1
EXHIBIT 4.1
VLSI TECHNOLOGY, INC.
AND
--------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
AS TRUSTEE
--------------
$150,000,000
8 1/4% Convertible Subordinated Notes due 2005*
--------------
INDENTURE
Dated as of September 1, 1995
_______________________
*Plus an over-allotment option to purchase up to $22,500,000 principal amount of
8 1/4% Convertible Subordinated Notes.
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.03 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . 7
SECTION 1.04 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2 - THE CONVERTIBLE SUBORDINATED NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.02 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.03 Registrar, Paying Agent and Conversion Agent . . . . . . . . . . . . . . . 10
SECTION 2.04 Paying Agent To Hold Money in Trust . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.05 Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.07 Replacement Convertible Subordinated Notes . . . . . . . . . . . . . . . . 11
SECTION 2.08 Outstanding Convertible Subordinated Notes . . . . . . . . . . . . . . . . 12
SECTION 2.09 When Treasury Convertible Subordinated Notes Disregarded . . . . . . . . . 13
SECTION 2.10 Temporary Convertible Subordinated Notes . . . . . . . . . . . . . . . . . 13
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.13 CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3 - REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.02 Selection of Convertible Subordinated Notes To Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.06 Convertible Subordinated Notes Redeemed in Part . . . . . . . . . . . . . . 17
SECTION 3.07 Conversion Arrangement on Call for Redemption . . . . . . . . . . . . . . . 17
ARTICLE 4 - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.01 Payment of Convertible Subordinated Notes . . . . . . . . . . . . . . . . . 18
SECTION 4.02 Commission Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.03 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.04 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.05 Continued Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-i-
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
SECTION 4.06 Repurchase Upon Designated Event . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.07 Appointments to Fill Vacancies in Trustee's Office . . . . . . . . . . . . 21
SECTION 4.08 Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 5 - SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.01 When the Company May Merge, Etc. . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.02 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.03 Purchase Option on Change of Control . . . . . . . . . . . . . . . . . . . 23
ARTICLE 6 - DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 6.07 Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . 28
SECTION 6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 7 - THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.01 Duties of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.02 Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.03 Individual Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.06 Reports by the Trustee to Holders . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.08 Replacement of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.09 Successor Trustee by Merger, etc . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.10 Eligibility, Disqualification . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.11 Preferential Collection of Claims Against Company . . . . . . . . . . . . . 35
ARTICLE 8 - SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.01 Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.02 Deposited Monies to be Held in Trust by Trustee . . . . . . . . . . . . . . 36
SECTION 8.03 Paying Agent to Repay Monies Held . . . . . . . . . . . . . . . . . . . . . 37
-ii-
4
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
SECTION 8.04 Return of Unclaimed Monies . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.05 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 9 - AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.01 Without the Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.02 With the Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 9.03 Compliance with the Trust Indenture Act . . . . . . . . . . . . . . . . . . 40
SECTION 9.04 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.05 Notation on or Exchange of Convertible Subordinated Notes . . . . . . . . . 40
SECTION 9.06 Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 10 - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.03 Communication by Holders With Other Holders . . . . . . . . . . . . . . . . 42
SECTION 10.04 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . 42
SECTION 10.05 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . 42
SECTION 10.06 Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.07 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.08 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.10 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.12 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . 45
SECTION 10.13 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.15 Table of Contents, Headings, Etc . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 11 - SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.01 Agreement to Subordinate. . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.02 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . 46
SECTION 11.03 Default on Senior Debt and/or Designated Senior Debt . . . . . . . . . . . 47
SECTION 11.04 Acceleration of Convertible Subordinated Notes . . . . . . . . . . . . . . 48
SECTION 11.05 When Distribution Must Be Paid Over . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.06 Notice by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.07 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.08 Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.09 Subordination May Not Be Impaired by Company . . . . . . . . . . . . . . . 49
SECTION 11.10 Distribution or Notice to Representative . . . . . . . . . . . . . . . . . 50
-iii-
5
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
SECTION 11.11 Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.12 Authorization to Effect Subordination . . . . . . . . . . . . . . . . . . . 50
SECTION 11.13 Article Applicable to Paying Agents. . . . . . . . . . . . . . . . . . . . 51
SECTION 11.14 Senior Debt Entitled to Rely. . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 12 - CONVERSION OF CONVERTIBLE SUBORDINATED NOTES . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 12.01 Right to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 12.02 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for
Interest or Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12.03 Cash Payments in Lieu of Fractional Shares . . . . . . . . . . . . . . . . 53
SECTION 12.04 Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.05 Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.06 Effect of Reclassification, Consolidation, Merger or Sale . . . . . . . . . 63
SECTION 12.07 Taxes on Shares Issued . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 12.08 Reservation of Shares; Shares to Be Fully Paid;
Listing of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 12.09 Responsibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 12.10 Notice to Holders Prior to Certain Actions . . . . . . . . . . . . . . . . 66
-iv-
6
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 7.11
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.08, 7.10, 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 10.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06, 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01, 10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.05, 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(2)(B) . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.02
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
N.A. means not applicable.
----------
*This Cross-Reference Table is not part of the Indenture.
-v-
7
THIS INDENTURE, dated as of September 1, 1995, is between VLSI
Technology, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ Trust and
Savings Bank (the "Trustee"). The Company has duly authorized the creation of
its 8 1/4% Convertible Subordinated Notes due 2005 (the "Convertible
Subordinated Notes") and to provide therefor the Company and the Trustee have
duly authorized the execution and delivery of this Indenture. Each party agrees
as follows for the benefit of the other party and for the equal and ratable
benefit of the holders from time to time of the Convertible Subordinated Notes.
ARTICLE 1
DEFINITIONS
SECTION 1.01 Definitions.
"Affiliate" means, when used with reference to any person, any other
person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, the referent person, as the case may be. 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 management or
policies of the referent person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Change of Control" means the occurrence of one or more of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of shares
representing more than 50% of the combined voting power of the then outstanding
securities entitled to vote generally in elections of directors of the Company
(the "Voting Stock"), (b) the Company consolidates with or merges into any other
corporation, or conveys, transfers, or leases all or substantially all of its
assets to any person, or any other corporation merges into the Company, and, in
the case of any such transaction, the outstanding Common Stock of the Company is
changed or exchanged as a result, unless the stockholders of the Company
immediately before such transaction own, directly or indirectly immediately
following such transaction, at least a majority of the combined voting power of
the outstanding voting securities of the corporation resulting from such
transaction in substantially the same proportion as their ownership of the
Voting Stock of the Company immediately before such transaction, or (c) any time
the Continuing Directors do not constitute a majority of the Board of Directors
of the Company (or, if applicable, a successor corporation to the Company);
provided that a Change of Control shall not be deemed to have occurred if either
(y) the last sale price of the Common Stock for any
1
8
five trading days during the ten trading days immediately preceding the Change
of Control is at least equal to 105% of the Conversion Price in effect on the
date of such Change of Control or (z) at least 90% of the consideration
(excluding cash payments for fractional shares) in the transaction or
transactions constituting the Change of Control consists of shares of common
stock that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 12.06, however, shares issuable on conversion of Convertible
Subordinated Notes shall include only shares of the class designated as Common
Stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the party named as such above until a successor
replaces it in accordance with Article 5 and thereafter means the successor.
A "consolidated subsidiary" of any person means a subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such person as a consolidated subsidiary.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of the Indenture or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"Convertible Subordinated Notes" means the Convertible Subordinated
Notes issued under this Indenture.
"Conversion Price" means the initial conversion price specified in the
form of Note in Section 17 of such form, as adjusted in accordance with the
provisions of Article 12.
2
9
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time its corporate business shall principally
be administered; as of the date hereof, the Corporate Trust Office is located at
▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
"Credit Agreement" means that certain Credit Agreement, dated as of
June 6, 1994, by and among the Company and the Lenders named therein and Bank of
America Illinois (as successor to Continental Bank N.A.), as Agent, providing
for up to $52,500,000 of revolving credit borrowings, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"Default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Designated Senior Debt" means any particular Senior Debt with respect
to which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such Indebtedness shall be "Designated Senior
Debt" for purposes of the Indenture (provided that such instrument, agreement or
other document may place limitations and conditions on the right of such Senior
Debt to exercise the rights of Designated Senior Debt.)
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.
"Indebtedness" means, with respect to any person, all obligations,
whether or not contingent, of such person (i) (a) for borrowed money (including,
but not limited to, any indebtedness secured by a security interest, mortgage or
other lien on the assets of the Company which is (1) given to secure all or part
of the purchase price of property subject thereto, whether given to the vendor
of such property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note, debenture, bond or other written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the lessee under GAAP or under any lease or related document (including a
purchase agreement) which provides that the Company is contractually obligated
to purchase or cause
3
10
a third party to purchase and thereby guarantee a minimum residual value of the
lease property to the lessor and the obligations of the Company under such lease
or related document to purchase or to cause a third party to purchase such
leased property, (d) in respect of letters of credit, bank guarantees or
bankers' acceptances (including reimbursement obligations with respect to any of
the foregoing), (e) with respect to Indebtedness secured by a mortgage, pledge,
lien, encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such person are subject, whether
or not the obligation secured thereby shall have been assumed by or shall
otherwise be such person's legal liability, (f) in respect of the balance of
deferred and unpaid purchase price of any property or assets, (g) under interest
rate or currency swap agreements, cap, floor and collar agreements, spot and
forward contracts and similar agreements and arrangements; (ii) with respect to
any obligation of others of the type described in the preceding clause (i) or
under clause (iii) below assumed by or guaranteed in any manner by such person
or in effect guaranteed by such person through an agreement to purchase
(including, without limitation, "take or pay" and similar arrangements),
contingent or otherwise (and the obligations of such person under any such
assumptions, guarantees or other such arrangements); and (iii) any and all
deferrals, renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any of the foregoing.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Payment Date" means April 1 and October 1 of each year.
"Issue Date" means the date on which the Convertible Subordinated Notes
are originally issued under this Indenture.
"Material Subsidiary" means, at any date of determination, any
subsidiary of the Company that, together with its subsidiaries, as of the end of
such fiscal year, was the owner of more than 25% of the consolidated assets of
the Company, after eliminating any inter-company receivables of such subsidiary,
all as set forth on the most recently available consolidated financial
statements of the Company and its consolidated subsidiaries for such fiscal year
prepared in conformity with GAAP.
"Maturity Date" means October 1, 2005.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President (whether or
not designated by a number or numbers or word or words before or after the title
"Vice President"), the Treasurer, any
4
11
other executive officer, the Secretary and any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers, one
of whom must be the principal executive officer, principal financial officer or
principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who may
be an employee of or counsel to the Company or the Trustee except to the extent
otherwise indicated in this Indenture.
A "person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"redemption date" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the date fixed by the Company for such
redemption pursuant to Article 3 of this Indenture and the Convertible
Subordinated Notes.
"redemption price" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the price fixed for such redemption
pursuant to Article 3 of this Indenture and the Convertible Subordinated Notes.
"Regular Record Date" means the March 15 or September 15 immediately
preceding each Interest Payment Date.
"Representative" means the (a) Indenture trustee or other trustee,
agent or representative for any Senior Debt or (b) with respect to any Senior
Debt that does not have any such trustee, agent or other representative, (i) in
the case of such Senior Debt issued pursuant to an agreement providing for
voting arrangements as among the holders or owners of such Senior Debt, any
holder or owner of such Senior Debt acting with the consent of the required
persons necessary to bind such holders or owners of such Senior Debt and (ii) in
the case of all other such Senior Debt, the holder or owner of such Senior Debt.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Debt" means the principal of, premium, if any, and interest on,
rent under, and any other amounts payable on or in respect of the Credit
Agreement and any other Indebtedness of the Company (including, without
limitation, any Obligations in respect of such Indebtedness and, in the case of
Designated Senior Debt, any interest accruing after the filing of a petition by
or against the Company under any bankruptcy law, whether or not allowed as a
claim after such filing in any proceeding under such bankruptcy law), whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed
5
12
or in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to the
foregoing); provided, however, that Senior Debt does not include (v)
Indebtedness evidenced by the Convertible Subordinated Notes, (w) any liability
for federal, state, local or other taxes owed or owing by the Company, (x)
Indebtedness of the Company to any subsidiary of the Company except to the
extent such Indebtedness is of a type described in clause (ii) of the definition
of Indebtedness, (y) trade payables of the Company (other than, to the extent
they may otherwise constitute trade payables, any obligations of the type
described in clause (ii) of the definition of Indebtedness), and (z) any
particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Indebtedness shall
not be senior in right of payment to, or is pari passu with, or is subordinated
or junior to, the Convertible Subordinated Notes.
A "subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other subsidiaries of that person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such person or a subsidiary of such person or (b)
the only general partners of which are such person or of one or more
subsidiaries of such person (or any combination thereof).
"Termination of Trading" means a date when the Common Stock (or other
common stock into which the Convertible Subordinated Notes are then convertible)
is neither listed for trading on a United States national securities exchange
nor approved for trading on an established automated over-the-counter trading
market in the United States.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
Section 77aaa-77bbbb) as in effect on the date of execution of this Indenture,
except as provided in Sections 9.03 and 12.06.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporation trust matters.
"U.S. Government Obligations" means direct obligation of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on
6
13
the Convertible Subordinated Notes, the U.S. Government Obligations shall be
payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
SECTION 1.02 Other Definitions.
Defined in
Section
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . 6.01
"business day" . . . . . . . . . . . . . . . . . . . . . . . . 10.07
"Current Market Price" . . . . . . . . . . . . . . . . . . . . 12.05
"closing price" . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"Conversion Agent" . . . . . . . . . . . . . . . . . . . . . . 2.03
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Designated Event Date" . . . . . . . . . . . . . . . . . . . . 4.06
"Designated Event Offer" . . . . . . . . . . . . . . . . . . . 4.06
"Designated Event Offer Termination Date" . . . . . . . . . . . 4.06
"Designated Event Payment" . . . . . . . . . . . . . . . . . . 4.06
"Designated Event Payment Date" . . . . . . . . . . . . . . . . 4.06
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . 6.01
"Expiration Time" . . . . . . . . . . . . . . . . . . . . . . . 12.05
"fair market value" . . . . . . . . . . . . . . . . . . . . . . 12.05
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . 10.07
"New Rights Plan . . . . . . . . . . . . . . . . . . . . . . . 12.05
"non-electing share" . . . . . . . . . . . . . . . . . . . . . 12.06
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . . . 10.04
"Purchased Shares" . . . . . . . . . . . . . . . . . . . . . . 12.05
"Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"Rights Plan" . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"Securities" . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"trading day" . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"Trigger Event" . . . . . . . . . . . . . . . . . . . . . . . . 12.05
"United States Government Obligations" . . . . . . . . . . . . 8.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
7
14
"Commission" means the Commission;
"indenture securities" means the Convertible Subordinated
Notes;
"indenture security holder" means a holder of a Convertible
Subordinated Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Convertible Subordinated Notes means the
Company or any other obligor on the Convertible Subordinated Notes.
