EXHIBIT 4.1
_______________________________________________________________________________
EARTHWEB INC.
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee
INDENTURE
___________________
Dated as of January 25, 2000
____________________
7% Convertible Subordinated Notes due 2005
_______________________________________________________________________________
TABLE OF CONTENTS
___________________
Page
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ARTICLE 1 Definitions and Other Provisions of General Application
Section 1.01. Definitions............................................................ 1
Section 1.02. Other Definitions...................................................... 9
Section 1.03. Compliance Certificates and Opinions................................... 10
Section 1.04. Form of Documents Delivered to Trustee................................. 11
Section 1.05. Acts of Holders........................................................ 12
Section 1.06. Notices, Etc., to Trustee and Company.................................. 14
Section 1.07. Notice to Holders; Waiver.............................................. 14
Section 1.08. Effect of Headings and Table of Contents............................... 15
Section 1.09. Successors and Assigns................................................. 15
Section 1.10. Separability Clause.................................................... 15
Section 1.11. Benefits of Indenture.................................................. 15
Section 1.12. Governing Law.......................................................... 15
Section 1.13. Legal Holidays......................................................... 15
Section 1.14. Personal Immunity from Liability for Incorporators, Stockholders, Etc.. 16
Section 1.15. Conflict with Trust Indenture Act...................................... 16
ARTICLE 2 Securities Forms
Section 2.01. Forms of Securities.................................................... 16
Section 2.02. Form of Trustee's Certificate of Authentication........................ 17
Section 2.03. Securities Issuable in Global Form..................................... 17
ARTICLE 3 The Securities
Section 3.01. Title and Term......................................................... 18
Section 3.02. Denominations.......................................................... 19
Section 3.03. Execution, Authentication, Delivery and Dating......................... 19
Section 3.04. Registration, Registration of Transfer and Exchange.................... 19
Section 3.05. Mutilated, Destroyed, Lost and Stolen Securities....................... 26
Section 3.06. Payment of Interest; Interest Rights Preserved......................... 27
Section 3.07. Persons Deemed Owners.................................................. 28
Section 3.08. Cancellation........................................................... 29
Section 3.09. Computation of Interest................................................ 29
Section 3.10. CUSIP Numbers.......................................................... 29
ARTICLE 4 Remedies
Section 4.01. Events of Default...................................................... 30
Section 4.02. Acceleration of Maturity; Rescission and Annulment..................... 32
Section 4.03. Collection of Indebtedness and Suits for Enforcement by Trustee........ 33
Section 4.04. Trustee May File Proofs of Claim....................................... 34
Section 4.05. Trustee May Enforce Claims Without Possession of Securities............ 34
Section 4.06. Application of Money Collected......................................... 35
Section 4.07. Limitation on Suits.................................................... 35
Section 4.08. Unconditional Right of Holders to Receive Principal, Premium,
If Any, and Interest................................................... 36
Section 4.09. Restoration of Rights and Remedies..................................... 36
Section 4.10. Rights and Remedies Cumulative......................................... 36
Section 4.11. Delay or Omission Not Waiver........................................... 37
Section 4.12. Control by Holders of Securities....................................... 37
Section 4.13. Waiver of Past Defaults................................................ 37
Section 4.14. Waiver of Usury, Stay or Extension Laws................................ 38
Section 4.15. Undertaking for Costs.................................................. 38
ARTICLE 5 The Trustee
Section 5.01. General................................................................ 39
Section 5.02. Certain Rights of Trustee.............................................. 39
Section 5.03. Individual Rights of Trustee........................................... 41
Section 5.04. Trustee's Disclaimer................................................... 41
Section 5.05. Notice of Default...................................................... 41
Section 5.06. Conflicting Interests of Trustee....................................... 42
Section 5.07. Compensation and Indemnity............................................. 42
Section 5.08. Replacement of Trustee................................................. 43
Section 5.09. Successor Trustee by Merger, Etc.................................... 44
Section 5.10. Eligibility......................................................... 44
Section 5.11. Money Held in Trust................................................. 44
Section 5.12. Preferential Collection of Claims................................... 44
Section 5.13. Trustee's Application for Instructions from the Company;
Liquidated Damages.................................................. 45
ARTICLE 6 Holders' Lists and Reports by Trustee and Company
Section 6.01. Disclosure of Names and Addresses of Holders........................ 45
Section 6.02. Reports by Trustee.................................................. 46
Section 6.03. Reports by Company.................................................. 46
Section 6.04. Company to Furnish Trustee Names and Addresses of Holders........... 47
ARTICLE 7 Consolidation, Merger, Sale, Lease or Conveyance
Section 7.01. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions................. 47
Section 7.02. Rights and Duties of Successor Corporation.......................... 48
Section 7.03. Officers' Certificate and Opinion of Counsel........................ 48
ARTICLE 8 Supplemental Indentures
Section 8.01. Supplemental Indentures Without Consent of Holders.................. 49
Section 8.02. Supplemental Indentures with Consent of Holders..................... 50
Section 8.03. Execution of Supplemental Indentures................................ 51
Section 8.04. Effect of Supplemental Indentures................................... 51
Section 8.05. Conformity with Trust Indenture Act................................. 51
Section 8.06. Reference in Securities to Supplemental Indentures.................. 51
ARTICLE 9 Covenants
Section 9.01. Payment of Principal, Premium, If Any, and Interest................. 51
Section 9.02. Maintenance of Office or Agency..................................... 52
Section 9.03. Money for Securities Payments to Be Held in Trust................... 52
Section 9.04. Existence........................................................... 54
Section 9.05. Payment of Taxes and Other Claims................................... 54
Section 9.06. Statement as to Compliance.......................................... 54
Section 9.07. Waiver of Certain Covenants......................................... 54
Section 9.08. Rule 144A Information Requirement................................... 55
ARTICLE 10 Redemption of Securities.
Section 10.01. Provisional and Optional Redemption by the Company............. 55
Section 10.02. Election to Redeem; Notice to Trustee.......................... 56
Section 10.03. Selection by Trustee of Securities to Be Redeemed.............. 56
Section 10.04. Notice of Redemption........................................... 57
Section 10.05. Deposit of Redemption Price.................................... 58
Section 10.06. Securities Payable on Redemption Date.......................... 59
Section 10.07. Securities Redeemed in Part.................................... 59
ARTICLE 11 Repurchase at Option of Holders upon Change in Control
Section 11.01. Right to Require Repurchase.................................... 60
Section 11.02. Conditions to the Company's Election to Pay the Repurchase
Price in Common Stock.......................................... 60
Section 11.03. Notices; Method of Exercising Repurchase Right, Etc............ 60
Section 11.04. Certain Definitions............................................ 64
Section 11.05. Change in Control.............................................. 64
ARTICLE 12 Conversion
Section 12.01. Conversion Privilege, Conversion Rate and Conversion Price..... 65
Section 12.02. Exercise of Conversion Privilege............................... 66
Section 12.03. Fractions of Shares............................................ 67
Section 12.04. Adjustment of Conversion Rate.................................. 68
Section 12.05. Notice of Adjustments of Conversion Rate....................... 74
Section 12.06. Notice of Certain Corporate Action............................. 74
Section 12.07. Company's Obligation Regarding Common Stock.................... 75
Section 12.08. Taxes on Conversions........................................... 76
Section 12.09. Covenant as to Common Stock.................................... 76
Section 12.10. Cancellation of Converted Securities .......................... 76
Section 12.11. Provisions in Case of Reclassification, Consolidation,
Merger or Sale of Assets....................................... 77
Section 12.12. Company's Obligation........................................... 77
ARTICLE 13 Subordination
Section 13.01. Securities Subordinate to Senior Indebtedness.................. 78
Section 13.02. Payment over of Proceeds upon Dissolution, Etc................. 78
Section 13.03. No Payment When Senior Indebtedness in Default................. 79
iv
Section 13.04. Payment Permitted If No Default..................................... 80
Section 13.05. Subrogation to Rights of Holders of Senior Indebtedness............. 80
Section 13.06. Provisions Solely to Define Relative Rights......................... 81
Section 13.07. Trustee to Effectuate Subordination................................. 81
Section 13.08. No Waiver of Subordination Provisions............................... 82
Section 13.09. Notice to Trustee................................................... 82
Section 13.10. Reliance on Judicial Order or Certificate of Liquidating Agent...... 83
Section 13.11. Trustee Not Fiduciary for Holders of Senior Indebtedness............ 84
Section 13.12. Rights of Trustee as Holder of Senior Indebtedness; Preservation
of Trustee's Rights................................................. 84
Section 13.13. Article Applicable to Paying Agents................................. 84
Section 13.14. Certain Conversions Deemed Payment.................................. 84
SIGNATURES
EXHIBIT A - FORM OF SECURITY
INDENTURE, dated as of January 25, 2000, between EARTHWEB INC., a Delaware
corporation (the "Company"), having its principal office at ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 hereunder (the "Trustee"), having an office at ▇▇▇
▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
RECITALS OF THE COMPANY
The Company has duly authorized the issue of its 7% Convertible
Subordinated Notes due 2005 (the "Securities"), and to provide for such
issuance, the Company has duly authorized the execution and delivery of this
Indenture.
Upon qualification of this Indenture under the Trust Indenture Act of 1939
(the "TIA"), it will be subject to the provisions of such Act that are deemed to
be incorporated into this Indenture and shall, to the extent applicable, be
governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all the holders of the Securities, as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.1. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular and
references to he or him or she or her are intended to be gender neutral;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper,"
as used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the TIA;
(3) the word "including" means "including without limitation," and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
Section 1.05.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 4.01.
"Board of Directors" means the board of directors of the Company, the
executive committee of that board or any committee of that board duly authorized
to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
2
"Business Day," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
any day, other than a Saturday or Sunday, that is neither a legal holiday nor a
day on which banking institutions in that Place of Payment or particular
location are authorized or required by law, regulation or executive order to
close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Common Stock" means the common stock of the Company, $0.01 par value, as
it exists on the date of this Indenture and any shares of any class or classes
of capital stock of the Company resulting from any reclassification or
reclassifications thereof.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chief Executive Officer, Chief
Financial Officer, the President or a Vice President of the Company and
delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company pursuant to
Section 9.02 to convert Securities in accordance with Article 12.
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business as it relates to this Indenture
shall be principally administered, which office at the date hereof is located at
State Street Bank and Trust Company of California, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration
(EarthWeb Inc. 7% Convertible Subordinated Notes due 2005).
"corporation" means a corporation, association, partnership, company
(including limited liability company), joint-stock company or business trust.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
3
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"Government Obligations" means securities that are (i) direct obligations
of the United States of America, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which is not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the holder
of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of the Government Obligation evidenced by such depository receipt.
"Holder" means the Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, and without duplication,
(a) all indebtedness, obligations and other liabilities, contingent or
otherwise, of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
or similar agreements, interest rate protection, hedging or similar agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof) other than any account
payable or other accrued current liability or obligation, in each case incurred
in the ordinary course of business in connection with the obtaining of materials
or services; (b) all reimbursement obligations and other liabilities, contingent
or otherwise, of such Person with respect to letters of credit, bank guarantees,
bankers' acceptances, security purchase facilities or similar credit
transactions; (c) all obligations and liabilities, contingent or otherwise, in
respect of deferred and unpaid balances on any purchase price of any property;
(d) all obligations and liabilities (contingent or otherwise) in respect of
leases of such Person required, in conformity with
4
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person and all obligations and
other liabilities, contingent or otherwise, under any lease or related document,
including, without limitation, the balance deferred and unpaid on any purchase
price of any property and a purchase agreement in connection with the lease of
real property that provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor and the
obligations of such Person under such lease or related document to purchase or
to cause a third party to purchase such leased property; (e) all obligations of
such Person, contingent or otherwise, with respect to an interest rate or other
swap, cap or collar agreement or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement;
(f) all direct or indirect guarantees or similar agreements by such Person in
respect of, and obligations or liabilities, contingent or otherwise, of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of indebtedness, obligations or liabilities of another Person of
the kind described in clauses (a) through (f); (g) any indebtedness or other
obligations described in clauses (a) through (f) secured by any mortgage,
pledge, lien or other encumbrance existing on property that is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (h) any and all deferrals,
renewals, extensions, refinancing, replacements, restatements and refundings of,
or amendments, modifications or supplements to, or any indebtedness, or
obligation issued in exchange for, any indebtedness, obligation or liability of
the kind described in clauses (a) through (g).
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Initial Purchasers" means ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated and FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on such Security.
"Maturity" means the date on which the principal of the Securities becomes
due and payable as therein or herein provided, whether at the Stated Maturity,
conversion or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
5
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, the President or a Vice President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for the Company
and who shall be reasonably satisfactory to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder, money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities that have been paid pursuant to Section 3.05 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities converted into Common Stock pursuant to or in
accordance with this Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that,
6
in determining whether the Trustee shall be protected in making such calculation
or in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" means the place or places where the principal of (and
premium, if any), interest on and the Redemption Prices and the Repurchase Price
with respect to the Securities are payable as specified as contemplated by
Section 9.02.
"Predecessor Security" means every previous Security evidencing all or a
portion of the same debt as that evidenced by such Security; and, for the
purposes of this definition, any Security authenticated and delivered under
Section 3.05 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date," when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," means the Optional Redemption Price, in the event of an
Optional Redemption, or the Provisional Redemption Price, in the event of a
Provisional Redemption, as the case may be.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated January 25, 2000, between the Company and the Initial Purchasers.
