EXHIBIT 4.1
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ATHEROGENICS, INC.
To
The Bank of New York Trust Company of Florida N.A.,
as Trustee
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INDENTURE
Dated as of
August 19, 2003
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4 1/2% CONVERTIBLE NOTES DUE 2008
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions....................................................................... 1
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Designation Amount And Issue Of Notes............................................. 8
Section 2.02. Form of Notes..................................................................... 9
Section 2.03. Date And Denomination Of Notes; Payments Of Interest.............................. 10
Section 2.04. Execution of Notes................................................................ 11
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer.......... 12
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes........................................ 18
Section 2.07. Temporary Notes................................................................... 19
Section 2.08. Cancellation of Notes............................................................. 20
Section 2.09. CUSIP Numbers..................................................................... 20
ARTICLE 3
REDEMPTION OF NOTES
Section 3.01. Reserved.......................................................................... 20
Section 3.02. Reserved.......................................................................... 20
Section 3.03. Reserved.......................................................................... 21
Section 3.04. Reserved.......................................................................... 21
Section 3.05. Redemption At Option of Holders Upon a Designated Event........................... 21
Section 3.06. Effect of Redemption Notice....................................................... 23
Section 3.07. Deposit of Redemption Price....................................................... 24
Section 3.08. Repayment to the Company.......................................................... 24
ARTICLE 4
RESERVED
ARTICLE 5
RESERVED
ARTICLE 6
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01. Payment of Principal, Premium and Interest........................................ 25
Section 6.02. Maintenance of Office or Agency................................................... 25
Section 6.03. Appointments to Fill Vacancies in Trustee's Office................................ 26
Section 6.04. Provisions as to Paying Agent..................................................... 26
Section 6.05. Existence......................................................................... 27
Section 6.06. Maintenance of Properties......................................................... 27
Section 6.07. Payment of Taxes and Other Claims................................................. 27
Section 6.08. Rule 144A Information Requirement................................................. 28
Section 6.09. Stay, Extension and Usury Laws.................................................... 28
Section 6.10. Compliance Certificate............................................................ 28
Section 6.11. Liquidated Damages Notice......................................................... 29
ARTICLE 7
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01. Noteholders' Lists................................................................ 29
Section 7.02. Preservation And Disclosure Of Lists.............................................. 29
Section 7.03. Reports By Trustee................................................................ 30
Section 7.04. Reports by Company................................................................ 30
ARTICLE 8
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT
Section 8.01. Events Of Default................................................................. 31
Section 8.02. Payments of Notes on Default; Suit Therefor....................................... 33
Section 8.03. Application of Monies Collected By Trustee........................................ 35
Section 8.04. Proceedings by Noteholder......................................................... 35
Section 8.05. Proceedings By Trustee............................................................ 36
Section 8.06. Remedies Cumulative And Continuing................................................ 37
Section 8.07. Direction of Proceedings and Waiver of Defaults By Majority of Noteholders........ 37
Section 8.08. Notice of Defaults................................................................ 37
Section 8.09. Undertaking To Pay Costs.......................................................... 38
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ARTICLE 9
THE TRUSTEE
Section 9.01. Duties and Responsibilities of Trustee............................................ 38
Section 9.02. Reliance on Documents, Opinions, Etc.............................................. 40
Section 9.03. No Responsibility For Recitals, Etc............................................... 41
Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes.............. 41
Section 9.05. Monies to Be Held in Trust........................................................ 42
Section 9.06. Compensation and Expenses of Trustee.............................................. 42
Section 9.07. Officers' Certificate As Evidence................................................. 43
Section 9.08. Conflicting Interests of Trustee.................................................. 43
Section 9.09. Eligibility of Trustee............................................................ 43
Section 9.10. Resignation or Removal of Trustee................................................. 43
Section 9.11. Acceptance by Successor Trustee................................................... 45
Section 9.12. Succession By Merger.............................................................. 45
Section 9.13. Preferential Collection of Claims................................................. 46
ARTICLE 10
THE NOTEHOLDERS
Section 10.01. Action By Noteholders............................................................ 46
Section 10.02. Proof of Execution by Noteholders................................................ 46
Section 10.03. Who Are Deemed Absolute Owners................................................... 47
Section 10.04. Company-owned Notes Disregarded.................................................. 47