All other terms in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 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 GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE 2
THE CONVERTIBLE SUBORDINATED NOTES
SECTION 2.01 Form and Dating.
The Convertible Subordinated Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form set forth in
Exhibit A, which is part of this Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture. The Convertible Subordinated Notes may have
8
15
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall approve the form of the Convertible Subordinated Notes
and any notation, legend or endorsement on them. Each Convertible Subordinated
Note shall be dated the date of its authentication.
The terms and provisions contained in the Convertible Subordinated
Notes shall constitute, and are hereby expressly made, a part of this Indenture
and, to the extent applicable, the Company and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby.
SECTION 2.02 Execution and Authentication.
Two Officers shall sign the Convertible Subordinated Notes for the
Company by manual or facsimile signature. The Company's seal shall be reproduced
on the Convertible Subordinated Notes.
If an Officer whose signature is on a Convertible Subordinated Note no
longer holds that office at the time the Convertible Subordinated Note is
authenticated, the Convertible Subordinated Note shall nevertheless be valid.
A Convertible Subordinated Note shall not be valid until authenticated
by the manual signature of the Trustee. The signature shall be conclusive
evidence that the Convertible Subordinated Note has been authenticated under
this Indenture.
Upon a written order of the Company signed by an Officer of the
Company, the Trustee shall authenticate Convertible Subordinated Notes for
original issue up to an aggregate principal amount of $150,000,000 (plus up to
$22,500,000 aggregate principal amount of Convertible Subordinated Notes that
may be sold by the Company pursuant to the over-allotment option granted
pursuant to the Underwriting Agreement, dated as of September 7, 1995, among the
Company and Salomon Brothers Inc, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇▇▇▇
Securities). The aggregate principal amount of Convertible Subordinated Notes
outstanding at any time may not exceed that amount except as provided in Section
2.07.
The Convertible Subordinated Notes shall be issuable only in registered
form without coupons and only in denominations of $1,000 or any integral
multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Convertible Subordinated Notes. An authenticating agent
may authenticate Convertible Subordinated Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same right as an
Agent to deal with the Company or an Affiliate of the Company.
9
16
SECTION 2.03 Registrar, Paying Agent and Conversion Agent.
The Company shall maintain or cause to be maintained in such locations
as it shall determine, which may be the Corporate Trust Office, an office or
agency: (i) where securities may be presented for registration of transfer or
for exchange ("Registrar"); (ii) where Convertible Subordinated Notes may be
presented for payment ("Paying Agent"); (iii) an office or agency where
Convertible Subordinated Notes may be presented for conversion (the "Conversion
Agent"); and (iv) where notices and demands to or upon the Company in respect of
Convertible Subordinated Notes and this Indenture may be served by the holders
of the Convertible Subordinated Notes. The Registrar shall keep a register of
the Convertible Subordinated Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars, one or more additional paying
agents and one or more additional conversion agents. The term "Paying Agent"
includes any additional paying agent and the term "Conversion Agent" includes
any additional Conversion Agent. The Company may change any Paying Agent,
Registrar, Conversion Agent or co-registrar without prior notice. The Company
shall notify the Trustee of the name and address of any Agent not a party to
this Indenture and shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar not a party to this
Indenture. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company or any of its subsidiaries may act as Paying
Agent, Registrar, Conversion Agent or co-registrar, except that for purposes of
Articles 3 and 8 and Section 4.06, neither the Company nor any of its
subsidiaries shall act as Paying Agent. If the Company fails to appoint or
maintain another entity as Registrar, or Paying Agent or Conversion Agent, the
Trustee shall act as such, and the Trustee shall initially act as such.
SECTION 2.04 Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent (other than the Trustee,
who hereby so agrees), to agree in writing that the Paying Agent will hold in
trust for the benefit of holders of the Convertible Subordinated Notes or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Convertible Subordinated Notes, and will notify the Trustee of
any default by the Company in respect of making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a subsidiary of the Company) shall
have no further liability for the money. If the Company or a subsidiary of the
Company acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the holders of the Convertible Subordinated Notes all
money held by it as Paying Agent.
SECTION 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
holders of Convertible Subordinated
10
17
Notes and shall otherwise comply with TIA Section 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven business
days before each Interest Payment Date, and as the Trustee may request in
writing within fifteen (15) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form and as of such date as the Trustee may reasonably require of the
names and addresses of holders of Convertible Subordinated Notes.
SECTION 2.06 Transfer and Exchange.
When Convertible Subordinated Notes are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Convertible Subordinated Notes for other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall issue and the Trustee shall
authenticate Convertible Subordinated Notes at the Registrar's request, bearing
registration numbers not contemporaneously outstanding. No service charge shall
be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06, 9.05 or 12.02.
The Company shall not be required (i) to issue, register the transfer
of or exchange Convertible Subordinated Notes during a period beginning at the
opening of business fifteen (15) days before the day of any selection of
Convertible Subordinated Notes for redemption under Section 3.02 and ending at
the close of business on the day of selection, (ii) to register the transfer or
exchange of any Convertible Subordinated Note so selected for redemption in
whole or in part, except the unredeemed portion of any Convertible Subordinated
Note being redeemed in part or (iii) to register the transfer of any Convertible
Subordinated Notes surrendered for repurchase pursuant to Section 4.06.
All Convertible Subordinated Notes issued upon any transfer or exchange
of Convertible Subordinated Notes in accordance with this Indenture shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture as the Convertible Subordinated Notes
surrendered upon such registration of transfer or exchange.
SECTION 2.07 Replacement Convertible Subordinated Notes.
If the holder of a Convertible Subordinated Note claims that the
Convertible Subordinated Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Convertible
Subordinated Note if the Trustee's requirements are met. If required by the
Trustee or the Company as a condition of receiving a replacement Convertible
Subordinated Note, the holder of a Convertible Subordinated Note
11
18
must provide a certificate of loss and an indemnity and/or an indemnity bond
sufficient, in the judgment of both the Company and the Trustee, to fully
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss, liability, cost or expense which any of them may suffer or incur if
the Convertible Subordinated Note is replaced. The Company and the Trustee may
charge the relevant holder for their expenses in replacing any Convertible
Subordinated Note.
The Trustee or any authenticating agent may authenticate any such
substituted Convertible Subordinated Note, and deliver the same upon the receipt
of such security or indemnity as the Trustee, the Company and, if applicable,
such authenticating agent may require. Upon the issuance of any substituted
Convertible Subordinated Note, 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 connected therewith. In case any
Convertible Subordinated Note which has matured or is about to mature, or has
been called for redemption pursuant to Article 3, submitted for repurchase
pursuant to Section 4.06 or is about to be converted into Common Stock pursuant
to Article 12, shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Convertible Subordinated Note, pay
or authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Convertible
Subordinated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
the authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable, any paying
agent or conversion agent of the destruction, loss or theft of such Convertible
Subordinated Note and of the ownership thereof.
Every replacement Convertible Subordinated Note is an additional
obligation of the Company.
SECTION 2.08 Outstanding Convertible Subordinated Notes.
The Convertible Subordinated Notes outstanding at any time are all the
Convertible Subordinated Notes properly authenticated by the Trustee except for
those cancelled by the Trustee, those delivered to it for cancellation, and
those described in this Section as not outstanding.
If a Convertible Subordinated Note is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory
to it that the replaced Convertible Subordinated Note is held by a bona fide
purchaser.
If Convertible Subordinated Notes are considered paid under Section
4.01 or converted under Article 12, they cease to be outstanding and interest on
them ceases to accrue.
12
19
Subject to Section 2.09 hereof, a Convertible Subordinated Note does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Convertible Subordinated Note.
SECTION 2.09 When Treasury Convertible Subordinated Notes Disregarded.
In determining whether the holders of the required principal amount of
Convertible Subordinated Notes have concurred in any direction, waiver or
consent, Convertible Subordinated Notes owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Convertible Subordinated
Notes which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Convertible Subordinated Notes.
Until definitive Convertible Subordinated Notes are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be
substantially in the form of definitive Convertible Subordinated Notes but may
have variations that the Company considers appropriate for temporary Convertible
Subordinated Notes. If temporary Convertible Subordinated Notes are issued, the
Company will cause definitive Convertible Subordinated Notes to be prepared
without unreasonable delay. After the preparation of definitive Convertible
Subordinated Notes, the temporary Convertible Subordinated Notes shall be
exchangeable for definitive Convertible Subordinated Notes upon surrender of the
temporary Convertible Subordinated Notes at any office or agency of the Company
designated pursuant to Section 2.03 without charge to the holder of the
Convertible Subordinated Note. Upon surrender for cancellation of any one or
more temporary Convertible Subordinated Notes the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Convertible Subordinated Notes of authorized denominations.
Until so exchanged, the temporary Convertible Subordinated Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Convertible Subordinated Notes.
SECTION 2.11 Cancellation.
The Company at any time may deliver Convertible Subordinated Notes to
the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any Convertible Subordinated Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel Convertible Subordinated Notes surrendered for registration of transfer,
exchange, payment, replacement, conversion, redemption, repurchase or
cancellation and shall dispose of cancelled Convertible Subordinated Notes as
the Company directs, provided that the Trustee shall not be required to destroy
such Convertible Subordinated Notes. The Company may not issue new
13
20
Convertible Subordinated Notes to replace Convertible Subordinated Notes that it
has paid, redeemed or repurchased or that have been delivered to the Trustee for
cancellation or that any holder has (i) converted pursuant to Article 12 hereof,
(ii) submitted for redemption pursuant to Article 3 hereof or (iii) submitted
for repurchase pursuant to Section 4.06 hereof (unless revoked).
SECTION 2.12 Defaulted Interest.
If the Company fails to make a payment of interest on the Convertible
Subordinated Notes, it shall pay such defaulted interest plus, to the extent
lawful, any interest payable on the defaulted interest. It may pay such
defaulted interest, plus any such interest payable on it, to the persons who are
holders of Convertible Subordinated Notes on a subsequent special record date.
The Company shall fix any such record date and payment date. At least 15 days
before any such record date, the Company shall mail to holders of the
Convertible Subordinated Notes a notice that states the record date, payment
date and amount of such interest to be paid.
SECTION 2.13 CUSIP Number.
The Company in issuing the Convertible Subordinated Notes may use a
"CUSIP" number, and if so, such CUSIP number shall be included in notices of
redemption, repurchase or exchange as a convenience to holders of Convertible
Subordinated Notes; provided, however, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Convertible Subordinated Notes and that reliance
may be placed only on the other identification numbers printed on the
Convertible Subordinated Notes. The Company will promptly notify the Trustee of
any change in the CUSIP number.
ARTICLE 3
REDEMPTION
SECTION 3.01 Notices to Trustee.
If the Company elects to redeem Convertible Subordinated Notes pursuant
to the optional redemption provisions of paragraph 5 of the Convertible
Subordinated Notes, it shall furnish to the Trustee, at least 15 (20 if less
than all of the then outstanding Convertible Subordinated Notes are to be
redeemed or if the Company requests the Trustee to give notice of redemption
pursuant to Section 3.03) days but not more than 60 days before a redemption
date (unless a shorter period shall be satisfactory to the Trustee), an
Officers' Certificate setting forth (i) the Section of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Convertible Subordinated Notes (if less than all) to be
redeemed and (iv) the redemption price.
14
21
SECTION 3.02 Selection of Convertible Subordinated Notes To Be Redeemed.
If less than all the Convertible Subordinated Notes are to be redeemed,
the Trustee shall select the Convertible Subordinated Notes to be redeemed by
lot or pro rata or by a method that complies with the requirements of any
exchange on which the Convertible Subordinated Notes are listed or quoted that
the Trustee considers fair and appropriate. The Trustee shall make the selection
not more than 60 days and not less than 15 days before the redemption date from
Convertible Subordinated Notes outstanding not previously called for redemption.
The Trustee may select for redemption portions of the principal of Convertible
Subordinated Notes that have a denomination larger than $1,000 or integral
multiple thereof. Convertible Subordinated Notes and portions thereof will be
redeemed in the amount of $1,000 or integral multiples of $1,000. Provisions of
this Indenture that apply to Convertible Subordinated Notes called for
redemption also apply to portions of Convertible Subordinated Notes called for
redemption. The Trustee shall notify the Company promptly of the Convertible
Subordinated Notes or portions of Convertible Subordinated Notes to be called
for redemption.
SECTION 3.03 Notice of Redemption.
At least 15 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each holder whose Convertible
Subordinated Notes are to be redeemed.
The notice shall identify the Convertible Subordinated Notes to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Convertible Subordinated Note is being redeemed in
part, the portion of the principal amount of such Convertible
Subordinated Note to be redeemed and that, after the redemption date,
upon surrender of such Convertible Subordinated Note, a new Convertible
Subordinated Note or Convertible Subordinated Notes in principal amount
equal to the unredeemed portion will be issued;
(4) that Convertible Subordinated Notes called for redemption
must be surrendered to the Paying Agent to collect the redemption
price;
(5) that interest on Convertible Subordinated Notes called for
redemption and for which funds have been set apart for payment, ceases
to accrue on and after the redemption date (unless the Company defaults
in the payment of the redemption price);
15
22
(6) the Paragraph of the Convertible Subordinated Notes
pursuant to which the Convertible Subordinated Notes are being
redeemed;
(7) the aggregate principal amount of Convertible Subordinated
Notes (if less than all) that are being redeemed;
(8) the CUSIP number of the Convertible Subordinated Notes
(provided that the disclaimer permitted by Section 2.13 may be made);
(9) the name and address of the Paying Agent;
(10) that Convertible Subordinated Notes called for redemption
may be converted at any time prior to the close of business on the last
trading day immediately preceding the redemption date and if not
converted prior to the close of business on such date, the right of
conversion will be lost; and
(11) that in the case of Convertible Subordinated Notes or
portions thereof called for redemption on a date that is also an
Interest Payment Date, the interest payment due on such date shall be
paid to the person in whose name the Convertible Subordinated Note is
registered at the close of business on the relevant Regular Record
Date.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at its expense.
