(CUSIP No. _________ /ISIN No._______) with the Depositary](1) in the name of
_______________________ [name of transferor] (the "Transferor") to effect the
transfer of the Notes to the undersigned.
In connection with such request, and in respect of such Notes we confirm
that:
1. We understand that the Notes were originally offered in a
transaction not involving any public offering in the United States within
the meaning of the United States Securities Act of 1933, as amended (the
"Securities Act"), that the Notes have not been registered under the
Securities Act and that (A) the Notes may be offered, resold, pledged or
otherwise transferred only (i) to a person who the seller reasonably
believes is a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in a transaction meeting the requirements of Rule
144A, to an institutional "accredited investor" (as defined in Rule
501(a)(1)(2)(3) or (7) under the Securities Act of 1933) that prior to such
transfer furnishes the Trustee a signed letter containing certain
representations and agreements, in a transaction meeting the requirements
of Rule 144 under the Securities Act, outside the United States to a
foreign person in a transaction meeting the requirements of Rule 904 under
the Securities Act or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion
of counsel if the Company so requests), (ii) to the Company or (iii)
pursuant to an effective registration statement, and, in each case, in
accordance with any applicable securities laws of any State of the United
States or any other applicable jurisdiction and (B) the purchaser will, and
each subsequent holder is required to, notify any subsequent purchaser from
it of the resale restrictions set forth in (A) above.
2. We are a corporation, partnership or other entity having such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of
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an investment in the Notes, and we are (or any account for which we are
purchasing under paragraph 4 below is) an institutional accredited investor
as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act,
able to bear the economic risk of our proposed investment in the Notes.
3. We are acquiring the Notes for our own account (or for accounts
as to which we exercise sole investment discretion and have authority to
make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Notes, subject, nevertheless, to the
understanding that the disposition of our property shall at all times be
and remain within our control.
4. We are, and each account (if any) for which we are purchasing
Notes is, purchasing Notes having an aggregate principal amount of not less
than $100,000.
5. We understand that (a) the Notes will be delivered to us in
registered form only and that the certificate delivered to us in respect of
the Notes will bear a legend substantially to the following effect:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
AND ANY SHARES OF COMMON STOCK ISSUED UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (a) SUCH SECURITY AND ANY SHARES OF COMMON STOCK ISSUED UPON
CONVERSION HEREOF MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE, AS REGISTRAR FOR THE NOTES (OR IN THE CASE OF THE COMMON STOCK, THE
TRANSFER AGENT FOR THE COMMON STOCK (THE "TRANSFER AGENT")), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE NOTES (OR THE COMMON STOCK, AS THE CASE MAY BE) (THE FORM OF
WHICH LETTER OF WHICH CAN BE OBTAINED FROM THE TRUSTEE FOR THE NOTES OR THE
TRANSFER AGENT FOR THE COMMON STOCK), (c) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
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PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OR ANY COMMON STOCK ISSUED UPON CONVERSION HEREOF OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
and (b) such certificates will be reissued without the foregoing legend
only in accordance with the terms of the Indenture.
6. We agree that in the event that at some future time we wish to
dispose of any of the Notes, we will not do so unless:
(a) the Notes are sold to the Company or any Subsidiary thereof;
(b) the Notes are sold to a qualified institutional buyer in
compliance with Rule 144A under the Securities Act;
(c) the Notes are sold to an institutional accredited investor, as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act,
acquiring at least $100,000 principal amount of the Notes that, prior to
such transfer, furnishes to the Trustee a signed letter containing certain
representations and agreements substantially similar to those set forth
herein relating to the restrictions on transfer of the Notes;
(d) the Notes are sold outside the United States in compliance with
Rule 903 or Rule 904 under the Securities Act;
(e) the Notes are sold by us pursuant to Rule 144 under the Securities
Act; or
(f) the Notes are sold pursuant to an effective registration statement
under the Securities Act.
Very truly yours,
[PURCHASER]
By:______________________________________________
Name:
Title:
Dated:
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