Section 10.05. Revocation Of Consents, Future Holders Bound..................................... 47
ARTICLE 11
MEETINGS OF NOTEHOLDERS
Section 11.01. Purpose Of Meetings.............................................................. 48
Section 11.02. Call Of Meetings By Trustee...................................................... 48
Section 11.03. Call Of Meetings By Company Or Noteholders....................................... 49
Section 11.04. Qualifications For Voting........................................................ 49
Section 11.05. Regulations...................................................................... 49
Section 11.06. Voting........................................................................... 50
Section 11.07. No Delay Of Rights By Meeting.................................................... 50
ARTICLE 12
SUPPLEMENTAL INDENTURES
Section 12.01. Supplemental Indentures Without Consent of Noteholders........................... 50
Section 12.02. Supplemental Indenture With Consent Of Noteholders............................... 52
Section 12.03. Effect Of Supplemental Indenture................................................. 53
Section 12.04. Notation On Notes............................................................... 53
Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be Furnished To Trustee...... 53
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ARTICLE 13
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 13.01. Company May Consolidate On Certain Terms......................................... 54
Section 13.02. Successor To Be Substituted...................................................... 54
Section 13.03. Opinion Of Counsel To Be Given To Trustee........................................ 55
ARTICLE 14
SATISFACTION AND DISCHARGE OF INDENTURE
Section 14.01. Discharge Of Indenture........................................................... 55
Section 14.02. Deposited Monies To Be Held In Trust By Trustee.................................. 56
Section 14.03. Paying Agent To Repay Monies Held................................................ 56
Section 14.04. Return Of Unclaimed Monies....................................................... 56
Section 14.05. Reinstatement.................................................................... 56
ARTICLE 15
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01. Indenture And Notes Solely Corporate Obligations................................. 57
ARTICLE 16
CONVERSION OF NOTES
Section 16.01. Right To Convert................................................................. 57
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common Stock On Conversion; No
Adjustment For Interest Or Dividends..... ....................................... 57
Section 16.03. Cash Payments in Lieu of Fractional Shares....................................... 59
Section 16.04. Conversion Rate.................................................................. 60
Section 16.05. Adjustment Of Conversion Rate.................................................... 60
Section 16.06. Effect Of Reclassification, Consolidation, Merger or Sale........................ 69
Section 16.07. Taxes On Shares Issued........................................................... 70
Section 16.08. Reservation of Shares, Shares to Be Fully Paid; Compliance With Governmental
Requirements; Listing of Common Stock............................................ 70
Section 16.09. Responsibility Of Trustee........................................................ 71
Section 16.10. Notice To Holders Prior To Certain Actions....................................... 72
Section 16.11. Stockholder Rights Plans......................................................... 73
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding On Company's Successors....................................... 73
Section 17.02. Official Acts By Successor Corporation........................................... 73
Section 17.03. Addresses For Notices, Etc....................................................... 73
Section 17.04. Governing Law.................................................................... 74
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Section 17.05. Evidence Of Compliance With Conditions Precedent, Certificates To Trustee........ 74
Section 17.06. Legal Holidays................................................................... 74
Section 17.07. Trust Indenture Act.............................................................. 74
Section 17.08. No Security Interest Created..................................................... 75
Section 17.09. Benefits Of Indenture............................................................ 75
Section 17.10. Table Of Contents, Headings, Etc................................................. 75
Section 17.11. Authenticating Agent............................................................. 75
Section 17.12. Execution In Counterparts........................................................ 76
Section 17.13. Severability..................................................................... 76
Exhibit A Form of Note A-1
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INDENTURE
INDENTURE dated as of August 19, 2003 between AtheroGenics, Inc., a
Georgia corporation (hereinafter called the "COMPANY"), having its principal
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and The Bank of New
York Trust Company of Florida N.A., a national banking association organized
under the laws of the United States, as trustee hereunder (hereinafter called
the "TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 4 1/2% Convertible Notes Due 2008 (hereinafter
called the "NOTES"), in an aggregate principal amount not to exceed $100,000,000
and, to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture;
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect redemption upon a
Designated Event, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall
have the respective meanings specified in this Section 1.01. All other terms
used in this Indenture that are defined in the Trust Indenture Act or which are
by reference therein defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires) shall have the
meanings assigned to such terms in the Trust Indenture Act and in the Securities
Act as in force at the date of the execution of this Indenture. The words
"HEREIN", "HEREOF", "HEREUNDER" and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
"ACCEPTED PURCHASED SHARES" has the meaning specified in Section
16.05(g).