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed, Convertible Subordinated Notes
called for redemption become due and payable on the redemption date at the
redemption price set forth in the Convertible Subordinated Note.
SECTION 3.05 Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the redemption price of and accrued interest on all Convertible
Subordinated Notes to be redeemed on that date. The Trustee or the Paying Agent
shall return to the Company any money not required for that purpose.
On and after the redemption date, unless the Company shall default in
the payment of the redemption price, interest will cease to accrue on the
principal amount of the Convertible Subordinated Notes or portions thereof
called for redemption and for which funds have been set apart for payment. In
the case of Convertible Subordinated Notes or portions thereof redeemed on a
redemption date which is also an Interest Payment Date, the interest payment
16
23
due on such date shall be paid to the person in whose name the Convertible
Subordinated Note is registered at the close of business on the relevant Regular
Record Date.
SECTION 3.06 Convertible Subordinated Notes Redeemed in Part.
Upon surrender of a Convertible Subordinated Note that is redeemed in
part, the Company shall issue and the Trustee shall authenticate for the holder
of a Convertible Subordinated Note at the expense of the Company a new
Convertible Subordinated Note equal in principal amount to the unredeemed
portion of the Convertible Subordinated Note surrendered.
SECTION 3.07 Conversion Arrangement on Call for Redemption.
In connection with any redemption of Convertible Subordinated Notes,
the Company may arrange for the purchase and conversion of any Convertible
Subordinated Notes by an arrangement with one or more investment bankers or
other purchasers to purchase such Convertible Subordinated Notes by paying to
the Trustee in trust for the holders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to the date fixed for redemption, of such Convertible
Subordinated Notes. Notwithstanding anything to the contrary contained in this
Article 3, the obligation of the Company to pay the redemption price of such
Convertible Subordinated Notes, together with interest accrued to the date fixed
for redemption, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by the purchasers. If such an agreement is entered into,
a copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Convertible Subordinated Notes not duly surrendered for
conversion by the holders thereof may, at the option of the Company, be deemed,
to the fullest extent permitted by law, acquired by such purchasers from such
holders and (notwithstanding anything to the contrary contained in Article 12)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption (and the right to convert
any such Convertible Subordinated Notes shall be deemed to have been extended
through such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Convertible Subordinated Notes. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Convertible Subordinated Notes
shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Convertible Subordinated Notes between
the Company and such purchasers to which the Trustee has not consented in
writing, including the costs and expenses incurred by the Trustee in the defense
of any claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this Indenture.
17
24
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Convertible Subordinated Notes.
The Company shall pay the principal of and interest on the Convertible
Subordinated Notes on the dates and in the manner provided in the Convertible
Subordinated Notes. Principal, interest, the redemption price and the Designated
Event Payment shall be considered paid on the date due if the Trustee or Paying
Agent (other than the Company or a subsidiary of the Company) holds as of 10:00
a.m. New York City time on that date immediately available funds designated for
and sufficient to pay all principal, interest, the redemption price and the
Designated Event Payment then due, provided, however, that money held by the
Agent for the benefit of holders of Senior Debt pursuant to the provisions of
Article 11 hereof or the payment of which to the holders of the Convertible
Subordinated Notes is prohibited by Article 11 shall not be considered to be
designated for the payment of any principal of or interest on the Convertible
Subordinated Notes within the meaning of this Section 4.01.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by Convertible Subordinated Notes,
compounded semiannually; and (ii) overdue installments of interest (without
regard to any applicable grace period) at the same rate, compounded
semiannually.
SECTION 4.02 Commission Reports.
The Company shall comply with Section 314(a) of the TIA.
SECTION 4.03 Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has fully performed its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge, the Company
is not in default in the performance or observance of any of the terms and
conditions hereof (or, if any Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge) and, that to the best of his or her knowledge, no event has occurred
and remains in existence by reason of which payments on account of the principal
of or interest on the Convertible Subordinated Notes are prohibited.
18
25
The Company shall, so long as any of the Convertible Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default.
SECTION 4.04 Maintenance of Office or Agency.
The Company shall maintain or cause to be maintained the office or
agency required under Section 2.03. The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency not maintained by the Trustee. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, presentations, surrenders, notices and demands
with respect to the Convertible Subordinated Notes may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Convertible Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designation.
SECTION 4.05 Continued Existence.
Subject to Article 5, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 4.06 Repurchase Upon Designated Event.
Following a Designated Event (the date of each such occurrence being
the "Designated Event Date"), the Company shall notify the holders of
Convertible Subordinated Notes in writing of such occurrence and shall make an
offer (the "Designated Event Offer") to repurchase all Convertible Subordinated
Notes then outstanding at a repurchase price (the "Designated Event Payment")
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to, but excluding, the Designated Event Payment Date (as defined below).
Notice of a Designated Event shall be mailed by or at the direction of
the Company to the holders of Convertible Subordinated Notes as shown on the
register of such holders maintained by the Registrar not less than 20 days after
the applicable Designated Event Date at the addresses as shown on the register
of holders maintained by the Registrar, with a copy to the Trustee and the
Paying Agent. The Designated Event Offer shall remain open until a specified
date (the "Designated Event Offer Termination Date") which is at least 20
business days from the date such notice is mailed. During the period specified
in such notice, holders of Convertible Subordinated Notes may elect to tender
their Convertible Subordinated Notes in whole or in part in integral multiples
of $1,000 in exchange for cash. Payment shall be made by the Company in respect
of Convertible Subordinated Notes properly tendered pursuant to this Section on
a specified business day (the "Designated Event Payment Date")
19
26
which shall be no earlier than five business days after the applicable
Designated Event Offer Termination Date and no later than 60 days after the
applicable Designated Event.
The notice, which shall govern the terms of the Designated Event Offer,
shall include such disclosures as are required by law and shall state:
(a) that a Designated Event Offer is being made pursuant to
this Section 4.06 and that all Convertible Subordinated Notes will be
accepted for payment;
(b) the Designated Event Payment for each Convertible
Subordinated Note, the Designated Event Offer Termination Date and the
Designated Event Payment Date;
(c) that any Convertible Subordinated Note not accepted for
payment will continue to accrue interest in accordance with the terms
thereof;
(d) that, unless the Company defaults on making the Designated
Event Payment, any Convertible Subordinated Note accepted for payment
pursuant to the Designated Event Offer shall cease to accrue interest
on the Designated Event Payment Date and no further interest shall
accrue on or after such date;
(e) that holders electing to have Convertible Subordinated
Notes repurchased pursuant to a Designated Event Offer will be required
to surrender their Convertible Subordinated Notes to the Paying Agent
at the address specified in the notice prior to 5:00 p.m., New York
City time, on the Designated Event Offer Termination Date and must
complete any form letter of transmittal proposed by the Company and
acceptable to the Trustee and the Paying Agent;
(f) that holders of Convertible Subordinated Notes will be
entitled to withdraw their election if the Paying Agent receives, not
later than 5:00 p.m., New York City time, on the Designated Event Offer
Termination Date, a facsimile transmission or letter setting forth the
name of the holder, the principal amount of Convertible Subordinated
Notes the holder delivered for purchase, the Convertible Subordinated
Note certificate number (if any) and a statement that such holder is
withdrawing his election to have such Convertible Subordinated Notes
purchased;
(g) that holders whose Convertible Subordinated Notes are
repurchased only in part will be issued Convertible Subordinated Notes
equal in principal amount to the unpurchased portion of the Convertible
Subordinated Notes surrendered;
(h) the instructions that holders must follow in order to
tender their Convertible Subordinated Notes; and
20
27
(i) that in the case of a Designated Event Offer Termination
Date that is also an interest payment date, the interest payment due on
such date shall be paid to the person in whose name the Convertible
Subordinated Note is registered at the close of business on the
relevant Designated Event Offer Termination Date.
On the Designated Event Offer Termination Date the Company shall (i)
accept for payment Convertible Subordinated Notes or portions thereof tendered
pursuant to the Designated Event Offer, (ii) deposit with the Paying Agent money
sufficient to pay the Designated Event Payment with respect to all Convertible
Subordinated Notes or portions thereof so tendered and accepted and (iii)
deliver to the Trustee the Convertible Subordinated Notes so accepted together
with an Officers' Certificate setting forth the Convertible Subordinated Notes
or portions thereof tendered to and accepted for payment by the Company. On the
Designated Event Payment Date, the Paying Agent shall mail or deliver to the
holders of Convertible Subordinated Notes so accepted payment in an amount equal
to the Designated Event Payment, and the Trustee shall promptly authenticate and
mail or deliver to such holders a new Convertible Subordinated Note equal in
principal amount to any unpurchased portion of the Convertible Subordinated Note
surrendered. Any Convertible Subordinated Notes not so accepted shall be
promptly mailed or delivered by the Company to the holder thereof.
In the case of any consolidation, merger, conveyance, transfer or lease
to which Section 12.06 applies, in which the Common Stock of the Company is
changed or exchanged as a result into the right to receive securities, cash or
other property which includes shares of common stock of the Company or another
person that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such securities, cash and other property (as
determined by the Company, which determination shall be conclusive and binding),
then the person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (which shall comply with the TIA as in force at
the date of execution of such supplemental indenture) modifying the provisions
of this Indenture relating to the right of holders of Convertible Subordinated
Notes to cause the Company to repurchase Convertible Subordinated Notes
following a Designated Event, including the applicable provisions of this
Section 4.06 and the definitions of the Designated Event, Change of Control and
Termination of Trading, as appropriate, as determined in the good faith by the
Company (which determination shall be conclusive and binding), to make such
provision apply to such common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
21
28
SECTION 4.07 Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.08, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.08 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter enforced, that may affect the Company's
obligation to pay the Convertible Subordinated Notes; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law insofar as such law applies to the Convertible
Subordinated Notes, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
ARTICLE 5
SUCCESSORS
SECTION 5.01 When the Company May Merge, Etc.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets to, any person as an entirety or substantially as an entirety unless:
(a) either (i) the Company shall be the surviving or continuing
corporation or (ii) the person (if other than the Company) formed by or
surviving any such consolidation or into which the Company is merged or
the person which acquires by sale, assignment, transfer, lease,
conveyance or other disposition the properties and assets of the
Company substantially as an entirety (1) shall be a corporation
organized and validly existing under the laws of the United States or
any State thereof or the District of Columbia and (2) shall expressly
assume, by supplemental indenture in form reasonably satisfactory to
the Trustee, executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest
on all of the Convertible Subordinated Notes and the performance of
every covenant of the Convertible Subordinated Notes and this Indenture
on the part of the Company to be performed or observed, including,
without limitation, modifications to rights of holders to cause the
repurchase of Notes upon a Designated Event in accordance with
22
29
the last paragraph of Section 4.06 and conversion rights in accordance
with Section 12.06 to the extent required by such Sections;
(b) immediately after giving effect to such transaction no
Default and no Event of Default shall have occurred and be continuing;
and
(c) the Company or such person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance, transfer or lease and, if
a supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this provision of
this Indenture and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
For purposes of this Section 5.01, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of the
Company, the capital stock of which constitutes 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.
SECTION 5.02 Successor Corporation Substituted.
Upon any such consolidation, merger, sale, assignment, conveyance,
lease, transfer or other disposition in accordance with Section 5.01, the
successor person formed by such consolidation or into which the Company is
merged or to which such assignment, conveyance, lease, transfer or other
disposition is made will 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 therein, and thereafter
(except in the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Convertible Subordinated
Notes.
SECTION 5.03 Purchase Option on Change of Control.
This Article 5 does not affect the obligations of the Company
(including without limitation any successor to the Company) under Section 4.06.
ARTICLE 6
DEFAULTS AND REMEDIES
23
30
SECTION 6.01 Events of Default.
An "Event of Default" with respect to any Convertible Subordinated
Notes occurs if:
(a) the Company defaults in the payment (whether or not such
payment is prohibited by the subordination provisions of Article 11 of
this Indenture) of principal of, or premium, if any, on the Convertible
Subordinated Notes when due at maturity, upon repurchase, upon
acceleration or otherwise, including, without limitation, failure of
the Company to repurchase the Convertible Subordinated Notes on the
Designated Event Payment Date as required pursuant to Section 4.06 or
of the Company's failure to make any optional redemption payment when
required pursuant to Article 3; or
(b) the Company defaults in the payment (whether or not such
payment is prohibited by the subordination provisions of Article 11 of
this Indenture) of any installment of interest on the Convertible
Subordinated Notes when due (including any interest payable in
connection with a repurchase pursuant to Section 4.06 or in connection
with any optional redemption payment pursuant to Article 3) and
continuance of such default for more than 30 days; or
(c) the Company defaults (other than a default set forth in
clauses (a) and (b) above) in the performance of, or breach of, any
other covenant or warranty of the Company set forth in this Indenture
or the Convertible Subordinated Notes and fails to remedy such default
or breach within a period of 60 days after the receipt of written
notice from the Trustee or the holders of at least 25% in aggregate
principal amount of the then outstanding Convertible Subordinated
Notes; or
(d) the Company fails to provide notice of any Designated Event
in accordance with Section 4.06; or
(e) failure of the Company or any Material Subsidiary to make
any payment at maturity, including any applicable grace period, in
respect of indebtedness for borrowed money of, or guaranteed or assumed
by, the Company or any Material Subsidiary which payment is in an
amount in excess of $25,000,000 and continuance of such failure for 30
days after notice thereof from the Trustee or the holders of at least
25% in aggregate principal amount of the then outstanding Convertible
Subordinated Notes; or
(f) default by the Company or any Material Subsidiary with
respect to any indebtedness referred to in clause (e) above which
default results in the acceleration of any such indebtedness of an
amount in excess of $25,000,000 without such indebtedness having been
paid or discharged or such acceleration having been cured, waived,
rescinded or annulled for 30 days after notice thereof from the Trustee
or the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes; or
24
31
(g) the Company or any Material Subsidiary, pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(iv) makes a general assignment for the benefit of its
creditors; or
(h) a court of competent jurisdiction enters a judgment, order
or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any
Material Subsidiary, and the order or decree remains unstayed
and in effect for 90 days.