7
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities means the date specified for that purpose as contemplated by
Section 3.06, whether or not a Business Day.
"Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge and familiarity with the
particular subject.
"Rule 144A" shall mean Rule 144A as promulgated under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and all other amounts
owed in respect of all Indebtedness of the Company, whether outstanding on the
date of this Indenture or thereafter created, incurred, assumed, guaranteed or
in effect guaranteed by the Company (including all deferrals, renewals,
extensions, refinancings, replacements, restatements or refundings of, or
amendments, modifications or supplements to, the foregoing); except for (i) any
such Indebtedness that is by its terms subordinated to or ranking equal with the
Securities, and (ii) any Indebtedness between or among the Company or any of its
Subsidiaries or its Affiliates, including all other debt securities and
guarantees in respect of those debt securities issued to any trust, or trustees
of any trust, partnership or other entity affiliated with the Company that is,
directly or indirectly, a financing vehicle used by the Company in connection
with the issuance by that financing vehicle of preferred securities or other
securities that rank equal with, or junior to, the Securities.
"Significant Subsidiary" means any Subsidiary that is a "significant
subsidiary" (as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act) of the Company.
8
"Special Record Date" for the payment of any Defaulted Interest on the
Securities means a date fixed by the Trustee pursuant to Section 3.06.
"Stated Maturity" means the date specified in the Securities as the fixed
date on which the principal of, or interest on, such Securities is due and
payable.
"Subsidiary" means a corporation a majority of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries of the Company, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
that ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as in
force on the date this Indenture is qualified thereunder; provided, however,
that in the event the Trust Indenture Act of 1939 or such rules and regulations
are amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 and such rules and
regulations as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder.
"United States" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
Section 1.2. Other Definitions.
Defined
Term in Section
"Act"............................................................ 1.05
"Average Sale Price"............................................. 12.04
"Bankruptcy Law"................................................. 4.01
"Change in Control".............................................. 11.05
"Change in Control Purchase Notice".............................. 11.03
"Closing Price".................................................. 12.03
"Commencement Date".............................................. 12.04
"Company Notice"................................................. 11.03
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"Conversion Price"............................................... 12.01
"Conversion Rate"................................................ 12.01
"Current Event".................................................. 12.04
"Custodian"...................................................... 4.01
"Defaulted Interest"............................................. 3.06
"Event of Default"............................................... Article 4
"Ex-Dividend Time"............................................... 12.04
"Expiration Time"................................................ 12.04
"Indemnities".................................................... 5.07
"Make-Whole Payment"............................................. 10.01
"Material Adverse Effect"........................................ 9.04
"Notice Date".................................................... 10.01
"Notice of Default".............................................. 4.01
"Optional Redemption"............................................ 10.01
"Other Event".................................................... 12.04
"Provisional Redemption"......................................... 10.01
"Provisional Redemption Date".................................... 10.01
"Purchased Shares"............................................... 12.04
"Redeemable Capital Stock"....................................... 11.05
"Reference Date"................................................. 12.04
"Repurchase Date"................................................ 11.01
"Repurchase Price"............................................... 11.01
"Restricted Securities".......................................... 3.04
"Security Register".............................................. 3.04
"Security Registrar"............................................. 3.04
"Senior Indebtedness Default Notice"............................. 13.03
"Time of Determination".......................................... 12.04
"Trading Day".................................................... 12.03
Section 1.3. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need
refurnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
10
(a) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(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 each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant
has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.4. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which such certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
11
Section 1.5. Acts of Holders. (a Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities, may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by agents duly appointed in writing. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 1.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of the Securities shall be proved by the Security
Register.
(d) (i) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, in or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so; provided that the Company shall not
be entitled to set a record date for, and the provisions of this paragraph shall
not apply with respect to, the giving or making of any notice, declaration,
request or direction referred to in clause 1.05(d)(iii) below. Notwithstanding
TIA Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the
12
date such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(ii) Subject to clause 1.05(d)(iii) below, in the absence of any such
record date fixed by the Company, regardless as to whether any solicitation of
the Holders is occurring on behalf of the Company or any Holder, the Trustee
may, at its option, fix in advance a record date for the determination of such
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Trustee shall have no obligation to do so.
Any such record date shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later than the
date of such solicitation.
(iii) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (A) any notice of default, (B) any declaration of acceleration
referred to in Section 4.02, (C) any request to institute proceedings referred
to in Section 4.07(b), or (D) any direction referred to in Section 4.12. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to any applicable expiration date
by Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
cancelled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the proposed action
by Holders and the applicable expiration date to be given to the Company in
writing and to each Holder of Securities in the manner set forth in Section
1.07.
13
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Conversion Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
Section 1.6. Notices, Etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration (EarthWeb Inc. 7% Convertible Subordinated Notes due
2005); provided that notices to the Trustee shall only be deemed given when
actually received by the Trustee,
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.7. Notice to Holders; Waiver. Where this Indenture provides for
notice of any event to Holders by the Company or the Trustee, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders given as provided herein. Any notice mailed to a Holder in the
manner herein prescribed shall be conclusively deemed to have been received by
such Holder, whether or not such Holder actually receives such notice.
14
If by reason of the suspension of or irregularities in regular mail service
or by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders as shall be made with the approval of
the Trustee shall constitute a sufficient notification to such Holders for every
purpose hereunder.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.8. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.9. Successors and Assigns. All covenants and agreements in this
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 1.10. Separability Clause. In case any provision in this
Indenture or in any Security shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1.11. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Conversion Agent and their
successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 1.12. Governing Law. This Indenture and the Securities shall be
governed by and construed in accordance with the law of the State of New York
without regard to conflicts of laws principles.
Section 1.13. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repurchase Date, Stated Maturity or Maturity of any
15
Security or the last date on which a Holder has the right to convert his
Securities shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security), payment
of Redemption Price, Repurchase Price, interest or principal (and premium, if
any), or conversion of the Securities, need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at such Place
of Payment with the same force and effect as if made on the Interest Payment
Date, Redemption Date, Repurchase Date or at the Stated Maturity or Maturity or
on such last day for conversion; provided that no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repurchase Date, Stated Maturity or Maturity or on such last
day for conversion, as the case may be.
Section 1.14. Personal Immunity from Liability for Incorporators,
Stockholders, Etc. No recourse shall be had for the payment of the principal of
or premium, if any, or interest, if any, on any Security, or for any claim based
thereon, or otherwise in respect of any Security, or based on or in respect of
this Indenture or any indenture supplemental hereto, against any incorporator,
or against any past, present or future stockholder, director or officer, as
such, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being expressly waived and released as
a condition of, and as consideration for, the execution of this Indenture and
the issue of Securities.
Section 1.15. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with a provision of the TIA that is required
under such Act to be a part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be. To the extent a Security conflicts with a provision in the
Indenture, the Indenture governs.
ARTICLE 2
Securities Forms
Section 2.1. Forms of Securities. The Securities shall be in
substantially the form of Exhibit A hereto, and shall have notations, legends or
endorsements
16
required by law, stock exchange rate or usage or as otherwise indicated in
Exhibit A hereto.
Section 2.2. Form of Trustee's Certificate of Authentication'.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities described in the within-mentioned Indenture.
DATED: STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:___________________________
Authorized Signatory
Section 2.3. Securities Issuable in Global Form. Except as otherwise
provided in this Section 2.03 or in Section 3.04, the Securities shall be
issuable only in global form and deposited with the Trustee, at its Corporate
Trust Office, as custodian for DTC or the nominees thereof, and any such
Security shall represent such of the Outstanding Securities as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be increased or decreased to reflect exchanges. Any endorsement of a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 3.03. Subject to the provisions of Section 3.03,
the Trustee shall deliver and redeliver any Security in global form in the
manner and upon instructions given by the Person or Persons specified therein or
in the applicable Company Order. If a Company Order pursuant to Section 3.03 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 1.03 and need not be
accompanied by an Opinion of Counsel.
17
The provisions of the last sentence of Section 3.03 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 1.03 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.03.
Notwithstanding the provisions of Section 3.07, payment of principal of and
any premium and interest on any Security in global form shall be made to the
Person or Persons specified therein.
All Securities issued in global form shall bear the following 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
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE.
ARTICLE 3
The Securities
Section 3.1. Title and Term. The Securities shall be and are hereby
authorized to be designated as "7% Convertible Subordinated Notes due 2005",
limited in aggregate principal amount to $75,000,000 (up to $86,250,000 if the
18
option set forth in Section 2(b) of the Purchase Agreement dated January 19,
2000 among the Company and the Initial Purchasers, is exercised in full). The
Securities shall mature and the principal thereof shall be due and payable,
together with all accrued and unpaid interest thereon, on January 25, 2005. The
Securities shall be convertible into shares of Common Stock.
Section 3.2. Denominations. The Securities shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 3.3. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by the Chief Executive
Officer, Chief Financial Officer, the President or a Vice President of the
Company. The signature of any of these individuals on the Securities may be a
manual or facsimile signature of such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individual who was
at any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such office prior
to the authentication and delivery of such Securities or did not hold such
office at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities, executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Section
2.02 duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in
Section 3.08 together with a written statement (which need not comply with
Section 1.03 and need not be accompanied by an Opinion of Counsel) stating that
such Security has never been issued and sold by the Company, for all purposes of
this Indenture, such Security
19
shall be deemed not to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 3.4. Registration, Registration of Transfer and Exchange. (a The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for the
Securities (the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of the Securities and of transfers of the Securities. The Security Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. The Trustee, at its Corporate Trust
Office, is hereby appointed "Security Registrar" for the purpose of registering
the Securities and transfers of the Securities on such Security Register as
herein provided. In the event that the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 3.04 and except as otherwise
provided in any Security, including any legend thereon, upon surrender for
registration of transfer of any Security at any office or agency of the Company
in a Place of Payment, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities, of any authorized denominations and of
a like aggregate principal amount, bearing a number not contemporaneously
outstanding, and containing identical terms and provisions.
Subject to the provisions of this Section 3.04, at the option of the
Holder, the Securities may be exchanged for other Securities, of any authorized
denomination or denominations and of a like aggregate principal amount,
containing identical terms and provisions, upon surrender of the Securities to
be exchanged at any such office or agency. Whenever any such Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, any global Security shall be exchangeable
only as provided in this paragraph. The depositary for the global Securities
shall be DTC, and the global Securities may be transferred, in whole but not in
part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor
to DTC for such global Security selected or approved by the Company or to a
nominee of such successor to DTC. If at any time DTC notifies the Company that
it is unwilling or unable to continue as depositary for the applicable global
Security or Securities or if at any time DTC ceases to be a clearing agency
20
registered under the Securities Exchange Act of 1934 if so required by
applicable law or regulation, the Company shall appoint a successor depositary
with respect to such global Security or Securities. If (x) a successor
depositary for such global Security or Securities is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such unwillingness, inability or ineligibility, or (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable Securities represented by such global
Security or Securities advise DTC to cease acting as depositary for such global
Security or Securities, then the Company shall execute, and the Trustee shall
authenticate and deliver, definitive Securities of like rank, tenor and terms in
definitive form, registered in such names as DTC shall direct and bearing such
legends as the Company shall specify, in an aggregate principal amount equal to
the principal amount of such global Security or Securities. If a Security is
issued in exchange for any portion of a global Security after the close of
business at the office or agency where such exchange occurs on (i) any Regular
Record Date and before the opening of business at such office or agency on the
relevant Interest Payment Date or (ii) any Special Record Date and before the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Security, but will be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange or redemption shall (if so required by the Company or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 10.07 or 11.03(e) not involving any transfer.
21
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security is
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
10.03 and ending at the close of business on the day of the mailing of the
relevant notice of redemption or (ii) to register the transfer of or exchange
any Security so selected for redemption in whole or in part, except, in the case
of any Security to be redeemed in part, the portion thereof not to be redeemed,
or (iii) to issue, register the transfer of or exchange any Security that has
been surrendered for repayment at the option of the Holder, except the portion,
if any, of such Security not to be so repaid.
(b) Every Security that bears or is required under this Section 3.04(b) to
bear the legend set forth in this Section 3.04(b) (together with any Common
Stock issued upon conversion of the Securities and required to bear the legend
set forth in Section 3.04(c), collectively, the "Restricted Securities") shall
be subject to the restrictions on transfer set forth in this Section 3.04(b)
(including one of the legends set forth below), unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such holder's acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in Sections 3.04(b) and
3.04(c), the term "transfer" encompasses any sale, pledge, transfer or other
disposition whatsoever of any Restricted Security.
Until two years after the original issuance date of any Security, any
certificate evidencing such Security (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof which shall bear the legend set forth in Section 3.04(c), if
applicable) shall bear a legend in substantially the following form (unless such
Securities have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or unless otherwise
agreed by the Company in writing, with notice thereof to the Trustee):
THE NOTES EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES
22
THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY
EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR
THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE. IF THE
PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA,
N.A., AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL
ISSUANCE OF THE SECURITY EVIDENCED HEREBY.
Any Security (or Security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms may, upon surrender of such Security for exchange to the Security
Registrar in accordance with the provisions of this Section 3.04, be exchanged
for a new Security or Securities, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 3.04(b).
23
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 3.04(b)), the global Security may not be
transferred as a whole or in part except by the depositary to a nominee of the
depositary or by a nominee of the depositary to the depositary or another
nominee of the depositary or by the depositary or any such nominee to a
successor depositary or a nominee of such successor depositary.
