EXHIBIT 4.1
MEMBERWORKS INCORPORATED
5.50% Convertible Senior Subordinated Notes due 2010
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INDENTURE
Dated as of September 30, 2003
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Deutsche Bank Trust Company Americas
TRUSTEE
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TABLE OF CONTENTS
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Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.......................................................................1
Section 1.2 Other Definitions.................................................................7
Section 1.3 Incorporation by Reference of Trust Indenture Act.................................7
Section 1.4 Rules of Construction.............................................................8
Section 1.5 Acts of Holders...................................................................9
ARTICLE II
THE SECURITIES
Section 2.1 Form and Dating..................................................................10
Section 2.2 Execution and Authentication.....................................................11
Section 2.3 Registrar, Paying Agent and Conversion Agent.....................................12
Section 2.4 Paying Agent to Hold Money and Securities in Trust...............................12
Section 2.5 Securityholder Lists.............................................................12
Section 2.6 Transfer and Exchange............................................................13
Section 2.7 Replacement Securities...........................................................15
Section 2.8 Outstanding Securities; Determinations of Holders' Action........................15
Section 2.9 Temporary Securities.............................................................16
Section 2.10 Cancellation.....................................................................16
Section 2.11 Defaulted Interest...............................................................17
Section 2.12 Persons Deemed Owners............................................................18
Section 2.13 Global Securities................................................................18
Section 2.14 CUSIP Numbers....................................................................24
ARTICLE III
REDEMPTION AND PURCHASES
Section 3.1 Company's Right to Redeem; Notices to Trustee....................................24
Section 3.2 Selection of Securities to Be Redeemed...........................................24
Section 3.3 Notice of Redemption.............................................................25
Section 3.4 Effect of Notice of Redemption...................................................26
Section 3.5 Deposit of Redemption Price......................................................26
Section 3.6 Securities Redeemed in Part......................................................26
Section 3.7 Purchase of Securities at Option of the Holder upon Change of Control............26
Section 3.8 Effect of Change of Control Purchase Notice; Withdrawal..........................30
Section 3.9 Deposit of Change of Control Purchase Price......................................31
Section 3.10 Securities Purchased in Part.....................................................31
Section 3.11 Covenant to Comply With Securities Laws Upon Purchase of Securities..............31
Section 3.12 Repayment to the Company.........................................................31
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ARTICLE IV
COVENANTS
Section 4.1 Payment of Securities............................................................32
Section 4.2 SEC and Other Reports............................................................32
Section 4.3 Compliance Certificate...........................................................32
Section 4.4 Further Instruments and Acts.....................................................33
Section 4.5 Maintenance of Office or Agency..................................................33
Section 4.6 Delivery of Certain Information..................................................33
Section 4.7 Statement by Officers as to Default..............................................33
Section 4.8 Additional Interest Notice.......................................................33
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge or Transfer Assets........................................34
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default................................................................35
Section 6.2 Acceleration.....................................................................36
Section 6.3 Other Remedies...................................................................37
Section 6.4 Waiver of Past Defaults..........................................................37
Section 6.5 Control by Majority..............................................................37
Section 6.6 Limitation on Suits..............................................................38
Section 6.7 Rights of Holders to Receive Payment.............................................38
Section 6.8 Collection Suit by Trustee.......................................................38
Section 6.9 Trustee May File Proofs of Claim.................................................38
Section 6.10 Priorities.......................................................................39
Section 6.11 Undertaking for Costs............................................................39
Section 6.12 Waiver of Stay, Extension or Usury Laws..........................................40
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee................................................................40
Section 7.2 Rights of Trustee................................................................41
Section 7.3 Individual Rights of Trustee.....................................................43
Section 7.4 Trustee's Disclaimer.............................................................43
Section 7.5 Notice of Defaults...............................................................43
Section 7.6 Reports by Trustee to Holders....................................................43
Section 7.7 Compensation and Indemnity.......................................................44
Section 7.8 Replacement of Trustee...........................................................44
Section 7.9 Successor Trustee by Merger......................................................45
Section 7.10 Eligibility; Disqualification....................................................45
Section 7.11 Preferential Collection of Claims Against Company................................45
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ARTICLE VIII
AMENDMENTS
Section 8.1 Without Consent of Holders.......................................................46
Section 8.2 With Consent of Holders..........................................................46
Section 8.3 Compliance with Trust Indenture Act..............................................47
Section 8.4 Revocation and Effect of Consents, Waivers and Actions...........................48
Section 8.5 Notation on or Exchange of Securities............................................48
Section 8.6 Trustee to Sign Supplemental Indentures..........................................48
Section 8.7 Effect of Supplemental Indentures................................................48
ARTICLE IX
CONVERSIONS
Section 9.1 Conversion Privilege.............................................................48
Section 9.2 Conversion Procedure; Conversion Price; Fractional Shares........................48
Section 9.3 Adjustment of Conversion Price...................................................50
Section 9.4 Consolidation or Merger of the Company...........................................58
Section 9.5 Notice of Adjustment.............................................................60
Section 9.6 Notice in Certain Events.........................................................60
Section 9.7 Company To Reserve Stock: Registration; Listing..................................61
Section 9.8 Taxes on Conversion..............................................................61
Section 9.9 Conversion After Interest Payment Record Date....................................62
Section 9.10 Company Determination Final......................................................62
Section 9.11 Responsibility of Trustee for Conversion Provisions..............................62
Section 9.12 Unconditional Right of Holders to Convert........................................62
ARTICLE X
SUBORDINATION OF THE SECURITIES
Section 10.1 Agreement to Subordinate.........................................................63
Section 10.2 Liquidation, Dissolution, Bankruptcy.............................................63
Section 10.3 Default on Designated Senior Indebtedness of the Company.........................64
Section 10.4 Acceleration of Payment of Securities............................................65
Section 10.5 When Distribution Must Be Paid Over..............................................65
Section 10.6 Subrogation......................................................................65
Section 10.7 Relative Rights..................................................................65
Section 10.8 Subordination May Not Be Impaired................................................65
Section 10.9 Rights of Trustee and Paying Agent...............................................65
Section 10.10 Distribution or Notice to Representative.........................................66
Section 10.11 Article 10 Not to Prevent Events of Default or Limit Right to Accelerate.........66
Section 10.12 Trustee Entitled to Rely.........................................................66
Section 10.13 Trustee to Effectuate Subordination..............................................67
Section 10.14 Trustee Not Fiduciary for Holders of Senior Indebtedness.........................67
Section 10.15 Reliance by Holders of Senior Indebtedness on Subordination Provisions...........67
Section 10.16 Amendments.......................................................................67
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ARTICLE XI
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls.....................................................67
Section 11.2 Notices..........................................................................67
Section 11.3 Communication by Holders with Other Holders......................................68
Section 11.4 Certificate and Opinion as to Conditions Precedent...............................69
Section 11.5 Statements Required in Certificate or Opinion....................................69
Section 11.6 Separability Clause..............................................................69
Section 11.7 Rules by Trustee, Paying Agent, Conversion Agent and Registrar..................69
Section 11.8 Legal Holidays...................................................................69
Section 11.9 GOVERNING LAW; WAIVER OF JURY TRIAL..............................................69
Section 11.10 No Recourse Against Others.......................................................70
Section 11.11 Successors.......................................................................70
Section 11.12 Multiple Originals...............................................................70
Section 11.13 Effect of Headings and Table of Contents.........................................70
EXHIBIT A......... Form of Global Security
EXHIBIT B......... Form of Certificated Security
EXHIBIT C......... Transfer Certificate
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CROSS-REFERENCE TABLE(1)
TIA Section Indenture Section
310(a)(1).............................................. 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(b)............................................... 7.8; 7.10; 11.2
(c)............................................... N.A.
311(a)................................................. 7.11
(b)............................................... 7.11
(c)............................................... N.A.
312(a)................................................. 2.4
(b)............................................... 11.3
(c)............................................... 11.3
313(a)................................................. 7.6
(b)(1)............................................ 7.6
(b)(2)............................................ 7.6
(c)............................................... 11.2
(d)............................................... 7.6
314(a)................................................. 4.2; 4.3; 11.2
(b)............................................... N.A.
(c)(1)............................................ 11.4; 11.5
(c)(2)............................................ 11.4; 11.5
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 11.5
(f)............................................... N.A.
315(a)................................................. 7.1; 7.2
(b)............................................... 7.5; 11.2
(c)............................................... 7.1
(d)............................................... 6.5; 7.1; 7.2
(e)............................................... 6.11
316(a) (last sentence)................................. 2.8
(a)(1)(A)......................................... 6.5
(a)(1)(B)......................................... 6.4
(a)(2)............................................ 8.2
(b)............................................... 6.7
(c)............................................... 8.4
317(a)(1).............................................. 6.8
(a)(2)............................................ 6.9
(b)............................................... 2.4
318(a)................................................. 11.1
N.A. means Not Applicable.
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(1) Note: This Cross-Reference Table shall not, for any purpose be deemed to be
part of the Indenture.
INDENTURE dated as of September 30, 2003 between MEMBERWORKS
INCORPORATED, a Delaware corporation ("Company"), and DEUTSCHE BANK TRUST
COMPANY AMERICAS, a New York banking corporation ("Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
5.50% Convertible Senior Subordinated Notes due 2010:
DEFINITIONS AND INCORPORATION BY REFERENCE
Definitions.
"144A Global Security" means a permanent Global Security in
the form of the Security attached hereto as Exhibit A, and that is deposited
with and registered in the name of the Depositary, representing Securities sold
in reliance on Rule 144A under the Securities Act.
"Additional Amounts" shall have the meaning ascribed to it in
the Registration Rights Agreement.
"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 or cause the direction of 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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or non-U.S. law for the relief of debtors.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of such board.
"Board Resolution" means a resolution of the Board of
Directors.
"Business Day" means a day other than a Saturday or a Sunday
or other day on which banking institutions in The City of New York are
authorized to close.
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"Capital Stock" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"Cash Equivalents" means (i) any evidence of Indebtedness
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (ii) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $250.0 million and a ▇▇▇▇▇▇▇▇ Bank Watch Rating
of "B" or better, or whose short-term debt has the highest rating obtainable
from ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P"), (iii) any money market deposit account issued or offered by
a domestic commercial bank having capital and surplus in excess of $250.0
million and a ▇▇▇▇▇▇▇▇ Bank Watch Rating of "B" or better, or whose short-term
debt has the highest rating obtainable from Moody's or S&P, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i) and (ii) above entered into with any
financial institution meeting the qualifications specified in clause (ii) above,
and (v) commercial paper having the highest rating obtainable from Moody's or
S&P, and in each case maturing within one year after the date of acquisition.
"Certificated Securities" means Securities that are in the
form of the Securities attached hereto as Exhibit B.
"Common Stock" shall mean the Common Stock, $0.01 par value
per share, of the Company existing on the date of this Indenture or any other
shares of Capital Stock of the Company into which such Common Stock shall be
reclassified or changed.
"Company" means the party named as the "Company" in the first
Section of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by any two Officers.
"Conversion Price" means initially $40.365 per share, subject
to adjustment as set forth herein.
"Corporate Trust Office" means the principal office of the
Trustee at which at any time its corporate trust business shall be administered,
which office at the date hereof is located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust and Agency Services, or such
other address as the Trustee may designate from time to time by notice to the
Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as a successor Trustee may designate
from time to time by notice to the Holders and the Company).
2
"Credit Facility" means the Credit Agreement dated March 31,
2003, among the Company, Brown Brothers ▇▇▇▇▇▇▇▇ and Co. and LaSalle Bank
National Association, as the same may be amended, modified, supplemented,
extended, renewed, restated, refinanced, restructured or replaced in whole or in
part from time to time (including, without limitation, any successive renewals,
extensions, substitutions, refinancings, restructurings, replacements,
supplements or modifications of the foregoing), whether with the present lender
or any other lenders.
"Default" means an event which, with the giving of notice or
the lapse of time, or both, would become an Event of Default.
"Defaulted Interest" has the meaning assigned to it in
Section 2 of the Form of Reverse of Global Security contained in Exhibit A.
"Designated Senior Indebtedness" means (i) the Obligations
outstanding under or in respect of the Credit Facility and any Senior
Indebtedness outstanding under any other credit facility and (ii) any other
Senior Indebtedness permitted under this Indenture, the principal amount of
which is $25.0 million or more and that has been designated by the Company as
"Designated Senior Indebtedness."
"Ex-Dividend Time" means, with respect to any issuance or
distribution on shares of Common Stock, the first date on which the shares of
Common Stock trade regular way on the principal securities market on which the
shares of Common Stock are then traded without the right to receive such
issuance or distribution.
"Global Securities" means Securities that are in the form of
the Securities attached hereto as Exhibit A, and that are registered in the
register of Securities in the name of a Depositary or a nominee thereof, and to
the extent that such Securities are required to bear the Legend required by
Section 2.6, such Securities will be in the form of a 144A Global Security.
"Holder" or "Securityholder" means a Person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, any
indebtedness of such person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing capital lease obligations or the balance deferred
and unpaid of the purchase price of any property or representing any hedging
obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and hedging obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with generally accepted
accounting principles, as well as all indebtedness of others secured by a lien
on any assets of such Person (whether or not such indebtedness is assumed by
such Person) and, to the extent not otherwise included, the guarantee by such
Person of any indebtedness of any other Person.
3
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including the provisions
of the TIA that are deemed to be a part hereof.
"Interest Payment Date" means the stated due date of an
installment of interest on the Securities as specified in Section 2 of the Form
of Reverse of Global Security contained in Exhibit A.
"Interest Payment Record Date" means the March 15 and
September 15 preceding an Interest Payment Date.
"Issue Date" of any Security means the date on which the
Security was originally issued or deemed issued as set forth on the face of the
Security.
"Obligations" means, collectively, all advances, debts,
liabilities, obligations, covenants and duties arising under the Credit Facility
(or under any other document, agreement or instrument delivered to the agent or
any lender under the Credit Facility (or any affiliate of the agent or any
lender) or in connection with the transactions contemplated by the Credit
Facility) owing by any borrower under the Credit Facility to the agent or any
lender under the Credit Facility (or any affiliate of the agent or any lender)
or any person entitled to indemnification from any borrower under or in
connection with the transactions contemplated by the Credit Facility, or arising
under any swap contract or treasury services contract between any borrower under
the Credit Facility and the agent or any lender under the Credit Facility (or
any affiliate of the agent or any lender), in any case, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising. For the purposes of this
definition, the term "swap contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option and any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing, and the term "treasury services contract" means any agreement,
whether or not in writing, relating to demand deposit, operating, collections,
payroll and trust accounts, cash management services, controlled disbursement
services, electronic funds transfer services, information reporting services,
lockbox services, stop payment services, wire transfer services, merchant card
services and automated clearinghouse transfer services and any other, similar
services or products, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, any Executive Vice President, any Senior Vice President,
the Chief Financial Officer, the Secretary or any Assistant Secretary of the
Company.
4
"Officers' Certificate" means a written certificate containing
the information specified in Sections 11.4 and 11.5, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.3 shall be signed by the principal
executive officer, principal financial officer or principal accounting officer
of the Company but need not contain the information specified in Sections 11.4
and 11.5.
"Opinion of Counsel" means a written opinion containing the
information specified in Sections 11.4 and 11.5. The counsel may be an employee
of, or counsel to, the Company.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Redemption Date" or "redemption date" means the date
specified for redemption of the Securities in accordance with the terms of the
Securities and this Indenture.
"Redemption Notice" shall have the meaning set forth in
Section 6 of the Securities.