(iii) orders the liquidation of the Company or any
Material Subsidiary, and the order or decree remains unstayed
and in effect for 90 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any wilful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium which the Company would have had to pay if the Company then had
elected to redeem the Convertible Subordinated Notes pursuant to Paragraph 5 of
the Convertible Subordinated Notes of this Indenture, an equivalent premium
shall also become and be immediately due and payable to the extent permitted by
law, anything in this Indenture or in the Convertible Subordinated Notes
contained to the contrary notwithstanding.
If an Event of Default occurs prior to any date on which the Company is
prohibited from redeeming the Convertible Subordinated Notes pursuant to the
optional redemption provisions of Article 3 of this Indenture by reason of any
wilful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding the prohibition on
25
32
redemption of the Convertible Subordinated Notes prior to such date, then the
premium specified in this Indenture shall also become immediately due and
payable to the extent permitted by law upon the acceleration of the Convertible
Subordinated Notes.
SECTION 6.02 Acceleration.
If an Event of Default (other than an Event of Default with respect to
the Company specified in clauses (g) and (h) of Section 6.01) occurs and is
continuing, then and in every such case the Trustee, by written notice to the
Company, or the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes, by written notice to the
Company and the Trustee, may declare the unpaid principal of and accrued
interest on all the Convertible Subordinated Notes to be due and payable. Upon
such declaration such principal amount, premium, if any, and accrued and unpaid
interest shall become immediately due and payable, notwithstanding anything
contained in this Indenture or the Convertible Subordinated Notes to the
contrary but subject to the provisions of Article 11 hereof. If any Event of
Default with respect to the Company specified in clauses (g) or (h) of Section
6.01 occurs, all unpaid principal of and premium, if any, and accrued and unpaid
interest on the Convertible Subordinated Notes then outstanding shall become
automatically due and payable subject to the provisions of Article 11 hereof,
without any declaration or other act on the part of the Trustee or any holder of
Convertible Subordinated Notes.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Subordinated Notes by notice to the Trustee may rescind
an acceleration of the Convertible Subordinated Notes and its consequences if
all existing Events of Default (other than nonpayment of principal of or
premium, if any, and interest on the Convertible Subordinated Notes which has
become due solely by virtue of such acceleration) have been cured or waived and
if the rescission would not conflict with any judgment or decree of any court of
competent jurisdiction. No such rescission shall affect any subsequent Default
or Event of Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Convertible Subordinated Notes or to enforce the
performance of any provision of the Convertible Subordinated Notes or this
Indenture. The Trustee may maintain a proceeding even if it does not possess any
of the Convertible Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any holder of a Convertible
Subordinated Note in exercising any right or remedy occurring upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
26
33
SECTION 6.04 Waiver of Past Defaults.
The holders of a majority in aggregate principal amount of the
Convertible Subordinated Notes then outstanding may, on behalf of the holders of
all the Convertible Subordinated Notes, waive an existing Default or Event of
Default and its consequences, except a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Convertible
Subordinated Notes (other than the non-payment of principal of and premium, if
any, and interest on the Convertible Subordinated Notes which has become due
solely by virtue of an acceleration which has been duly rescinded as provided
above), or in respect of a covenant or provision of this Indenture which cannot
be modified or amended without the consent of all holders of Convertible
Subordinated Notes. When a Default is waived, it is cured and stops continuing.
No waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05 Control by Majority.
The holders of a majority in principal amount of the then outstanding
Convertible Subordinated Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other holders of
Convertible Subordinated Notes or that may involve the Trustee in personal
liability; provided that the Trustee shall have no duty or obligation (subject
to Section 7.01) to ascertain whether or not such actions of forebearances are
unduly prejudicial to such holders; provided, further, that the Trustee may take
any other action the Trustee deems proper that is not inconsistent with such
directions.
SECTION 6.06 Limitation on Suits.
A holder of a Convertible Subordinated Note may not pursue any remedy
with respect to this Indenture or the Convertible Subordinated Notes unless:
(1) the holder gives to the Trustee notice of a continuing
Event of Default;
(2) the holders of at least 25% in principal amount of the then
outstanding Convertible Subordinated Notes make a request to the
Trustee to pursue the remedy;
(3) such holder or holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
27
34
(5) during such 60-day period the holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes
do not give the Trustee a direction inconsistent with the request.
A holder of a Convertible Subordinated Note may not use this Indenture
to prejudice the rights of another holder or to obtain a preference or priority
over another holder.
SECTION 6.07 Rights of Holders To Receive Payment.
Subject to the provisions of Article 11 hereof, notwithstanding any
other provision of this Indenture, the right of any holder of a Convertible
Subordinated Note to receive payment of principal, premium, if any, and interest
on the Convertible Subordinated Note, on or after the respective due dates
expressed in the Convertible Subordinated Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, or to bring
suit for the enforcement of the right to convert the Convertible Subordinated
Note shall not be impaired or affected without the consent of the holder of a
Convertible Subordinated Note.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid on the Convertible Subordinated Notes and interest on
overdue principal and interest and such further amount as shall be sufficient to
cover the costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the holders of Convertible Subordinated Notes allowed in any judicial
proceedings relative to the Company, its creditors or its property. Nothing
contained herein shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any holder of a Convertible
Subordinated Note any plan of reorganization, arrangement, adjustment or
composition affecting the Convertible Subordinated Notes 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.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
28
35
First: to the Trustee for amounts due under Section 7.07,
including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee, and the costs and
expenses of collection;
Second: to holders of Senior Debt to the extent required by
Article 11;
Third: to holders of Convertible Subordinated Notes for amounts
due and unpaid on the Convertible Subordinated Notes for principal,
premium, if any, and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the
Convertible Subordinated Notes for principal, premium, if any, and
interest, respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a
record date and payment date for any payment to holders of Convertible
Subordinated Notes.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit, other than the Trustee, of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a holder pursuant to Section 6.07 or a suit by holders of more than 10% in
principal amount of the then outstanding Convertible Subordinated Notes.
ARTICLE 7
THE TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed. Whether or
not herein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article 7.
SECTION 7.01 Duties of the Trustee.
(a) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use
29
36
the same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(1) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(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 any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the form required by this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(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 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that is in any way related to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability in the performance of any of its
duties or the exercise of any of its rights and powers hereunder.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
30
37
SECTION 7.02 Rights of the Trustee.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, security or other document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter contained therein.
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof is herein specifically prescribed). In addition,
before the Trustee acts or refrains from acting, it may require an Officers'
Certificate, an Opinion of Counsel or both. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and other persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its discretion,
rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by Officers of the Company.
(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(g) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
discretion of any of the holders of Convertible Subordinated Notes pursuant to
the provisions of this Indenture, unless such holders have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby.
(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, consent, order, security or other document
unless requested in writing to do so by the holders of not less than a majority
in aggregate principal amount of the Convertible Subordinated Notes then
outstanding, provided that if the Trustee determines in its discretion
31
38
to make any such investigation, then it shall be entitled, upon reasonable prior
notice and during normal business hours, to examine the books and records and
the premises of the Company, personally or by agent or attorney, and the
reasonable expenses of every such examination shall be paid by the Company or,
if paid by the Trustee or any predecessor Trustee, shall be reimbursed by the
Company upon demand.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or wilful misconduct.
(j) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether an
adjustment is required.
SECTION 7.03 Individual Rights of the Trustee.
Subject to Sections 7.10 and 7.11, the Trustee in its individual or any
other capacity may become the owner or pledgee of Convertible Subordinated Notes
with the same rights it would have if it were not the Trustee and may otherwise
deal with the Company or an Affiliate and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Convertible Subordinated
Notes. It shall not be accountable for the Company's use of the proceeds from
the Convertible Subordinated Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture. It shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Convertible Subordinated Notes or any
other document in connection with the sale of the Convertible Subordinated Notes
or pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each holder of a Convertible
Subordinated Note a notice of the Default or Event of Default within 60 days
after it occurs. A Default or an Event of Default shall not be considered known
to the Trustee unless it is a Default or Event of Default in the payment of
principal or interest when due under Section 6.01(a) or (b) or the Trustee shall
have received notice thereof, in accordance with this Indenture, from the
Company or from the holders of a majority in principal amount of the outstanding
Convertible Subordinated Notes. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest on any
Convertible Subordinated Note,
32
39
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the interest
of the holders of the Convertible Subordinated Notes.
SECTION 7.06 Reports by the Trustee to Holders.
Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to holders of Convertible Subordinated Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to holders of
Convertible Subordinated Notes shall be filed, at the expense of the Company, by
the Trustee with the Commission and each stock exchange or securities market, if
any, on which the Convertible Subordinated Notes are listed. The Company shall
timely notify the Trustee when the Convertible Subordinated Notes are listed or
quoted on any stock exchange or securities market.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time and the Trustee
shall be entitled to reasonable compensation for its acceptance of this
Indenture and its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by or on behalf of it in
addition to the compensation for its services. Such expenses may include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
counsel and other persons not regularly in its employ.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture and the trusts hereunder,
including the costs and expenses of defending itself against or investigating
any claim of liability in the premises, except as set forth in the next
paragraph. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim with counsel designated by the Company, who may be outside counsel to the
Company but shall in all events be reasonably satisfactory to the Trustee, and
the Trustee shall cooperate in the defense. In addition, the Trustee may retain
one separate counsel and, if deemed advisable by such counsel, local counsel,
and the Company shall pay the reasonable fees and expenses of such separate
counsel and local counsel. The indemnification herein extends to any
33
40
settlement, provided that the Company will not be liable for any settlement made
without its consent, provided, further, that such consent will not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or wilful
misconduct.
Upon the earlier to occur of (i) the expiration of the Credit Agreement
or (ii) the date which the Company obtains the necessary waiver or consents to
the Credit Agreement by the lenders thereto, the Trustee shall have a lien prior
to the Convertible Subordinated Notes on all money or property held or collected
by the Trustee to secure the Company's payment obligations in this Section 7.07,
except that held in trust to pay principal and interest on Convertible
Subordinated Notes. Such liens and the Company's obligations under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08 Replacement of the Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company. The holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes may
remove the Trustee by so notifying the Trustee and the Company in writing and
may appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then
34
41
outstanding Convertible Subordinated Notes may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Convertible
Subordinated Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any holder of a Convertible
Subordinated Note who has been a holder for at least six months fails to comply
with Section 7.10, such holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to holders of Convertible Subordinated Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided that all sums owing to the retiring Trustee hereunder have
been paid and subject to the lien provided for in Section 7.07. Notwithstanding
the replacement of the Trustee pursuant to this Section 7.08, the Company's
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
SECTION 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation
or national banking association, the resulting, surviving or transferee
corporation or national banking association without any further act shall be the
successor Trustee with the same effect as if the successor Trustee had been
named as the Trustee herein.
SECTION 7.10 Eligibility, Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a combined
capital and surplus as stated in Section 10.10. The Trustee is subject to TIA
Section 310(b) regarding the disqualification of a trustee upon acquiring a
conflicting interest.
35
42
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship set forth in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Indenture.
When (a) the Company delivers to the Trustee for cancellation all
Convertible Subordinated Notes theretofore authenticated (other than any other
Convertible Subordinated Notes which have been destroyed, lost or stolen and in
lieu of or in substitution for which other Convertible Subordinated Notes have
been authenticated and delivered) and not theretofore canceled, or (b) all the
Convertible Subordinated Notes not theretofore canceled or delivered to the
Trustee for cancellation have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company deposits with the Trustee, in trust, cash and/or
U.S. Government Obligations sufficient to pay at maturity or upon redemption of
all of the Convertible Subordinated Notes (other than any Convertible
Subordinated Notes which have been mutilated, destroyed, lost or stolen and in
lieu of or in substitution for which other Convertible Subordinated Notes have
been authenticated and delivered) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case
may be, and if in either case the Company also pays, or causes to be paid, all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) rights of registration of transfer,
substitution, replacement and exchange and conversion of Convertible
Subordinated Notes, (ii) rights hereunder of holders of Convertible Subordinated
Notes to receive payments of principal of and premium, if any, and interest on,
the Convertible Subordinated Notes, (iii) the obligations under Sections 2.03
and 8.05 hereof and (iv) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel as required by Section 10.04 and
at the Company's cost and expense, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Convertible Subordinated Notes.
36
43
SECTION 8.02 Deposited Monies to be Held in Trust by Trustee.
Subject to Section 8.04, all monies deposited with the Trustee pursuant
to Section 8.01 shall be held in trust and applied by it to the payment,
notwithstanding the provisions of Article 11, either directly or through the
Paying Agent, to the holders of the particular Convertible Subordinated Notes
for the payment or redemption of which such monies have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest
and premium, if any.
SECTION 8.03 Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture, all monies then
held by any Paying Agent (other than the Trustee) shall, upon the Company's
demand, be repaid to it or paid to the Trustee, and thereupon such Paying Agent
shall be released from all further liability with respect to such monies.
SECTION 8.04 Return of Unclaimed Monies.
Subject to the requirements of applicable law, any monies deposited
with or paid to the Trustee for payment of the principal of, premium, if any, or
interest on Convertible Subordinated Notes and not applied but remaining
unclaimed by the holders thereof for two years after the date upon which the
principal of, premium, if any, or interest on such Convertible Subordinated
Notes, as the case may be, have become due and payable, shall be repaid to the
Company by the Trustee on demand and all liability of the Trustee shall
thereupon cease with respect to such monies; and the holder of any of the
Convertible Subordinated Notes shall thereafter look only to the Company for any
payment which such holder may be entitled to collect unless an applicable
abandoned property law designates another person.