At such time as all interests in the global Security have been redeemed,
converted, canceled, repurchased or transferred, the global Security shall be,
upon receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions existing between the depositary and the Custodian.
(c) Until two years after the original issuance date of any Security,
any stock certificate representing Common Stock issued upon conversion of such
Security shall bear a legend in substantially the following form (unless such
Common Stock has been sold pursuant to the exemption from registration provided
by Rule 144 under the Securities Act or pursuant to a registration statement
that has been declared effective under the Securities Act, and which continues
to be effective at the time of such transfer, or such Common Stock has been
issued upon conversion of Securities that have been transferred pursuant to a
registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company with written notice thereof to
the Trustee and any transfer agent for the Common Stock):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE
COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (2) PRIOR TO
24
ANY SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT WILL
FURNISH TO AMERICAN STOCK TRANSFER AND TRUST COMPANY, AS TRANSFER AGENT, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO
WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(C) OR 1(D) ABOVE OR THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE
CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED.
Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance with the
procedures of the transfer agent for the Common Stock, be exchanged for a new
certificate or certificates for a like aggregate number of shares of Common
Stock, which shall not bear the restrictive legend required by this Section
3.04(c).
(d) Any Security or Common Stock issued upon the conversion or
exchange of a Security that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction that results in
such Securities or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
(e) Notwithstanding any provision of Section 3.04 to the contrary, in
the event Rule 144(k) as promulgated under the Securities Act (or any successor
rule) is amended to change the two-year period under Rule 144(k) (or the
corresponding period under any successor rule), from and after receipt by the
Trustee of the Officers' Certificate and Opinion of Counsel provided for in this
Section 3.04(e), (i) each reference in Section 3.04(b) to "two years" and in the
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restrictive legend set forth in such paragraph to "TWO YEARS" shall be deemed
for all purposes hereof to be references to such changed period, (ii) each
reference in Section 3.04(c) to "two years" and in the restrictive legend set
forth in such paragraph to "TWO YEARS" shall be deemed for all purposes hereof
to be references to such changed period and (iii) all corresponding references
in the Securities and the restrictive legends thereon shall be deemed for all
purposes hereof to be references to such changed period, provided that such
changes shall not become effective if they are otherwise prohibited by, or would
otherwise cause a violation of, the then-applicable federal securities laws. As
soon as practicable after the Company has knowledge of the effectiveness of any
such amendment to change the two-year period under Rule 144(k) (or the
corresponding period under any successor rule), unless such changes would
otherwise be prohibited by, or would otherwise cause a violation of, the then-
applicable securities law, the Company shall provide to the Trustee an Officers'
Certificate and Opinion of Counsel informing the Trustee of the effectiveness of
such amendment and the effectiveness of the foregoing changes to Sections
3.04(b) and 3.04(c) and the Notes. The provisions of this Section 3.04(e) will
not be effective until such time as the Opinion of Counsel and Officers'
Certificate have been received by the Trustee hereunder. This Section 3.04(e)
shall apply to successive amendments to Rule 144(k) (or any successor rule)
changing the holding period thereunder.
Section 3.5. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee or the Company, together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them or any agent of either of them harmless, the Company shall, at
the relevant Holder's expense, execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same principal amount,
containing identical terms and provisions and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company, at the relevant Holder's expense, shall execute and upon
its request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same principal amount,
containing identical terms and provisions and bearing a number not
contemporaneously outstanding, appertaining to such destroyed, lost or stolen
Security.
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Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a
new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security, shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 3.6. Payment of Interest; Interest Rights Preserved. Interest on
any Security that is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 9.02; provided,
however, that each installment of interest on any Security may at the Company's
option be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 3.07, to the
address of such Person as it appears on the Security Register or (ii) transfer
to an account maintained by the payee located inside the United States;
provided, however, that payments to DTC will be made by wire transfer of
immediately available funds to the account of DTC or its nominee. The term
"Regular Record Date" with respect to any Interest Payment Date shall mean the
January 10 or July 10 preceding January 25 or July 25, respectively.
Any interest on any Security that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause 3.06(a) or 3.06(b) below:
27
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment (which shall not be less than
30 days after such notice is received by the Trustee) and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each Place of Payment, but such publications shall
not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by the
Trustee.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 3.7. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any), and (subject to Sections 3.04 and 3.06)
interest on, such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security, 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 any depositary, as a Holder, with respect to such
global Security or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
Section 3.8. Cancellation. All Securities surrendered for payment,
redemption, repayment at the option of the Holder, registration of transfer or
exchange or for credit against any sinking fund payment shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee, and any such
Securities surrendered directly to the Trustee for any such purpose shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
that the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder that the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. If the Company shall so acquire any of the Securities,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Securities unless and until the same are
surrendered to the
29
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. Canceled Securities held by the Trustee
shall be destroyed by the Trustee and the Trustee shall deliver a certificate of
such destruction to the Company, unless by a Company Order the Company directs
their return to it.
Section 3.9. Computation of Interest. Interest on the Securities shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
Section 3.10. CUSIP Numbers. The Company in issuing the Securities shall
use "CUSIP" numbers, and the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders', provided however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE 4
Remedies
Section 4.1. Events of Default. "Event of Default," wherever used herein
with respect to the Securities, means any one of the following events (whatever
the reason for such Event of Default and whether or not it shall be occasioned
by the provisions of Article 13 or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest upon any Security, when such
interest becomes due and payable, and continuance of such default for a period
of 30 days (whether or not such payment is prohibited by the provisions of
Article 13); or
(b) default in the payment of (i) the principal of (or premium, if any,
on) any Security when it becomes due and payable at its Maturity, or (ii) the
payment of the Redemption Price (including the Make-Whole Payment, if any) with
respect to any Security when it becomes due and payable (whether or not such
payment is prohibited by the provisions of Article 13); or
30
(c) default in the payment of the Repurchase Price in respect of any
Security on the Repurchase Date therefor (whether or not such payment is
prohibited by the provisions of Article 13 hereof); or
(d) failure by the Company to deliver shares of Common Stock (together
with cash in lieu of fractional shares) when such Common Stock (or cash in lieu
of fractional shares) is required to be delivered following conversion of a
Security and continuation of such default for a period of 10 days; or
(e) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security (other than a
covenant or warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with) and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding Securities
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(f) a default under any bonds, debentures, notes or other evidences of
indebtedness for money borrowed of the Company or under any mortgages,
indentures or instruments under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the Company,
whether such indebtedness now exists or shall hereafter be created, which
indebtedness, individually or in the aggregate, has a principal amount
outstanding in excess of $10,000,000, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been 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 Securities then
Outstanding, a written notice specifying such default and requiring the Company
to cause such indebtedness to be discharged or cause such acceleration to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder (unless such default has been cured or waived); or
(g) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case,
31
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(iv) makes a general assignment for the benefit of its creditors;
or
(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 Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of any of them,
or
(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
As used in this Section 4.01 only, the term "Bankruptcy Law" means title
11, U.S. Code or any similar Federal or State law for the relief of debtors and
the term "Custodian" means any receiver, trustee, assignee, liquidator or other
similar official under any Bankruptcy Law.
Section 4.2. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities at the time Outstanding occurs and
is continuing, then and in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities may declare the
principal of all the Securities to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration such principal shall become immediately due and payable. If
an Event of Default specified in Section 4.01(g) or 4.01(h) occurs, the
principal of, and accrued interest on, all the Securities shall automatically,
and without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
32
Securities, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue installments of interest on all Outstanding
Securities,
(ii) the principal of (and premium, if any, on) any Outstanding
Securities that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne by or provided
for in such Securities,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate or rates borne
by or provided for in such Securities, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to Securities, other than the
nonpayment of the principal of (or premium, if any) or interest on Securities
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 4.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 4.3. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(a) default is made in the payment of any installment of interest
on any Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Security at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, with
interest upon any overdue principal (and premium, if any) and, to the extent
that payment of such interest shall be legally enforceable, upon any
33
overdue installments of interest, if any, at the rate or rates borne by or
provided for in such Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders of Securities by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 4.4. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal, premium, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities, of principal (and premium,
if any) and interest, owing and unpaid in respect of the Securities and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
34
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby directed by
each Holder of Securities to make such payments to the Trustee, and in the event
that the Trustee shall request the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 5.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security, any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder of a Security in any
such proceeding; provided however, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official
and be a member of a creditors' or other similar committee.
Section 4.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or any of the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 4.6. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium, if any) or interest, upon
presentation of the Securities, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
35
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 5.07;
SECOND: To the holders of Senior Indebtedness to the extent required by the
provisions of Article 13.
THIRD: To the payment of the amounts then due and unpaid upon the
Securities for principal (and premium, if any) and interest payable, in respect
of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the aggregate amounts
due and payable on such Securities for principal (and premium, if any) and;
interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company.
36
Section 4.7. Limitation on Suits. No Holder of any Security shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 4.8. Unconditional Right of Holders to Receive Principal, Premium,
If Any, and Interest. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional to receive payment of the principal of, and premium, if any,
including the Redemption Prices and Make-Whole Payment upon redemption pursuant
to Article 10, and (subject to Sections 3.04 and 3.06) interest on such Security
on the respective due dates expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be) and to convert such Security in accordance with the provisions of this
Indenture and to institute suit for the enforcement of any such payment and
37
right to convert, and such rights shall not be impaired without the consent of
such Holder.
Section 4.9. Restoration of Rights and Remedies. If the Trustee or any
Holder of a Security has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 4.10. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.05, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 4.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities, as the case may be.
Section 4.12. Control by Holders of Securities. The Holders of not less
than a majority in principal amount of the Outstanding Securities shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction, and
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(c) the Trustee need not take any action that might involve it in
personal liability or be unduly prejudicial to the Holders of Securities
not joining therein.
Section 4.13. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past Default or Event of Default
hereunder with respect to such Securities and its consequences, except a Default
or Event of Default:
(a) in the payment of the principal of (or premium, if any) or
interest on any Security,
(b) in respect of the conversion by the Company of any Security into
Common Stock,
(c) in the payment of the Redemption Prices or Make-Whole Payment
pursuant to Article 10,
(d) in the payment of the Repurchase Price pursuant to Article 11, or
(e) in respect of a covenant or provision hereof that under Article 8
cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
Section 4.14. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
39
Section 4.15. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of any undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption or repurchase, on or after the
Redemption Date or the Repurchase Date, respectively), or the right to convert
any Security in accordance with Article 12.
ARTICLE 5
The Trustee
Section 5.1. General. The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (that has not
been cured or waived) 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.
No provision of this Indenture shall be construed to relive the Trustee
from liability for its own negligent action, its own negligent failure to act,
its own willful misconduct, its own recklessness or its own bad faith.
Section 5.2. Certain Rights of Trustee. Subject to TIA Sections 315(a)
through (d):
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(a) the Trustee may rely, and shall be protected in acting or refraining
from acting, upon any resolution, certificate, statement, instrument, facsimile
transmission, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, made or presented by the
proper person and may accept and rely upon the same as conclusive evidence of
the truth and accuracy of the statement and opinions contained therein. The
Trustee need not investigate any fact or matter stated in any such document;
(b) before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to Section
1.03. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion;
(c) the Trustee may consult with counsel and the written advice of such
counsel shall be full and complete authorization and protection with respect to
any action taken, suffered or omitted by it hereunder in good faith and reliance
thereon and may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the holders, unless such holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction;
(e) the Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers or for any action it takes or omits to take in accordance with the
written direction of the holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture;
(f) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(g) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
41
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company personally or by agent or attorney;
(h) the Trustee shall not be required to take notice or be deemed to
have notice of any default hereunder unless the Trustee be specifically notified
of such default in writing by the Company or any holder of the Securities, and
in the absence of such notice the Trustee may conclusively assume that there is
no default; provided that if the Trustee is acting as Paying Agent, the Trustee
shall be required to take and be deemed to have notice of its failure to receive
payments of interest or principal hereunder;
(i) except for information provided by the Trustee concerning the
Trustee, the Trustee shall have no responsibility with respect to any
information in any offering memorandum or other disclosure material distributed
with respect to the Securities, and the Trustee shall have no responsibility for
compliance with securities laws in connection with the issuance and sale of the
Securities;
(j) in the event the Trustee shall receive inconsistent or conflicting
requests and indemnity from two or more groups of holders of the Securities,
each representing at least 25% (but less than 50%) of the aggregate principal
amount of the Securities then outstanding, the Trustee will act in accordance
with instructions received by the holders of the greater percentage thereof;
(k) except as otherwise expressly provided by the provisions of this
Indenture, the Trustee shall not be obligated and may not be required to give or
furnish any notice, demand, report, request, reply, statement, advice or opinion
to the holder of any Security or to the Company or any other Person, and the
Trustee shall not incur any liability for its failure or refusal to give or
furnish the same unless obligated or required to do so by the express provisions
hereof; and
(l) the Trustee shall not be required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers under
this Indenture.
Section 5.3. Individual Rights of Trustee. The Trustee, any Paying Agent,
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries or its Affiliates with the same
42
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent. Any registrar, co-registrar, paying agent,
conversion agent or authenticating agent may do the same with like rights.
However, upon qualification of this Indenture under the TIA the Trustee will be
subject to TIA Sections 310(b) and 311.