"Redemption Price" or "redemption price" shall have the
meaning set forth in Section 6 of the Securities.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, among the Company, ▇▇▇▇▇▇ Brothers Inc.
and CIBC World Markets Corp.
"Responsible Officer" means, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any principal, managing director, director or any other officer of the
Trustee who customarily performs functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.
"Restricted Security" means a Security required to bear the
restrictive legend set forth in the form of Security set forth in Exhibits A and
B of this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Sale Price" of a security on any date of determination means:
(i) the closing sales price as reported by the Nasdaq National
Market;
(ii) if such security is not so reported, on any such date,
the closing sale price as reported in the composite transactions for the
principal U.S. securities exchange on which such security is so listed;
5
(iii) if such security is not so reported, the last price
quoted by Interactive Data Corporation for such security on such date or, if
Interactive Data Corporation is not quoting such price, a similar quotation
service selected by the Company;
(iv) if such security is not so quoted, the average of the
mid-point of the last bid and ask prices for such security on such date from at
least two dealers recognized as market-makers for such security selected by the
Company for this purpose; or
(v) if such security is not so quoted, the average of that
last bid and ask prices for such security on such date from a dealer engaged in
the trading of convertible securities selected by the Company for this purpose.
"SEC" means the Securities and Exchange Commission.
"Security" or "Securities" means any of the Company's 5.50%
Convertible Senior Subordinated Notes due 2010, as amended or supplemented from
time to time, issued under this Indenture.
"Securityholder" or "Holder" means a Person in whose name a
Security is registered on the Registrar's books.
"Senior Indebtedness" means (i) all Obligations outstanding
under or in respect of the Credit Facility, including, without limitation, all
loans, letters of credit or other extensions of credit under the Credit
Facility, and all Indebtedness under any other credit facilities and all hedging
obligations with respect thereto, (ii) any other Indebtedness permitted to be
incurred by the Company under the terms of this Indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Securities and (iii) all
principal, premium, if any, and interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization, whether or
not a claim for post-filing interest is allowed in such proceeding), penalties,
fees, charges, expenses, indemnification, reimbursement obligations, damages,
guarantees and other liabilities or amounts payable under the documentation
governing any Indebtedness referred to in clauses (i) and (ii) above.
Notwithstanding anything to the contrary in the foregoing, "Senior Indebtedness"
will not include (i) any liability for federal, state, local or other taxes owed
or owing by the Company, (ii) any Indebtedness of the Company to any of its
subsidiaries or other affiliates, (iii) any trade payables or (iv) any
indebtedness that is incurred in violation of this Indenture.
"Significant Subsidiary" or "Significant Subsidiaries" shall
have the meaning ascribed to such term in Rule 405 of the Securities Act.
"Stated Maturity", when used with respect to any Security,
means October 1, 2010.
"Subsidiary" means any Person of which at least a majority of
the outstanding Voting Stock shall at the time directly or indirectly be owned
or controlled by the Company or by one or more Subsidiaries or by the Company
and one or more Subsidiaries.
6
"TIA" means the Trust Indenture Act of 1939 as in effect on
the date of this Indenture, provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
"Trading Day" means a day during which trading in securities
generally occurs on the Nasdaq National Market or, if the Common Stock is not
quoted on the Nasdaq National Market, on the principal other national or
regional securities exchange on which the Common Stock then is listed or, if the
Common Stock is not traded on the Nasdaq National Market or listed on a national
or regional securities exchange, on the principal other market on which the
Common Stock is then traded or quoted.
"Trustee" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Voting Stock" of a Person means Capital Stock of such Person
of the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such Person (irrespective of whether
or not at the time Capital Stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
Other Definitions.
Term: Section defined in:
"Act" ..................................................... 1.5
"Additional Amounts Notice" ............................... 4.8
"Agent Members"............................................ 2.12(e)
"beneficial owner"......................................... 3.7(a)
"Change of Control"........................................ 3.7(a)
"Change of Control Purchase Date".......................... 3.7(a)
"Change of Control Purchase Notice"........................ 3.7(c)
"Change of Control Purchase Price"......................... 3.7(a)
"Common Stock Restrictive Legend" ......................... 2.6(f)
"Continuing Director"...................................... 3.7(a)
"Conversion Agent"......................................... 2.3
"Current Market Price"..................................... 9.3(g)
"Depositary"............................................... 2.1(a)
"distributed assets" ...................................... 9.3(d)
"DTC" ..................................................... 2.1(a)
"Event of Default"......................................... 6.1
"Exchange Act"............................................. 2.12(e)
"Expiration Time" ......................................... 9.3(f)
"Fair Market Value" ....................................... 9.3(g)
"issuer tender offer" ..................................... 3.11
7
"Legal Holiday"............................................ 10.8
"Legend"................................................... 2.6(f)
"Non-Electing Share" ...................................... 9.4
"Nonpayment Default" ...................................... 10.3(a)
"Paying Agent"............................................. 2.3
"Payment Blockage Notice".................................. 10.3(a)
"Payment Default" ......................................... 10.3(a)
"QIB"...................................................... 2.1(a)
"Record Date" ............................................. 9.3(g)
"Reference Period" ........................................ 9.3(d)
"Registrar"................................................ 2.3
"Rule 144A Information".................................... 4.6
"Securities Act"........................................... 2.6(f)
"Special Record Date" ..................................... 2.11(a)
"Spin-Off" ................................................ 9.3(d)
"transfer" ................................................ 2.12(d)
"Trigger Event" ........................................... 9.3(d)
Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in
this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with U.S. generally accepted accounting
principles as in effect from time to time;
(3) "or" is not exclusive;
8
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the
plural include the singular.
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 may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company, as described in Section
11.2. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(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 such officer the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial number of any Security and the
ownership of Securities shall be proved by the register for the Securities.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder shall bind every future Holder of the same Security
and the Holder of every Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(e) 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, by 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. 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 six months after the
record date.
9
THE SECURITIES
Section 2.1 Form and Dating. The Securities and the Trustee's certificate
of authentication shall be substantially in the form of Exhibits A and B, which
shall constitute, and are expressly made, a part of this Indenture, and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture expressly agree to such terms and provisions and to be bound
thereby. The Securities may have notations, legends or endorsements required by
law, stock exchange rule or usage (provided that any such notation, legend or
endorsement required by usage is in a form acceptable to the Company). The
Company shall provide any such notations, legends or endorsements to the Trustee
in writing. Each Security shall be dated the date of its authentication.
(a) 144A Global Securities. Securities offered and sold within the United
States to qualified institutional buyers as defined in Rule 144A ("QIBs") in
reliance on Rule 144A shall be issued initially in the form of a 144A Global
Security, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary (as defined below) and registered in the
name of The Depository Trust Company ("DTC") or the nominee thereof (DTC, or any
successor thereto, and any such nominee being hereinafter referred to as the
"Depositary"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.
(b) Global Securities in General. Each Global Security shall represent such
of the outstanding Securities as shall be specified therein and each shall
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 reduced or increased, as
appropriate, to reflect exchanges, redemptions, repurchases and conversions.
Any adjustment of the aggregate principal amount of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee in
accordance with instructions given by the Holder thereof as required by Section
2.12 hereof and shall be made on the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to Global
Securities deposited with or on behalf of the Depositary.
10
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(c), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall be substantially in the form of Exhibit A attached
hereto; provided that the Legend (other than the first and second paragraphs
thereof) may be removed from such Global Security on satisfaction of the
conditions specified in this Indenture.
(d) Certificated Securities. Securities not issued as interests in the
Global Securities will be issued in certificated form substantially in the form
of Exhibit B attached hereto; provided that the Legend may be removed from such
Securities on satisfaction of the conditions specified in this Indenture.
Section 2.2 Execution and Authentication. The Securities shall be executed
on behalf of the Company by any Officer. The signature of the Officer on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were Officers at the time of the execution of the Securities
shall bind the Company, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Securities or did not hold such offices at the date of authentication of
such Securities.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein 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.
The Trustee shall authenticate and deliver the Securities for
original issue in an aggregate principal amount of up to $75,000,000 (up to
$90,000,000 if the Initial Purchasers exercise their option to purchase up to
$15,000,000 aggregate principal amount of additional Securities) upon one or
more Company Orders without any further action by the Company (other than as
contemplated in Section 11.4 and Section 11.5 hereof). The aggregate principal
amount of the Securities due at the Stated Maturity thereof outstanding at any
time may not exceed the amount set forth in the foregoing sentence.
The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 of principal amount and any integral
multiple of $1,000.
The Securities shall bear interest on the principal amount of
the Securities at the interest rate of 5.50% per annum from the date of issuance
until repayment in full at October 1, 2010, or until an earlier conversion,
redemption or repurchase, and such interest shall be paid on this Security
semi-annually in arrears on April 1 and October 1 of each year commencing April
1, 2004.
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Section 2.3 Registrar, Paying Agent and Conversion Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange ("Registrar"), an office or agency where Securities
may be presented for purchase or payment ("Paying Agent") and an office or
agency where Securities may be presented for conversion ("Conversion Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars, one or more additional
paying agents and one or more additional conversion agents. The term Paying
Agent includes any additional paying agent, including any named pursuant to
Section 4.5. The term Conversion Agent includes any additional conversion agent,
including any named pursuant to Section 4.5.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent, Conversion Agent or co-registrar (in each
case, if such Registrar, agent or co-registrar is a Person other than the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee in writing of the
name and address of any such agent. If the Company fails to maintain a
Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.7.
The Company or any Subsidiary or an Affiliate of either of them may act as
Paying Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar,
Paying Agent and Conversion Agent in connection with the Securities.
Section 2.4 Paying Agent to Hold Money and Securities in Trust. Except as
otherwise provided herein, on or prior to 10:00 a.m. New York City time on each
due date of payments in respect of any Security, the Company shall deposit with
the Paying Agent a sum of money (in immediately available funds if deposited on
the due date) sufficient to make such payments when so becoming due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the making of payments in
respect of the Securities and shall notify the Trustee of any default by the
Company in making any such payment. At any time during the continuance of any
such default, the Paying Agent shall, upon the written request of the Trustee,
forthwith pay to the Trustee all money so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds and Common Stock disbursed by
it. Upon doing so, the Paying Agent shall have no further liability for the
money.
Section 2.5 Securityholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Securityholders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on
January 1 and July 1 a listing of Securityholders dated within 15 days of the
date on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
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Section 2.6 Transfer and Exchange. (a) Subject to Section 2.12 hereof, upon
surrender for registration of transfer of any Security, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Securityholder or such Securityholder's attorney duly authorized in writing, at
the office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.3, 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 denomination or
denominations, of a like aggregate principal amount. The Company shall not
charge a service charge for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with the transfer
or exchange of the Securities from the Securityholder requesting such transfer
or exchange.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denomination or denominations, of a like
aggregate principal amount upon surrender of the Securities to be exchanged,
together with a written instrument of transfer satisfactory to the Registrar
duly executed by the Securityholder or such Securityholder's attorney duly
authorized in writing, at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
The Company shall not be required to make, and the Registrar
need not register, transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or any Securities in respect of which a Change of Control
Purchase Notice has been given and not withdrawn by the Holder thereof in
accordance with the terms of this Indenture (except, in the case of Securities
to be purchased in part, the portion thereof not to be purchased) or any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so
long as a Global Security remains outstanding and is held by or on behalf of the
Depositary, (i) transfers of beneficial interests in a Global Security, in whole
or in part, may be effected only through a book entry system maintained by the
Holder of such Global Security (or its agent) in accordance with Applicable
Procedures, (ii) ownership of a beneficial interest in the Security shall be
required to be reflected in book entry and (iii) transfers of Global Securities
or beneficial interests in Global Securities shall be made only in accordance
with Section 2.12 and this Section 2.6(b). Transfers of a Global Security shall
be limited to transfers of such Global Security in whole or in part, to the
Depositary, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers
and exchanges as aforesaid may be made from time to time as desired, and each
such registration shall be noted on the register for the Securities.
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(d) Any Registrar appointed pursuant to Section 2.3 hereof
shall provide to the Trustee such information as the Trustee may reasonably
require in connection with the delivery by such Registrar of Securities upon
transfer or exchange of Securities.
(e) No Registrar shall be required to make registrations of
transfer or exchange of Securities during any periods designated in the text of
the Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the forms of Security attached hereto as Exhibits A and B
setting forth such restrictions (collectively, the "Legend"), or if a request is
made to remove the Legend on a Security, the Securities so issued shall bear the
Legend, or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel, as may be reasonably required by the
Company and the Registrar and the Trustee (if not the same Person as the
Trustee), that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A or Rule 144 under the Securities Act of 1933, as amended
("Securities Act") or that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon (i) provision of such
satisfactory evidence, or (ii) notification by the Company to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that
is effective at the time of such sale, the Trustee, upon receipt of a Company
Order, shall authenticate and deliver a Security that does not bear the Legend.
If the Legend is removed from the face of a Security and the Security is
subsequently held by the Company or an Affiliate of the Company, the Legend
shall be reinstated.
In the event Rule 144(k) as promulgated under the Securities
Act is amended to shorten the two-year period under Rule 144(k), then, the
references in the Legend to "TWO YEARS", and in the corresponding transfer
restrictions described above, will be deemed to refer to such shorter period,
from and after receipt by the Trustee of an Officers' Certificate and an Opinion
of Counsel to that effect. As soon as practicable after the Company knows of the
effectiveness of any such amendment to shorten the two-year period under Rule
144(k), unless such changes would otherwise be prohibited by, or would cause a
violation of, the federal securities laws applicable at the time, the Company
will provide to the Trustee an Officers' Certificate and an Opinion of Counsel
as to the effectiveness of such amendment and the effectiveness of such change
to the restrictive legends and transfer restrictions.
Until the Legend on any Restricted Security has been removed
in compliance with this Section 2.6(f), all shares of Common Stock (or other
securities issuable upon conversion as a result of the provisions of this
Indenture) issued upon conversion of such Restricted Security shall bear a
legend substantially in the form of the Legend (the "Common Stock Restrictive
Legend") and shall be subject to the same restrictions on transfer as such
Restricted Security. At any time following the time when the restrictions on
transfer set forth in the Common Stock Restrictive Legend shall have expired in
accordance with their terms or shall have terminated under applicable law, the
holder of such Common Stock may, upon a surrender of the certificate
representing such Common Stock exchange to the Company's transfer agent in
accordance with such agent's customary procedures (accompanied, in the event
that such restrictions on transfer have terminated by reason of a transfer in
compliance with Rule 144 or any successor provision, by an opinion of counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Common Stock
has been made in compliance with Rule 144 or such successor provision), may
receive a new certificate representing such Common Stock, in like amount, which
shall not bear the Common Stock Restrictive Legend.
14
Section 2.7 Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee, upon receipt of
a Company Order, shall authenticate and deliver, in exchange for any such
mutilated Security or in lieu of any such destroyed, lost or stolen Security, a
new Security of like tenor and principal amount, bearing a certificate number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Upon the issuance of any new Securities under this Section
2.7, 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 2.7 in lieu
of any mutilated, 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 benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.8 Outstanding Securities; Determinations of Holders' Action.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those paid pursuant to Section 2.7,
those delivered to it for cancellation and those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite principal amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent, waiver, or other Act hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
Act, only Securities which a Responsible Officer of the Trustee actually knows
to be so owned shall be so disregarded. The Trustee shall have no affirmative
duty to inquire or investigate as to whether the Company owns any Securities.
Subject to the foregoing, only Securities outstanding at the time of such
determination shall be considered in any such determination (including, without
limitation, determinations pursuant to Articles 6 and 8).