SECTION 8.05 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 8.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Convertible
Subordinated Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or the Paying
Agent is permitted to apply all such money in accordance with Section 8.02;
provided, however, that if the Company makes any payment of interest on or
principal of any Convertible Subordinated Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders
thereof to receive such payment from the money held by the Trustee or Paying
Agent.
37
44
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without the Consent of Holders.
The Company and the Trustee may amend this Indenture or the Convertible
Subordinated Notes without notice to or the consent of any holder of a
Convertible Subordinated Note for the purposes of:
(a) curing any ambiguity or correcting or supplementing any
defective or inconsistent provision contained in this Indenture, or
making any other changes in the provisions of this Indenture which the
Company and the Trustee may deem necessary or desirable and which will
not adversely affect the legal rights under the Indenture of the
holders of Convertible Subordinated Notes.
(b) providing for uncertificated Convertible Subordinated Notes
in addition to or in place of certificated Convertible Subordinated
Notes;
(c) evidencing the succession of another person to the Company
and the assumption by such successor of the covenants and obligations
of the Company thereunder and in the Convertible Subordinated Notes as
permitted by Section 5.01;
(d) providing for conversion rights and/or repurchase rights of
holders of Convertible Subordinated Notes in the event of
consolidation, merger or sale of all or substantially all of the assets
of the Company as required to comply with Sections 5.01 and/or 12.06;
(e) reducing the Conversion Price;
(f) making any changes or adding to the covenants of the
Company for the benefit of the holders of Convertible Subordinated
Notes; or
(g) complying with the requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the TIA.
SECTION 9.02 With the Consent of Holders.
Subject to Section 6.07, the Company and the Trustee may amend this
Indenture or the Convertible Subordinated Notes with the written consent of the
holders of at least a majority in principal amount of the then outstanding
Convertible Subordinated Notes (including consents obtained in connection with a
tender offer or exchange offer for Convertible Subordinated Notes).
38
45
Subject to Sections 6.04 and 6.07, the holders of a majority in
principal amount of the Convertible Subordinated Notes then outstanding may also
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Convertible Subordinated Notes.
However, without the consent of each holder of a Convertible
Subordinated Note affected, an amendment or waiver under this Section may not:
(a) reduce the principal amount of Convertible Subordinated
Notes whose holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or premium on or change the fixed
maturity of any Convertible Subordinated Note or, except as permitted
pursuant to Section 9.01(a), alter the redemption provisions with
respect thereto;
(c) reduce the rate of, or extend the time for payment of,
interest, including defaulted interest, on any Convertible Subordinated
Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Convertible
Subordinated Notes (except a rescission of acceleration of the
Convertible Subordinated Notes by the holders of at least a majority in
aggregate principal amount of the Convertible Subordinated Notes then
outstanding and a waiver of the payment default that resulted from such
acceleration);
(e) make the principal of, or premium, if any, or interest on,
any Convertible Subordinated Note payable in money other than as
provided for herein and in the Convertible Subordinated Notes;
(f) waive a redemption payment with respect to any Convertible
Subordinated Notes;
(g) except as permitted herein (including Section 9.01),
increase the Conversion Price or modify the provisions contained herein
relating to conversion of the Convertible Subordinated Notes in a
manner adverse to the holders thereof; or
(h) make any change in provisions relating to waivers of
defaults, or the rights of holders of Convertible Subordinated Notes to
receive payments of principal of, premium, if any, or interest on the
Convertible Subordinated Notes or the abilities of holders of
Convertible Subordinated Notes to enforce their rights hereunder or the
provisions of clauses (a) through (h) of this Section 9.02.
To secure a consent of the holders of Convertible Subordinated Notes
under this Section, it shall not be necessary for such holders to approve the
particular form of any
39
46
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to holders of Convertible Subordinated Notes a notice briefly
describing the amendment or waiver.
In order to amend any provisions of Article 11, holders of at least 75%
principal amount of Convertible Subordinated Notes then outstanding must consent
to such amendment if such amendment would adversely affect the rights of holders
of Convertible Subordinated Notes.
SECTION 9.03 Compliance with the Trust Indenture Act.
Every amendment to this Indenture or the Convertible Subordinated Notes
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
holder of a Convertible Subordinated Note is a continuing consent by the holder
and every subsequent holder of a Convertible Subordinated Note or portion of a
Convertible Subordinated Note that evidences the same debt as the consenting
holder's Convertible Subordinated Note, even if notation of the consent is not
made on any Convertible Subordinated Note. However, any such holder or
subsequent holder may revoke the consent as to his or her Convertible
Subordinated Note or portion of a Convertible Subordinated Note if the Trustee
receives the notice of revocation before the date on which the Trustee receives
an Officers' Certificate certifying that the holders of the requisite principal
amount of Convertible Subordinated Notes have consented to the amendment or
waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the holders of Convertible Subordinated Notes
entitled to consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
persons who were holders of Convertible Subordinated Notes at such record date
(or their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from holders of the principal amount of Convertible Subordinated
Notes required hereunder for such amendment or waiver to be effective shall have
also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
holder of a Convertible Subordinated Note, unless it is of the type described in
clauses (a) - (h) of
40
47
Section 9.02. In such case, the amendment or waiver shall bind each holder of a
Convertible Subordinated Note who has consented to it.
SECTION 9.05 Notation on or Exchange of Convertible Subordinated Notes.
Convertible Subordinated Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article 9 may, and
shall if required by the Trustee, bear a notation in the form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Convertible Subordinated Notes so modified as to
conform, in the opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for outstanding Convertible Subordinated
Notes.
SECTION 9.06 Trustee Protected.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if such amendment or supplemental
indenture does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment or supplemental indenture, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
or supplemental indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms.
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), such imposed duties shall control. If
any provision of this Indenture expressly modifies or excludes any provision of
the TIA that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 10.02 Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail, with postage prepaid (registered or certified, return receipt requested),
facsimile or overnight air couriers guaranteeing next day delivery, to the
other's address stated in Section 10.10. The Company
41
48
or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
All notices and communications (other than those sent to holders of
Convertible Subordinated Notes) shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when transmission is
confirmed, if transmitted by facsimile; and the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.
Any notice or communication to a holder of a Convertible Subordinated
Note shall be mailed by first-class mail, with postage prepaid, to his or her
address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a holder or any defect in it shall not affect its sufficiency
with respect to other holders.
If a notice or communication is sent in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company sends a notice or communication to holders of
Convertible Subordinated Notes, it shall send a copy to the Trustee and each
Agent at the same time.
All other notices or communications shall be in writing.
SECTION 10.03 Communication by Holders With Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
holders with respect to their rights under this Indenture or the Convertible
Subordinated Notes. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such person,
all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 10.05) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been complied with.
42
49
SECTION 10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall include:
(1) a statement that the person making such certificate or
opinion 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 certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his or her certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her certificate, statement or opinion may be based as
aforesaid are erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representation by an accountant (who may be an employee of the
Company), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect to
the accounting matters upon which his certificate, statement or opinion may be
based as aforesaid is erroneous.
SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
holders of Convertible Subordinated Notes. The Registrar or Paying Agent may
make reasonable rules and set reasonable requirements for its functions.
43
50
SECTION 10.07 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the City of Chicago or the City of San
Jose, California are not required to be open, and a "business day" is any day
that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period. If
any date specified in this Indenture, including, without limitation, a
redemption date under Paragraph 5 of Convertible Subordinated Notes, is a Legal
Holiday, then such date shall be the next succeeding business day.
SECTION 10.08 No Recourse Against Others.
No director, officer, employee or stockholder, as such, of the Company
from time to time shall have any liability for any obligations of the Company
under the Convertible Subordinated Notes or this Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each holder by accepting a Convertible Subordinated Note waives and releases all
such liability. This waiver and release are part of the consideration for the
Convertible Subordinated Notes. Each of such directors, officers, employees and
stockholders is a third party beneficiary of this Section 10.08.
SECTION 10.09 Counterparts.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10.10 Other Provisions.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The reporting date for Section 7.06 is April 15 of each year. The first
reporting date is the first April 15 following the issuance of Convertible
Subordinated Notes hereunder.
The Trustee shall always have, or shall be a subsidiary of a bank or
bank holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
44
51
The Company's address is:
VLSI Technology, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel's Office
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Trustee's address is:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇/Indenture Trust Division
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 10.11 Governing Law.
The internal laws of the State of New York shall govern this Indenture
and the Convertible Subordinated Notes, without regard to the conflict of laws
provisions thereof.
SECTION 10.12 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a subsidiary. Any such other indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 10.13 Successors.
All agreements of the Company in this Indenture and the Convertible
Subordinated Notes shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 10.14 Severability.
In case any provision in this Indenture or in the Convertible
Subordinated Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
45
52
SECTION 10.15 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE 11
SUBORDINATION
SECTION 11.01 Agreement to Subordinate.
The Company agrees, and each holder of Convertible Subordinated
Notes by accepting a Convertible Subordinated Note agrees, that the indebtedness
evidenced by the Convertible Subordinated Note is subordinated in right of
payment, to the extent and in the manner provided in this Article 11, to the
prior payment in full of all Senior Debt (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 11.02 Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment
in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt) in cash or U.S.
Government Obligations or other payment satisfactory to the holders of
the Senior Debt before holders of Convertible Subordinated Notes shall
be entitled to receive any payment with respect to the Convertible
Subordinated Notes (except that the holders of Convertible Subordinated
Notes may receive (i) securities that are subordinated to at least the
same extent as the Convertible Subordinated Notes to (a) Senior Debt
and (b) any securities issued in exchange for Senior Debt and (ii)
payments and other distributions made from any trust created pursuant
to Section 8.01 hereof); and
(2) until all Senior Debt is paid in full in cash or U.S.
Government Obligations or other payment satisfactory to the holders of
the Senior Debt, any distribution to which holders of Convertible
Subordinated Notes would be entitled but for this Article 11 shall be
made to holders of Senior Debt (except that holders of
46
53
Convertible Subordinated Notes may receive securities that are
subordinated to at least the same extent as the Convertible
Subordinated Notes to (a) Senior Debt and (b) any securities issued in
exchange for Senior Debt), as their interests may appear.
SECTION 11.03 Default on Senior Debt and/or Designated Senior Debt.
The Company may not make any payment or distribution to the
Trustee or any holder of Convertible Subordinated Notes in respect of
Obligations with respect to the Convertible Subordinated Notes and may not
acquire from the Trustee or any holder of Convertible Subordinated Notes any
Convertible Subordinated Notes (other than, in each case, (i) securities that
are subordinated to at least the same extent as the Convertible Subordinated
Notes to (a) Senior Debt and (b) any securities issued in exchange for Senior
Debt and (ii) payments and other distributions made from any trust created
pursuant to Section 8.01 hereof) until all Senior Debt has been paid in full in
cash or U. S. Government Obligations or other payment satisfactory to the
holders of the Senior Debt if:
(i) a default in the payment of any principal of, premium, if
any, interest, rent or other Obligations in respect of Senior Debt
occurs and is continuing beyond any applicable grace period in the
agreement, indenture or other document governing such Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of such
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
person who may give it pursuant to Section 11.11 hereof.
If the Trustee receives any Payment Blockage Notice pursuant to
Section 11.03 (ii) hereof, no subsequent Payment Blockage Notice shall be
effective for purposes of such Section unless and until (i) at least 365 days
shall have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal, premium, if any,
and interest on the Convertible Subordinated Notes that have come due have been
paid in full in cash. No nonpayment default that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee shall be, or
be made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Convertible Subordinated Notes and may acquire them upon the
earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 11.03(ii)
hereof, 179 days pass after notice is received if the maturity of such
Designated Senior Debt has not been accelerated,
47
54
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 11.04 Acceleration of Convertible Subordinated Notes
In the event of the acceleration of the Convertible Subordinated Notes
because of an Event of Default, the Company may not make any payment or
distribution to the Trustee or any holder of Convertible Subordinated Notes in
respect of Obligations with respect to Convertible Subordinated Notes and may
not acquire or purchase from the Trustee or any holder of Convertible
Subordinated Notes any Convertible Subordinated Notes (other than, in each case,
(i) securities that are subordinated to at least the same extent as the
Convertible Subordinated Notes to (a) Senior Debt and (b) any securities issued
in exchange for Senior Debt, and (ii) payments and other distributions made from
any trust created pursuant to Section 8.01) until all Senior Debt has been paid
in full in cash or U. S. Government Obligations or other payment satisfactory to
the holders of Senior Debt or such acceleration is rescinded in accordance with
the terms of this Indenture. If payment of the Convertible Subordinated Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Debt of the acceleration.
SECTION 11.05 When Distribution Must Be Paid Over.
In the event that the Trustee or any holder of Convertible Subordinated
Notes receives any payment or any distributions of assets of the Company of any
kind with respect to the Convertible Subordinated Notes, whether in cash,
property or securities, including without limitation by way of set-off or
otherwise, at a time when payment or distribution is prohibited by this
Indenture, such payment shall be held by the Trustee or such holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, to the
extent necessary to make payment in full of any Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt; provided that the foregoing shall apply to the Trustee
only if the Trustee has actual knowledge (as determined in accordance with
Section 11.11) that such payment or distribution is prohibited by this
Indenture.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 11, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of holders of Convertible
Subordinated Notes or the Company or any other person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this Article 11,
except if such payment is made as a result of the wilful misconduct or gross
negligence of the Trustee.
48
55
SECTION 11.06 Notice by Company.
The Company shall promptly notify the Trustee of any facts known to the
Company that would cause a payment of any Obligations with respect to the
Convertible Subordinated Notes or the purchase of any Convertible Subordinated
Notes by the Company to violate this Article, but failure to give such notice
shall not affect the subordination of the Convertible Subordinated Notes to the
Senior Debt as provided in this Article.
SECTION 11.07 Subrogation.
After all Senior Debt is paid in full and until the Convertible
Subordinated Notes are paid in full, holders of Convertible Subordinated Notes
shall be subrogated (equally and ratably with all other indebtedness pari passu
with the Convertible Subordinated Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the holders of Convertible Subordinated Notes
have been applied to the payment of Senior Debt. A distribution made under this
Article to holders of Senior Debt that otherwise would have been made to holders
of Convertible Subordinated Notes is not, as between the Company and holders of
Convertible Subordinated Notes, a payment by the Company on the Convertible
Subordinated Notes.