"ADJUSTMENT EVENT" has the meaning specified in Section 16.05(l).
"AGENT MEMBERS" has the meaning specified in Section 2.05(b).
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York or the city in which the
Corporate Trust Office is located are authorized or obligated by law, regulation
or executive order to close.
"CLOSING SALE PRICE" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the Nasdaq National Market or by the
National Quotation Bureau Incorporated. In the absence of such quotations, the
Company shall be entitled to determine the Closing Sale Price on the basis it
considers appropriate. The Closing Sale Price shall be determined without
reference to extended or after hours trading.
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"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMMON STOCK" 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 16.06, however, shares issuable on conversion of Notes shall include
only shares of the class designated as common stock of the Company at the date
of this Indenture (namely, the Common Stock, no par value) 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 on conversion
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 corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 13 and
Section 16.06, shall include its successors and assigns.
"CONVERSION PRICE" as of any day will equal $1,000 divided by the
Conversion Rate as of such date.
"CONVERSION RATE" has the meaning specified in Section 16.04.
"CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇.
"CURRENT MARKET PRICE" has the meaning specified in Section 16.05(h).
"CUSTODIAN" means The Bank of New York Trust Company of Florida N.A.,
as custodian with respect to the Notes in global form, or any successor entity
thereto.
"DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
3
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DESIGNATED EVENT" means the occurrence of (a) a Fundamental Change or
(b) the termination of trading in the Company's Common Stock (or other common
stock into which the Notes are at such time convertible) on the NASDAQ National
Market or any United States national securities exchange, following which the
Company's Common Stock (or other common stock into which the Notes are at such
time convertible) is no longer approved for trading on the NASDAQ National
Market or any similar United States system of automated dissemination of
quotations and security prices or listed for trading on a United States national
securities exchange.
"DESIGNATED EVENT EXPIRATION TIME" has the meaning specified in Section
3.05(b).
"DESIGNATED EVENT NOTICE" has the meaning specified in Section 3.05(b.
"DESIGNATED EVENT REDEMPTION DATE" has the meaning specified in Section
3.05(a).
"DEPOSITARY" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Notes. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "DEPOSITARY" shall mean or include such
successor.
"DETERMINATION DATE" has the meaning specified in Section 16.05(l).
"EVENT OF DEFAULT" means any event specified in Section 8.01 as an
Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"EXPIRATION TIME" has the meaning specified in Section 16.05(f).
"FAIR MARKET VALUE" has the meaning specified in Section 16.05(h).
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) in connection with which all or substantially all of the Common Stock
shall be exchanged for, converted into, acquired for or constitutes solely the
right to receive, consideration which is not all or substantially all common
stock that is (or, upon consummation of or immediately following such
transaction or event, which will be) listed on a United States national
securities exchange or approved (or, upon consummation of or immediately
following such transaction or event, which will
4
be approved) for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
"GLOBAL NOTE" has the meaning specified in Section 2.02.