15
If a Security is replaced pursuant to Section 2.7, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture,
on a Redemption Date, or on the Business Day following a Change of Control
Purchase Date, or on Stated Maturity, money sufficient to pay Securities payable
on that date, then immediately after such Redemption Date, Change of Control
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and interest, including Additional Amounts, if any, on
such Securities shall cease to accrue; 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.
If a Security is converted in accordance with Article 9, then
from and after the time of conversion on the date of conversion, such Security
shall cease to be outstanding and interest, including Additional Amounts, if
any, shall cease to accrue on such Security.
Section 2.9 Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, typewritten or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 2.3, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
16
Section 2.10 Cancellation. If the Company shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Securities unless the same are delivered
to the Trustee for cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 9. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee's customary procedure.
Section 2.11 Defaulted Interest. When any installment of interest becomes
Defaulted Interest, such installment shall forthwith cease to be payable to the
Holders in whose names the Securities were registered on the Interest Payment
Record Date applicable to such installment of interest. Defaulted Interest
(including any interest on such Defaulted Interest) may be paid by the Company,
at its election, as provided in Section 2.11(a) or (b).
(a) The Company may elect to make payment of any Defaulted Interest
(including any interest payable on such Defaulted Interest) to the Holders in
whose names the Securities are registered at the close of business on a special
record date for the payment of such Defaulted Interest (a "Special Record
Date"), 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
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Holders entitled to such Defaulted Interest as provided in this
Section 2.11(a). Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest, which shall be not more than 15 calendar
days and not less than ten calendar days prior to the date of the proposed
payment and not less than ten calendar days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be sent, first-class mail, postage
prepaid, to each Holder at such Holder's address as it appears in the
registration books of the Registrar, not less than ten calendar days prior to
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 Holders in whose names the
Securities are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to Section 2.11(b); or
(b) The Company may make payment of any Defaulted Interest (including any
interest on such Defaulted Interest) 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, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Section 2.11(b), such manner of payment shall be deemed practicable by the
Trustee.
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Section 2.12 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 the Security or the payment of any Redemption Price or Change of
Control Purchase Price in respect thereof, and interest thereon, for the purpose
of conversion and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Section 2.13 Global Securities. (a) Notwithstanding any other provisions of
this Indenture or the Securities, (A) transfers of a Global Security, in whole
or in part, shall be made only in accordance with Section 2.6 and Section
2.13(a)(i), (B) transfers or exchanges of a beneficial interest in a Global
Security for an interest in the same or another Global Security shall comply
with Section 2.6 and Section 2.13(a)(ii) below, (C) transfers of a beneficial
interest in a Global Security for a Certificated Security shall comply with
Section 2.6, Section 2.13(a)(iii) below and Section 2.13(e)(1) below, and (D)
transfers of a Certificated Security shall comply with Section 2.6 and Sections
2.13(a)(iv) and (v) below.
(i) Transfer of Global Security. A Global Security may not be transferred,
in whole or in part, to any Person other than the Depositary or a nominee or any
successor thereof, and no such transfer to any such other Person may be
registered; provided that this clause (i) shall not prohibit any transfer of a
Certificated Security that is issued in exchange for a Global Security. No
transfer of a Global Security to any Person shall be effective under this
Indenture or the Securities unless and until such Security has been registered
in the name of such Person. Nothing in this Section 2.13(a)(i) shall prohibit or
render ineffective any transfer of a beneficial interest in a Global Security
effected in accordance with the other provisions of this Section 2.13.
(ii) Transfer of a Beneficial Interest in a Global Security; Exchange of a
Beneficial Interest in a Global Security for a Beneficial Interest in the Same
or Another Global Security.
(x) A beneficial interest in a Global Security may
not be transferred, nor may it be exchanged for a
beneficial interest in another Global Security,
except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a request
to effect such a transfer or exchange in accordance
with Applicable Procedures, together with:
(A) so long as the Securities are Restricted
Securities, certification in the form set forth in
Exhibit C;
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(B) written instructions to the Trustee to make, or
direct the Registrar to make, in the case of a
transfer of a beneficial interest in a Global
Security, an appropriate adjustment on its books and
records with respect to such Global Securities to
reflect such transfer and containing information
regarding the Depositary account to be credited;
(C) written instructions to the Trustee to make, or
direct the Registrar to make, in the case of an
exchange of a beneficial interest in a Global
Security, an appropriate adjustment on its books and
records with respect to such Global Securities to
reflect such exchange and containing information
regarding the Depositary account to be credited; and
(D) if the Company or the Trustee so requests, an
opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the
restrictions set forth in the Legend,
then the Trustee, (1) shall cause, or direct the Registrar to
cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Registrar,
the aggregate principal amount of the Securities represented
by the appropriate Global Security to be decreased by the
aggregate principal amount that the other Global Security is
increased and (2) in accordance with the standing instructions
and procedures existing between the Depositary and the
Registrar and Applicable Procedures, shall debit and credit or
cause to be debited or credited, as appropriate, to the
accounts of the persons specified in such instructions a
beneficial interest in the Global Security or Global
Securities, as appropriate, equal to the amount of the
beneficial interests so transferred or exchanged.
(y) Other than transfers to the Company or to an
Affiliate of the Company, beneficial interests in a Global
Security that is not a Restricted Security may not be
transferred to Person who takes delivery thereof in the form a
beneficial interest in a Global Security that is a Restricted
Security.
(iii) Transfer or Exchange of a Beneficial Interest in a Global Security
for a Certificated Security. A beneficial interest in a Global Security may not
be exchanged for a Certificated Security except upon satisfaction of the
requirements set forth below and in Section 2.13(e)(1) below. Upon receipt by
the Trustee of a transfer of a beneficial interest in a Global Security in
accordance with Applicable Procedures for a Certificated Security in the form
satisfactory to the Trustee, together with:
(A) so long as the Securities are Restricted
Securities, certification in the form set forth in
Exhibit C;
(B) written instructions to the Trustee to make, or
direct the Registrar to make, an adjustment on its
books and records with respect to such Global
Security to reflect a decrease in the aggregate
principal amount of the Securities represented by the
Global Security, such instructions to contain
information regarding the Depositary account to be
credited with such decrease; and
19
(C) if the Company or the Trustee so requests, an
opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the
restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate principal amount of the Securities represented
by the Global Security to be decreased by the aggregate principal amount of the
Certificated Security to be issued, shall issue such Certificated Security and
shall debit or cause to be debited to the account of the person specified in
such instructions a beneficial interest in the Global Security equal to the
principal amount of the Certificated Security so issued.
(iv) Transfer and Exchange of Certificated Securities. When Certificated
Securities are presented to the Registrar with a request:
(y) to register the transfer of such Certificated Securities;
or
(z) to exchange such Certificated Securities for an equal
principal amount of Certificated Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Certificated Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(2) so long as such Securities are Restricted Securities, such Securities
are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause
(A), (B) or (C) below, and are accompanied by the following additional
information and documents, as applicable:
(a) if such Certificated Securities are being delivered to the
Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect; or
(b) if such Certificated Securities are being transferred to the
Company, a certification to that effect; or
(c) if such Certificated Securities are being transferred pursuant to
an exemption from registration, (i) a certification to that
effect (in the form set forth in Exhibit C, if applicable) and
(ii) if the Company so requests, an opinion of counsel or other
evidence reasonably satisfactory to it as to the compliance with
the restrictions set forth in the Legend.
20
(v) Transfer of a Certificated Security for a Beneficial Interest in a
Global Security. A Certificated Security may not be exchanged for a beneficial
interest in a Global Security except upon satisfaction of the requirements set
forth below.
Upon receipt by the Trustee of a Certificated Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(I) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit C, that such
Certificated Security is being transferred to a QIB in
accordance with Rule 144A, or to an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7)
of Regulation D of the Securities Act; and
(II) written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and
records with respect to such Global Security to reflect an
increase in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to
contain information regarding the Depositary account to be
credited with such increase, then the Trustee shall cancel
such Certificated Security and cause, or direct the Registrar
to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Registrar,
the aggregate principal amount of Securities represented by
the Global Security to be increased by the aggregate principal
amount of the Certificated Security to be exchanged, and shall
credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
Global Security equal to the principal amount of the
Certificated Security so cancelled. If no Global Securities
are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the
form of an Officers' Certificate, a new Global Security in the
appropriate principal amount.
(b) Subject to the succeeding Section (c), every Security shall be subject
to the restrictions on transfer provided in the Legend and herein including the
delivery of an opinion of counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for transfer or for exchange, such Security
must be accompanied by a certificate in substantially the form set forth in
Exhibit C, dated the date of such surrender and signed by the Holder, as to
compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such transfer or exchange any Security not so accompanied
by a properly completed certificate.
21
(c) The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.13 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive Legend. The Company shall inform the Trustee of the
effective date of any registration statement registering the Securities under
the Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.13, the term
"transfer" encompasses any sale, pledge, transfer, loan, hypothecation, or other
disposition of any interest in any Security.
(e) The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or
in part for a Security registered in the name of any Person other
than the Depositary or one or more nominees thereof, provided
that a Global Security may be exchanged for Securities registered
in the names of any Person designated by the Depositary in the
event that (i) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency"
registered under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and a successor Depositary is not appointed
by the Company within 90 days or (ii) an Event of Default has
occurred and is continuing with respect to the Securities. Any
Global Security exchanged pursuant to clause (i) above shall be
so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (ii) above may be exchanged in whole
or from time to time in part as directed by the Depositary. Any
Security issued in exchange for a Global Security or any portion
thereof shall be a Global Security; provided that any such
Security so issued that is registered in the name of a Person
other than the Depositary or a nominee thereof shall not be a
Global Security.
22
(2) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered
form, without interest coupons, shall have an aggregate principal
amount equal to that of such Global Security or portion thereof
to be so exchanged, shall be registered in such names and be in
such authorized denominations as the Depositary shall designate
and shall bear the applicable legends provided for herein. Any
Global Security to be exchanged in whole shall be surrendered by
the Depositary to the Trustee, as Registrar. With regard to any
Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the Trustee
is acting as custodian for the Depositary or its nominee with
respect to such Global Security, the principal amount thereof
shall be reduced, by an amount equal to the portion thereof to be
so exchanged, by means of an appropriate adjustment made on the
records of the Trustee. Upon any such surrender or adjustment,
the Trustee shall authenticate and deliver the Security issuable
on such exchange to or upon the order of the Depositary or an
authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any Person,
including Agent Members (as defined below) and Persons that may
hold interests through Agent Members, to take any action which a
holder is entitled to take under this Indenture or the
Securities.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the
Trustee a reasonable supply of Certificated Securities in
definitive, fully registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on
whose behalf Agent Members may act shall have any rights under
this Indenture with respect to any Global Security registered in
the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and
holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent
Members and any other Person on whose behalf an Agent Member may
act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Security.
23
(f) By its acceptance of any Security bearing the Legend, each
Holder acknowledges the restrictions on transfer of such Security set forth in
this Indenture and agrees that it will transfer such Security only as provided
in this Indenture.
Section 2.14 CUSIP Numbers. The Company may issue the Securities with one
or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed 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 in writing of any change in the CUSIP numbers.
REDEMPTION AND PURCHASES
Section 3.1 Company's Right to Redeem; Notices to Trustee. Prior to October
6, 2008, the Securities will not be redeemable at the Company's option.
Beginning on October 6, 2008, the Company, at its option, may redeem the
Securities, subject to and in accordance with the terms and conditions of
Section 6 of the Securities, for cash, as a whole or in part, at a redemption
price equal to the principal amount of those Securities plus any accrued and
unpaid interest, including Additional Amounts, if any, on those Securities to
the Redemption Date. If the Company elects to redeem Securities pursuant to
Section 6 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the principal amount of Securities to be redeemed and the
Redemption Price.
The Company shall give the notice to the Trustee of its
intention to exercise its right to redeem the Securities as provided for in this
Section 3.1 by a Company Order at least ten (10) Business Days prior to the day
the Redemption Notice is to be mailed.
Section 3.2 Selection of Securities to Be Redeemed. If less than all the
Securities are to be redeemed, unless the procedures of the Depositary provide
otherwise, the Trustee shall select the Securities to be redeemed by lot, on a
pro rata basis or by another method the Trustee considers fair and appropriate.
The Trustee shall make the selection within five Business Days after it receives
the notice provided for in Section 3.1 from outstanding Securities not
previously called for redemption.
Securities to be redeemed shall be in principal amounts of
$1,000 or an integral multiple of $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 notify the Company promptly of the
Securities or portions of the Securities to be redeemed.
Securities and portions of Securities that are to be redeemed
are convertible by the Holder until the close of business on the second Business
Day prior to the Redemption Date unless the Company fails to pay the Redemption
Price on the Redemption Date. If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.
24
Section 3.3 Notice of Redemption. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Price;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any
time before the close of business on the second Business Day
prior to the Redemption Date;
(6) that Holders who wish to convert their Securities must satisfy
the requirements set forth in Section 9 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(8) if fewer than all of the outstanding Securities are to be
redeemed, the certificate numbers, if any, and principal amounts
of the particular Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, interest, including Additional Amounts, if any,
on Securities called for redemption will cease to accrue interest
on and after the Redemption Date; and
(10) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least ten Business Days prior to the date by which
such notice of redemption is to be given to Holders in accordance with this
Section 3.3, unless the Trustee agrees to a shorter period.
25
Section 3.4 Effect of Notice of Redemption. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Securities
which are converted in accordance with the terms of this Indenture. Upon
surrender to the Paying Agent, such Securities shall be paid at the Redemption
▇▇▇▇▇ stated in the notice.
Section 3.5 Deposit of Redemption Price. Prior to 10:00 a.m., New York City
time, on the Redemption Date, the Company shall deposit with the Paying Agent
(or if the Company or a Subsidiary or an Affiliate of either of them is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall as promptly as practicable return to
the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 9. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
Section 3.6 Securities Redeemed in Part. Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in principal amount to the unredeemed portion of the Security
surrendered.
Section 3.7 Purchase of Securities at Option of the Holder upon Change of
Control. (a)(1) If a Change of Control occurs (subject to certain exceptions set
forth below), the Securities not previously purchased by the Company shall be
purchased by the Company for cash, at the option of the Holder thereof, at a
purchase price specified in Section 7 of the Securities (the "Change of Control
Purchase Price"), as of the date that is no later than 30 days after the date of
a notice of Change of Control delivered by the Company pursuant to Section
3.7(b) (the "Change of Control Purchase Date"), subject to satisfaction by or on
behalf of the Holder of the requirements set forth in Section 3.7(c).
A "Change of Control" will be deemed to have occurred at such
time after the Securities are originally issued when any of the following events
shall occur:
(i) the acquisition by any Person, including any
syndicate or group deemed to be a "person" under Section 13(d)(3) of
the Exchange Act, of beneficial ownership, directly or indirectly,
through a purchase, merger or other acquisition transaction or series
of purchases, mergers or other acquisition transactions of shares of
the Capital Stock of the Company entitling that Person to exercise 50%
or more of the total voting power of all shares of the Capital Stock of
the Company entitled to vote generally in elections of directors, other
than any acquisition by the Company, any of its subsidiaries or any of
its employee benefit plans; or
(ii) the first day on which a majority of the members of the board of
directors of the Company does not consist of Continuing Directors; or
26
(iii) the Company consolidates or merges with or into any other Person, any
merger of another Person into the Company, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of the Company's
properties and assets to another Person, other than: (A) any transaction: (1)
that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of the Company's Capital Stock; and (2)
pursuant to which the holders of 50% or more of the total voting power of the
Company's Capital Stock entitled to vote generally in elections of directors
immediately prior to the transaction have the right to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of Capital Stock
entitled to vote generally in elections of directors of the continuing or
surviving Person immediately after giving effect to such issuance; and (B) any
merger primarily for the purpose of changing the Company's jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of Common Stock, if at all, solely into shares of common
stock of the surviving entity.