SECTION 11.08 Relative Rights.
This Article defines the relative rights of holders of Convertible
Subordinated Notes and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and holders of Convertible
Subordinated Notes, the obligation of the Company, which is absolute
and unconditional, to pay principal of and interest on the Convertible
Subordinated Notes in accordance with their terms;
(2) affect the relative rights of holders of Convertible
Subordinated Notes and creditors (other than with respect to Senior
Debt) of the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any holder of Convertible
Subordinated Notes from exercising its available remedies upon a
Default or Event of Default, subject to the rights of holders and
owners of Senior Debt to receive distributions and payments otherwise
payable to holders of Convertible Subordinated Notes.
If the Company fails because of this Article to pay principal of or
interest on a Convertible Subordinated Note on the due date, the failure is
still a Default or Event of Default.
49
56
SECTION 11.09 Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the indebtedness evidenced by the Convertible Subordinated Notes shall be
impaired by any act or failure to act by the Company or any holder of
Convertible Subordinated Notes or by the failure of the Company or any such
holder to comply with this Indenture.
SECTION 11.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee and the holders of Convertible Subordinated
Notes shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the holders of Convertible Subordinated Notes for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt 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 11.
SECTION 11.11 Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee (other than pursuant to Section 11.04), and the
Trustee may continue to make payments on the Convertible Subordinated Notes,
unless the Trustee shall have received at least two business days prior to the
date of such payment or distribution written notice of facts that would cause
such payment or distribution with respect to the Convertible Subordinated Notes
to violate this Article. Only the Company or a Representative may give the
notice.
Nothing in this Article 11 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
50
57
SECTION 11.12 Authorization to Effect Subordination.
Each holder of a Convertible Subordinated Note by the holder's
acceptance thereof authorizes and directs the Trustee on the holder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 11, and appoints the Trustee to act as
the holder's attorney-in-fact for any and all such purposes. If the Trustee does
not file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the holders of any Senior Debt or
their Representatives are hereby authorized to file an appropriate claim for and
on behalf of the holders of the Convertible Subordinated Notes.
SECTION 11.13 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that the second and third paragraphs of Section 11.11 shall not apply
to the Company or any subsidiary of the Company if it or such subsidiary acts as
Paying Agent.
SECTION 11.14 Senior Debt Entitled to Rely.
The holders of Senior Debt shall have the right to rely upon this
Article 11, and no amendment or modification of the provisions contained herein
shall diminish the rights of such holders unless such holders shall have agreed
in writing thereto.
ARTICLE 12
CONVERSION OF CONVERTIBLE SUBORDINATED NOTES
SECTION 12.01 Right to Convert.
Subject to and upon compliance with the provisions of this Indenture,
each holder of Convertible Subordinated Notes shall have the right, at his or
her option, at any time prior to the close of business on the last trading day
prior to the Maturity Date (except that, with respect to any Convertible
Subordinated Note or portion of a Convertible Subordinated Note which is called
for redemption, such right shall terminate, except as provided in the fourth
paragraph of Section 12.02, at the close of business on the last trading day
prior to the date fixed for redemption of such Convertible Subordinated Note or
portion of a Convertible Subordinated Note unless the Company defaults in the
payment due upon redemption thereof and such right shall terminate with respect
to any Convertible Subordinated Note or portion
51
58
thereof subject to a duly completed election for repurchase unless the Company
defaults in the payment due upon repurchase or such holder elects to withdraw
the submission of such election to repurchase on or prior to the close of
business on the Designated Event Offer Termination Date) to convert the
principal amount of any Convertible Subordinated Note held by such holder, or
any portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Convertible Subordinated Note or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Convertible Subordinated Note so to be converted in whole or in
part in the manner provided in Section 12.02. A holder of Convertible
Subordinated Notes is not entitled to any rights of a holder of Common Stock
until such holder of Convertible Subordinated Notes has converted his or her
Convertible Subordinated Notes to Common Stock, and only to the extent such
Convertible Subordinated Notes are deemed to have been converted to Common Stock
under this Article 12.
SECTION 12.02 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for
Interest or Dividends
.
To exercise, in whole or in part, the conversion privilege with respect
to any Convertible Subordinated Note, the holder of such Convertible
Subordinated Note shall surrender such Convertible Subordinated Note, duly
endorsed, at an office or agency maintained by the Company pursuant to Section
4.04, accompanied by the funds, if any, required by the penultimate paragraph of
this Section 12.02, and shall give written notice of conversion in the form
provided on the Convertible Subordinated Notes (or such other notice which is
acceptable to the Company) to the office or agency that the holder of
Convertible Subordinated Notes elects to convert such Convertible Subordinated
Note or such portion thereof specified in said notice. Such notice shall also
state the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which are issuable on such conversion
shall be issued, and shall be accompanied by transfer taxes, if required
pursuant to Section 12.07. Each such Convertible Subordinated Note surrendered
for conversion shall, unless the shares issuable on conversion are to be issued
in the same name as the registration of such Convertible Subordinated Note, be
duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder of Convertible
Subordinated Notes or his or her duly authorized attorney.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
holder at the office or agency maintained by the Company for such purpose
pursuant to Section 4.04, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Convertible
Subordinated Note or portion thereof in accordance with the provisions of this
Article 12 and a check or cash in respect of any fractional interest in respect
of a share of Common Stock arising upon such conversion, as provided in Section
12.03 (which payment, if any, shall be paid no later than five business days
after satisfaction of the
52
59
requirements for conversion set forth above). In case any Convertible
Subordinated Note of a denomination of an integral multiple greater than $1,000
is surrendered for partial conversion, and subject to Section 2.02, the Company
shall execute, and the Trustee shall authenticate and deliver to the holder of
the Convertible Subordinated Note so surrendered, without charge to him or her,
a new Convertible Subordinated Note or Convertible Subordinated Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Convertible Subordinated Note.
Each conversion shall be deemed to have been effected as to any such
Convertible Subordinated Note (or portion thereof) on the date on which the
requirements set forth above in this Section 12.02 have been satisfied as to
such Convertible Subordinated Note (or portion thereof), and the person in whose
name any certificate or certificates for shares of Common Stock are issuable
upon such conversion shall be deemed to have become on said date the holder of
record of the shares represented thereby; provided, however, that any such
surrender on any date when the Company's stock transfer books are closed shall
constitute the person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date upon which such Convertible Subordinated Note is
surrendered.
Any Convertible Subordinated Note or portion thereof surrendered for
conversion during the period from the close of business on the record date for
any interest payment through the close of business on the trading day next
preceding such interest payment date shall (unless such Convertible Subordinated
Note or portion thereof being converted has been called for redemption on a date
in such period) be accompanied by payment, in funds acceptable to the Company,
of an amount equal to the interest otherwise payable on such interest payment
date on the principal amount being converted; provided however, that no such
payment need be made if there exists at the time of conversion a default in the
payment of interest on the Convertible Subordinated Notes. An amount equal to
such payment shall be paid by the Company on such interest payment date to the
holder of such Convertible Subordinated Note at the close of business on such
record date; provided, however, that if the Company defaults in the payment of
interest on such interest payment date, such amount shall be paid to the person
who made such required payment. Except as provided above in this Section 12.02,
no adjustment shall be made for interest accrued on any Convertible Subordinated
Note converted or for dividends on any shares issued upon the conversion of such
Convertible Subordinated Note as provided in this Article 12.
SECTION 12.03 Cash Payments in Lieu of Fractional Shares.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Convertible Subordinated Notes. If
more than one Convertible Subordinated Note shall be surrendered for conversion
at one time by the same holder, the number of full shares which shall be
issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Convertible Subordinated Notes (or specified
53
60
portions thereof to the extent permitted hereby) so surrendered for conversion.
If any fractional share of stock otherwise would be issuable upon the conversion
of any Convertible Subordinated Note or Convertible Subordinated Notes, the
Company shall make an adjustment therefor in cash based upon the Current Market
Price of the Common Stock on the last trading day prior to the date of
conversion.
SECTION 12.04 Conversion Price.
The conversion price shall be as specified in the form of Convertible
Subordinated Note attached as Exhibit A hereto, subject to adjustment as
provided in this Article 12.
SECTION 12.05 Adjustment of Conversion Price.
The Conversion Price shall be adjusted from time to time by the Company
as follows:
(a) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares
of Common Stock, the Conversion Price in effect at the opening of
business on the date following the 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 of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date (as defined in
Section 12.05(g)) fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction
to become effective immediately after the opening of business on the
day following the Record Date. If any dividend or distribution of the
type described in this Section 12.05(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) If the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price (as defined in Section 12.05(g)) on
the Record Date fixed for the determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be adjusted
so that the same shall 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 of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business
on the Regular Record Date plus the number of shares which the
aggregate offering price of the total number of shares so offered would
purchase at such Current Market Price, and of which the denominator
shall be the number of shares of Common Stock outstanding on the close
of business on the Record Date plus the total number of additional
shares of Common Stock so offered for subscription or purchase. Such
adjustment shall become effective
54
61
immediately after the opening of business on the day following the
Record Date fixed for determination of stockholders entitled to receive
such rights or warrants. To the extent that 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 be 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 delivery of only the number of shares of Common
Stock actually delivered. If 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 such 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 Current Market 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,
with the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, 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, if the outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, 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, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) If the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock
of the Company (other than any dividends or distributions to which
Section 12.05(a) applies) or evidences of its indebtedness, cash or
other assets (including securities, but excluding any rights or
warrants of a type referred to in Section 12.05(b) and dividends and
distributions paid exclusively in cash and excluding any capital stock,
evidences of indebtedness, cash or assets distributed upon a merger or
consolidation to which Section 12.06 applies) (the foregoing
hereinafter in this Section 12.05(d) called the "Securities"), then, in
each such case, the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on the
Record Date (as defined in Section 12.05(g)) with respect to such
distribution by a fraction of which the numerator shall be the Current
Market Price (determined as provided in Section 12.05(g)) on such date
less the 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) on such date of the portion of the
Securities so distributed applicable to one share of Common Stock and
55
62
the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the
day following the Record Date; provided, however, that in the event the
then fair market value (as so determined) of the portion of the
Securities 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 of Convertible Subordinated Notes shall have the
right to receive upon conversion of a Convertible Subordinated Note (or
any portion thereof) the amount of Securities such holder would have
received had such holder converted such Convertible Subordinated Note
(or portion thereof) immediately prior to such 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 which would then be
in effect if such dividend or distribution had not been declared. If
the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12.05(d) by reference to the
actual or when issued trading market for any securities comprising all
or part of such distribution, it must in doing so consider the prices
in such market over the same period used in computing the Current
Market Price pursuant to Section 12.05(g) to the extent possible.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence
of a specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of
this Section 12.05(d) (and no adjustment to the Conversion Price under
this Section 12.05(d) shall be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment to the
Conversion Price under this Section 12.05(d) shall be made. If any such
rights or warrants, including any such existing rights or warrants
distributed prior to the date of this Indenture (including the Rights),
are subject to subsequent events, upon the occurrence of each of which
such rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the
occurrence of each such event shall be deemed to be such date of
issuance and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants (including
the Rights), or any Trigger Event with respect thereto, that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 12.05 was made,
(1) in the case of any such rights or warrants (including the Rights)
which shall all have been
56
63
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 or holders of
Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of
Common Stock as of the date of such redemption or repurchase, and (2)
in the case of such rights or warrants (including the Rights) which
shall have expired or been terminated without exercise by any holders
thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued. In lieu of any adjustment to the
Conversion Price otherwise required by this Section 12.05(d) as a
result of a Trigger Event affecting rights (the "Rights") distributed
pursuant to the Company's First Amended and Restated Stockholder Rights
Plan, as amended (the "Rights Plan"), the Company may amend such Rights
Plan to provide that upon conversion of the Convertible Subordinated
Notes the holder thereof will receive, in addition to the Common Stock
issuable upon such conversion, the Rights which attached to such shares
of Common Stock or would have attached to such shares if the Rights had
not become separated from the Common Stock pursuant to the provisions
of the Rights Plan.
Notwithstanding any other provision of this Section 12.05(d) to
the contrary, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any
rights distributed pursuant to any stockholder rights plan) shall be
deemed not to have been distributed for purposes of this Section
12.05(d) if the Company makes proper provision so that each holder of
Convertible Subordinated Notes who converts a Convertible Subordinated
Note (or any portion thereof) after the date fixed for determination of
stockholders entitled to receive such distribution shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the amount and kind of such
distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date,
converted such Convertible Subordinated Note into Common Stock.
For purposes of this Section 12.05(d) and Sections 12.05(a) and (b),
any dividend or distribution to which this Section 12.05(d) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 12.05(b) applies (or both),
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 or rights or warrants to which Section 12.05(b)
applies (and any Conversion Price reduction required by this Section 12.05(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 or
57
64
such rights or warrants (and any further Conversion Price reduction required by
Sections 12.05(a) and (b) with respect to such dividend or distribution shall
then be made, except that (A) the Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution", "Record Date fixed for
such determination" and "Record Date" within the meaning of Section 12.05(a) and
as "the date fixed for the determination of stockholders entitled to receive
such rights or warrants", "the Record Date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and "such Record Date"
within the meaning of Section 12.05(b) and (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 12.05(a)).
(e) If the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any cash that is distributed upon a
merger or consolidation to which Section 12.06 applies or as part of a
distribution referred to in Section 12.05(d)) in an aggregate amount that,
combined together with (1) the aggregate amount of any other such distributions
to all holders of its Common Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 12.05(e) has been made, and (2) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) of consideration payable in respect of any tender
offer by the Company or any of its subsidiaries for all or any portion of the
Common Stock concluded within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to Section
12.05(f) has ben made, exceeds 15% of the product of the Current Market Price
(determined as provided in Section 12.05(g)) on the Record Date with respect to
such distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Record Date by a fraction (i) the
numerator of which shall be equal to the Current Market Price on the Record Date
less an amount equal to the quotient of (x) the excess of such combined amount
over such 15% and (y) the number of shares of Common Stock outstanding on the
Record Date and (ii) the denominator of which shall be equal to the Current
Market Price on such Record Date; provided, however, 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 of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of Convertible Subordinated Notes shall have the right to receive upon
conversion of a Convertible Subordinated Note (or any portion thereof) the
amount of cash such holder would have received had such holder converted such
Convertible Subordinated Note (or portion thereof) immediately prior to such
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 which would
then be in effect if such dividend or distribution had not been declared. Any
cash distribution to all holders of
58
65
Common Stock as to which the Company makes the election permitted by Section
12.05(m) and as to which the Company has complied with the requirements of such
Section shall be treated as not having been made for all purposes of this
Section 12.05(e).