"INDEBTEDNESS" means, with respect to any Person, and without
duplication, whether recourse is to all or a portion of the assets of such
Person and whether or not contingent, (a) all indebtedness, obligations and
other liabilities of such Person for borrowed money (including obligations of
the Person in respect of overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any loans or
advances from banks, whether or not evidenced by notes or similar instruments)
or evidenced by bonds, debentures, notes or similar instruments, other than any
account payable or other accrued current liability or obligation incurred in the
ordinary course of business in connection with the obtaining of materials or
services; (b) all reimbursement obligations and other liabilities of such Person
with respect to letters of credit, bank guarantees or bankers' acceptances; (c)
all obligations and liabilities in respect of leases of such Person required, in
conformity with generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such Person and all
obligations and other liabilities under any lease or related document (including
a purchase agreement) in connection with the lease of real property which
provides that such Person is contractually obligated to purchase or cause a
third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a third
party to purchase such leased property; (d) all net obligations of such Person
with respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement; (e) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d); (f) any indebtedness or
other obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
"INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASERS" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇
Brothers, Inc. and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
5
"INTEREST" means, when used with reference to the Notes, any interest
payable under the terms of the Notes, and Liquidated Damages, if any, payable
under the terms of the Registration Rights Agreement.
"LIQUIDATED DAMAGES" has the meaning specified for "LIQUIDATED DAMAGES
AMOUNT" in Section 2(e) of the Registration Rights Agreement.
"LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section 6.11.
"NON-ELECTING SHARE" has the meaning specified in Section 16.06.
"NOTE" or "NOTES" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including any Global Note.
"NOTE REGISTER" has the meaning specified in Section 2.05.
"NOTE REGISTRAR" has the meaning specified in Section 2.05.
"NOTEHOLDER" or "HOLDER" as applied to any Note, or other similar terms
(but excluding the term "BENEFICIAL HOLDER"), means any Person in whose name at
the time a particular Note is registered on the Note Registrar's books.
"OFFER EXPIRATION TIME" has the meaning specified in Section 16.05(g).
"OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "VICE PRESIDENT") and
the Treasurer or any Assistant Treasurer, or the Secretary or Assistant
Secretary of the Company.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"OUTSTANDING", when used with reference to Notes and subject to the
provisions of Section 10.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes in lieu of which, or in substitution for which, other
Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.06; and
(c) Notes converted into Common Stock pursuant to Article 16 and
Notes deemed not outstanding pursuant to Article 3.
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"PERSON" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"PORTAL MARKET" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.
"PREMIUM" means any premium payable under the terms of the Notes.
"PURCHASED SHARES" has the meaning specified in Section 16.05(f).
"QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.
"RECORD DATE" has the meaning specified in Section 16.05(h).
"REDEMPTION NOTICE" has the meaning specified in Section 3.05(a).
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of August 19, 2003, between the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge of any familiarity
with the particular subject.
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES" has the meaning specified in Section 16.05(d).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SIGNIFICANT SUBSIDIARY" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "SIGNIFICANT SUBSIDIARY" as
7
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.
"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 or other equity interest 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).
"TRADING DAY" has the meaning specified in Section 16.05(h).
"TRIGGER EVENT" has the meaning specified in Section 16.05(d).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 12.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "TRUST INDENTURE ACT" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"TRUSTEE" means The Bank of New York Trust Company of Florida N.A. and
its successors and any corporation resulting from or surviving any consolidation
or merger to which it or its successors may be a party and any successor trustee
at the time serving as successor trustee hereunder.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01 . Designation Amount And Issue Of Notes. The Notes shall
be designated as "4 1/2% CONVERTIBLE NOTES DUE 2008". Notes not to exceed the
aggregate principal amount of $80,000,000, or if the Company sells up to an
additional $20,000,000 principal amount of its Notes pursuant to the option of
the Initial Purchasers granted pursuant to the Purchase Agreement dated as of
August 13, 2003 between the Company and the Initial Purchasers, limited in
aggregate principal amount to $100,000,000, (except pursuant to Sections 2.05,
2.06, 3.05 and 16.02 hereof) upon the execution of this Indenture, or from time
to time thereafter, may be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Notes to or upon the written order of the Company, signed by its Chairman
of the Board, Chief Executive Officer, President or any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the
8
title "VICE PRESIDENT"), the Treasurer or any Assistant Treasurer or the
Secretary or Assistant Secretary, without any further action by the Company
hereunder.