A "Continuing Director" shall mean, as of any date of
determination, any member of the Board of Directors who:
(i) was a member of the Board of Directors of the
Company on September 24, 2003; or
(ii) was nominated for election or elected to the
Board of Directors with the approval of a majority of the Continuing
Directors who were members of the Board of Directors at the time of the
new director's nomination or election.
(2) Notwithstanding the provisions of Section 3.7(a)(1), the Company shall
not be required to purchase the Securities of the Holders upon a Change
of Control pursuant to this Section 3.7 (and a Change of Control shall
be deemed not to have occurred) if:
(i) the Sale Price per share of Common Stock for any five
Trading Days within (1) the period of 10 consecutive
Trading Days ending immediately after the later of
the Change of Control or the public announcement of
the Change of Control, in the case of a Change of
Control under clause (i) or (ii) of the definition of
"Change of Control" above, or (2) the period of 10
consecutive Trading Days ending immediately before
the Change of Control, in the case of a Change of
Control under clause (iii) of the definition of
"Change of Control" above, equals or exceeds 110% of
the Conversion Price of the Securities in effect on
each of those five Trading Days; or
(ii) all of the consideration in the transaction or
transactions (other than cash payments for fractional
shares and cash payments made in respect of
dissenters' appraisal rights) constituting a Change
of Control consists of shares of common stock traded
or to be traded immediately following a Change of
Control on a national securities exchange or the
Nasdaq National Market, and, as a result of the
transaction or transactions, the Securities become
convertible solely into that common stock (and any
rights attached thereto).
27
For the purposes of this Section 3.7, (x) whether a Person is a "beneficial
owner" shall be determined in accordance with Rule 13d-3 and Rule 13d-5 under
the Exchange Act (except that any of those Persons shall be deemed to have
beneficial ownership of all securities it has the right to acquire, whether the
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition) and (y) the term "Person" includes any syndicate or group
that would be deemed to be a "person" under Section 13(d)(3) of the Exchange
Act.
(b) No later than 30 days after the occurrence of a Change of Control, the
Company shall mail a written notice of the Change of Control by first class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change of Control Purchase
Notice to be completed by the Holder and shall state:
(1) briefly, the events causing a Change of Control and the date of
such Change of Control;
(2) the date by which the Change of Control Purchase Notice pursuant
to this Section 3.7 must be delivered to the Paying Agent in
order for a Holder to exercise the repurchase rights;
(3) the Change of Control Purchase Date;
(4) the Change of Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion
Agent;
(6) the Conversion Price and any adjustments thereto;
(7) that the Securities as to which a Change of Control Purchase
Notice has been given may be converted if they are otherwise
convertible pursuant to Article 9 hereof only if the Change of
Control Purchase Notice has been withdrawn in accordance with the
terms of this Indenture;
(8) that the Securities must be surrendered to the Paying Agent to
collect payment;
(9) that the Change of Control Purchase Price for any Security as to
which a Change of Control Purchase Notice has been duly given and
not withdrawn will be paid as promptly as practicable following
the later of the Change of Control Purchase Date and the time of
surrender of such Security as described in clause (8) above;
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.7;
28
(11) briefly, the conversion rights of the Securities;
(12) the procedures for withdrawing a Change of Control Purchase
Notice;
(13) that, unless the Company defaults in making payment of such
Change of Control Purchase Price, interest, if any, on Securities
surrendered for purchase by the Company will cease to accrue on
and after the Change of Control Purchase Date; and
(14) the CUSIP number(s) of the Securities.
Without otherwise limiting the Company's obligations pursuant
to this Section 3.7 in any way, the Company shall also issue a press release
through Dow ▇▇▇▇▇ & Company, Inc., Bloomberg Business News or a similar newswire
service containing the relevant information and otherwise make this information
available on the Company's web site or through another public medium as the
Company may use at that time.
(c) A Holder may exercise its rights specified in Section 3.7(a) upon
delivery of a written notice of purchase (a "Change of Control Purchase Notice")
to the Paying Agent at any time on or prior to the close of business on the
second Business Day preceding the Change of Control Purchase Date (unless the
Company shall specify a later date), specifying:
(1) the certificate number of the Security which the Holder will
deliver to be purchased or, if Certificated Securities have not
been issued, the appropriate Depositary procedures;
(2) the portion of the principal amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000
or an integral multiple of $1,000; and
(3) that such Security shall be purchased pursuant to the terms and
conditions specified in Section 6 of the Securities and in this
Indenture.
The receipt of such Security by the Paying Agent with the
Change of Control Purchase Notice (together with all necessary endorsements) at
the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change of Control Purchase Price therefor; provided, however, that
such Change of Control Purchase Price shall be so paid pursuant to this Section
3.7 and Section 3.8 only if the Security so delivered to the Paying Agent shall
conform in all respects to the description thereof set forth in the related
Change of Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant
to this Section 3.7 and Section 3.8, a portion of a Security if the principal
amount of such portion is $1,000 or an integral multiple of $1,000. Provisions
of this Indenture that apply to the purchase of all of a Security also apply to
the purchase of such portion of such Security.
29
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.7 and Section 3.8 shall be consummated by the
delivery of the consideration to be received by the Holder.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change of Control Purchase Notice
contemplated by this Section 3.7(c) shall have the right to withdraw such Change
of Control Purchase Notice at any time prior to the close of business on the
Change of Control Purchase Date by delivery of a written notice of withdrawal to
the Paying Agent in accordance with Section 3.8.
The Paying Agent shall promptly notify the Company of the
receipt by it of any Change of Control Purchase Notice or written withdrawal
thereof.
Section 3.8 Effect of Change of Control Purchase Notice; Withdrawal. Upon
receipt by the Paying Agent of the Change of Control Purchase Notice specified
in Section 3.7(c), the Holder of the Security in respect of which such Change of
Control Purchase Notice was given shall (unless such Change of Control Purchase
Notice is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to
such Security. Such Change of Control Purchase Price shall be paid to such
Holder, subject to the receipt of funds by the Paying Agent, promptly following
the later of (x) the Change of Control Purchase Date with respect to such
Security (provided the conditions in Section 3.7(c) have been satisfied) and (y)
the time of delivery of such Security to the Paying Agent by the Holder thereof
in the manner required by Section 3.7(c). Securities in respect of which a
Change of Control Purchase Notice has been given by the Holder thereof may not
be converted pursuant to Article 9 hereof on or after the date of the delivery
of such Change of Control Purchase Notice unless such Change of Control Purchase
Notice has first been validly withdrawn as specified in the following two
paragraphs.
A Change of Control Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change of Control Purchase Notice, at any time prior to the
close of business on the Change of Control Purchase Date, specifying:
(1) the certificate number, if any, of the Security in respect of
which such notice of withdrawal is being submitted or, if
Certificated Securities have not been issued, such information as
may be required by the appropriate Depositary procedures,
(2) the principal amount of the Security with respect to which such
notice of withdrawal is being submitted, and
(3) the principal amount, if any, of such Security which remains
subject to the original Change of Control Purchase Notice, and
which has been or will be delivered for purchase by the Company.
30
There shall be no purchase of any Securities pursuant to
Section 3.7 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Securities, of the required Change of Control
Purchase Notice) and is continuing an Event of Default (other than a default in
the payment of the Change of Control Purchase Price with respect to such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Change of Control Purchase
Notice has been withdrawn in compliance with this Indenture, or (y) held by it
during the continuance of an Event of Default (other than a default in the
payment of the Change of Control Purchase Price with respect to such Securities)
in which case, upon such return, the Change of Control Purchase Notice with
respect thereto shall be deemed to have been withdrawn.
Section 3.9 Deposit of Change of Control Purchase Price. Prior to 10:00
a.m., New York City time, on the Business Day following the Change of Control
Purchase Date, the Company shall deposit with the Trustee or with the Paying
Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is
acting as the Paying Agent, shall segregate and hold in trust as provided in
Section 2.4) an amount of cash (in immediately available funds if deposited on
such Business Day) sufficient to pay the aggregate Change of Control Purchase
Price of all the Securities or portions thereof which are to be purchased as of
the Change of Control Purchase Date.
Section 3.10 Securities Purchased in Part. Any Certificated Security which
is to be purchased only in part shall be surrendered at the office of the Paying
Agent (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 such ▇▇▇▇▇▇'s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, 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 portion of the
principal amount of the Security so surrendered which is not purchased.
Section 3.11 Covenant to Comply With Securities Laws Upon Purchase of
Securities. When complying with the provisions of Section 3.7 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall (i)
comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the
Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, and (iii) otherwise comply with all Federal
and state securities laws so as to permit the rights and obligations under
Section 3.7 to be exercised in the time and in the manner specified in Section
3.7.
Section 3.12 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed as provided in
Section 11 of the Securities, together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.1(f)), held by them for the
payment of the Change of Control Purchase Price; provided, however, that to the
extent that the aggregate amount of cash deposited by the Company pursuant to
Section 3.9 exceeds the aggregate Change of Control Purchase Price of the
Securities or portions thereof which the Company is obligated to purchase as of
the Change of Control Purchase Date, then, unless otherwise agreed in writing
with the Company, promptly after the Business Day following the Change of
Control Purchase Date, the Trustee shall return any such excess to the Company
together with interest thereon (subject to the provisions of Section 7.1(e)).
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ARTICLE IV
COVENANTS
Section 4.1 Payment of Securities. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Any amounts of cash to be given to
the Trustee or Paying Agent, shall be deposited with the Trustee or Paying Agent
by 10:00 a.m., New York City time, by the Company. Principal amount plus accrued
interest, if any, including Additional Amounts, if any, the Redemption Price,
the Change of Control Purchase Price and cash interest, if any, shall be
considered paid on the applicable date due if on such date the Trustee or the
Paying Agent holds, in accordance with this Indenture, cash sufficient to pay
all such amounts then due.
Section 4.2 SEC and Other Reports. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall
continue to provide the Trustee with reports containing substantially the same
information as would have been required to be filed with the SEC had the Company
continued to have been subject to such reporting requirements. In such event,
such reports shall be provided at the times the Company would have been required
to provide reports had it continued to have been subject to such reporting
requirements. The Company also shall comply with the other provisions of TIA
Section 314(a). Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including, without limitation,
the existence of any Default or Event of Default or the Company's compliance
with any of its covenants hereunder (as to which the Trustee is entitled to rely
conclusively on Officers' Certificates).
Section 4.3 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on June 30, 2004) an Officers'
Certificate, stating whether or not to the knowledge of the signers thereof, the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge and the steps, if any, the Company intends to take
to remedy such default.
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Section 4.4 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
Section 4.5 Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, the City of New York, an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion. The
office of Deutsche Bank Trust Company Americas, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Corporate Trust and Agency Services), shall
initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office of the Trustee).
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes.
Section 4.6 Delivery of Certain Information. At any time when the Company
is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder or any beneficial owner of Securities or holder or beneficial owner of
shares of Common Stock issued upon conversion thereof, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder or any beneficial owner of Securities or holder or beneficial owner
of shares of Common Stock, or to a prospective purchaser of any such security
designated by any such holder, as the case may be, to the extent required to
permit compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act. Whether a Person is a beneficial owner shall be determined by
the Company to the Company's reasonable satisfaction.
Section 4.7 Statement by Officers as to Default. The Company shall deliver
to the Trustee, as soon as possible and in any event within five Business Days
after the Company becomes aware of the occurrence of any Event of Default, an
Officers' Certificate setting forth the details of such Event of Default and the
action which the Company proposes to take with respect thereto.
Section 4.8 Additional Amounts Notice. In the event that the Company is
required to pay Additional Amounts to Holders pursuant to the Registration
Rights Agreement, the Company will provide written notice ("Additional Amounts
Notice") to the Trustee of its obligation to pay Additional Amounts no later
than fifteen days prior to the proposed payment date for the Additional Amounts,
and the Additional Amounts Notice shall set forth the amount of Additional
Amounts to be paid by the Company on such payment date. The Trustee shall not at
any time be under any duty or responsibility to any Holder to determine the
Additional Amounts, or with respect to the nature, extent, or calculation of the
amount of Additional Amounts owed, or with respect to the method employed in
such calculation of the Additional Amounts.
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ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge or Transfer Assets. The Company shall
not consolidate with or merge with or into any other Person or convey, transfer,
sell, lease or otherwise dispose of all or substantially all of its properties
and assets to any Person, unless:
(a) either (1) the Company shall be the continuing corporation or (2) the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance, transfer or
lease all or substantially all of the properties and assets of the Company
substantially as an entirety (i) shall be organized and validly existing under
the laws of the United States or any State thereof or the District of Columbia
and (ii) shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the Trustee,
all of the obligations of the Company under the Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Default or
Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent set forth in this
Indenture relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease,
assignment (excluding the grant of a security interest but including any
foreclosure thereon), sale or otherwise) of the properties and assets of one or
more Subsidiaries (other than to the Company or another Subsidiary), which, if
such assets were owned by the Company, would constitute all or substantially all
of the properties and assets of the Company, shall be deemed to be the transfer
of all or substantially all of the properties and assets of the Company.
The successor Person formed by such consolidation or into
which the Company is merged or the successor Person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease and obligations the Company may have
under a supplemental indenture, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 8.6, the Company, the Trustee and the successor Person shall enter into
a supplemental indenture to evidence the succession and substitution of such
successor Person and such discharge and release of the Company.
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ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. So long as any Securities are outstanding,
each of the following shall be an "Event of Default":
(1) the Company defaults in the payment of the principal amount on any
Security when the same becomes due and payable at its Stated Maturity;
(2) the Company defaults in its obligation to repurchase any Security, or
any portion thereof, upon the exercise by the Holder of such Holder's right to
require the Company to purchase such Securities pursuant to and in accordance
with Section 3.7 hereof;
(3) the Company defaults in its obligation to redeem any Security, or any
portion thereof, called for redemption by the Company pursuant to and in
accordance with Section 3.1 hereof;
(4) the Company defaults in the payment of any accrued and unpaid interest,
including Additional Amounts, if any, on any Security, in each case when due and
payable, and continuance of such default for a period of 30 days;
(5) the Company fails to comply with any of its covenants or agreements in
the Securities or this Indenture (other than those referred to in clause (1)
through (4) above) and such failure continues for 60 days after receipt by the
Company of a Notice of Default;
(6) a default under any indebtedness for money borrowed by the Company or
any Significant Subsidiary in an aggregate outstanding principal amount of $10.0
million or more, for a period of 30 days after written notice of default is
given to the Company by the Trustee or to the Company and the Trustee by Holders
of not less than 25% in aggregate principal amount of the Securities then
outstanding, which default (A) is caused by the failure to pay principal or
interest when due on such indebtedness by the end of the applicable grace
period, if any, unless such indebtedness is discharged or (B) results in the
acceleration of such indebtedness, unless such acceleration is waived, cured,
rescinded or annulled or unless such indebtedness is discharged;
(7) the entry by a court having jurisdiction of (i) a decree or order for
relief in respect of the Company or any of its Significant Subsidiaries, in an
involuntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company or any of its Significant Subsidiaries, as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any of its
Significant Subsidiaries, under any applicable law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such decree
or order for relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or
35
(8) the commencement by the Company or any of its Significant Subsidiaries,
of a voluntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company or any of its
Significant Subsidiaries the entry of a decree or order for relief in respect of
the Company or any of its Significant Subsidiaries in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company, or the filing by the Company or any of its
Significant Subsidiaries, of a petition or answer or consent seeking
reorganization or relief under any applicable law, or the consent by the Company
to the filing of such petition or to the appointment of or the taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
the making by the Company or any of its Significant Subsidiaries, of an
assignment for the benefit of creditors, or the admission by the Company or any
of its Significant Subsidiaries, in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
or any of its Significant Subsidiaries, expressly in furtherance of any such
action.