(f) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires the payment to stockholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased Shares (as defined below)) of an aggregate consideration 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, combined together with (1) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this Section 12.05(f) has been made and (2) the aggregate amount of any
distributions to all holders of the Common Stock made exclusively in cash within
12 months preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to Section 12.05(e) has been made, exceeds 15% of the
product of the Current Market Price (determined as provided in Section 12.05(g))
as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on the date of
the Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the trading day next succeeding the Expiration Time and the denominator 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 offer) of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction (if any)
to become effective immediately prior to the opening of business on the day
following the Expiration Time. If the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such tender offer had not been made. If
the application of this Section 12.05(f) to any tender offer
59
66
would result in an increase in the Conversion Price, no adjustment shall be made
for such tender offer under this Section 12.05(f).
(g) For purposes of this Section 12.05, the following terms shall have
the meaning indicated:
(1) "closing price" with respect to any securities on any day
means the closing price on such day or, if no such sale takes place on
such day, the average of the reported high and low prices on such day,
in each case on The Nasdaq Stock Market or New York Stock Exchange, as
applicable, or, if such security is not listed or admitted to trading
on such national market or exchange, on the principal national
securities exchange or quotation system on which such security is
quoted or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation
system, the average of the high and low prices of such security on the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available, in such manner as furnished
by any New York Stock Exchange member firm selected from time to time
by the Board of Directors for that purpose, or a price determined in
good faith by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors.
(2) "Current Market Price" means the average of the daily
closing prices per share of Common Stock for the 10 consecutive trading
days immediately prior to the date in question; provided, however, that
(1) if the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires
an adjustment to the Conversion Price pursuant to Sections 12.05(a),
(b), (c), (d), (e) or (f) occurs during such 10 consecutive trading
days, the closing price for each trading day prior to the "ex" date for
such other event shall be adjusted by multiplying such closing price by
the same fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if 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 12.05(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 closing price for
each trading day on and after the "ex" date for such other event shall
be adjusted by multiplying such closing price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted as
a result of such other event, and (3) if 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 closing price for each trading
day on or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by the
Board of Directors in a manner consistent with any determination of
such value for purposes of Sections 12.05(d) or (f), whose
60
67
determination shall be conclusive and described in a resolution of the
Board of Directors) 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 12.05(f), the Current Market
Price on any date shall be deemed to be the average of the daily
closing prices per share of Common Stock for such day and the next two
succeeding trading days; provided, however, that if the "ex" date for
any event (other than the tender offer requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section
12.05(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 closing price for each trading day on
and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the 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,
(1) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the closing price was
obtained without the right to receive such issuance or distribution,
(2) when used with respect to any subdivision or combination of shares
of Common Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at which
such subdivision or combination becomes effective, and (3) when used
with respect to any tender or exchange offer means the first date on
which the Common Stock trades regular way on such exchange or in such
market after the Expiration Time of such offer. Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are
called for pursuant to this Section 12.05, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 12.05 and to avoid unjust or
inequitable results as determined in good faith by the Board of
Directors.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is
exchanged for or converted into any combination of cash, securities or
other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether
such date is fixed by the Board of Directors or by statute, contract or
otherwise).
(5) "trading day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another national securities exchange, a day on which the New York Stock
Exchange or another national securities exchange is open for business
or (y) if the applicable security is quoted on
61
68
The Nasdaq Stock Market, a day on which trades may be made thereon or
(z) if the applicable security is not so listed, admitted for trading
or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 12.05(a), (b), (c), (d), (e) and (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during the period and
the Board of Directors has made a determination that such reduction would be in
the Company's best interests, which determination shall be conclusive and
described in a resolution of the Board of Directors. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
the holders of Convertible Subordinated Notes at his or her last address
appearing on the register of holders maintained for that purpose a notice of the
reduction at least 15 days prior to the date the reduced Conversion Price takes
effect, and such notice shall state the reduced Conversion Price and the period
during which it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 12.05(i)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 12 shall be made
by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to each holder of Convertible Subordinated Notes at his or her last address
appearing on the register of holders maintained for that purpose within 20 days
of the effective date of such adjustment. Failure to deliver such notice shall
not affect the legality or validity of any such adjustment.
62
69
(k) In any case in which this Section 12.05 provides that an adjustment
shall become effective immediately after a Record Date for an event, the Company
may defer until the occurrence of such event issuing to the holder of any
Convertible Subordinated Note converted after such Record Date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Stock issuable upon such conversion before giving effect to
such adjustment.
(l) For purposes of this Section 12.05, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(m) In lieu of making any adjustment to the Conversion Price pursuant
to Section 12.05(e), the Company may elect to reserve an amount of cash for
distribution to the holders of Convertible Subordinated Notes upon the
conversion of the Convertible Subordinated Notes so that any such holder
converting Convertible Subordinated Notes will receive upon such conversion, in
addition to the shares of Common Stock and other items to which such holder is
entitled, the full amount of cash which such holder would have received if such
holder had, immediately prior to the Record Date for such distribution of cash,
converted its Convertible Subordinated Notes into Common Stock, together with
any interest accrued with respect to such amount, in accordance with this
Section 12.05(m). The Company may make such election by providing an Officers'
Certificate to the Trustee to such effect on or prior to the payment date for
any such distribution and depositing with the Trustee on or prior to such date
an amount of cash equal to the aggregate amount that the holders of Convertible
Subordinated Notes would have received if such holders had, immediately prior to
the Record Date for such distribution, converted all of the Convertible
Subordinated Notes into Common Stock. Any such funds so deposited by the Company
with the Trustee shall be invested by the Trustee in U.S. Government Obligations
with a maturity not more than three (3) months from the date of issuance. Upon
conversion of Convertible Subordinated Notes by a holder thereof, such holder
shall be entitled to receive, in addition to the Common Stock issuable upon
conversion, an amount of cash equal to the amount such holder would have
received if such holder had, immediately prior to the Record Date for such
distribution, converted its Convertible Subordinated Note into Common Stock,
along with such holder's pro-rata share of any accrued interest earned as a
consequence of the investment of such funds. Promptly after making an election
pursuant to this Section 12.05(m), the Company shall give or shall cause to be
given notice to all holders of Convertible Subordinated Notes of such election,
which notice shall state the amount of cash per $1,000 principal amount of
Convertible Subordinated Notes such holders shall be entitled to receive
(excluding interest) upon conversion of the Convertible Subordinated Notes as a
consequence of the Company having made such election.
63
70
SECTION 12.06 Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur: (i) any reclassification or
change of the outstanding shares of 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), (ii) any consolidation, merger 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 (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety 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, then 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 TIA as in force at the date of execution of such
supplemental indenture if such supplemental indenture is then required to so
comply) providing that the Convertible Subordinated Notes shall be convertible
into the kind and amount of shares of stock and other securities or property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of the Convertible
Subordinated Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available to convert all such Convertible
Subordinated Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise his or her rights of election, if any, as to the
kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election have
not been exercised ("non-electing share"), then, for the purposes of this
Section 12.06, the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, statutory 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
12. If, in the case of any such reclassification, change, consolidation, merger,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares 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,
consolidation, merger, 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
Convertible Subordinated Notes as the Board of Directors shall reasonably
consider necessary by reason of the foregoing.
64
71
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Convertible Subordinated Notes at his
or her address appearing on the register of holders for that purpose 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 12.06 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 12.06 applies to any event or occurrence, Section 12.05
shall not apply.
SECTION 12.07 Taxes on Shares Issued.
The issue of stock certificates on conversions of Convertible
Subordinated Notes shall be made without charge to the converting holder for any
tax in respect of the issue thereof. The Company shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the holder of any
Convertible Subordinated Note converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
SECTION 12.08 Reservation of Shares; Shares to Be Fully Paid; Listing
of Common Stock.
The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Convertible Subordinated Notes from time to
time as such Convertible Subordinated Notes are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Convertible Subordinated Notes, the Company
shall take all corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue shares of such
Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Convertible Subordinated Notes will be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company further covenants that as long as the Common Stock is
quoted on the Nasdaq National Market, or its successor, the Company shall cause
all Common Stock issuable upon conversion of the Convertible Subordinated Notes
to be eligible for such quotation in accordance with, and at the times required
under, the requirements of such
65
72
market, and if at any time the Common Stock becomes listed on the New York Stock
Exchange or any other national securities exchange, the Company shall cause all
Common Stock issuable upon conversion of the Convertible Subordinated Notes to
be so listed and kept listed.
SECTION 12.09 Responsibility of Trustee.
The Trustee shall not at any time be under any duty of responsibility
to any holders of Convertible Subordinated Notes to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Convertible Subordinated Note;
and the Trustee makes no representations with respect thereto. Subject to the
provisions of Section 7.01, the Trustee shall not be responsible for any failure
of the Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or cash upon the surrender of any
Convertible Subordinated Note for the purpose of conversion or to comply with
any of the duties, responsibilities or covenants of the Company contained in
this Article 12. Without limiting the generality of the foregoing, the Trustee
shall not have any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 12.06
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by holders of Convertible Subordinated
Notes upon the conversion of their Convertible Subordinated Notes after any
event referred to in such Section 12.06 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 7.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
SECTION 12.10 Notice to Holders Prior to Certain Actions.
If
(a) the Company declares a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings or
other than a dividend that results in an adjustment in the Conversion
Price pursuant to Section 12.05 as to which the Company has made an
election in accordance with Section 12.05(m)); or
(b) the Company authorizes the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any
share of any class of Common Stock or any other rights or warrants; or
66
73
(c) there is any reclassification of the Common Stock (other
than a subdivision or combination of outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any 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 transfer of all or substantially
all of the assets of the Company; or
(d) there is any voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Convertible Subordinated Notes at his or her address appearing on
the register maintained for that purpose as promptly as possible but in any
event 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
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
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,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
67
74
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
VLSI TECHNOLOGY, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Title: Vice President
-------------------
Attest:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Title: Vice President
--------------------
Attest:
/s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
68
75
EXHIBIT A
(Face of Security)
No. ________________ $____________
CUSIP ▇▇▇▇▇▇▇▇▇
VLSI TECHNOLOGY, INC.
8 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2005
promises to pay to
or registered assigns,
the principal sum of Dollars on October 1, 2005
Interest Payment Dates: April 1 and October 1, commencing April 1, 1996
Regular Record Dates: March 15 and September 15
Certificate of Authentication
This is one of the Convertible Subordinated Notes described in the
within-mentioned Indenture.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, VLSI TECHNOLOGY, INC.
as Trustee
By_______________________________ By_________________________________
Authorized Signatory Chief Financial Officer
Dated:
By_________________________________
Assistant Secretary
(SEAL)
A-1
76
(Back of Security)
VLSI TECHNOLOGY, INC.
8 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2005
1. INTEREST. VLSI Technology, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Convertible
Subordinated Note at the rate per annum shown above. The Company will pay
interest semiannually on April 1 and October 1 of each year, commencing April 1,
1996. Interest on the Convertible Subordinated Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from September 13, 1995. Interest will be computed on the basis of a 360-day
year composed of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Convertible
Subordinated Notes (except defaulted interest) to the person in whose name each
Convertible Subordinated Note is registered at the close of business on the
March 15 or September 15 immediately preceding the relevant interest payment
date (each a "Regular Record Date") (other than with respect to a Convertible
Subordinated Note or portion thereof called for redemption on a redemption date,
or repurchased in connection with a Designated Event on a repurchase date,
during the period from the close of business on a Regular Record Date to (but
excluding) the next succeeding interest payment date (in which case accrued
interest shall be payable (unless such Convertible Subordinated Note is
converted) to the holder of the Convertible Subordinated Note or portion thereof
redeemed or repurchased in accordance with the applicable redemption or
repurchase provisions of the Indenture). Holder must surrender Convertible
Subordinated Notes to a Paying Agent to collect principal payments. The Company
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However, the
Company may pay principal and interest by check payable in such money, and may
mail such check to the holder's registered address.
3. PAYING AGENT AND REGISTRAR. ▇▇▇▇▇▇ Trust and Savings Bank (together
with any successor Trustee under the Indenture referred to below, the
"Trustee"), will act as Paying Agent and Registrar. The Company may change the
Paying Agent, Registrar or co-registrar without prior notice. Subject to certain
limitations in the Indenture, the Company or any of its subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Convertible Subordinated Notes
under an Indenture dated as of September 1, 1995 (the "Indenture") between the
Company and the Trustee. The terms of the Convertible Subordinated Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA") as in effect on the date of the Indenture. The Convertible Subordinated
Notes are subject to, and qualified by, all such
A-2
77
terms, certain of which are summarized hereon, and holders are referred to the
Indenture and the TIA for a statement of such terms. The Convertible
Subordinated Notes are unsecured general obligations of the Company limited to
(except as otherwise provided in the Indenture) up to $150,000,000 in aggregate
principal amount, unless an election has been made as set forth in Article 2 of
the Indenture to increase such aggregate principal amount by an amount not to
exceed $22,500,000. Capitalized terms not defined below have the same meaning as
is given to them in the Indenture.