Section 5.4. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the
Securities, (ii) shall not be accountable for the Company's use or application
of the proceeds from the Securities and (iii) shall not be responsible for any
statement in the Securities other than its certificate of authentication.
Section 5.5. Notice of Default. If any Event of Default occurs and is
continuing and if the Trustee has actual knowledge of such Event of Default, the
Trustee shall mail to each holder in the manner and to the extent provided in
TIA Section 313(c) notice of the Event of Default within 90 days after it
occurs, unless such Event of Default has been cured or waived; provided,
however, that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interests of the Holders of the Securities; and provided further that in the
case of any Default or breach referred to in Section 4.01(e) with respect to the
Securities, no such notice to Holders shall be given until at least 90 days
after the occurrence thereof.
Section 5.6. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the TIA, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of the TIA and this Indenture.
Section 5.7. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services.
The compensation of the Trustee 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 out-of-pocket expenses and advances incurred or made
by the Trustee in accordance with this Indenture. Such expenses shall include
the reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee and its
directors, agents and employees (collectively the "Indemnities") against any and
all losses, liabilities, obligations, damages, penalties, fines, judgments,
actions, suits, proceedings, reasonable costs and expenses (including reasonable
fees and disbursements of counsel) of any kind whatsoever that may be incurred
by or
43
imposed on the Indemnities or any of them arising out of or in connection with
the acceptance or administration of its duties under this Indenture; provided,
however, that the Company need not reimburse any expense or indemnify against
any loss, obligation, damage, penalty, fine, judgment, action, suit, proceeding,
reasonable cost or expense (including reasonable fees and disbursements of
counsel) of any kind whatsoever that may be incurred by Indemnities or any of
them which results from the negligence or willful misconduct of the Indemnities
or any of them. 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, unless the Company
is materially prejudiced thereby. The Company shall defend the claim and the
Trustee shall cooperate in the defense. Unless otherwise set forth herein, the
Indemnities of any of them may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld. The provisions of this Section 5.07 shall survive the termination of
this Indenture and the resignation or removal of the Trustee for any reason.
To secure the Company's payment obligations in this Section 5.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, and interest on
particular Securities.
If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in Section 4.01(g) or Section 4.01(h), the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.
Section 5.8. 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
5.08.
The Trustee may resign at any time by so notifying the Company in writing
at least thirty days prior to the date of the proposed resignation. The holders
of a majority in principal amount of the Outstanding Securities may remove the
Trustee by so notifying the Trustee in writing and may appoint a successor
Trustee with the prior consent of the Company. The Company may remove the
Trustee if: (i) the Trustee is no longer eligible under Section 5.10; (ii) the
Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public
officer takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting. The holders of a majority in aggregate principal amount of
44
the Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee that shall be deemed appointed as successor trustee
unless within ten days after notice to the Company of such nomination the
Company objects thereto, in which case the Trustee so removed or any Noteholder,
upon the terms and conditions and otherwise provided herein, may petition any
court of competent jurisdiction for an appointment of a successor trustee.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the Outstanding Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 5.08 within thirty days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of a majority in principal amount of the Outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 5.07, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee shall
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee
shall mail notice of its succession to each holder.
If the Trustee is no longer eligible under Section 5.10, any holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section 5.08,
the Company's obligation under Section 5.07 shall continue for the benefit of
the retiring Trustee.
45
Section 5.9. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business (including the administration of this
Indenture) to, another corporation or national banking association, the
resulting, surviving or transferee corporation or national banking association
without any further act shall be the successor Trustee with the same effect as
if the successor Trustee had been named as the Trustee herein.
Section 5.10. Eligibility. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1). The Trustee (or the bank
holding company to which the Trustee is a member) shall have a combined capital
and surplus of at least $25 million as set forth in its most recent published
annual report of condition.
Section 5.11. Money Held in Trust. Subject to the provisions of Section
9.03 and Section 13.02, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received. The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree 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 5.12. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
Section 5.13. Trustee's Application for Instructions from the Company;
Liquidated Damages. (a) Any application by the Trustee for written
instructions from the Company (other than with regard to any action proposed to
be taken or omitted to be taken by the Trustee that affects the rights of the
holders of the Securities or holders of Senior Indebtedness under this
Indenture, including, without limitation, under Article 13 hereof) may, at the
option of the Trustee, set forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the date on and/or after which
such action shall be taken or such omission shall be effective. The Trustee
shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than ten Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written
46
instructions in response to such application specifying the action to be taken
or omitted.
(b) If liquidated damages are payable to Holders pursuant to the terms of
the Registration Rights Agreement, the Company shall deliver to the Trustee a
certificate to that effect stating (i) the amount of such liquidated damages
that is payable and (ii) the date on which such amount of liquidated damages is
payable. Unless and until a Responsible Officer of the Trustee receives at the
Corporate Trust Office such a certificate, the Trustee may assume without
inquiry that no such liquidated damages are payable. Upon receipt of a Company
Request together with a sum sufficient to pay such liquidated damages so
becoming due, the Trustee shall pay such liquidated damages to the Holders in
the same manner as interest on the Securities. If the Company has paid
liquidated damages directly to the persons entitled to them, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment.
ARTICLE 6
Holders' Lists and Reports by Trustee and Company
Section 6.1. Disclosure of Names and Addresses of Holders. Every Holder
of Securities, by receiving and holding the same, agrees with the Company and
the Trustee that neither the Company nor the Trustee nor any Paying Agent nor
any Security Registrar shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
Section 6.2. Reports by Trustee. Within 60 days after May 15 of each year
commencing with the first May 15 after the first issuance of Securities pursuant
to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a). A copy of each such report shall at the
time of such transmission to Holders be filed by the Trustee with the Company.
Section 6.3. Reports by Company. The Company will:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
47
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Company may be required
to file with the Commission pursuant to Sections 13(a) or 13(b) or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to any of such
Sections, then it will file with the Trustee, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(c) file with the Trustee and the Commission, if applicable, and
transmit by mail to the Holders of Securities, within thirty days after the
filing thereof with the Trustee, in the manner and to the extent provided
in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission and other information as may be
required pursuant to the TIA at the time and in the manner provided
pursuant to such Act.
Section 6.4. Company to Furnish Trustee Names and Addresses of Holders.
(a) The Company will furnish or cause to be furnished to the Trustee:
(i) semi-annually, not later than 10 days after the Regular Record
Date for interest for the Securities, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of
Securities as of such Regular Record Date, or if there is no Regular Record
Date for interest for the Securities, semi-annually, upon such dates as are
set forth in a Board Resolution or indenture supplemental hereto; and
48
(ii) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
(b) The Company shall provide the Trustee with at least thirty days'
prior notice of any change in location of its principal executive offices
or other principal place of business.
ARTICLE 7
Consolidation, Merger, Sale, Lease or Conveyance
Section 7.1. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease, transfer, convey or otherwise dispose of
all or substantially all of its assets to, or merge with or into any other
Person, provided however, that in any such case, (1) either the Company
shall be the continuing corporation, or the Person (if other than the
Company) formed by such consolidation or into which the Company is merged
or the Person that acquires or leases the Company's assets substantially as
an entirety is a corporation organized and existing under the laws of any
United States jurisdiction and expressly assumes the due and punctual
payment of the principal of (and premium, if any) and any interest payable
pursuant to this Indenture on all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company
and shall have provided for conversion rights, if applicable, in accordance
with the provisions of Article 12 hereof, by supplemental indenture,
complying with Article 8 hereof, satisfactory to the Trustee, executed and
delivered to the Trustee by such corporation and (2) immediately after
giving effect to such transaction and treating any indebtedness that
becomes an obligation of the Company or such Person or any Subsidiary as a
result thereof as having been incurred by the Company or such Subsidiary at
the time of such transaction, no Default or Event of Default, shall have
occurred and be continuing.
49
Section 7.2. Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor Person, such successor Person shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the predecessor corporation, except
in the event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company, any
or all of the Securities issuable hereunder that theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 7.3. Officers' Certificate and Opinion of Counsel'. Any
consolidation, merger, sale, lease, transfer, conveyance or other dispositions
permitted under Section 7.01 is also subject to the condition that the Trustee
receive an Officers' Certificate and an Opinion of Counsel to the effect that
any such consolidation, merger, sale, lease, transfer or conveyance or other
dispositions and the assumption by any successor Person, complies with the
provisions of this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
ARTICLE 8
Supplemental Indentures
Section 8.1. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders of Securities, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time
50
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
contained herein and the Securities issued hereunder;
(b) to add to the covenants of the Company for the equal and ratable
benefit of the Holders of the Securities or to surrender any right, power
or option herein conferred upon the Company;
(c) to add any Events of Default for the benefit of the Holders of
the Securities; provided, however, that in respect of any such additional
Events of Default such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default or may limit the right of the Holders of a
majority in aggregate principal amount of those Securities to which such
additional Events of Default apply to waive such default;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities and to add
to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by
more than one Trustee;
(e) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein; provided such provisions shall not adversely affect the interests
of the Holders of Securities in any material respect;
(f) to make any change that does not adversely affect the rights of
any holder of Securities or to surrender any right, power or option
conferred on the Company hereunder;
(g) to make any change to comply with any requirement of the
Commission in connection with the qualification of the Indenture under TIA;
or
(h) to provide for the issuance of uncertificated Securities in
addition to or in place of certificated Securities; provided, however that
the
51
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Internal Revenue Code of 1986.
Section 8.2. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) reduce the principal amount, Repurchase Price or Redemption
Price with respect to any Security, or extend the Stated Maturity of any
Security or alter the manner of payment or rate of interest on any Security
or make any Security payable in money or securities other than that stated
in the Security;
(b) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to Securities (or compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture;
(c) make any change that adversely affects the right to convert
any Security;
(d) modify the provisions of the Indenture relating to the
ranking of the Securities in a manner adverse to the Holders of the
Securities; or
(e) impair the right to institute suit for the enforcement of
any payment with respect to, or conversion of, the Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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Section 8.3. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Article 5)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 8.4. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
Section 8.5. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
Section 8.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall, if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE 9
Covenants
Section 9.1. Payment of Principal, Premium, If Any, and Interest. The
Company covenants and agrees for the benefit of the Holders of Securities that
it will duly and punctually pay the principal of (and premium, if any), interest
on, and the Repurchase Price, the Redemption Price and the Make-Whole Payment
with respect to the Securities in accordance with the terms of the Securities
and this Indenture. At the option of the Company, all payments of principal may
be paid by check to the registered Holder of the Security or other person
entitled thereto against surrender of such Security. The conversion of any
Securities
53
pursuant to Article 12 hereof, together with any cash payments required to be
made in accordance with the terms of the Securities and this Indenture, will
satisfy the Company's obligations under this Section 9.01 with respect to such
Securities.
Section 9.2. Maintenance of Office or Agency. The Company shall maintain
a Place of Payment for the Securities in The City of New York, an office or
agency where the Securities may be presented or surrendered for payment or
conversion or redemption, where the Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Corporate Trust Office shall initially be such office or agency of the Company,
unless and until the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of each
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee its agent to receive all such presentations, surrenders,
notices and demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all of 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 accordance with the requirements set forth above for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
Section 9.3. Money for Securities Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any
Securities, it will, on or before each due date of the principal of (and
premium, if any), or interest on the Securities, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, before each due date of the principal of (and premium, if
any), or interest on, the Securities, deposit with a Paying Agent a sum
sufficient to pay
54
the principal (and premium, if any) or interest, so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of principal of (and
premium, if any,) or interest on the Securities, in trust for the benefit
of the Persons entitled thereto, until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest; and
(c) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company upon Company Request or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on any Security, without interest
thereon, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
55
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining, will be repaid to the Company.
Section 9.4. Existence. Subject to Article 7, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect the corporate existence of the Company and its Subsidiaries, and their
respective rights (charter and statutory) and franchises, except to the extent
that the Board of Directors shall determine that the failure to do so would not
have a material adverse effect on the business, assets, financial condition or
results of operation of the Company (a "Material Adverse Effect"); provided,
however, that the Company shall not be required to preserve any right or
franchise 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
that the loss thereof is not disadvantageous in any material respect to the
Holders.
Section 9.5. Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary and have a Material Adverse Effect; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 9.6. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company, a
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all terms, conditions and provisions under this Indenture and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 9.06, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
Section 9.7. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 9.04 to 9.05, inclusive, if before the time for such compliance the
Holders of at least a majority in principal amount of all outstanding
Securities, by
56
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
Section 9.8. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any Holder or
beneficial owner of Securities that continue to be Restricted Securities, in
connection with any sale thereof and any prospective purchaser of Securities
from such holder or beneficial owner, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any such holder or
beneficial owner of the Securities and it will take such further action as any
holder or beneficial owner of such Securities may reasonably request, all to the
extent required from time to time to enable such holder or beneficial owner to
sell its Securities without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such rule may be amended
from time to time.
ARTICLE 10
Redemption of Securities.