A Default under clause (5) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause (5)
above after actual receipt of such notice. Any such notice must specify the
Default, require that it be remedied and state that such notice is a "Notice of
Default."
The Trustee shall, within 90 days of the occurrence of a
Default or Event of Default, give to the Holders of the Securities notice of all
uncured Defaults or Events of Default known to it, its status and what action
the Company is taking or proposes to take with respect thereto; provided,
however, the Trustee shall be protected in withholding such notice if it, in
good faith, determines that the withholding of such notice is in the best
interest of such Holders, except in the case of a Default or Event of Default
under clauses (1), (2), (3) or (4) above.
Section 6.2 Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.1(7) or (8) with respect to the Company) occurs
and is continuing (the Event of Default not having been cured or waived as
provided in this Article 6), the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the Securities at the
time outstanding by notice to the Company, may declare the principal amount plus
accrued and unpaid interest, including Additional Amounts, if any, on all the
Securities to be immediately due and payable. Upon such a declaration, such
accelerated amount shall be due and payable immediately. If an Event of Default
specified in Section 6.1(7) or (8) occurs (with respect to the Company) and is
continuing, the principal amount plus accrued and unpaid interest, including
Additional Amounts, if any, on all the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the principal amount plus accrued and unpaid
interest, including Additional Amounts, if any, that have become due solely as a
result of acceleration and if all amounts due to the Trustee under Section 7.7
have been paid. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
36
Section 6.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount plus accrued and unpaid interest, including Additional
Amounts, if any, on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.4 Waiver of Past Defaults. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder), may waive an existing
Default and its consequences except (i) an Event of Default described in Section
6.1(1), 6.1(2), 6.1(3) or 6.1(4), (ii) a Default in respect of a provision that
under Section 8.2 cannot be amended without the consent of each Securityholder
affected or (iii) a Default which constitutes a failure to convert any Security
in accordance with the terms of Article 9. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or impair any consequent right. This Section 6.4 shall be in lieu of Section
316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
Section 6.5 Control by Majority. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability unless the Trustee is offered indemnity satisfactory to it. This
Section 6.5 shall be in lieu of Section 316(a)(1)(A) of the TIA and such Section
316(a)(1)(A) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
Section 6.6 Limitation on Suits. A Securityholder may not pursue any remedy
with respect to this Indenture or the Securities unless:
37
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or
expense in connection with pursuing such remedy;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or
indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding do not give the Trustee a
direction inconsistent with the request during such 60-day
period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
Section 6.7 Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of the
principal amount, Redemption Price, Change of Control Purchase Price or
interest, including Additional Amounts, if any, in respect of the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities or any Redemption Date, and to convert the Securities in accordance
with Article 9, or to bring suit for the enforcement of any such payment on or
after such respective dates or the right to convert, shall not be impaired or
affected adversely without the consent of such Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default described in
Section 6.1(1), (2), (3) or (4) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Securities and the
amounts payable to the Trustee under Section 7.7.
Section 6.9 Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or 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 amount, Redemption Price, Change of Control Purchase
Price or interest, including Additional Amounts, if any, in respect 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 any such amount) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
38
(a) to file and prove a claim for the whole amount of the principal amount,
Redemption Price, Change of Control Purchase Price, or interest, including
Additional Amounts, if any, 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 compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel or any other amounts due the Trustee under Section 7.7)
and of the Holders allowed in such judicial proceeding, and
(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 similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities. Subject to the provisions of Article 10, if the
Trustee collects any money pursuant to this Article 6, it shall pay out the
money in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the principal amount, Redemption Price, Change of Control
Purchase Price or interest, including Additional Amounts, if any, as the case
may be, ratably, without preference or priority of any kind, according to such
amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder and the
Company a notice that states the record date, the payment date and the amount to
be paid.
Section 6.11 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7 or a suit by Holders of more than 10% in aggregate principal amount of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
39
Section 6.12 Waiver of Stay, Extension or Usury 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 stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of the principal amount, Redemption
Price or Change of Control Purchase Price in respect of Securities, or any
interest, including Additional Amounts, if any, on such amounts, as contemplated
herein, or which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee. If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(a) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture, but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture, but
need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein. This Section 7.1(b)
shall be in lieu of Section 315(a) of the TIA and such Section
315(a) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
(b) Neither the Trustee nor any of its officers, directors, employees or
agents shall be liable for any action taken or omitted under this Indenture or
in connection herewith except to the extent caused by the Trustee's negligence
or willful misconduct as determined by a court of competent jurisdiction no
longer subject to appeal or review. The Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
40
(1) this subparagraph (b) does not limit the effect of subparagraph
(a) of this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
Subparagraphs (b)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(c) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense associated therewith.
(e) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.
Section 7.2 Rights of Trustee. Subject to its duties and responsibilities
under Section 7.1 and the TIA:
(a) the Trustee may conclusively rely and shall be completely protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) 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, obtain
and conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, nominee, custodian or
attorney appointed with due care by it hereunder;
41
(d) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it believes to be authorized or
within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders, pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to
it against the costs, expenses and liabilities which may be incurred therein or
thereby;
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(h) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has received actual
written notice specifying the nature of such Default or Event of Default;
(j) the rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder;
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any Person authorized to sign an
Officers' Certificate, including any Person specified as so authorized in any
such certificate previously delivered and not superseded; and
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(l) anything in this Indenture notwithstanding, in no event
shall the Trustee be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action taken.
Section 7.3 Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer. The Trustee makes no representation as to
the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's performance hereunder, the Company's
representations and warranties or its use or application of the proceeds from
the Securities, it shall not be responsible for any statement in the
registration statement for the Securities under the Securities Act or in any
offering document for the Securities, the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
Section 7.5 Notice of Defaults. If a Default occurs and if it is actually
known to a Responsible Officer of the Trustee, the Trustee shall give to each
Securityholder notice of the Default within 90 days after it occurs or, if
later, within 15 days after it is known to the Trustee, unless such Default
shall have been cured or waived before the giving of such notice.
Notwithstanding the preceding sentence, in the case of a Default described in
Section 6.1(1), (2) (3) or (4), the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interest of the Securityholders. The preceding
sentence shall be in lieu of the proviso to Section 315(b) of the TIA and such
proviso is hereby expressly excluded from this Indenture, as permitted by the
TIA. The Trustee shall not be deemed to have knowledge of a Default unless a
Responsible Officer of the Trustee has received written notice of such Default,
which notice specifically references this Indenture and the Securities.
Section 7.6 Reports by Trustee to Holders. The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. Within 60 days after each May 15 beginning
with the May 15 following the date of this Indenture, the Trustee shall mail to
each Securityholder a brief report dated as of such May 15 that complies with
TIA Section 313(a), if required by such Section 313(a). The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC (but only if this Indenture is then
qualified under the TIA) and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee in writing
promptly whenever the Securities become listed on any securities exchange and of
any delisting thereof.
43
Section 7.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the Trustee
upon its request for all reasonable expenses and disbursements incurred or made
by the Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses, advances and disbursements of its
agents and counsel), except any such expense or disbursement as may be
attributable to its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and their
respective officers, directors, employees and agents for, and to hold them
harmless against, any loss, damage, claim, liability, cost or expense (including
attorney's fees and expenses, and taxes (other than taxes based upon, measured
by or determined by the income of the Trustee and any and all franchise taxes of
the Trustee)) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust or
performance hereunder, including the reasonable costs and expenses of defending
itself against any claim (whether asserted by the Company or any Holder or any
other Person), liability in connection with the exercise or performance of any
of its powers or duties hereunder or in connection with enforcing the provisions
of this Section.
To secure the Company's payment obligations in this Section
7.7, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay the
principal amount, Redemption Price, Change of Control Purchase Price or
interest, including Additional Amounts, if any, as the case may be, on
particular Securities.
The Company's payment obligations pursuant to this Section 7.7
shall survive the discharge of this Indenture or the earlier resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.1(6) or (7), the expenses including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any applicable bankruptcy law.
Section 7.8 Replacement of Trustee. The Trustee may resign by so notifying
the Company; provided, however, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this Section 7.8. The
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may remove the Trustee by so notifying the Trustee and the
Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
44
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Section 7.9 Successor Trustee by ▇▇▇▇▇▇. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee (or
its parent holding company) shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company. The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.
45
ARTICLE VIII
AMENDMENTS
Section 8.1 Without Consent of Holders. The Company and the Trustee may
amend, modify or supplement this Indenture or the Securities without the consent
of any Securityholder to:
(a) add to the covenants of the Company for the benefit of the Holders of
Securities;
(b) surrender any right or power herein conferred upon the Company;
(c) provide for conversion rights of Holders of Securities if any
reclassification or change of the Common Stock or any consolidation, merger or
sale of all or substantially all of the Company's assets occurs;
(d) provide for the assumption of the Company's obligations to the Holders
of Securities in the case of a merger, consolidation, conveyance, transfer or
lease pursuant to Article 5 hereof;
(e) reduce the Conversion Price; provided, however, that such reduction in
the Conversion Price shall not adversely affect the interests of the Holders of
Securities (after taking into account tax and other consequences of such
reduction);
(f) comply with the requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(g) cure any ambiguity, to correct or supplement any provision herein which
may be inconsistent with any other provision herein or which is otherwise
defective; provided, however, that such action pursuant to this clause (g) does
not, in the good faith opinion of the Board of Directors of the Company (as
evidenced by a Board Resolution), adversely affect the interests of the Holders
of Securities in any material respect; and
(h) add or modify any other provisions herein with respect to matters or
questions arising hereunder which the Company and the Trustee may deem necessary
or desirable and that will not, in the good faith opinion of the Board of
Directors of the Company (as evidenced by a Board Resolution), adversely affect
the interests of the Holders of Securities.
Section 8.2 With Consent of Holders. Except as provided below in this
Section 8.2, this Indenture or the Securities may be amended, modified or
supplemented, and noncompliance in any particular instance with any provision of
this Indenture or the Securities may be waived, in each case with the written
consent of the Holders of at least a majority of the principal amount of the
Securities at the time outstanding.
Without the written consent or the affirmative vote of each
Holder affected thereby, an amendment or waiver under this Section 8.2 may not:
46
(a) change the maturity of the principal amount of, or the date any
installment of interest, including Additional Amounts, is due on, any Security;
(b) reduce the principal amount of, or interest, including Additional
Amounts payable on, or the Redemption Price or Change of Control Purchase Price
of, any Security;
(c) change the currency of any amount owed or owing under the Security or
any interest thereon from U.S. Dollars;
(d) impair the right of any Holder to institute suit for the enforcement of
any payment or with respect to, or conversion of, any Security;
(e) modify the obligation of the Company to maintain an office or agency in
The City of New York pursuant to Section 4.5;
(f) except as otherwise permitted or contemplated by the provisions of this
Indenture, adversely affect the repurchase right of the Holders of the
Securities as provided in Article 3 or the right of the Holders of the
Securities to convert any Security as provided in Article 9;
(g) modify the provisions of Article 5 in a manner adverse to the Holders
of the Securities;
(h) modify any of the provisions of this Section 8.2, or reduce the
principal amount of outstanding Securities required to waive a default, except
to provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Security affected
thereby; or
(i) reduce the percentage of the principal amount of the outstanding
Securities the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver provided
for in this Indenture.
It shall not be necessary for the consent of the Holders under
this Section 8.2 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 8.2 becomes effective,
the Company shall mail to each Holder a notice briefly describing the amendment.
Nothing in this Section 8.2 shall impair the ability of the
Company and the Trustee to amend this Indenture or the Securities without the
consent of any Securityholder to provide for the assumption of the Company's
obligations to the Holders of Securities in the case of a merger, consolidation,
conveyance, transfer or lease pursuant to Article 5 hereof.
Section 8.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then in
effect.
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Section 8.4 Revocation and Effect of Consents, Waivers and Actions. Until
an amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder hereunder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same obligation as the consenting Holder's Security, even if notation of the
consent, waiver or action is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent, waiver or action as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment, waiver or action becomes effective.
After an amendment, waiver or action becomes effective, it shall bind every
Securityholder.
Section 8.5 Notation on or Exchange of Securities. 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 Board of Directors, 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.
Section 8.6 Trustee to Sign Supplemental Indentures. The Trustee shall sign
any supplemental indenture authorized pursuant to this Article 8. If it does,
the Trustee may, but need not, sign such supplemental indenture. In signing any
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture and that all conditions precedent have been
satisfied.
Section 8.7 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 theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
ARTICLE IX
CONVERSIONS
Section 9.1 Conversion Privilege. Subject to and upon compliance with the
provisions of this Article 9, a Holder shall have the right, at such Holder's
option, to convert all or any portion (if the portion to be converted is $1,000
or an integral multiple of $1,000) of such Security into shares of Common Stock
at the Conversion Price in effect on the date of conversion, at any time prior
to the close of business on the Business Day prior to the Stated Maturity of the
Securities.
Section 9.2 Conversion Procedure; Conversion Price; Fractional Shares. Each
Security shall be convertible at the office of the Conversion Agent into fully
paid and nonassessable shares (calculated to the nearest 1/100th of a share) of
Common Stock. The Security will be converted into shares of Common Stock at the
Conversion Price therefor. No payment or adjustment shall be made in respect of
dividends on the Common Stock or accrued interest on a converted Security,
except as described in Section 9.9 hereof. The Company shall not issue any
fraction of a share of Common Stock in connection with any conversion of
Securities, but instead shall, subject to Section 9.3(k) hereof, make a cash
payment (calculated to the nearest cent) equal to such fraction multiplied by
the Sale Price of the Common Stock on the last Trading Day prior to the date of
conversion. Notwithstanding the foregoing, a Security in respect of which a
Holder has delivered a Change of Control Purchase Notice exercising such
Holder's option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn in accordance with the
Section 3.8 hereof.
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(a) Before any Holder shall be entitled to convert the same into Common
Stock, such Holder shall, in the case of Global Securities, comply with the
procedures of the Depositary in effect at that time, and in the case of
Certificated Securities, surrender such Securities, duly endorsed to the Company
or in blank, at the office of the Conversion Agent, and shall give written
notice to the Company at said office or place that such Holder elects to convert
the same and shall state in writing therein the principal amount of Securities
to be converted and the name or names (with addresses) in which such Holder
wishes the certificate or certificates for Common Stock to be issued.
Before any such conversion, a Holder also shall pay all funds
required, if any, relating to interest on the Securities, as provided in Section
9.9, and all taxes or duties, if any, as provided in Section 9.8.
If more than one Security shall be surrendered for conversion
at one time by the same Holder, the number of full shares of Common Stock which
shall be deliverable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the Company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder, or to such Holder's nominee or nominees,
certificates for the number of full shares of Common Stock to which such Holder
shall be entitled as aforesaid, together with cash in lieu of any fraction of a
share to which such Holder would otherwise be entitled. The Company shall not be
required to deliver certificates for shares of Common Stock while the stock
transfer books for such stock or the security register are duly closed for any
purpose, but certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or security
register.
(b) A Security shall be deemed to have been converted as of the close of
business on the date of the surrender of such Securities for conversion as
provided above, and the Person or Persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock as of the close of business on such date.