5. OPTIONAL REDEMPTION. The Company shall not have the option to redeem
the Convertible Subordinated Notes prior to October 3, 1997. Thereafter, the
Company shall have the option to redeem the Convertible Subordinated Notes, in
whole or from time to time in part, at the following redemption prices
(expressed as percentages of principal amount), plus accrued and unpaid interest
to, but excluding, the date fixed for redemption if redeemed during the 12-month
period beginning October 1 of each year indicated (October 3 with respect to
1997); provided, however, that the Company shall not have the option to redeem
the Convertible Subordinated Notes prior to October 3, 1999 unless the closing
price of the Common Stock on the principal stock exchange or market on which the
Common Stock is then listed or admitted to trading equals or exceeds 125% of the
Conversion Price for at least 20 trading days within a period of 30 consecutive
trading days ending on the fifth trading day prior to the date the notice of
redemption is first mailed to the holders of the Convertible Subordinated Notes:
Redemption
Year Price
---- -----
1997 . . . . . . . . . . . . . . . . . . . . . . . . . 103.3000%
1998 . . . . . . . . . . . . . . . . . . . . . . . . . 102.8875%
1999 . . . . . . . . . . . . . . . . . . . . . . . . . 102.4750%
2000 . . . . . . . . . . . . . . . . . . . . . . . . . 102.0625%
2001 . . . . . . . . . . . . . . . . . . . . . . . . . 101.6500%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . 101.2375%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . 100.8250%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . 100.4125%
2005 . . . . . . . . . . . . . . . . . . . . . . . . . 100.0000%
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
15 days but not more than 60 days before the date fixed for redemption to each
holder of Convertible Subordinated Notes to be redeemed at his or her registered
address. Convertible Subordinated Notes in denominations larger than $1,000 may
be redeemed in part but only in integral multiples of $1,000. In the event of a
redemption of less than all of the Convertible
A-3
78
Subordinated Notes, the Convertible Subordinated Notes will be chosen for
redemption by the Trustee by lot or pro rata or, if required, in compliance with
the requirements of the principal national securities exchange, if any, on which
the Convertible Subordinated Notes are listed. On and after the redemption date
interest ceases to accrue on Convertible Subordinated Notes or portions of them
called for redemption (unless the Company defaults in the payment of the
redemption price). If this Convertible Subordinated Note is redeemed on a date
which is also an Interest Payment Date, the interest payment due on such date
will be paid to the person in whose name this Convertible Subordinated Note is
registered at the close of business on such record date.
7. DESIGNATED EVENT. Upon a Designated Event, the Company shall make a
Designated Event Offer to repurchase all outstanding Convertible Subordinated
Notes at a price equal to 101% of the aggregate principal amount of the
Convertible Subordinated Notes, plus accrued and unpaid interest to, but
excluding, the date of repurchase, such offer to be made as provided in the
Indenture. To accept the Designated Event Offer, the holder hereof must comply
with the terms thereof, including surrendering this Convertible Subordinated
Note, with the "Option of Holder to Elect Repurchase" portion hereof completed,
to the Company, a depositary, if appointed by the Company, or a Paying Agent, at
the address specified in the notice of the Designated Event Offer mailed to
holders as provided in the Indenture, prior to termination of the Designated
Event Offer.
8. SUBORDINATION. The Company's payment of the principal of, premium,
if any, and interest on the Convertible Subordinated Notes is subordinated to
the prior payment in full of the Company's Senior Debt as set forth in the
Indenture. Each holder of Convertible Subordinated Notes by his or her
acceptance hereof covenants and agrees that all payments of the principal of,
premium, if any, and interest on the Convertible Subordinated Notes by the
Company shall be subordinated in accordance with the provisions of Article 11 of
the Indenture, and each holder of Convertible Subordinated Notes accepts and
agrees to be bound by such provisions.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated
Notes are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. The transfer of Convertible Subordinated Notes may
be registered and Convertible Subordinated Notes may be exchanged as provided in
the Indenture. As a condition of transfer, the Registrar may require a holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a holder to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not exchange or register the
transfer of any Convertible Subordinated Note or portion of a Convertible
Subordinated Note selected for redemption or submitted for repurchase. Also, it
need not exchange or register the transfer of any Convertible Subordinated Note
for a period of 15 days before a selection of Convertible Subordinated Notes to
be redeemed.
▇-▇
▇▇
▇▇. PERSONS DEEMED OWNERS. The registered holder of a Convertible
Subordinated Note may be treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Convertible Subordinated Notes may be amended with the consent
of the holders of at least a majority in principal amount of the then
outstanding Convertible Subordinated Notes and any existing default may be
waived with the consent of the holders of a majority in principal amount of the
then outstanding Convertible Subordinated Notes.
Without the consent of any holder, the Indenture or the Convertible
Subordinated Notes may be amended to: (a) cure any ambiguity or correct or
supplement any defective or inconsistent provision contained in the Indenture,
or make any other changes in the provisions of the Indenture which the Company
and the Trustee may deem necessary or desirable and which will not adversely
affect the legal rights under the Indenture of the holders of Convertible
Subordinated Notes; (b) provide for uncertificated Convertible Subordinated
Notes in addition to or in place of certificated Convertible Subordinated Notes;
(c) evidence the succession of another person to the Company and the assumption
by such successor of the covenants and obligations of the Company thereunder and
in the Convertible Subordinated Notes as permitted by Section 5.01 of the
Indenture; (d) provide for conversion rights and/or repurchase rights of holders
of Convertible Subordinated Notes in the event of consolidation, merger or sale
of all or substantially all of the assets of the Company as required to comply
with Sections 5.01 and/or 12.06 of the Indenture; (e) reduce the Conversion
Price; (f) make any changes or add to the covenants of the Company for the
benefit of the holders of Convertible Subordinated Notes; or (g) comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA.
Without the consent of each holder affected, amendment or waiver may
not: (a) reduce the principal amount of Convertible Subordinated Notes whose
holders must consent to an amendment, supplement or waiver; (b) reduce the
principal of, or premium on, or change the fixed maturity of any Convertible
Subordinated Note or, except as permitted pursuant to clause (a) of the
immediately preceding paragraph, alter the provisions with respect to the
redemption of the Convertible Subordinated Notes; (c) reduce the rate of or
extend the time for payment of interest, including defaulted interest, on any
Convertible Subordinated Notes; (d) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Convertible
Subordinated Notes (except a rescission of acceleration of the Convertible
Subordinated Notes by the holders of at least a majority in aggregate principal
amount of the Convertible Subordinated Notes and a waiver of the payment default
that resulted from such acceleration); (e) make the principal of, or premium, if
any, or interest on, any Convertible Subordinated Note payable in money other
than as provided for in the Indenture and in the Convertible Subordinated Notes;
(f) make any change in the provisions of the Indenture relating to waivers of
defaults or the rights of holders of Convertible Subordinated Notes to receive
payments of principal of, premium, if any, or interest on the Convertible
Subordinated Notes or the abilities of holders of
A-5
80
Convertible Subordinated Notes to enforce their rights under the Indenture or
the provisions of the preceding paragraph; (g) waive a redemption payment with
respect to any Convertible Subordinated Note; or (h) except as permitted by the
Indenture (including Section 9.01(a)), increase the Conversion Price or modify
the provisions of the Indenture relating to conversion of the Convertible
Subordinated Notes in a manner adverse to the holders thereof. In addition, any
amendment to the provisions of Article 11 of the Indenture (which relate to
subordination) will require the consent of the holders of at least 75% in
aggregate principal amount of the Convertible Subordinated Notes then
outstanding if such amendment would adversely affect the rights of holders of
Convertible Subordinated Notes.
12. DEFAULTS AND REMEDIES. An Event of Default is: (a) default in
payment of the principal of, or premium, if any, on the Convertible Subordinated
Notes, when due at maturity, upon repurchase, upon acceleration or otherwise,
whether or not such payment is prohibited by the subordination provisions of the
Indenture; (b) default for 30 days in payment of any installment of interest on
the Convertible Subordinated Notes, whether or not such payment is prohibited by
the subordination provisions of the Indenture; (c) default by the Company for 60
days after notice in the observance or performance of any other covenants in the
Indenture; (d) failure to provide timely notice of a Designated Event; (e)
failure of the Company or any Material Subsidiary to make any payment at
maturity, including any applicable grace period, in respect of indebtedness for
borrowed money of, or guaranteed or assumed by, the Company or any Material
Subsidiary which payment is in an amount in excess of $25,000,000 and
continuance of such failure for 30 days after notice; (f) default by the Company
or any Material Subsidiary with respect to any such indebtedness, which default
results in the acceleration of such indebtedness of an amount in excess of
$25,000,000 without such indebtedness having been paid or discharged or such
acceleration having been cured, waived, rescinded, or annulled for 30 days after
notice; or (g) certain events involving bankruptcy, insolvency or reorganization
of the Company or any Material Subsidiary. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the then outstanding Convertible Subordinated Notes may declare all the
Convertible Subordinated Notes to be due and payable immediately, except that in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company all outstanding Convertible Subordinated
Notes become due and payable without further action or notice. Holders of
Convertible Subordinated Notes may not enforce the Indenture or the Convertible
Subordinated Notes except as provided in the Indenture. The Trustee may require
an indemnity satisfactory to it before it enforces the Indenture or the
Convertible Subordinated Notes. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Convertible Subordinated
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company must furnish annual compliance certificates to the
Trustee.
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or
A-6
81
guaranteed by, accept deposits from and perform services for the Company or its
Affiliates and may otherwise deal with the Company or its Affiliates as if it
were not Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Company shall have any liability for any
obligations of the Company under the Convertible Subordinated Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each holder by accepting a Convertible
Subordinated Note waives and releases all such liability. The waiver and release
are part of the consideration for the Convertible Subordinated Notes.
15. AUTHENTICATION. This Convertible Subordinated Note shall not be
valid until authenticated by the manual signature of the Trustee or an
authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
holder or an assignee, such as: TEN CO = tenants in common, TEN ENT = tenants by
the entireties, JT TEN = joint tenants with right of survivorship and not as
tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to Minors Act.
17. CONVERSION. Subject to and upon compliance with the provisions of
the Indenture, the registered holder of this Convertible Subordinated Note has
the right at any time prior to the close of business on the last trading day
prior to October 1, 2005 (or in case this Convertible Subordinated Note or any
portion hereof (a) shall be called for redemption prior to such date, then on or
prior to the close of business on the last trading day preceding the date fixed
for redemption) or (b) shall be subject to a duly completed election for
repurchase, than on or prior to the close of business on the Designated Event
Offer Termination Date (unless revoked prior to the close of business on or
prior to the Designated Event Offer Termination Date), to convert the principal
amount hereof, or any portion of such principal amount which is $1,000 or an
integral multiple thereof, into that number of fully paid and nonassessable
whole shares of common stock of the Company ("Common Stock") obtained by
dividing the principal amount of the Convertible Subordinated Note or portion
thereof to be converted by the conversion price of $54.80 per share, as adjusted
from time to time as provided in the Indenture (the "Conversion Price"), upon
surrender of this Convertible Subordinated Note to the Company at the office or
agency maintained for such purpose (and at such other offices or agencies
designated for such purpose by the Company), accompanied by written notice of
conversion duly executed (and if the shares of Common Stock to be issued on
conversion are to be issued in any name other than that of the registered holder
of this Convertible Subordinated Note by instruments of transfer, in form
satisfactory to the Company, duly executed by the registered holder or its duly
authorized attorney) and, in case such surrender shall be made during the period
starting after the close of business on the Regular Record Date immediately
preceding any Interest Payment Date through the close of business on the last
trading day immediately preceding such Interest Payment Date (unless this
Convertible Subordinated Note or the portion thereof being converted is subject
to redemption on a redemption date in that period), also accompanied by payment
in funds acceptable to the Company of an amount equal to the
A-7
82
interest otherwise payable on such Interest Payment Date on the principal amount
of this Convertible Subordinated Note then being converted. Subject to the
aforesaid requirement for a payment in the event of conversion after the close
of business on a Regular Record Date immediately preceding an Interest Payment
Date, no payment or adjustment shall be made on conversion for interest accrued
hereon or for dividends on Common Stock delivered on conversion. The right to
convert this Convertible Subordinated Note is subject to the provisions of the
Indenture relating to conversion rights in the case of certain consolidations,
mergers, or sales or transfers of substantially all the Company's assets.
The Company shall not issue fractional shares or scrip representing
fractions of shares of Common Stock upon any such conversion, but shall make an
adjustment therefor in cash on the basis of the then current market value of
such fractional interest as provided in the Indenture.
The Company will furnish to any holder upon written request and without
charge a copy of the Indenture. Requests may be made to: General Counsel, VLSI
Technology, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
A-8
83
FORM OF CONVERSION NOTICE
To: VLSI TECHNOLOGY, INC.
The undersigned registered owner of the Convertible Subordinated Note
hereby irrevocably exercises the option to convert this Convertible Subordinated
Note, or portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of VLSI Technology, Inc. in accordance
with the terms of the Indenture referred to in this Convertible Subordinated
Note, and directs that the shares issuable and deliverable upon the conversion,
together with any check in payment for fractional shares and Convertible
Subordinated Notes representing any unconverted principal amount hereof, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below. If shares or any portion of this Convertible Subordinated
Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest and taxes accompanies this Convertible Subordinated Note.
Dated: _______________________________
Fill in for registration of shares if to be
delivered, and Convertible Subordinated _______________________________
Notes if to be issued, other than to and in Signature(s)
the name of the registered holder
(Please Print):
Principal amount to be
___________________________________________ converted (if less than all):
(Name) $___,000
___________________________________________ _______________________________
(Street Address) Social Security or other
Taxpayer Identification Number
___________________________________________
(City, State and Zip Code)
Signature Guarantee:
___________________________________________
A-9
84
ASSIGNMENT FORM
If you the holder want to assign this Convertible Subordinated Note,
fill in the form below and have your signature guaranteed:
I or we assign and transfer this Convertible Subordinated Note to _____________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________________ agent to
transfer this Convertible Subordinated Note on the books of the Company. The
agent may substitute another to act for him.
Date: _________________ Your Signature:___________________________________
(Sign exactly as your name appears
on the other side of this
Convertible Subordinated Note)
Signature Guarantee: ___________________________________________________________
A-10
85
OPTION OF HOLDER TO ELECT REPURCHASE
If you wish to have this Convertible Subordinated Note repurchased by
the Company pursuant to Section 4.06 of the Indenture, check the Box: / /
If you wish to have a portion of this Convertible Subordinated Note
purchased by the Company pursuant to Section 4.06 of the Indenture, state the
amount (in multiples of $1,000): $______________
Date: ___________ Your Signature: ___________________________________
(Sign exactly as your name appears
on the other side of this
Convertible Subordinated Note)
Signature Guarantee: ___________________________________________________
A-11