Section 10.1. Provisional and Optional Redemption by the Company. (a)
The Securities may be redeemed at the election of the Company, as a whole or
from time to time in part, at any time prior to January 25, 2003 (a "Provisional
Redemption"), upon notice as set forth in Section 10.04, at a redemption price
equal to $1,000 per $1,000 principal amount of the Securities redeemed plus
accrued and unpaid interest, if any (such amount, together with the Make-Whole
Payment described below, the "Provisional Redemption Price"), to but excluding
the date of redemption (the "Provisional Redemption Date") if (i) the Closing
Price of the Common Stock has exceeded 150% of the Conversion Price (as defined
in Article 12 and as such may be adjusted from time to time) then in effect for
at least 20 Trading Days in any consecutive 30-Trading Day period ending on the
Trading Day prior to the date of mailing of the provisional notice of redemption
pursuant to Section 10.04 (the "Notice Date"), and (ii) a registration
57
statement covering resales of the Securities and the Common Stock issuable upon
conversion thereof is effective and available for use and is expected to remain
effective for the 30 days following the Provisional Redemption Date.
Upon any such Provisional Redemption, the Company shall make an additional
payment in cash (the "Make-Whole Payment") with respect to the Securities called
for redemption to holders on the Notice Date in an amount equal to $130.43 per
$1,000 principal amount of the Securities, less the amount of any interest
actually paid on such Securities prior to the Notice Date. The Company shall
make the Make-Whole Payment on all Securities called for Provisional Redemption,
including those Securities converted into Common Stock between the Notice Date
and the Provisional Redemption Date.
(b) The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at any time on or after January 25, 2003,
and prior to maturity (an "Optional Redemption"), upon notice as set forth in
Section 10.04, at the following optional redemption prices (expressed as
percentages of the principal amount), together in each case with accrued and
unpaid interest, if any, up to but not including the date fixed for redemption
(the "Optional Redemption Price"), if redeemed during the periods described
below:
Period Redemption Price
------ ----------------
January 25, 2003 through January 24, 2004 102.8%
Thereafter 101.4%.
Section 10.2. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by a Board Resolution. In
case of any redemption at the election of the Company of all or any part of the
Securities pursuant to Section 10.01 (Provisional Redemption or Optional
Redemption), the Company shall, at least 45 days prior to the giving of the
notice of redemption in Section 10.04 (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of the Redemption Date and of
the principal amount of Securities to be redeemed. In the case of any redemption
of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
Section 10.3. Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days and not less than 30 days prior
to the Redemption Date by the Trustee, from the Outstanding Securities not
previously
58
called for redemption, by lot, pro rata or any other method as the Trustee shall
deem fair and appropriate.
If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed, solely for
purposes of determining the aggregate principal amount of the Securities to be
redeemed, to be the portion selected for redemption (provided, however, that the
Holder of such Security so converted and deemed redeemed shall not be entitled
to any additional interest payment as a result of such deemed redemption than
such Holder would have otherwise been entitled to receive upon conversion of
such Security). Securities that have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as Outstanding for the
purpose of such selection.
Securities in denominations of $1,000 may only be redeemed in whole. The
Trustee may select for redemption portions (equal to $1,000 or any multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Security which has been or is to be redeemed.
Section 10.4. Notice of Redemption. Notice of redemption shall be given
in the manner provided in Section 1.07, (i) no less than 10 Trading Days nor
more than 20 Trading Days prior to the Provisional Redemption Date in the case
of a Provisional Redemption, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other such Security or portion thereof and (ii) not less
than 30 days nor more than 60 days prior to the Redemption Date in the case of
an Optional Redemption.
All notices of redemption shall state:
59
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of partial redemption, the principal
amount) of the particular Securities to be redeemed;
(d) in case any Security is to be redeemed in part only, the notice
that relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(e) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security, or the portion thereof, to be redeemed
and, if applicable, that interest thereon shall cease to accrue on and
after said date;
(f) the Place or Places of Payment where such Securities are to be
surrendered for payment of the Redemption Price;
(g) that Securities called for redemption must be presented and
surrendered to the Paying Agent to collect the redemption price;
(h) the then current Conversion Price and Make-Whole Payment, if any;
(i) that the Securities called for redemption may be converted at any
time before the close of business on the last Business Day prior to the
Redemption Date;
(j) the CUSIP number of such Security, if any; and
(k) that a Holder of Securities who desires to convert Securities
must satisfy the requirements for conversion contained in such Securities.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
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Section 10.5. Deposit of Redemption Price. Not later than 11:00 a.m. New
York City time on the Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 9.03) an amount of
money sufficient to pay on the Redemption Date, the Redemption Price of all the
Securities or portions thereof that are to be redeemed on that date, other than
Securities or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation or have been converted.
Section 10.6. Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price) such Securities shall cease to bear interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price
provided, however, that if the Provisional Redemption Date is an Interest
Payment Date, the semi-annual payment of interest becoming due on such date
shall be payable to the Holders of such Securities registered as such on the
relevant Regular Record Date according to their terms and the provisions of
Section 3.06, and with respect to a Provisional Redemption, the holder of any
Securities converted into Common Stock pursuant to the terms hereof after the
Notice Date and prior to the Provisional Redemption Date shall have the right to
the Make-Whole Payment regardless of the conversion of such Securities.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the Redemption Price, shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security and such Security
shall remain convertible into Common Stock until the Redemption Price, and any
such accrued interest, shall have been paid or duly provided for.
Section 10.7. Securities Redeemed in Part. Any Security that is to be
redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered.
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ARTICLE 11
Repurchase at Option of Holders upon Change in Control
Section 11.1. Right to Require Repurchase. In the event that a Change in
Control shall occur, each Holder shall have the right, at the Holder's option,
to require the Company to repurchase (subject to the provisions of Section 13.03
hereof) all of such Holder's Securities, or any portion of the principal amount
thereof that is an integral multiple of $1,000 (provided that no single Security
may be repurchased in part unless the portion of the principal amount of such
Security to be outstanding after such repurchase is equal to $1,000 or an
integral multiple of $1,000), on the date (the "Repurchase Date") that is not
later than 45 Business Days after the date of the occurrence of a Change in
Control at a purchase price equal to 100% of the principal amount plus interest
accrued and unpaid to the Repurchase Date (the "Repurchase Price"). At the
option of the Company, the Repurchase Price may be paid in cash or, subject to
the fulfillment by the Company of the conditions set forth in Section 11.02, by
delivery of that number of shares of Common Stock equal to the quotient of (i)
the Repurchase Price divided by (ii) 95% of the average of the Closing Prices of
the Common Stock for the five consecutive Trading Days ending on and including
the third Trading Day immediately preceding the Repurchase Date.
Section 11.2. Conditions to the Company's Election to Pay the Repurchase
Price in Common Stock.
The Company may elect to pay the Repurchase Price by delivery of shares of
Common Stock pursuant to Section 11.01 if and only if the following conditions
have been satisfied:
(a) The shares of Common Stock deliverable in payment of the Repurchase
Price shall be listed for trading on a U.S. national securities exchange or
approved for trading in the NASDAQ National Market; and
(b) All shares of Common Stock deliverable in payment of the Repurchase
Price shall be issued out of the Company's authorized but unissued Common Stock
and will, upon issue, be duly and validly issued and fully paid and non-
assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 11.02 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
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Section 11.3. Notices; Method of Exercising Repurchase Right, Etc. (a)
Unless the Company shall have theretofore called for redemption all of the
Outstanding Securities, on or before the 15th Business Day after the occurrence
of a Change in Control, the Company shall give notice to all Holders of the
Securities and the Trustee (the "Company Notice") of the occurrence of the
Change in Control and of the repurchase right set forth herein arising as a
result thereof.
Each Company Notice shall state:
(i) the date of such Change in Control and, briefly, the events
causing such Change in Control;
(ii) the date by which the Change in Control Purchase Notice (as
defined below) must be delivered;
(iii) the Repurchase Date;
(iv) the Repurchase Price, and whether the Repurchase Price shall
be paid by the Company in cash or by delivery of shares of Common Stock;
(v) a description of the procedure that a Holder must follow to
exercise a repurchase right;
(vi) the procedures for withdrawing a Change in Control Purchase
Notice;
(vii) the place or places where such Securities are to be
surrendered for payment of the Repurchase Price or for conversion;
(viii) briefly, the conversion rights of Holders of Securities;
(ix) the Conversion Price and any adjustments thereto; and
(x) that Holders who want to convert Securities must satisfy the
requirements set forth in the Securities.
The Company will cause a copy of the Company Notice to be published in The
Wall Street Journal or another daily newspaper of national circulation.
(b) To exercise a repurchase right, a Holder must deliver to the Trustee
or a Paying Agent or an office or agency maintained by the Company for such
63
purpose in the Borough of Manhattan, The City of New York, prior to the close of
business on or before the Repurchase Date written notice of the Holder's
exercise of such right (the "Change in Control Purchase Notice"), which notice
shall set forth (i) the name of the Holder, (ii) the certificate numbers of the
Securities with respect to which the repurchase right is being exercised, (iii)
the principal amount of the Securities to be repurchased (and, if any Security
is to be repurchased in part, the portion of the principal amount thereof to be
repurchased, which shall be in integral multiples of $1,000) and (iv) a
statement that an election to exercise the repurchase right is being made
thereby pursuant to the applicable provisions of the Securities.
(c) On or prior to the Repurchase Date, the Company shall deposit with
the Trustee or with the Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 9.03) an amount
of money sufficient to pay the Repurchase Price of the Securities that are to be
repaid on the Repurchase Date. On the Repurchase Date, the Trustee, a Paying
Agent (or, if the Company is acting as its own Paying Agent, the Company) shall
repurchase all such Securities validly tendered prior to such date.
In the event that a Holder has previously delivered a Change in Control
Purchase Notice, but failed to tender the Security with respect to which such
Change in Control Purchase Notice relates, then so long as the Trustee or the
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold on trust as provided in Section 9.03) holds money sufficient to pay the
Repurchase Price in respect of such Security shall cease to be Outstanding for
the purposes of this Indenture and all rights of the Holder thereof, other than
the right to receive the Repurchase Price together with any accrued interest
thereon, shall terminate.
(d) If any Security (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the Repurchase Price in respect of such
Security shall, until paid, bear interest from the Repurchase Date at the rate
borne by the Security and such Security shall remain convertible into Common
Stock until the Repurchase Price and any such accrued interest shall have been
paid or duly provided for.
(e) Any Security that is to be repurchased only in part shall be
surrendered to the Trustee or any such Paying Agent and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal
64
amount equal to and in exchange for the portion of the principal of the Security
so surrendered that was not repurchased.
(f) Any Holder that has delivered a Change in Control Purchase Notice
shall have the right to withdraw such notice at any time prior to the close of
business on the Repurchase Date by delivery of a written notice of withdrawal to
the Trustee or any such Paying Agent prior to the close of business on the
Repurchase Date. The notice of withdrawal shall state the principal amount and
the certificate numbers of the Securities as to which the withdrawal notice
relates and the principal amount, if any, that remains subject to the notice of
exercise of a repurchase right. A Security in respect of which a Holder has
exercised its option to require repurchase upon a Change in Control may
thereafter be converted into Common Stock only if such Holder withdraws its
Change in Control Purchase Notice in accordance with the preceding sentence.
(g) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the person or persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open.
(h) No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon repurchase of Securities. If more than one Security
shall be repurchased from the same holder and the Repurchase Price shall be
payable in shares of Common Stock, the number of full shares that shall be
issued upon repurchase shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof to the extent permitted
hereby) so repurchased from such Holder. If any fractional share of stock
otherwise would be issuable upon repurchase of any Security or Securities, the
Company shall make an adjustment therefor in cash at the price per share at
which the Common Stock is valued for purposes of Section 11.01 to the Holder of
Securities.
(i) The issue of stock certificates on repurchase of Securities shall be
made without charge to the Holder of Securities being repurchased for any tax in
respect of the issue thereof. The Company shall not, however, be required to
pay
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any tax that may be payable in respect of any transfer involved in the issue
and delivery of stock in any name other than that of the Holder of any Security
repurchased, and the Company shall not be required to issue or deliver any such
stock certificate unless and until the person or persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
Section 11.4. Certain Definitions. For purposes of this Article 11:
(a) the terms "beneficial owner" and "beneficial ownership" shall be
determined in accordance with Rules 13d-3 and 13d-5 promulgated by the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time; and
(b) the term "Person" shall include any syndicate or group that would be
deemed to be a "Person" under Section 13(d)(3) of the Exchange Act.
Section 11.5. Change in Control. A "Change in Control" shall be deemed to
have occurred at such time after the original issuance of the Securities as:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), acquires the beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction, of more
than 50% of the Company's total outstanding voting stock other than an
acquisition by the Company, any of its Subsidiaries or any of its employee
benefit plans;
(b) the Company shall consolidate with, or merge with or into another
Person or convey, transfer, lease or otherwise dispose of all or substantially
all of its assets to any Person, or any Person, consolidates with or merges with
or into the Company, in any event pursuant to a transaction in which the
Company's outstanding voting stock is converted into or exchanged for cash,
securities or other property, other than any such transactions where:
(i) the Company's voting stock is not converted or exchanged at all
(except to the extent necessary to reflect a change in the Company's
jurisdiction of incorporation) or is converted into or exchanged for voting
stock (other than Redeemable Capital Stock) of the surviving or transferee
corporation, and
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(ii) immediately after such transaction, no "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is the
beneficial owner of more than 50% of the total outstanding voting stock of
the surviving or transferee corporation;
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election to such Board of Directors, or whose nomination for
election by the Company's stockholders, was approved by a vote of a majority of
the directors then still in office who were either directors at the beginning of
such period of whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office;
(d) a special resolution is passed by the Company's stockholders approving
the plan of liquidation or dissolution other than in a transaction that complies
with the provisions described in Article 7.