(c) In case any Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Security so surrendered, without charge
to such Holder (subject to the provisions of Section 9.8 hereof), a new Security
or Securities in authorized denominations in an aggregate principal amount equal
to the unconverted portion of the surrendered Securities.
49
Section 9.3 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time while any
of the Securities are outstanding, pay a dividend or make a distribution in
shares of Common Stock to all holders of its outstanding shares of Common Stock,
then the Conversion Price in effect at the opening of business on the date
following the record date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction:
(1) the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date fixed for such
determination; and
(2) the denominator of which shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution.
Such reduction shall become effective immediately after the
opening of business on the day following the Record Date fixed for such
determination. If any dividend or distribution of the type described in this
Section 9.3(a) is declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(b) In case the Company shall, at any time or from time to time while any
of the Securities are outstanding, subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock, then the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case the Company shall, at any time or from time to time while
any of the Securities are outstanding, combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, then the Conversion Price
in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased.
Such reduction or increase, as the case may be, shall become
effective immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(c) In case the Company shall, at any time or from time to time while any
of the Securities are outstanding, issue rights or warrants (other than any
rights or warrants referred to in Section 9.3(d)) to all or substantially all
holders of its shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into shares of Common
Stock) at a price per share (or having a conversion price per share) less than
the Sale Price on the Business Day immediately preceding the Record Date of such
issuance (treating the conversion price per share of the securities convertible
into Common Stock as equal to (x) the sum of (i) the price for a unit of the
security convertible into Common Stock and (ii) any additional consideration
initially payable upon the conversion of such security into Common Stock divided
by (y) the number of shares of Common Stock initially underlying such
convertible security), then the Conversion Price shall be adjusted to equal the
price determined by multiplying the Conversion Price in effect at the opening of
business on the date after such Record Date by a fraction:
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(1) the numerator of which shall be the number of shares of
Common Stock outstanding on the close of business on the Record Date,
plus the number of shares of Common Stock or securities which the
aggregate offering price of the total number of additional shares of
Common Stock or securities so offered for subscription or purchase (or
the aggregate conversion price of the convertible securities so
offered) would purchase at such Sale Price of the Common Stock; and
(2) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date,
plus the total number of additional shares of Common Stock so offered
for subscription or purchase (or into which the convertible securities
so offered are convertible).
Such adjustment shall become effective immediately after the
opening of business on the day following the date of announcement of such
issuance. To the extent that shares of Common Stock (or securities convertible
into shares of Common Stock) are not delivered pursuant to such rights or
warrants, upon the expiration or termination of such rights or warrants, the
Conversion Price shall be readjusted to the Conversion Price which would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of the delivery of only the number of shares of Common
Stock (or securities convertible into shares of Common Stock) actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if the date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Sale Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received for such rights or warrants, the value
of such consideration if other than cash, to be determined by the Board of
Directors.
(d) In case the Company shall, at any time or from time to time while any
of the Securities are outstanding, by dividend or otherwise, distribute to all
or substantially all holders of its shares of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock is not changed or
exchanged), cash, shares of its capital stock (other than any dividends or
distributions to which Section 9.3(a) applies), evidences of its indebtedness or
other assets, including securities, but excluding (i) any rights or warrants
referred to in Section 9.3(c), (ii) dividends or distributions of stock,
securities or other property or assets (including cash) in connection with a
reclassification, consolidation, merger, statutory share exchange, combination,
sale or conveyance to which Section 9.4 applies and (iii) dividends and
distributions paid exclusively in cash (such capital stock, evidence of its
indebtedness, cash, other assets or securities being distributed hereinafter in
this Section 9.3(d) called the "distributed assets"), then, in each such case,
subject to the third and fourth succeeding paragraphs and the last paragraph of
this Section 9.3(d), the Conversion Price in effect immediately prior to the
close of business on the Record Date with respect to such distribution shall be
adjusted to equal the price determined by multiplying such Conversion Price by a
fraction:
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(1) the numerator of which shall be the Current Market Price,
less the Fair Market Value on such date of the portion of the
distributed assets so distributed applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the Record Date)(determined as provided in Section
9.3(g)) on such date; and
(2) the denominator of which shall be such Current Market
Price.
Such adjustment shall become effective immediately prior to the opening of
business on the day following the Record Date for such distribution. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.
Except as provided in the next paragraph, if the Board of
Directors determines the Fair Market Value of any distribution for purposes of
this Section 9.3(d) by reference to the actual or when issued trading market for
any distributed assets comprising all or part of such distribution, it must in
doing so consider the prices in such market over the same period (the "Reference
Period") used in computing the Current Market Price pursuant to Section 9.3(g)
to the extent possible, unless the Board of Directors determines in good faith
that determining the Fair Market Value during the Reference Period would not be
in the best interest of the Holders.
In the event any such distribution consists of shares of
capital stock of, or similar equity interests in, one or more of the Company's
Subsidiaries (a "Spin-Off"), the Fair Market Value of the securities to be
distributed shall equal the average of the closing sale prices of such
securities on the principal securities market on which such securities are
traded for the five consecutive Trading Days commencing on and including the
sixth day of trading of those securities after the effectiveness of the
Spin-Off, and the Current Market Price shall be measured for the same period. In
the event, however, that an underwritten initial public offering of the
securities in the Spin-Off occurs simultaneously with the Spin-Off, Fair Market
Value of the securities distributed in the Spin-Off shall mean the initial
public offering price of such securities and the Current Market Price shall mean
the Sale Price for the Common Stock on the same Trading Day.
Rights or warrants distributed by the Company to all holders
of its Common Stock entitling them to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"), (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of shares of Common Stock (including the shares to be issued upon
conversion of the Securities) shall be deemed not to have been distributed for
purposes of this Section 9.3(d) (and no adjustment to the Conversion Price under
this Section 9.3(d) will be required) until the occurrence of the earliest
Trigger Event. If such right or warrant is subject to subsequent events, upon
the occurrence of which such right or warrant shall become exercisable to
purchase different distributed assets, evidences of indebtedness or other
assets, or entitle the holder to purchase a different number or amount of the
foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed to be the date of
issuance and Record Date with respect to a new right or warrant (and a
termination or expiration of the existing right or warrant without exercise by
the holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment to the Conversion Price under this Section 9.3(d):
52
(1) in the case of any such rights or warrants which shall all
have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder of
shares of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to
all holders of shares of Common Stock as of the date of such redemption
or repurchase; and
(2) in the case of such rights or warrants which shall have
expired or been terminated without exercise, the Conversion Price shall
be readjusted as if such rights and warrants had never been issued.
For purposes of this Section 9.3(d) and Sections 9.3(a),
9.3(b) and 9.3(c), any dividend or distribution to which this Section 9.3(d) is
applicable that also includes (i) shares of Common Stock to which Section 9.3(a)
applies, (ii) a subdivision or combination of shares of Common Stock to which
Section 9.3(b) applies or (iii) rights or warrants to subscribe for or purchase
shares of Common Stock to which Section 9.3(c) applies (or any combination
thereof), shall be deemed instead to be:
(1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants,
other than such shares of Common Stock, such subdivision or combination
or such rights or warrants to which Sections 9.3(a), 9.3(b) and 9.3(c)
apply, respectively (and any Conversion Price reduction required by
this Section 9.3(d) with respect to such dividend or distribution shall
then be made), immediately followed by
(2) a dividend or distribution of such shares of Common Stock,
such subdivision or combination or such rights or warrants (and any
further Conversion Price adjustment required by Sections 9.3(a), 9.3(b)
and 9.3(c) with respect to such dividend or distribution shall then be
made), except:
(A) the Record Date of such dividend or distribution
shall be substituted as (i) "the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution," "Record Date fixed for such
determinations" and "Record Date" within the meaning of
Section 9.3(a), (ii) "the day upon which such subdivision
becomes effective" and "the day upon which such combination
becomes effective" within the meaning of Section 9.3(b), and
(iii) as "the date fixed for the determination of stockholders
entitled to receive such rights or warrants," "the Record Date
fixed for the determination of stockholders entitled to
receive such rights or warrants" and "Record Date" within the
meaning of Section 9.3(c); and
53
(B) 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 Section 9.3(a) and any
reduction or increase in the number of shares of Common Stock
resulting from such subdivision or combination shall be
disregarded in connection with such dividend or distribution.
In the event of any distribution referred to in this Section
9.3(d) in which (1) the Fair Market Value (as determined by the Board of
Directors) of such distribution applicable to one share of Common Stock
(determined as provided above) equals or exceeds the average of the Sale Prices
of the Common Stock over the ten consecutive Trading Day period ending on the
Record Date for such distribution or (2) the average of the Sale Prices of the
Common Stock over the ten consecutive Trading Day period ending on the Record
Date for such distribution exceeds the Fair Market Value of such distribution by
less than $1.00, then, in each such case, in lieu of an adjustment to the
Conversion Price, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion of a Security, in addition to shares
of Common Stock, the kind and amount of such distribution such Holder would have
received had such Holder converted such Security immediately prior to the Record
Date for determining the shareholders entitled to receive the distribution.
In case the Company shall, by dividend or otherwise,
distribute to all or substantially all holders of its
Common Stock, cash (excluding any dividend or distribution in connection with
the liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price in effect immediately
prior to the close of business on the Record Date with respect to such
distribution shall be adjusted to equal the price determined by multiplying such
Conversion Price by a fraction,
(1) the numerator of which shall be the Current Market
Price on such Record Date less the amount of cash so distributed as
applicable to one share of Common Stock; and
(2) the denominator of which shall be the Current Market
Price on such Record Date.
Such adjustment shall be effective immediately prior to the opening of business
on the day following the Record Date; provided that if the portion of the cash
so distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion the amount of cash such holder would have
received had such Holder converted each Security on the Record Date. If such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared.
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(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to holders of its Common Stock of consideration per share of Common
Stock having a Fair Market Value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) that as of the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it may be amended)
exceeds the Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Price in effect immediately prior
to the close of business on the Expiration Time shall be adjusted to equal the
price determined by multiplying the Conversion Price by a fraction,
(1) the numerator of which shall be the number of shares
of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Current Market Price
of a share of Common Stock on the Trading Day next succeeding the
Expiration Time such adjustment to become effective immediately prior
to the opening of business on the day following the Expiration Time;
and
(2) the denominator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price of a share
of Common Stock on the Trading Day next succeeding the Expiration Time.
If the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price that would then be in
effect if such tender or exchange offer had not been made.
(g) For purposes of this Article 9, the following terms shall have the
meanings indicated:
"Current Market Price" on any date means the average of the
daily Sale Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to such date; provided, however, that if:
55
(1) the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
9.3(a), (b), (c), (d), (e) or (f) occurs during such ten consecutive
Trading Days, the Sale Price for each Trading Day prior to the "ex"
date for such other event shall be adjusted by multiplying such Sale
Price by the same fraction by which the Conversion Price is so required
to be adjusted as a result of such other event;
(2) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 9.3(a), (b), (c), (d), (e) or
(f) occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the Sale
Price for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Sale Price by the
reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event; and
(3) the "ex" date for the issuance or distribution requiring
such computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2) of this
proviso, the Sale Price for each Trading Day on or after such "ex" date
shall be adjusted by adding thereto the amount of any cash and the Fair
Market Value (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of Section
9.3(d), (e) or (f)) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex" date.
For purposes of any computation under Section 9.3(f), if the "ex" date for any
event (other than the tender or exchange offer requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section 9.3(a), (b),
(c), (d), (e) or (f) occurs on or after the Expiration Time for the tender or
exchange offer requiring such computation and prior to the day in question, the
Sale Price for each Trading Day on and after the "ex" date for such other event
shall be adjusted by multiplying such Sale Price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted as a result
of such other event. For purposes of this paragraph, the term "ex" date, when
used:
(1) with respect to any issuance or distribution, means the
first date on which the shares of Common Stock trade regular way on the
relevant exchange or in the relevant market from which the Sale Price
was obtained without the right to receive such issuance or
distribution;
(2) with respect to any subdivision or combination of shares
of Common Stock, means the first date on which the shares of Common
Stock trade regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective; and
(3) with respect to any tender or exchange offer, means the
first date on which the shares of Common Stock trade regular way on
such exchange or in such market after the Expiration Time of such
offer.
56
Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 9.3, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 9.3 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
"Fair Market Value" shall mean the amount that a willing buyer
would pay a willing seller in an arm's-length transaction (as determined by the
Board of Directors, whose determination shall be conclusive).
"Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of shares of
Common Stock have the right to receive any cash, securities or other property or
in which the shares of Common Stock (or other applicable security) is exchanged
for or converted into any combination of cash, securities or other property, the
date fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(h) The Company shall be entitled to make such additional reductions in the
Conversion Price, in addition to those required by Sections 9.3(a), (b), (c),
(d), (e) and (f), as shall be necessary in order that any dividend or
distribution of Common Stock, any subdivision, reclassification or combination
of shares of Common Stock or any issuance of rights or warrants referred to
above shall not be taxable to the holders of Common Stock for United States
Federal income tax purposes.
(i) To the extent permitted by applicable law, the Company may, from time
to time, reduce the Conversion Price by any amount for any period of time, if
such period is at least 20 days and the reduction is irrevocable during the
period. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the Trustee, the Conversion Agent and each
Holder at the address of such Holder as it appears in the register of the
Securities maintained by the Registrar, at least 15 days prior to the date the
reduced Conversion Price takes effect, a notice of the reduction stating the
reduced Conversion Price and the period during which it will be in effect.
(j) In any case in which this Section 9.3 shall require that any adjustment
be made effective as of or retroactively immediately following a Record Date,
the Company may elect to defer (but only for five Trading Days following the
filing of the statement referred to in Section 9.5) issuing to the Holder of any
Securities converted after such Record Date the shares of Common Stock issuable
upon such conversion over and above the shares of Common Stock issuable upon
such conversion on the basis of the Conversion Price prior to adjustment;
provided, however, that the Company shall deliver to such Holder a due bill or
other appropriate instrument evidencing such Holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(k) All calculations under this Section 9.3 shall be made to the nearest
cent or one-hundredth of a share, with one-half cent and 0.005 of a share,
respectively, being rounded upward. Notwithstanding any other provision of this
Section 9.3, the Company shall not be required to make any adjustment of the
Conversion Price unless such adjustment would require an increase or decrease of
at least 1% of such price. Any lesser adjustment shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment
which, together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% in such price. Any adjustments
under this Section 9.3 shall be made successively whenever an event requiring
such an adjustment occurs.
57
(l) In the event that at any time, as a result of an adjustment made
pursuant to this Section 9.3, the Holder of any Securities thereafter
surrendered for conversion shall become entitled to receive any shares of stock
of the Company other than shares of Common Stock into which the Securities
originally were convertible, the Conversion Price of such other shares so
receivable upon conversion of any such Security shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to Common Stock contained in subparagraphs (a)
through (k) of this Section 9.3, and the provision of Sections 9.1, 9.2 and 9.4
through 9.9 with respect to the Common Stock shall apply on like or similar
terms to any such other shares and the determination of the Board of Directors
as to any such adjustment shall be conclusive.
(m) No adjustment shall be made pursuant to this Section 9.3 (i) if the
effect thereof would be to reduce the Conversion Price below the par value (if
any) of the Common Stock or (ii) if the Holders of the Securities may
participate in the transaction that would otherwise give rise to an adjustment
pursuant to this Section 9.3.