Section 2.02. Form of Notes. The Notes and the Trustee's certificate
of authentication to be borne by such Notes shall be substantially in the form
set forth in Exhibit A. The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradable on The Portal Market or as may be required for the Notes to be tradable
on any other market developed for trading of securities pursuant to Rule 144A or
as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.
So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, or otherwise contemplated by
Section 2.05(a), all of the Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a "GLOBAL NOTE"). The transfer and exchange of beneficial interests
in any such Global Note shall be effected through the Depositary in accordance
with this Indenture and the applicable procedures of the Depositary. Except as
provided in Section 2.05(a), beneficial owners of a Global Note shall not be
entitled to have certificates registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and
will not be considered holders of such Global Note.
Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect redemptions, conversions, transfers or
exchanges permitted hereby. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in such manner and upon instructions given by the
holder of such Notes in accordance
9
with this Indenture. Payment of principal of and interest and premium, if any,
on any Global Note shall be made to the holder of such Note.
Section 2.03. Date And Denomination Of Notes; Payments Of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Each Note shall be dated
the date of its authentication and shall bear interest from the date specified
on the face of the form of Note attached as Exhibit A hereto. Interest on the
Notes shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
The Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except that the interest payable upon
redemption upon the occurrence of a Designated Event will be payable to the
Person to whom principal is payable pursuant to such redemption. Interest shall
be payable at the office of the Company maintained by the Company for such
purposes in the Borough of Manhattan, City of New York, which shall initially be
an office or agency of the Trustee. The Company shall pay interest (i) on any
Notes in certificated form by check mailed to the address of the Person entitled
thereto as it appears in the Note Register (or upon written notice by such
Person, by wire transfer in immediately available funds, if such Person is
entitled to interest on aggregate principal in excess of $2 million) or (ii) on
any Global Note by wire transfer of immediately available funds to the account
of the Depositary or its nominee. The term "RECORD DATE" with respect to any
interest payment date shall mean the February 15 or August 15 preceding the
applicable March 1 or September 1 interest payment date, respectively.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any March 1 or September 1 (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder, and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a special record
date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Note and the date of the
proposed payment (which shall be not less than twenty-five (25) days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to an
earlier date), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of
10
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment, and not
less than ten (10) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first-class postage prepaid, to each holder at his
address as it appears in the Note Register, not less than ten (10) days prior to
such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close of business on
such special record date and shall no longer be payable pursuant to the
following clause (2) of this Section 2.03.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04. Execution of Notes. The Notes shall be signed in the
name and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President or any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title "VICE PRESIDENT") and attested by the manual or facsimile
signature of its Secretary or any of its Assistant Secretaries or its Treasurer
or any of its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section
17.11), shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
11
Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Notes;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 6.02
being herein sometimes collectively referred to as the "NOTE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The Note
Register shall be in written form or in any form capable of being converted into
written form within a reasonably prompt period of time. The Trustee is hereby
appointed "NOTE REGISTRAR" for the purpose of registering Notes and transfers of
Notes as herein provided. The Company may appoint one or more co-registrars in
accordance with Section 6.02.
Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 6.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption, or conversion shall (if so required by the Company or the
Note Registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
12
No service charge shall be made to any holder for any registration of,
transfer or exchange of Notes, but the Company may require payment by the holder
of a sum sufficient to cover any tax, assessment or other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Notes.