"Redeemable Capital Stock" means any class or series of capital stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed prior to the Stated
Maturity of the Securities or is redeemable at the option of the holder thereof
at any time prior to such Stated Maturity, or is convertible into or
exchangeable for debt securities at any time prior to such final stated
maturity; provided, however, that Redeemable Capital Stock shall not include any
Common Stock the holder of which has the right to put to the Company upon
termination of employment.
ARTICLE 12
Conversion
Section 12.1. Conversion Privilege, Conversion Rate and Conversion Price.
Subject to and upon compliance with the provisions of this Article 12, at the
option of the Holder thereof, any Security or any portion of the principal
amount thereof that is $1,000 or an integral multiple of $1,000 may be converted
at any time after original issuance thereof through the close of business on
January 25, 2005 into that number of fully paid and non-assessable shares of
Common Stock obtained by multiplying the Conversion Rate then in effect by each
$1,000 principal amount of Securities surrendered for conversion. In case a
Security or portion thereof has previously been called for redemption at the
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election of the Company, such conversion right in respect of the Security or
portion so called shall expire at the close of business, New York City time, on
the last Business Day prior to the Redemption Date, unless the Company defaults
in making the payment due upon redemption. A Security in respect of which a
Holder has delivered a Change in Control Purchase Notice (as defined in Article
11 hereof) exercising the option of such Holder to require the Company to
purchase such Security may be converted only if such notice and the Security is
withdrawn by a written notice of withdrawal delivered by the Holder to the
Trustee or any Paying Agent prior to the close of business on the Repurchase
Date, in accordance with the terms of this Indenture.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") shall be initially $39.10 per
share of Common Stock, which is equal to a conversion rate of 25.5754 shares per
$1,000 principal amount of the Securities (the "Conversion Rate"). The
Conversion Rate shall be adjusted in certain instances as provided in Section
12.04 and, in every instance in which an adjustment is made to the Conversion
Rate, a corresponding adjustment shall be made to the Conversion Price.
Section 12.2. Exercise of Conversion Privilege. In order to exercise the
conversion privilege with respect to any Security in definitive form, the Holder
of any Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency maintained by the
Company pursuant to Section 9.02 of this Indenture, accompanied by (a) written
notice to the Company in substantially the form of conversion notice attached to
the form of Security attached as Exhibit A hereto at such office or agency that
the Holder elects to convert such Security or, if less than the entire principal
amount thereof is to be converted, the portion thereof to be converted, (b) the
funds, if any, required by this Section 12.02, and (c) if shares or any portion
of such Security not to be converted are to be issued in the name of a Person
other than the Holder thereof, the name of the Person in which to issue such
shares and the transfer taxes, if any, required to be paid by the Holder
pursuant to Section 12.08.
In order to exercise the conversion privilege with respect to any interest
in a global Security, the beneficial owner must complete, or cause to be
completed, the appropriate instruction form for conversion pursuant to the
depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such global Security, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
other agent, and pay the funds if any required by this Section 12.02 and any
transfer taxes if required pursuant to Section 12.08.
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As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
Holder a certificate or certificates for the number of full shares of Common
Stock issuable upon the conversion of such Security or portion thereof in
accordance with the provisions of this Article and bearing the legend set forth
in Section 3.04(c) and a check or cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, as provided in
Section 12.03. In case any Security of a denomination greater than $1,000 shall
be surrendered for partial conversion, and subject to Article 2, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Security so surrendered, without charge, a new Security or Securities in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Security.
Each conversion shall be deemed to have been effected as to any such
Security (or portion thereof) on the date on which the requirements set forth
above in this Section 12.02 have been satisfied as to such Security (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
provided however that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
Security shall be surrendered.
Any Security or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day next preceding the following
interest payment date that has not been called for redemption during such
period, shall be accompanied by payment, in immediately available funds or other
funds acceptable to the Company, of an amount equal to the interest otherwise
payable on such interest payment date on the principal amount being converted;
provided however that no such payment need be made to the extent any overdue
interest shall exist at the time of conversion with respect to any such Security
or portion thereof. Except as provided above in this Section 12.02, no payment
or other adjustment shall be made for interest accrued on any Security converted
or for dividends on any shares issued upon the conversion of such Security as
provided in this Article.
Upon the conversion of an interest in a global Security, the Trustee (or
other conversion agent appointed by the Company), shall make a notation on such
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global Security as to the reduction in the principal amount represented thereby.
The Company shall notify the Trustee in writing of any conversions of Securities
effected through any conversion agent other than the Trustee.
Section 12.3. Fractions of Shares. No fractional shares of Common Stock
shall be issued upon conversion of Securities. If more than one Security shall
be surrendered for conversion at one time by the same Holder, the number of full
shares that shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock that
would otherwise be issuable upon conversion of any Security (or specified
portions thereof), the Company shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Closing Price per share
of the Common Stock at the close of business on the Trading Day immediately
preceding such day.
"Trading Day" shall mean each day on which the primary securities exchange
or quotation system that is used to determine the Closing Price is open for
trading or quotation.
"Closing Price" of a single share of Common Stock on any Trading Day shall
mean the closing sale price per share for the Common Stock (or if no closing
sale price is reported, the average of the bid and ask prices) on such Trading
Day on the principal United States national securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national stock exchange, as reported by the National Association of Securities
Dealers Automated Quotation System.
Section 12.4. Adjustment of Conversion Rate. (a) In case the Company
shall pay or make a dividend or other distribution on its Common Stock
exclusively in Common Stock, the Conversion Rate in effect at the opening of
business on the earlier of the day next following such dividend or other
distribution or the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be adjusted so that a Holder
upon conversion will be entitled to receive that number of shares of Common
Stock it would have been entitled to after such dividend or other distribution
if it had converted its Security immediately prior to such dividend or other
distribution.
(b) In case the Company shall pay or make a dividend or other distribution
on its Common Stock consisting exclusively of, or shall otherwise issue to all
holders of its Common Stock, rights, warrants or options entitling the holders
thereof, for a period not exceeding 45 days, to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
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share (determined as provided in Section 12.04(g)) of the Common Stock on the
date fixed for the determination of stockholders entitled to receive such
rights, warrants or options, the Conversion Rate in effect at the opening of
business on the day following the date fixed for such determination shall be
increased by multiplying such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate price of the total number of shares so offered
would purchase at the current market price per share (determined as provided in
Section 12.04(g)), such increase to become effective immediately after the
opening of business on the day following the date fixed for such determination.
(c) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock, securities, cash or assets (excluding any rights,
warrants or options referred to in Section 12.04(b), any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in Section 12.04(a)), the Conversion Rate shall be adjusted by multiplying
the Conversion Rate in effect immediately prior to the earlier of such
distribution or the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in Section 12.04(g)) and the denominator
shall be such current market price less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), on the date of such effectiveness, of the
portion of the evidences of indebtedness, shares of capital stock, securities,
cash and assets so distributed applicable to one share of Common Stock, such
adjustment to become effective immediately prior to the
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opening of business on the day next following the later of (i) the date fixed
for the payment of such distribution and (ii) the date 20 days after the notice
relating to such distribution is given pursuant to Section 12.06 (such later
date of (i) and (ii) being referred to as the "Reference Date"). The provisions
of this Section 12.04(d) shall not be applicable to an event covered by Section
12.04(j). For purposes of this Section 12.04(d) and Sections 12.04(a) and
12.04(b), any dividend or distribution for which an adjustment is being made
pursuant to this Section 12.04(d) that also includes shares of Common Stock or
rights, warrants or options to subscribe for or purchase shares of Common Stock
shall be deemed instead to be (A) a dividend or distribution of the evidences of
indebtedness, cash, property, shares of capital stock or securities other than
such shares of Common Stock or such rights, warrants or options (making any
Conversion Rate adjustment required by this Section 12.04(d)) immediately
followed by (B) a dividend or distribution of such shares of Common Stock or
such rights (making any further Conversion Rate adjustment required by Sections
12.04(a) or 12.04(b)), except (1) the record date of such dividend or
distribution as defined in this Section 12.04(d) shall be substituted as "the
date fixed for the determination of stockholders entitled to receive such
dividend or other distributions", "the date fixed for the determination of
stockholders entitled to receive such rights, warrants or options" and "the date
fixed for such determination" within the meaning of Sections 12.04(a) and
12.04(b) and (2) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of this 12.04(a).
(e) In case the Company shall, by dividend or otherwise, make a
distribution to all holders of its Common Stock exclusively in cash 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 of payment of such distribution and in respect
of which no Conversion Rate adjustment pursuant to this Section 12.04(e) has
been made and (ii) the aggregate of any cash plus the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of the
tender or exchange offer referred to below, of consideration payable in respect
of any tender or exchange offer by the Company or a Subsidiary for all or any
portion of the Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no Conversion Rate
adjustment pursuant to this Section 12.04(e) has been made, exceeds 10% of the
product of the current market price per share (determined as provided in Section
12.04(g)) of the Common Stock as of the Trading Day immediately preceding the
record date fixed for stockholders entitled to receive such distribution times
the number of
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shares of Common Stock outstanding on such record date, the Conversion Rate
shall be increased so that the same shall equal the price determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on the date fixed for the determination of the stockholders of record
entitled to such distribution by a fraction of which the denominator shall be
the current market price per share (determined as provided in Section 12.04(g))
on such date less an amount equal to the quotient of (x) the excess of such
combined amount over such 10% and (y) the number of shares of Common Stock
outstanding on the record date and (iii) the numerator of which shall be equal
to the current market price on such date, such adjustment to become effective
immediately prior to the opening of business on the day following the record
date fixed for the payment of such distribution.
(f) In case a successful tender or exchange offer, other than an odd lot
offer, made by the Company or any Subsidiary for all or any portion of the
Common Stock shall involve an aggregate consideration having a fair market value
(as determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it may be amended) that, together with (i) the aggregate of
the cash plus the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of the other tender or exchange offer referred
to below, of consideration payable in respect of any other tender or exchange
offer by the Company or a Subsidiary for all or any portion of the Common Stock
concluded within the preceding 12 months and in respect of which no Conversion
Rate adjustment pursuant to this Section 12.04(f) has been made and (ii) the
aggregate amount of any distributions to all holders of the Common Stock made
exclusively in cash within the preceding 12 months and in respect of which no
Conversion Rate adjustment pursuant to Section 12.04(e) has been made, exceeds
10% of the product of the current market price per share (determined as provided
in Section 12.04(g)) of the Common Stock outstanding (including any tendered
shares) on the Expiration Time, the Conversion Rate shall be adjusted by
multiplying the Conversion Rate in effect immediately prior to the Expiration
Time by a fraction of which the denominator shall be (i) the product of the
current market price per share (determined as provided in Section 12.04(g)) of
the Common Stock on the Trading Day next succeeding the Expiration Time times
the number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time minus (ii) the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
or exchange offer) of all shares validly tendered or exchanged and not withdrawn
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as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and the numerator shall be
the product of (i) such current market price per share (determined in accordance
with Section 12.04(g)) on the Trading Day next succeeding the Expiration Time
times (ii) such number of outstanding shares at the Expiration Time less the
number of Purchased Shares, such increase to become effective immediately prior
to the opening of business on the day following the Expiration Time.
(g) For the purpose of any computation under Sections 12.04(b), (d) and
(e), the current market price per share of Common Stock on any date in question
shall be deemed to be the average of the daily Closing Prices per share of
Common Stock for the ten consecutive Trading Days immediately prior to the date
in question; provided, however, that (i) if the "ex" date (as hereinafter
defined) for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Rate pursuant to
Section 12.04(a), (b), (c), (d), (e) or (f) ("Other Event") occurs on or after
the 20th Trading Day prior to the date in question and prior to the "ex" date
for the issuance or distribution requiring such computation (the "Current
Event"), the Closing Price for each Trading Day prior to the "ex" date for such
Other Event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Rate is so required to be
adjusted as a result of such Other Event, (ii) if the "ex" date for any Other
Event occurs after the "ex" date for the Current Event and on or prior to the
date in question, the Closing Price for each Trading Day on and after the "ex"
date for such Other Event shall be adjusted by multiplying such Closing Price by
the fraction by which the Conversion Rate is so required to be adjusted as a
result of such Other Event, (iii) if the "ex" date for any Other Event occurs on
the "ex" date for the Current Event, one of those events shall be deemed for
purposes of clauses (i) and (ii) of this proviso to have an "ex" date occurring
prior to the "ex" date for the Other Event, and (iv) if the "ex" date for the
Current Event is on or prior to the date in question, after taking into account
any adjustment required pursuant to clause (ii) of this proviso, the Closing
Price for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value on the date in
question (as determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for purposes of Section 12.04(d)
or (e), whose determination shall be conclusive and described in a Board
Resolution) of the portion of the rights, warrants, options, evidences of
indebtedness, shares of capital stock, securities, cash or property being
distributed applicable to one share of Common Stock. For the purpose of any
computation under Section 12.04(f), the current market price per share of Common
Stock on
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any date in question shall be deemed to be the average of the daily Closing
Prices for the five consecutive Trading Days selected by the Company commencing
on or after the latest (the "Commencement Date") of (i) the date 20 Trading Days
before the date in question, (ii) the date of commencement of the tender or
exchange offer requiring such computation and (iii) the date of the last
amendment, if any, of such tender or exchange offer involving a change in the
maximum number of shares for which tenders are sought or a change in the
consideration offered, and ending not later than the Trading Day next succeeding
the Expiration Time of such tender or exchange offer (or, if such Expiration
Time occurs before the close of trading on a Trading Day, not later than the
Trading Day during which the Expiration Time occurs); provided, however, that if
the "ex" date for any Other Event (other than the tender or exchange offer
requiring such computation) occurs on or after the Commencement Date and on or
prior to the Trading Day next succeeding the Expiration Time for the tender or
exchange offer requiring such computation, the Closing Price for each Trading
Day prior to the "ex" date for such Other Event shall be adjusted by multiplying
such Closing Price by the reciprocal of the same fraction by which the
Conversion Rate is so required to be adjusted as a result of such other event.