Section 9.4 Consolidation or Merger of the Company. If any of the following
events occurs, namely:
(1) any reclassification or change of the outstanding Common
Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
subdivision or combination);
(2) any merger, consolidation, statutory share exchange or
combination of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to
or in exchange for such Common Stock; or
(3) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other corporation as a
result of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock;
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture, if such supplemental indenture is then required to so
comply) providing that such Securities shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Securities been converted into Common
Stock immediately prior to such reclassification, change, merger, consolidation,
58
statutory share exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided, that if
the kind or amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance is not the
same for each share of Common Stock in respect of which such rights of election
shall not have been exercised ("Non-Electing Share"), then for the purposes of
this Section 9.4, the kind and amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
9. If, in the case of any such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of Common Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the conversion
rights set forth in this Article 9.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder, at the address of such
Holder as it appears on the register of the Securities maintained by the
Registrar, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture.
The above provisions of this Section 9.4 shall similarly apply
to successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 9.4 applies to any event or occurrence,
Section 11.3 shall not apply.
Section 9.5 Notice of Adjustment. Whenever an adjustment in the Conversion
Price with respect to the Securities is required:
(1) the Company shall forthwith place on file with the Trustee
and any Conversion Agent for such securities a certificate of the
Treasurer of the Company, stating the adjusted Conversion Price
determined as provided herein and setting forth in reasonable detail
such facts as shall be necessary to show the reason for and the manner
of computing such adjustment; and
(2) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall
forthwith be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company, to each Holder
in the manner provided in Section 11.2. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the
Holder receives such notice.
59
In addition, whenever an adjustment in the Conversion Price with respect to the
Securities is required, the Company will issue a press release through Dow ▇▇▇▇▇
& Company, Inc., Bloomberg Business News or a similar newswire service
containing the relevant information and make this information available on the
Company's web site or through another public medium as it may use at that time.
Section 9.6 Notice in Certain Events. In case:
(1) of a consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the sale or conveyance to another Person or entity or
group of Persons or entities acting in concert as a partnership,
limited partnership, syndicate or other group (within the meaning of
Rule 13d-3 under the Exchange Act) of all or substantially all of the
property and assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price referred
to in clauses (x) or (y) below;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Securities
in the manner provided in Section 11.2, at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Price pursuant to this Article 9, or,
if a record is not to be taken, the date as of which the holders of record of
Common Stock entitled to such distribution, rights or warrants are to be
determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article 9 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 Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger
sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in clause (1), (2)
or (3) of this Section 9.6.
Section 9.7 Company To Reserve Stock: Registration; Listing.
The Company shall, in accordance with the laws of the State of Delaware, at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued shares of Common Stock, for the purpose of effecting the
conversion of the Securities, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all Securities then outstanding into such Common Stock at any time (assuming
that, at the time of the computation of such number of shares or securities, all
such Securities would be held by a single Holder); provided, however, that
nothing contained herein shall preclude the Company from satisfying its
obligations in respect of the conversion of the Securities by delivery of
purchased shares of Common Stock which are then held in the treasury of the
Company. The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and free from all liens and charges and, except as provided in
Section 9.8, taxes with respect to the issue thereof.
60
(b) If any shares of Common Stock which would be issuable upon conversion
of Securities hereunder require registration with or approval of any
governmental authority before such shares or securities may be issued upon such
conversion, the Company will in good faith and as expeditiously as possible
endeavor to cause such shares or securities to be duly registered or approved,
as the case may be. The Company further covenants that so long as the Common
Stock shall be listed on the Nasdaq National Market, the Company will, if
permitted by the rules of such exchange, list and keep listed all Common Stock
issuable upon conversion of the Securities, and the Company will endeavor to
list the shares of Common Stock required to be delivered upon conversion of the
Securities prior to such delivery upon any other national securities exchange
upon which the outstanding Common Stock is listed at the time of such delivery.
Section 9.8 Taxes on Conversion. The issue of stock certificates on
conversion of Securities shall be made without charge to the converting Holder
for any documentary, stamp or similar issue or transfer taxes in respect of the
issue thereof, and the Company shall pay any and all documentary, stamp or
similar issue or transfer 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 such tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or the portion, if any, of the Securities which are not so
converted in a name other than that in which the Securities so converted were
registered, 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 such tax or
has established to the satisfaction of the Company that such tax has been paid.
Section 9.9 Conversion After Interest Payment Record Date. Except as
provided below, if any Securities are surrendered for conversion on any day
other than an Interest Payment Date, the Holder of such Securities shall not be
entitled to receive any interest that has accrued on such Securities since the
prior Interest Payment Date. By delivery to the Holder of the number of shares
of Common Stock issuable or cash payment, if any, in lieu of fractional shares
payable upon conversion in accordance with this Article 9, any accrued and
unpaid interest on such Securities will be deemed to have been paid in full.
If any Securities are surrendered for conversion subsequent to
the Interest Payment Record Date preceding an Interest Payment Date but on or
prior to such Interest Payment Date, the Holder of such Securities at the close
of business on such Interest Payment Record Date shall receive the interest
payable on such Securities on such Interest Payment Date notwithstanding the
conversion thereof. Securities surrendered for conversion during the period from
the close of business on any Interest Payment Record Date preceding any Interest
Payment Date to the opening of business on such Interest Payment Date shall
(except in the case of Securities which have been called for redemption on a
Redemption Date between such Interest Payment Record Date and the third Business
Day after such Interest Payment Date) be accompanied by payment by Holders, for
the account of the Company, in New York Clearing House funds or other funds of
an amount equal to the interest payable on such Interest Payment Date on the
Securities being surrendered for conversion. Except as provided in this Section
9.9, no adjustments in respect of payments of interest on Securities surrendered
for conversion or any dividends or distributions or interest on the Common Stock
issued upon conversion shall be made upon the conversion of any Securities.
61
Section 9.10 Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to this Article 9 shall be
conclusive if made in good faith and in accordance with the provisions of this
Article, absent manifest error, and set forth in a Board Resolution.
Section 9.11 Responsibility of Trustee for Conversion Provisions. The
Trustee has no duty to determine when an adjustment under this Article 9 should
be made, how it should be made or what it should be. The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. The Trustee shall not be responsible for any
failure of the Company to comply with this Article 9 or any duty to monitor the
Company's compliance. Each Conversion Agent other than the Company shall have
the same protection under this Section 9.11 as the Trustee.
The rights, privileges, protections, immunities and benefits
given to the Trustee under the Indenture including, without limitation, its
rights to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each Paying Agent or Conversion
Agent acting hereunder.
Section 9.12 Unconditional Right of Holders to Convert. Notwithstanding any
other provision in this Indenture, the Holder shall have the right, which is
absolute and unconditional, to convert its Security in accordance with this
Article 9 and to bring an action for the enforcement of any such right to
convert, and such rights shall not be impaired or affected without the consent
of such Holder.
ARTICLE X
SUBORDINATION OF THE SECURITIES
Section 10.1 Agreement to Subordinate. The Company agrees, and each Holder
by accepting a Security agrees, that the Indebtedness evidenced by the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full, in cash or Cash
Equivalents, of all Senior Indebtedness of the Company (in each case, whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed and including, without limitation, Senior Indebtedness of the Company
created, incurred, assumed or guaranteed during the pendency of any bankruptcy
or other insolvency proceeding of the Company) and that the subordination is for
the benefit of and enforceable by the holders of such Senior Indebtedness. Only
Senior Indebtedness of the Company shall rank senior to the Securities in
accordance with the provisions set forth herein. The Securities shall in all
respects rank pari passu with the Company's existing and future senior
subordinated Indebtedness, be senior to any future subordinated Indebtedness of
the Company and rank pari passu with, or be senior to, all other Indebtedness of
the Company. All provisions of this Article 10 shall be subject to Section
10.12.
62
Section 10.2 Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors upon a total or partial
liquidation or dissolution of the Company, in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, in an assignment by the Company for the benefit of its creditors or
any marshaling of the assets and liabilities of the Company:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of all obligations due in respect
thereof (including interest accruing after the commencement of any such
proceeding at the rate specified in the instrument evidencing such
Senior Indebtedness, whether or not a claim therefore is allowed in any
such proceeding, to the date of payment of such Senior Indebtedness)
before Holders shall be entitled to receive any payment of principal
of, premium, if any, or interest on the Securities; and
(2) until such Senior Indebtedness is paid in full in cash or
Cash Equivalents, any distribution to which Holders would be entitled
but for this Article 10 shall be made to holders of such Senior
Indebtedness as their interests may appear.
To the extent any payment of principal of, premium, if any, or interest on any
Senior Indebtedness of the Company (whether by or on behalf of the Company, as
proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be paid to
any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar
Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then, if such payment is recovered by, or paid over to, such
receiver, trustee in bankruptcy, liquidating trustee, agent or similar Person,
such Senior Indebtedness or part thereof intended to be satisfied shall be
deemed reinstated and outstanding, as if such payment had not occurred.
Section 10.3 Default on Designated Senior Indebtedness of the Company.
(a) The Company may not pay the principal of, premium, if any, or interest
on the Securities and may not repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities"), if:
(1) a default in the payment when due of the principal of,
premium, if any, or interest on or any other amount in respect of any
Designated Senior Indebtedness of the Company (a "Payment Default")
occurs and is continuing beyond any applicable grace period; or
63
(2) any default that is not a Payment Default (a "Nonpayment
Default") occurs and is continuing with respect to any Designated
Senior Indebtedness of the Company that permits the holders thereof to
accelerate its maturity and the Trustee receives a notice of that
default (a "Payment Blockage Notice") from the Company or the holders
of such Designated Senior Indebtedness.
(b) Payments on the Securities may and shall be resumed:
(1) in the case of a Payment Default, upon the date on which it is cured or
waived; and
(2) in case of a Nonpayment Default, the earlier of the date
on which it is cured or waived or 179 days after the date on which such
Payment Blockage Notice is received by the Trustee, unless the maturity
of the relevant Designated Senior Indebtedness of the Company has been
accelerated,
if this Article 10 otherwise permits the payment.
(c) No new Payment Blockage Notice may be delivered unless and until:
(1) 360 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice; and
(2) all scheduled payments of principal of and interest or
premium, if any, on the Securities that have come due have been paid in
full in cash.
(d) No Nonpayment Default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless that default shall have
been cured or waived for a period of not less than 90 days.
Section 10.4 Acceleration of Payment of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company shall
promptly notify the holders of the Senior Indebtedness of the Company (or their
representative) of the acceleration.
Section 10.5 When Distribution Must Be Paid Over. If a payment or
distribution is made to Holders that because of this Article 10 should not have
been made to them, the Holders who receive the payment or distribution shall
hold it in trust for holders of Senior Indebtedness of the Company and pay it
over promptly to them as their interests may appear.
Section 10.6 Subrogation. After all Senior Indebtedness of the Company is
paid in full in cash or Cash Equivalents and until the Securities are paid in
full in cash or Cash Equivalents, Holders shall be subrogated to the rights of
holders of such Senior Indebtedness to receive distributions applicable to such
Senior Indebtedness. A distribution made under this Article 10 to holders of
such Senior Indebtedness which otherwise would have been made to Holders is not,
as between the Company and Holders, a payment by the Company on such Senior
Indebtedness. In no event, however, shall Holders have any rights or claims
against the holders of any Senior Indebtedness of the Company for any alleged
impairment of Holders' subrogation rights, and each Holder, by accepting a
Security, acknowledges that any actions taken by the holders of any Senior
Indebtedness of the Company with respect to such Senior Indebtedness or any
security therefore are authorized and consented to by Holders.
64
Section 10.7 Relative Rights. This Article 10 defines the relative rights
of Holders and holders of Senior Indebtedness of the Company. Nothing in this
Indenture shall:
(1) impair, as between the Company and Holders, the obligation
of the Company, which is absolute and unconditional, to pay its
obligations in respect of this Indenture and the Securities in
accordance with their terms; or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Holders as provided in this Article 10.
Section 10.8 Subordination May Not Be Impaired. No right of any holder of
Senior Indebtedness of the Company to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by any such holder or by any noncompliance by the Company with this
Indenture, regardless of any knowledge thereof any such holder may have or
otherwise be charged with..
Section 10.9 Rights of Trustee and Paying Agent.
(a) Notwithstanding the provisions of Section 10.3, the Trustee or Paying
Agent may continue to make payments on the Securities and shall not be charged
with knowledge of the existence of facts that would prohibit the making of any
such payments unless, not less than three Business Days prior to the date of
such payment, a Responsible Officer receives notice reasonably satisfactory to
it that payments may not be made in accordance with the provisions of this
Article 10. The Company, a representative or a holder of Senior Indebtedness may
give the notice; provided, however, that, if the holders of an issue of Senior
Indebtedness of the Company have a representative, only the representative may
give the notice.
(b) The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 10 with respect to any Senior Indebtedness of the Company which may
at any time be held by it, to the same extent as any other holder of such Senior
Indebtedness, and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 10 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
65
(c) With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article and no implied
covenants or obligations with respect to holders of Senior Indebtedness shall be
read into this Indenture against the Trustee.
Section 10.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of the Company, the distribution may be made and the notice given to their
Representative (if any).
Section 10.11 Article 10 Not to Prevent Events of Default or Limit Right to
Accelerate. The failure to make a payment pursuant to the Securities by reason
of any provision in this Article 10 shall not be construed as preventing the
occurrence of a Default. Nothing in this Article 10 shall have any effect on the
right of the Holders or the Trustee to accelerate the maturity of the
Securities. The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities.
Section 10.12 Trustee Entitled to Rely. Upon any payment or distribution
pursuant to this Article 10, the Trustee and the Holders shall be entitled to
conclusively rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Holders or (iii) upon the Representative for the holders of Senior Indebtedness
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such 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 10. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article 10, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article 10, 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. The provisions of Sections 7.1 and 7.2 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
Section 10.13 Trustee to Effectuate Subordination. Each Holder by accepting
a Security authorizes and directs the Trustee on such ▇▇▇▇▇▇'s behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Company as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 10.14 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
contravention of this Indenture, pay over or distribute to Holders or the
Company or any other Person, money or assets to which any holders of Senior
Indebtedness of the Company shall be entitled by virtue of this Article 10 or
otherwise; provided, however, that nothing herein shall limit the Trustee's
liability for any such payment or distribution which results from the Trustee's
negligence or willful misconduct.
66
Section 10.15 Reliance by Holders of Senior Indebtedness on Subordination
Provisions. Each Holder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness of the Company,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall
be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
Section 10.16 Amendments. The provisions of this Article 10 shall not be
amended or modified without the written consent of the holders of all Senior
Indebtedness of the Company.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.2 Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
MemberWorks Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ No.: (▇▇▇) ▇▇▇-▇▇▇▇
67
if to the Trustee:
Deutsche Bank Trust Company Americas
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust and Agency Services
The Company or the Trustee by notice given to the other in the
manner provided above may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication given to a Securityholder shall be
mailed to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent, Conversion Agent or co-registrar.
Section 11.3 Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone else
shall have the protection of TIA Section 312(c).
Section 11.4 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent have been complied with.
Section 11.5 Statements Required in Certificate or Opinion. Each Officers'
Certificate or Opinion of Counsel with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that each Person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such Person, he has made such
examination or investigation as is necessary to enable such Person to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement that, in the opinion of such Person, such covenant or
condition has been complied with.
Section 11.6 Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Secton 11.7 Rules by Trustee, Paying Agent, Conversion Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 11.8 Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest, if any, shall accrue for the intervening
period.
Section 11.9 GOVERNING LAW; WAIVER OF JURY TRIAL. THIS INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 11.10 No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
68
Section 11.11 Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
Section 11.12 Multiple Originals. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 11.13 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.