For purposes of this paragraph, the term "ex" date, (i) when used with respect
to any issuance or distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant market from which
the Closing Price was obtained without the right to receive such issuance or
distribution, (ii) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which such
subdivision or combination becomes effective, and (iii) when used with respect
to any tender or exchange offer means the first date on which the Common Stock
trades regular way on such exchange or in such market after the Expiration Time
of such tender or exchange offer.
(h) The Company may make such increases in the Conversion Rate, in
addition to those required by paragraphs (a), (b), (c), (d), (e) and (f) of this
Section 12.04, as it considers to be advisable.
(i) No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Rate; provided, however, that any adjustments, which by reason of
this Section 12.04(i) are not required to be made, shall be carried forward and
taken into account in any subsequent adjustment.
(j) In the event that the Company distributes assets, debt securities,
rights, warrants or options (other than those referred to in Section 12.04(b)
above)
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pro rata to holders of Common Stock, and the fair market value of the portion of
assets, debt securities, rights, warrants or options applicable to one share of
Common Stock distributed to holders of Common Stock exceeds the Average Sale
Price (as defined below) per share of Common Stock, or such Average Sale Price
exceeds such fair market value by less than $1.00, then so long as any such
assets, debt securities, rights, options or warrants have not expired or been
redeemed by the Company, the Company shall make proper provision so that the
Holder of any Security upon conversion, rather than being entitled to an
adjustment in the Conversion Rate, will be entitled to receive upon such
conversion, in addition to the shares of Common Stock otherwise issuable upon
conversion, the kind and amount of assets, debt securities, rights, warrants and
options such Holder would have received had such Holder converted its Security
immediately prior to the date of determination of the holders entitled to such
distribution.
"Average Sale Price" means the average of the Closing Prices of the Common
Stock for the shorter of (i) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination (as defined below) with respect
to the rights, options, warrants or distribution in respect of which the Average
Sale Price is being calculated, or (ii) the period (x) commencing on the date
next succeeding the first public announcement of (a) the issuance of rights,
options or warrants or (b) the distribution, in each case, in respect of which
the Average Sale Price is being calculated and (y) proceeding through the last
full Trading Day prior to the Time of Determination with respect to the rights,
options, warrants or distribution in respect of which the Average Sale Price is
being calculated, or (iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time (as defined below) with respect to the next
preceding (a) issuance of rights, warrants or options or (b) distribution, in
each case, for which an adjustment is required by the provisions of Section
12.04(b) or Section 12.04(j) and (y) proceeding through the last full Trading
Day prior to the Time of Determination with respect to the rights, options,
warrants, or distribution in respect of which the Average Sale Price is being
calculated. If the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto) with
respect to a dividend, subdivision, combination or reclassification to which
Section 12.04(a) or (b) applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a manner
determined in good faith by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the Closing Price of
the Common Stock during such period.
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"Time of Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options or
a distribution, in each case, to which this Section 12.04 applies and (ii) the
time ("Ex-Dividend Time") immediately prior to the commencement of "ex-dividend"
trading for such rights, options, warrants or distribution on the New York Stock
Exchange or such other national or regional exchange or market on which the
shares of Common Stock are listed or quoted.
Section 12.5. Notice of Adjustments of Conversion Rate. Whenever the
Conversion Rate and Conversion Price are adjusted as herein provided, the
Company shall compute the adjusted Conversion Rate and Conversion Price in
accordance with Section 12.04 and shall prepare a certificate signed by the
Chief Financial Officer of the Company setting forth the adjusted Conversion
Rate and Conversion Price and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall forthwith be filed (with a
copy to the Trustee) at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 9.02; and the Company shall
forthwith cause a notice setting forth the adjusted Conversion Rate and
Conversion Price to be mailed, first class postage prepaid, to each Holder of
Securities at its address appearing on the Security Register. Unless and until
the Trustee shall receive such notice, the Trustee may assume without inquiry
that the Conversion Rate and Conversion Price have not been, and are not
required to be, adjusted and that the last Conversion Rate and Conversion Price
of which it has written notice remain in effect.
Section 12.6. Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require a Conversion Rate
adjustment pursuant to Section 12.04(e); or
(b) the Company shall authorize the granting to all holders of its
Common Stock of rights, warrants or options to subscribe for or purchase
any shares of capital stock of any class or of any other rights (excluding
rights distributed pursuant to any stockholder rights plan); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of
Common Stock), or of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
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required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding, up of the Company; or
(e) the Company or any Subsidiary of the Company shall commence a
tender or exchange offer for all or a portion of the Company's outstanding
shares of Common Stock (or shall amend any such tender or exchange offer);
then the Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 9.02,
and shall cause to be mailed to all Holders at their last addresses as they
shall appear in the Security Register, at least 20 days (or 10 days in any case
specified in clause 12.06(a) or 12.06(b) above) prior to the applicable record,
effective or expiration date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or granting of rights, warrants or options, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, warrants or options are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or (z) the date on which such tender offer commenced, the date on which such
tender offer is scheduled to expire unless extended, the consideration offered
and the other material terms thereof (or the material terms of any amendment
thereto).
Section 12.7. Company's Obligation Regarding Common Stock. The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, solely for the purpose of effecting
the conversion of Securities, the whole number of shares of Common Stock then
issuable upon the conversion in full of all outstanding Securities.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Securities, the Company will take all corporate
action that may, in the opinion of its counsel, be necessary in order that the
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Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that if any shares of Common Stock to be provided for
the purpose of conversion of Securities hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as practicable endeavor to secure such registration
or approval, as the case may be.
The Company further covenants that so long as the Common Stock shall be
listed or quoted on the New York Stock Exchange, the Nasdaq Stock Market
(National Market), or any other national securities exchange the Company will,
if permitted by the rules of such exchange, list and keep listed so long as the
Common Stock shall be so listed on such market or exchange, all Common Stock
issuable upon conversion of the Securities.
Section 12.8. Taxes on Conversions. The Company will pay any and all
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any tax that may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be converted, and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
Section 12.9. Covenant as to Common Stock. The Company covenants that all
shares of Common Stock that may be issued upon conversion of Securities shall
upon issue be newly issued (and not treasury shares) and be duly authorized,
validly issued, fully paid and nonassessable and, except as provided in Section
12.08, the Company shall pay all taxes, liens and charges with respect to the
issue thereof.
Section 12.10. Cancellation of Converted Securities. All Securities
delivered for conversion shall be delivered to the Trustee to be cancelled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 3.08 of this Indenture.
Section 12.11. Provisions in Case of Reclassification, Consolidation,
Merger or Sale of Assets. In the event that the Company shall be a party to any
transaction (including any (i) recapitalization or reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value, or from
79
no par value to par value, or as a result of a subdivision or combination of the
Common Stock), (ii) any consolidation of the Company with, or merger of the
Company into, any other person, any merger of another person into the Company
(other than a merger that does not result in a reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company),
(iii) any sale or transfer of all or substantially all of the assets of the
Company or (iv) any compulsory share exchange) pursuant to which the Common
Stock is converted into the right to receive other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby the Holder of each Security then Outstanding shall have the
right thereafter to convert such Security only into (subject to funds being
legally available for such purpose under applicable law at the time of such
conversion) the kind and amount of securities, cash and other property
receivable upon such transaction by a holder of the number of shares of Common
Stock into which such Security might have been converted immediately prior to
such transaction. The Company or the person formed by such consolidation or
resulting from such merger or that acquired such assets or that acquired the
Company's shares of Common Stock, as the case may be, shall execute and deliver
to the Trustee a supplemental indenture establishing such rights. Such
supplemental indenture shall provide for adjustments that, 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. The above provisions of this Section 12.11 shall similarly apply to
successive transactions of the foregoing type.
Section 12.12. Company's Obligation. All calculations, adjustments,
conversions and other determinations under this Article 12 shall be the sole
responsibility and obligation of the Company. The Trustee (a) shall have no
obligation to review, challenge or contest any such calculation, adjustment,
conversion or other determination and (b) shall not be liable for any default or
error by the Company under this Article 12.
ARTICLE 13
Subordination
Section 13.1. Securities Subordinate to Senior Indebtedness. The Company
covenants and agrees, and each Holder of Securities, by such Holder's acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article 13, the indebtedness represented by the
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Securities and the payment of the principal of (and premium, if any), and
interest on and all other amounts payable under the Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness.
Section 13.2. Payment over of Proceeds upon Dissolution, Etc. In the
event of any payment by, or distribution of the assets of, the Company in
connection with (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or its assets, (b) any
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Company, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due in
respect of all Senior Indebtedness, or provision shall be made for such payment
in cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment on account of principal of (or premium, if any), or interest
on or any other amount payable under the Securities, ratably according to the
aggregate amounts remaining unpaid on account of such Senior Indebtedness held
by them, for application to the payment thereof, any payment or distribution of
any kind or character, whether in cash, property or securities, that may be
payable or deliverable in respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding-up or event, after giving
effect to any concurrent payment or distribution, or provision therefore, to the
holders of such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this Section
13.02, the Trustee or the Holder of Securities shall have received any payment
or distribution of assets of the Company prohibited by the foregoing paragraph
of any kind or character, whether in cash, property or securities, before all
Senior Indebtedness is paid in full or payment thereof provided for, and if, at
or prior to the time of such payment or distribution, written notice that such
payment or distribution is prohibited by the foregoing paragraph shall have been
actually given to a Responsible Officer of the Trustee or, as the case may be,
such Holder, then and in such event such payment or distribution shall be paid
over or delivered forthwith to holders of such Senior Indebtedness remaining
unpaid or their representatives to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution, or provision therefore, to the holders of such Senior
Indebtedness.
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For purposes of this Article 13 only, the words "cash, property or
securities" shall not be deemed to include shares of capital stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment that in
either case are subordinated in right of payment to all Senior Indebtedness that
may at the time be outstanding to substantially the same extent as, or to a
greater extent than, the Securities are so subordinated as provided in this
Article 13. The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article 7
shall not be deemed a dissolution, winding-up, liquidation, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company for the purposes of this Section 13.02 if the Person formed by
such consolidation or into which the Company is merged or that acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article 7.
Section 13.3. No Payment When Senior Indebtedness in Default. (a) In the
event and during the continuation of any default in the payment of principal of
(or premium, if any) or interest on any Senior Indebtedness beyond any
applicable grace period with respect thereto (unless and until such payment
default shall have been cured or waived in writing by the holders of such Senior
Indebtedness), or (b) any default (other than a payment default) with respect to
Senior Indebtedness occurs and is continuing that permits the acceleration of
the maturity thereof and judicial proceedings shall be pending with respect to
any such default or the Company receives written notice of such default (a
"Senior Indebtedness Default Notice"), then no payment shall be made by the
Company on account of principal of (or premium, if any) or interest on the
Securities or on account of all other amounts payable under the Securities.
Notwithstanding the foregoing, payments with respect to the Securities may
resume and the Company may acquire Securities for cash or property when (x) the
default with respect to the Senior Indebtedness is cured or waived or ceases to
exist or (y) in the case of a default described in (b) above, 179 or more days
pass after the Senior Indebtedness Default Notice is received by the Company.
If the Company receives a Senior Indebtedness Default Notice, then a similar
notice received within nine months thereafter relating to the same default on
the same issue of Senior Indebtedness shall not be effective to prevent the
payment or acquisition of the Securities as described in the first sentence of
this Section 13.03(a). In addition, no payment may be made on the Securities if
any Securities are declared due and payable prior to their Stated Maturity by
reason of the occurrence of an
82
Event of Default resulting from the acceleration of the maturity of any Senior
Indebtedness until the earlier of (i) 120 days after the date of such
acceleration or (ii) the payment in full of all Senior Indebtedness, but only if
such payment is then otherwise permitted under the terms of this Indenture.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of Securities prohibited by the
foregoing provisions of this Section 13.03 before all Senior Indebtedness is
paid in full, or effective provisions made for its payment, and if, at or prior
to the time of such payment, written notice that such payment is prohibited by
the foregoing paragraph shall have been actually given to a Responsible Officer
of the Trustee or, as the case may be, such Holder, then and in such event (but
subject to the provisions of Section 13.09) such payment shall be paid over and
delivered forthwith to the holders of such Senior Indebtedness remaining unpaid
or their representatives to the extent necessary to pay all Senior Indebtedness
in full, after giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
The provisions of this Section 13.03 shall not apply to any payment with
respect to which Section 13.02 would be applicable.
Section 13.4. Payment Permitted If No Default. Nothing contained in this
Article 13 or elsewhere herein or in any of the Securities shall prevent (a) the
Company, at any time except during the pendency of any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities of the Company referred
to in Section 13.02, except under the conditions described in Section 13.03,
from making payments at any time of principal of (and premium, if any), or
interest on, or any other amount payable under the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any), or interest
on, or any other amount payable under the Securities, or the retention of such
payment by the Holders, if, two Business Days prior to such application by the
Trustee, the Trustee had not received written notice that such payment would be
prohibited by the provisions of this Article 13.
Section 13.5. Subrogation to Rights of Holders of Senior Indebtedness.
Upon payment in full of all Senior Indebtedness, the Holders of the Securities
shall be subrogated (equally and ratably with the holders of all Indebtedness of
the Company that by its express terms is subordinated to Indebtedness of the
Company to substantially the same extent as the Securities are subordinated to
Senior Indebtedness) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to
83
the Senior Indebtedness to the extent that payments and distributions otherwise
payable to Holders of Securities have been applied to the payment of Senior
Indebtedness as provided by this Article 13. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled, except for the provisions of this Article 13, and no
payments over pursuant to the provisions of this Article 13 to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
Section 13.6. Provisions Solely to Define Relative Rights. The provisions
of this Article 13 are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities on the one hand and the holders
of Senior Indebtedness on the other hand. Nothing contained in this Article 13
or elsewhere herein or in the Securities is intended to or shall:
(a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article 13 of the holders of Senior Indebtedness, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of (and premium, if any), and interest
on, and any other amount payable under the Securities, as and when the same
shall become due and payable in accordance with their terms;
(b) affect the relative rights against the Company of the Holders of the
Securities and other creditors of the Company, other than Holders' rights in
relation to the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Securities from exercising
all remedies available upon a Default or Event of Default under this Indenture,
subject to the rights, if any, under this Article 13 of the holders of Senior
Indebtedness to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
Section 13.7. Trustee to Effectuate Subordination. Each Holder of
Securities by its acceptance thereof authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 13 and appoints the Trustee its attorney-
in-fact for any and all such purposes, including the immediate filing of a
84
claim for the unpaid balance of such Holder's Securities in any insolvency or
bankruptcy proceeding, or any receivership, liquidation, reorganization or
similar case or proceeding in the form required in such proceeding and cause
such claim to be approved. If the Trustee does not file a proper claim in the
form required in such proceeding on or prior to thirty days before the
expiration of the time to file such claim or claims, then the holders of Senior
Indebtedness or their representatives are hereby authorized to file such claim
for and on behalf of the Holders.
Section 13.8. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article 13 or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend
or supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding;
(b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness;
(c) release any Person liable in any manner for the collection of
Senior Indebtedness;
(d) exercise or refrain from exercising any rights against the
Company and any other Person.
Section 13.9. Notice to Trustee. The Company shall give prompt written
notice to the Trustee if, to the Company's knowledge, any payment to or by the
Trustee in respect of the Securities is prohibited by this Article 13.
85
Notwithstanding the provisions of this Article 13 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge that any payment to
or by the Trustee in respect of the Securities is prohibited by this Article 13,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from any trustee therefor; and, prior to the receipt of any such written notice,
the Trustee, subject to the provisions of Section 1.05, shall be entitled in all
respects to assume that no facts exist that would prohibit any payment in
respect of the Securities; provided, however, that if a Responsible Officer of
the Trustee shall not have received at the Corporate Trust Office of the Trustee
the notice provided for in this Section 13.09 at least two Business Days prior
to the date upon which by the terms hereof any money may become payable for any
purpose (including the payment of the principal of (and premium, if any) or
interest on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date.
Subject to the provisions of Article 5, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing itself
to be a holder of Senior Indebtedness (or a representative thereof) to establish
that such notice has been given by a holder of Senior Indebtedness (or a
representative thereof). In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 13, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 13, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 13.10. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 13, the Trustee, subject to the provisions of Article 5, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the
86
Holders of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or 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 13.
Section 13.11. Trustee Not Fiduciary for Holders of Senior Indebtedness.
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 it shall in
good faith mistakenly pay over or distribute to Holders of Securities or to the
Company or to any other Person cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article 13 or
otherwise.
Section 13.12. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights'. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article 13 with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article 13 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 5.07.
Section 13.13. 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 13 shall in
such case (unless the context otherwise requires) be construed as extending to
and including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article 13 in addition to or
in place of the Trustee; provided, however, that Section 13.13 shall not apply
to the Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
Section 13.14. Certain Conversions Deemed Payment. For the purposes of this
Article 13 only, (1) the issuance and delivery of junior securities upon
conversion of Securities in accordance with Article 12 shall not be deemed to
constitute a payment or distribution on account of the principal of or premium
or interest on Securities or on account of the redemption, purchase or other
acquisition of Securities, and (2) the payment, issuance or delivery of cash,
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section 13.14, the term "junior
securities"
87
means (a) shares of any stock of any class of the Company and (b) securities of
the Company that are subordinated in right of payment to the prior payment in
full of 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 Securities are so subordinated as provided in this
Article 13. Nothing contained in this Article 13 or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article 12.
88
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
EARTHWEB INC.
By: ________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: ________________________________
▇▇▇▇ ▇'▇▇▇▇▇ Vice President
89
EXHIBIT A
EarthWeb Inc.
7% CONVERTIBLE SUBORDINATED NOTE DUE 2005
No. $ ___________
CUSIP 27032 CAA6
EARTHWEB INC., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company", which term includes any
successor entity under the Indenture hereinafter referred to), for value
received, hereby promises to pay to [ ] or registered assigns, the
principal sum of $ at the office or agency of the Company referred to below, on
January 25, 2005 in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest on said principal sum semiannually on January 25 and
July 25 of each year, commencing July 25, 2000 (each an "Interest Payment
Date"), at said office or agency, in like coin or currency, at the rate of 7%
per annum, until the principal hereof is paid or made available for payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the January 10 or July 10 (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of, premium, if any, and interest on this Security
will be made at the office or agency of the Company maintained for such purpose,
90
which initially will be Corporate Trust Office of the Trustee referred to on the
reverse side hereof, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts,
provided that the Company may make such payment either by (i) mailing a check
for such interest, payable to or upon the written order of the Person entitled
thereto pursuant to Section 3.07 of the Indenture (as defined herein) or (ii)
transfer to an account maintained by the payee located inside the United States.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
---------- ------------- --------
DATED: EARTHWEB INC.
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
DATED: STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:_________________________
Authorized Signatory
91
[FORM OF REVERSE OF SECURITY]
EarthWeb Inc.
7% CONVERTIBLE SUBORDINATED NOTE DUE 2005
This Security is one of a duly authorized issue of securities of the
Company designated as its 7% Convertible Subordinated Notes due 2005 (herein
called the "Securities"), limited in aggregate principal amount to $75,000,000
(up to $86,250,000 if the option set forth in section 2(b) of the Purchase
Agreement dated January 19, 2000 among the Company and the Initial Purchasers
named therein is exercised in full), which may be issued under an Indenture,
dated as of January 25, 2000 (the "Indenture"), between the Company and State
Street Bank and Trust Company of California, N.A., as Trustee for the Holders of
Securities issued under said Indenture (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at its option, at any time on or before
maturity of the Securities, or in case this Security or a portion hereof is
called for redemption, then in respect of this Security or such portion hereof
until and including, but (unless the Company defaults in making the payment due
upon redemption or repurchase) not after, the close of business on the Business
Day immediately preceding the Redemption Date or Repurchase Date, as the case
may be, to convert this Security (or any portion of the principal amount hereof
which is U.S.$1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and nonassessable shares of Common
Stock of the Company at a Conversion Rate of 25.5754 shares of common stock per
$1,000 principal amount of the Securities (or at the current adjusted Conversion
Rate if an adjustment has been made as provided in Article 12 of the Indenture)
by surrender of this Security, duly endorsed or assigned to the Company or in
blank, to the Company at its office or agency maintained for such purpose,
accompanied by the conversion notice hereon executed by the Holder hereof
evidencing such Holder's election to convert this Security, or if less than the
entire principal amount hereof is to be converted, the portion hereof to be
converted, and, in case
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such surrender shall be made during the period from the close of business on any
Regular Record Date to the opening of business on the corresponding Interest
Payment Date (unless this Security or the portion hereof being converted has
been called for redemption on a Redemption Date within such period between and
including such Regular Record Date and such Interest Payment Date), also
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted. Subject to the aforesaid requirement for
payment of interest and, in the case of a conversion after the close of business
on any Regular Record Date and on or before the corresponding Interest Payment
Date, to the right of the Holder of this Security (or any Predecessor Security)
of record at such Regular Record Date to receive an installment of interest
(even if the Security has been called for redemption on a Redemption Date within
such period), no payment or adjustment is to be made on conversion for interest
accrued hereon or for dividends on the Common Stock issued on conversion. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest the Company shall pay a cash
adjustment as provided in Article 12 of the Indenture. The Conversion Rate and
Conversion Price are subject to adjustment as provided in Article 12 of the
Indenture. In addition, the Indenture provides that in case of certain
reclassifications, consolidations, mergers, sales or transfers of assets or
other transactions pursuant to which the Common Stock is converted into the
right to receive other securities, cash or other property, the conversion
privilege shall be modified so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon the transaction by a holder of the number of shares of
Common Stock into which this Security might have been converted immediately
prior to such transaction.
The Securities may be redeemed at the election of the Company, as a whole
or from time to time in part, at any time prior to January 25, 2003 (a
"Provisional Redemption"), at a Redemption Price equal to $1,000 per $1,000
principal amount of the Securities plus accrued and unpaid interest, if any, to
but excluding the date of redemption (the "Provisional Redemption Date") if (i)
the Closing Price of the Common Stock has exceeded 150% of the Conversion Price
(as defined in Article 12 of the Indenture and as such may be adjusted from time
to time) then in effect for at least 20 Trading Days in any consecutive 30-
Trading Day period ending on the Trading Day prior to the date of mailing of the
provisional notice of redemption pursuant to Section 10.04 (the "Notice Date"),
and (ii) a registration statement covering resales of the Securities and Common
Stock issuable upon the conversion thereof is effective and available for use
and is
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expected to remain effective for the 30 days following the Provisional
Redemption Date.
Upon any such Provisional Redemption, the Company shall make an additional
payment in cash (the "Make-Whole Payment") to holders of the Securities called
for redemption, including those Securities converted into Common Stock between
the Notice Date and the Provisional Redemption Date, in an amount equal to
$130.43 per $1,000 principal amount of the Securities, less the amount of any
interest actually paid on the Securities before the Notice Date.
The Securities (other than those Securities that have been converted in
accordance with the terms of the Indenture) are subject to redemption at the
option of the Company upon not less than 30 days' or more than 60 days' notice
by mail (unless a shorter notice is deemed satisfactory by the Trustee), as a
whole or from time to time in part, at any time on or after January 25, 2003.
The redemption prices (expressed as percentages of the principal amount) shall
be as set forth below for Securities redeemed during the following periods
described below:
Period Redemption Price
------ ----------------
January 25, 2003 through January 24, 2004 102.8%
Thereafter 101.4%
together, in the case of any such redemption, with accrued interest to (but not
including) the Redemption Date (subject to the right of holders of record on the
Regular Record Date to receive interest on the related Interest Payment Date).
Any redemption of Securities must be in integral multiples of $1,000.
If fewer than all of the Securities are to be redeemed, the Trustee will
select the Securities to be redeemed in principal amounts at maturity of $1,000
or integral multiples thereof by lot, pro rata or by another method the Trustee
considers fair and appropriate. If a portion of a Holder's Securities is
selected for partial redemption and that holder converts a portion of those
Securities prior to the redemption, the converted portion shall be deemed,
solely for purposes of determining the aggregate principal amount of the
Securities to be redeemed by the Company, to be of the portion selected for
redemption.
In certain circumstances involving a Change in Control, each Holder shall
have the right to require the Company to repurchase all or part of its
Securities at a repurchase price equal to 100% of the principal amount thereof,
together with accrued and unpaid interest through the Repurchase Date (subject
to the right of
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holders of record on the Regular Record Date to receive interest on the related
Interest Payment Date). At the option of the Company, the Repurchase Price may
be paid in cash or, subject to the conditions provided in the Indenture, by
delivery of shares of Common Stock.
The Securities do not have the benefit of any sinking fund.
In the event of redemption, conversion or repurchase of this Security in
part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared due and payable in the manner and with the effect
provided in Article 4 of the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security .
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest
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on this Security at the times, place and rate, and in the coin or currency,
herein prescribed or to convert this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the Corporate
Trust Office duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
No service charge shall be made to a Holder for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day year
of twelve 30-day months. In the event that any date on which interest is payable
on the Securities is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay).
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES.
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FORM OF CONVERSION NOTICE
CONVERSION NOTICE
To: EARTHWEB INC.
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (which is $1,000 or an
integral multiple thereof) below designated, at any time following the date of
original issuance thereof, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon conversion, together with any check in payment for
a fractional share and any Security representing any unconverted principal
amount hereof, be issued and delivered to the registered owner hereof unless a
different name has been provided below. If shares or any portion of this
Security not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith a certificate in proper form certifying that
the applicable restrictions on transfer have been complied with. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.
Dated:
By:____________________________
Signature*
If shares or Securities are to be Principal amount to be converted (if
registered in the name of a Person less than all):$______,000
other than the Holder, please print
such Person's name and address:
_____________________________
Name
_____________________________
Social Security or Taxpayer
Identification Number
_____________________________
Street Address
______________________________
City, State and Zip Code
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* Signature(s) 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 if shares of Common Stock are to be delivered,
or unconverted Securities are to be issued, other than to and in the name of the
registered owner.
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