69
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this
Indenture on behalf of the respective parties hereto as of the date first above
written.
MEMBERWORKS INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President and CFO
DEUTSCHE BANK TRUST COMPANY AMERICAS
As Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
70
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY EVIDENCED BY THIS CERTIFICATE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED
UNDER THE 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) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR ANY
OF ITS AFFILIATES WAS THE OWNER OF THIS SECURITY 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) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, (E) TO
AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IF
AVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER; AND
(2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(F)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
The foregoing legend may be removed from this Security on satisfaction
of the conditions specified in the Indenture.
A-2
MEMBERWORKS INCORPORATED
5.50% Convertible Senior Subordinated Notes due 2010
No. : ______________
CUSIP: 586002 AA 5
Issue Date: September 30, 2003 ISIN: US586002AA53
Principal Amount: $_________
MEMBERWORKS INCORPORATED, a Delaware corporation, promises to pay to Cede &
Co. or registered assigns, the principal amount of [_____________________
dollars ($__________)] on [October 1], 2010.
Interest Payment Dates: April 1 and October 1, commencing April 1, 2004.
Interest Payment Record Dates: March 15 and September 15.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
MEMBERWORKS INCORPORATED
By:
------------------------------------------------
Title:
---------------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By__________________________________
Authorized Signatory
Dated: ______, 200__
A-3
[FORM OF REVERSE OF GLOBAL SECURITY]
5.50% Convertible Senior Subordinated Notes due 2010
This Security is one of a duly authorized issue of the 5.50%
Convertible Senior Subordinated Notes due 2010 (the "Securities") of MemberWorks
Incorporated, a Delaware corporation (including any successor corporation under
the Indenture hereinafter referred to, the "Company"), issued under an
Indenture, dated as of September 30, 2003 (as it may be amended from time to
time in accordance with the terms thereof, the "Indenture"), between the Company
and Deutsche Bank Trust Company Americas, as trustee (the "Trustee"). The terms
of the Security include those stated in the Indenture, those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended ("TIA"),
and those set forth in this Security. This Security is subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
all such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control. Capitalized terms used but not defined
herein have the meanings assigned to them in the Indenture unless otherwise
indicated.
1. Status
Each Holder by accepting a Security agrees that the payment of
principal of, premium, if any, and interest on each Security is subordinated in
right of payment to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full of the Senior Indebtedness of the
Company (whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed), and the subordination is for the benefit of
the holders of such Senior Indebtedness.
2. Interest
The Company promises to pay Interest on the principal amount of the
Securities at the interest rate of 5.50% per annum (the "Interest Rate") from
the date of issuance until repayment in full at October 1, 2010, or until an
earlier conversion, redemption or repurchase. The Company will pay Interest on
this Security semi-annually in arrears on April 1 and October 1 of each year
(each, an "Interest Payment Date"), commencing April 1, 2004.
Interest on the Securities shall be computed (i) for any full
semi-annual period for which a particular Interest Rate is applicable, on the
basis of a 360-day year of twelve 30-day months and (ii) for any period for
which a particular Interest Rate is applicable for less than a full semiannual
period for which Interest is calculated, on the basis of a 30-day month and, for
such periods of less than a month, the actual number of days elapsed over a
30-day month.
If this Security is redeemed or repurchased by the Company on a date
that is after the record date and prior to the corresponding Interest Payment
Date, interest and Additional Amounts, if any, accrued and unpaid hereon to but
not including the applicable Redemption Date or Change of Control Purchase Date,
as the case may be, will be paid to the same Holder to whom the Company pays the
principal of this Security.
A-4
Interest on Securities converted after a record date but prior to the
corresponding Interest Payment Date will be paid to the Holder on the record
date but, upon conversion, the Holder must pay the Company the interest and
Additional Amounts, if any, which have accrued and will be paid on such Interest
Payment Date; provided, that no such payment need be made with respect to
Securities which will be redeemed by the Company after a record date and prior
to the third Business Day after the corresponding Interest Payment Date.
If the principal amount hereof or any portion of such principal amount
or any interest, including Additional Amounts, if any, on any Security is not
paid when due (whether upon acceleration pursuant to Section 6.2 of the
Indenture, upon the date set for payment of the Redemption Price pursuant to
Section 6 hereof or the Change of Control Purchase Price pursuant to Section 7
hereof or upon the Stated Maturity of this Security), then in each such case the
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and, to the extent such payments
are lawful, interest on overdue installments of interest ("Defaulted Interest")
without regard to any applicable grace periods at the rate of 2.0% per annum in
excess of the rate shown on this Note, as provided in the Indenture. Such
Defaulted Interest shall be compounded semi-annually, which interest shall
accrue from the date on which such overdue amount was originally due to the date
of payment of such amount, including interest thereon, has been made or duly
provided for.
3. Method of Payment.
Except as provided below, interest will be paid (i) on the Global
Securities to The Depository Trust Company ("DTC") or its nominee in immediately
available funds, (ii) on any definitive Securities having an aggregate principal
amount of $5,000,000 or less, by check mailed to the Holders of such Securities;
and (iii) on any definitive Securities having an aggregate principal amount of
more than $5,000,000, by wire transfer in immediately available funds at the
election of the Holders of such Securities. Holders of such Securities
requesting wire transfer must provide the Trustee (as defined below) with wire
transfer instructions at least 15 days prior to the relevant payment date.
At Stated Maturity the Company will pay interest on definitive
Securities at the Company's office or agency in New York City, which initially
will be the Corporate Trust and Agency Services of the Trustee in New York City.
Principal on Global Securities will be paid to DTC or its nominee in
immediately available funds. Principal on definitive Securities will be payable,
upon Stated Maturity or when due, at the office or agency of the Company in New
York City, maintained for such purpose, initially the Corporate Trust and Agency
Services of the Trustee in New York City.
Subject to the terms and conditions of the Indenture, the Company will
make payments in cash in respect of Redemption Prices, Change of Control
Purchase Prices and at Stated Maturity to Holders who surrender Securities to a
Paying Agent to collect such payments in respect of the Securities. The Company
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may make such cash payments by check payable in such money.
A-5
4. Paying Agent, Conversion Agent and Registrar.
Initially, Deutsche Bank Trust Company Americas will act as Paying
Agent, Conversion Agent and Registrar. The Company may appoint and change any
Paying Agent, Conversion Agent or Registrar without notice, other than notice to
the Trustee; provided that the Company will maintain at least one Paying Agent
in the State of New York, City of New York, Borough of Manhattan, which shall
initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent or Registrar.
5. Indenture.
The Securities are unsecured senior subordinated obligations of the
Company limited to $75,000,000 aggregate principal amount (up to $90,000,000
aggregate principal amount if the Initial Purchasers exercise their option to
purchase up to $15,000,000 aggregate principal amount of additional Securities).
The Indenture does not limit other indebtedness of the Company, secured or
unsecured.
6. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are not
redeemable by the Company prior to October 6, 2008. The Securities are
redeemable for cash at the option of the Company, in whole or in part, at any
time or from time to time, on or after October 6, 2008 upon not less than 30 nor
more than 60 days' notice (the "Redemption Notice") by mail for a Redemption
Price equal to the principal amount of those Securities plus accrued and unpaid
interest, including Additional Amounts, if any, thereon up to the Redemption
Date (the "Redemption Price").
If money sufficient to pay the Redemption Price of all Securities (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, interest will cease to accrue
on such Securities (or portions thereof) immediately after such Redemption Date,
and the Holders thereof shall have no other rights as such other than the right
to receive the Redemption Price upon surrender of such Securities. Securities in
denominations larger than $1,000 of principal amount may be redeemed in part but
only in integral multiples of $1,000 of principal amount.
7. Purchase By the Company at the Option of the Holder.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to offer to purchase the
Securities held by such Holder within 30 days after the occurrence of a Change
of Control of the Company for a Change of Control Purchase Price equal to the
principal amount of those Securities plus accrued and unpaid interest, including
Additional Amounts, if any, thereon up to the Change of Control Purchase Date.
The Change of Control Purchase Date shall be within 30 days of the Company's
delivery of the notice described in the preceding sentence, which shall be
delivered to all Holders and the Trustee. The Change of Control Purchase Price
shall be paid in cash.
A-6
Holders have the right to withdraw any Change of Control Purchase
Notice, as the case may be, by delivering to the Paying Agent a written notice
of withdrawal in accordance with the provisions of the Indenture.
If money sufficient to pay the Change of Control Purchase Price of all
Securities or portions thereof to be purchased as of the Change of Control
Purchase Date, is deposited with the Paying Agent prior to or on the Change of
Control Purchase Date, interest will cease to accrue on such Securities (or
portions thereof) immediately after such Change of Control Purchase Date, and
the Holders thereof shall have no other rights as such other than the right to
receive the Change of Control Purchase Price upon surrender of such Security.
8. Conversion.
Subject to and in compliance with the provisions of the Indenture, a
Holder is entitled, at such Holder's option, to convert the Holder's Security
(or any portion of the principal amount thereof that is $1,000 or an integral
multiple $1,000), into fully paid and nonassessable shares of Common Stock at
the Conversion Price in effect at the time of conversion.
A Security in respect of which a Holder has delivered a Change of
Control Purchase Notice, exercising the option of such Holder to require the
Company to purchase such Security, may be converted only if such Change of
Control Purchase Notice is withdrawn in accordance with the terms of the
Indenture.
The initial Conversion Price is $40.365 per share, subject to
adjustment in certain events described in the Indenture. No fractional shares of
Common Stock shall be issued upon conversion of any Security. Instead of any
fractional share of Common Stock that would otherwise be issued upon conversion
of such Security, the Company shall pay a cash adjustment as provided in the
Indenture.
To surrender a Security for conversion, a Holder must (1) complete and
manually sign the conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2)
surrender the Security to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents and (4) pay any transfer or similar tax, if
required by the Indenture.
If the Company (i) is a party to a consolidation, merger or binding
share exchange, (ii) reclassifies the Common Stock or (iii) conveys, transfers
or leases its properties and assets substantially as an entirety to any Person,
the right to convert a Security into shares of Common Stock may be changed into
a right to convert it into securities, cash or other assets of the Company or
such other Person, in each case in accordance with the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Change of Control Purchase Notice has been
given and not withdrawn (except, in the case of a Security to be purchased in
part, the portion of the Security not to be purchased) or any Securities for a
period of 15 days before the mailing of a notice of redemption of Securities to
be redeemed.
A-7
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding
Securities and (ii) certain Defaults may be waived with the written consent of
the Holders of a majority in aggregate principal amount of the outstanding
Securities. The Indenture and the Securities may also be amended by the Company
and the Trustee, without the consent of any Holder, in certain circumstances set
forth in the Indenture; provided, that certain provisions of the Indenture and
the Securities may not be amended without the consent of each affected Holder.
13. Defaults and Remedies.
If any Event of Default with respect to Securities shall occur and be
continuing, the principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
A-8
16. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
18. GOVERNING LAW; WAIVER OF JURY TRIAL.
THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THIS NOTE
OR THE TRANSACTION CONTEMPLATED HEREBY.
A-9
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
MEMBERWORKS INCORPORATED
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Investor Relations
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
19. Registration Rights.
The Holders of the Securities are entitled to the benefits of a Resale
Registration Rights Agreement, dated as of September 30, 2003, among the
Company, ▇▇▇▇▇▇ Brothers Inc., and CIBC World Markets Corp. including the
receipt of Additional Amounts upon a registration default (as defined in such
agreement).
A-10
------------------------------------------------- ------- --------------------------------------------
ASSIGNMENT FORM CONVERSION NOTICE
------------------------------------------------- ------- --------------------------------------------
------------------------------------------------- ------- --------------------------------------------
To assign this Security, fill in the form below: To convert this Security into Common Stock
of the Company, check the box [ ]
------------------------------------------------- ------- --------------------------------------------
------------------------------------------------- ------- --------------------------------------------
I or we assign and transfer this Security to To convert only part of this Security,
_________________________ state the principal amount to be converted
_________________________ (which must be $1,000 or an integral
(Insert assignee's soc. sec. or tax ID no.) multiple of $1,000):
-------------------------
------------------------- $------------------------
-------------------------
(Print or type assignee's name, address and zip If you want the stock certificate made out
code) in another person's name fill in the form
below:
and irrevocably appoint _________________________
-------------------------
____________________ agent to transfer this (Insert the other person's soc. sec. tax
Security on the books of the Company. The ID no.)
agent may substitute another to act for him.
==========================
==========================
--------------------------
(Print or type other person's name,
address and zip code)
------------------------------------------------- ------- --------------------------------------------
Date: __________ Your Signature: _________________________________
--------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed
--------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
By:_____________________________
Authorized Signatory
A-11
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ____________ ($___________).
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Date Amount of Increase Amount of Decrease in Principal Amount of Notation by
in Principal Amount Principal Amount of Global Security Registrar or
of Global Security Global Security After Increase or Security Custodian
Decrease
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A-12
EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
THIS SECURITY EVIDENCED BY THIS CERTIFICATE AND THE SHARES OF
COMMON ▇▇▇▇▇▇ UISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE 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) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH MEMBERWORKS OR ANY OF
ITS AFFILIATES WAS THE OWNER OF THIS SECURITY 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) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT,
IF AVAILABLE, (E) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT, IF AVAILABLE, OR (F) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER; AND
2) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE)
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
The foregoing legend may be removed from this Security on
satisfaction of the conditions specified in the Indenture.
MEMBERWORKS INCORPORATED
5.50% Convertible Senior Subordinated Notes due 2010
No.: _________ CUSIP: 86002 AA 5
ISIN: US586002AA53
Issue Date: September 30, 2003 Principal Amount: $_________
MEMBERWORKS INCORPORATED, a Delaware corporation, promises to pay to
___________________ or registered assigns, the principal amount of [_________
dollars ($_________ )] on [October 1], 2010.
Interest Payment Dates: April 1 and October 1, commencing April 1, 2004.
Interest Payment Record Dates: March 15 and September 15.
Reference is hereby made to the further provisions of this
Security set forth on the reverse side of this Security, which further
provisions shall for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
MEMBERWORKS INCORPORATED
By: _______________________
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By ________________________
Authorized Signatory
Dated:
B-2
[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]
EXHIBIT C
5.50% Convertible Senior Subordinated Notes due 2010
Transfer Certificate
In connection with any transfer of any of the Securities or beneficial
interest in a Global Security that is a Restricted Security within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision), the undersigned registered owner or
beneficial owner of this Security hereby certifies with respect to $____________
principal amount of the above-captioned Securities (the "Surrendered
Securities") presented or surrendered on the date hereof for registration of
transfer, or for exchange or conversion where the securities issuable upon such
exchange or conversion are to be registered in a name other than that of the
undersigned registered or beneficial owner (each such transaction being a
"transfer"), that such transfer complies with the restrictive legend set forth
on the face of the Surrendered Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is
made to the Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities
is to a qualified institutional buyer as
defined and in all other respects in
compliance with Rule 144A under the
Securities Act; or
[_] The transfer of the Surrendered Securities
is to an institutional accredited investor
within the meaning of and all other respects
in compliance with Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities
Act; or
[_] The transfer of the Surrendered Securities
is pursuant to an effective registration
statement under the Securities Act; or
[_] The transfer of the Surrendered Securities
is pursuant to another available exemption
from the registration requirement of the
Securities Act;
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: __________________________________
Signature(s)
(If the registered owner is a corporation,
partnership or fiduciary, the title of the person
signing on behalf of such registered owner must be
stated.)
Signature Guarantee:
--------------------------------
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee.
C-2