Neither the Company nor the Trustee nor any Note Registrar shall be
required to exchange or register a transfer of (a) any Notes or portions thereof
surrendered for conversion pursuant to Article 16 or (b) any Notes or portions
thereof tendered for redemption (and not withdrawn) pursuant to Section 3.05.
(b) The following provisions shall apply only to Global Notes:
(i) Each Global Note authenticated under this Indenture
shall be registered in the name of the Depositary or a nominee thereof
and delivered to such Depositary or a nominee thereof or Custodian
therefor, and each such Global Note shall constitute a single Note for
all purposes of this Indenture.
(ii) Notwithstanding any other provision in this
Indenture, no Global Note may be exchanged in whole or in part for
Notes registered, and no transfer of a Global Note in whole or in part
may be registered, in the name of any Person other than the Depositary
or a nominee thereof unless (A) the Depositary (i) has notified the
Company that it is unwilling or unable to continue as Depositary for
such Global Note and a successor depositary has not been appointed by
the Company within ninety days or (ii) has ceased to be a clearing
agency registered under the Exchange Act, (B) an Event of Default has
occurred and is continuing or (C) the Company, in its sole discretion,
notifies the Trustee in writing that it no longer wishes to have all
the Notes represented by Global Notes. Any Global Note exchanged
pursuant to clause (A) or (B) above shall be so exchanged in whole and
not in part and any Global Note exchanged pursuant to clause (C) above
may be exchanged in whole or from time to time in part as directed by
the Company. Any Note issued in exchange for a Global Note or any
portion thereof shall be a Global Note; provided that any such Note so
issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Note.
(iii) Securities issued in exchange for a Global Note or
any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate principal amount equal to that of such Global Note or
portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depositary shall
designate and shall bear any legends required hereunder. Any Global
Note to be exchanged in whole shall be surrendered by the Depositary to
the Trustee, as Note Registrar. With regard to any Global Note to be
exchanged in part, either such
13
Global Note shall be so surrendered for exchange or, if the Trustee is
acting as Custodian for the Depositary or its nominee with respect to
such Global Note, the principal amount thereof shall be reduced, by an
amount equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and make
available for delivery the Note issuable on such exchange to or upon
the written order of the Depositary or an authorized representative
thereof.
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make
available to the Trustee a reasonable supply of certificated Notes in
definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the
Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Note registered in the name of the Depositary or
any nominee thereof, and the Depositary or such nominee, as the case
may be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other Person on whose behalf an
Agent Member may act, the operation of customary practices of such
Persons governing the exercise of the rights of a holder of any Note.
(vi) At such time as all interests in a Global Note have
been redeemed, converted, canceled or exchanged for Notes in
certificated form, such Global Note shall, upon receipt thereof, be
canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any
time prior to such cancellation, if any interest in a Global Note is
redeemed, converted, canceled or exchanged for Notes in certificated
form, the principal amount of such Global Note shall, in accordance
with the standing procedures and instructions existing between the
Depositary and the Custodian, be appropriately reduced, and an
endorsement shall be made on such Global Note, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction.
(c) Every Note that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.05(c), collectively, the "RESTRICTED SECURITIES") shall
be subject to the
14
restrictions on transfer set forth in this Section 2.05(c) (including those set
forth in the legend below) unless such restrictions on transfer shall be waived
by written consent of the Company, and the holder of each such Restricted
Security, by such Note holder's acceptance thereof, agrees to be bound by all
such restrictions on transfer. As used in Section 2.05(c) and 2.05(d), the term
"TRANSFER" encompasses any sale, pledge, loan, transfer or other disposition
whatsoever of any Restricted Security or any interest therein.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.05(c), if
applicable) shall bear a legend in substantially the following form, unless such
Note has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or sold pursuant to Rule 144 under the Securities Act or
any similar provision then in force, or unless otherwise agreed by the Company
in writing, with written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO ATHEROGENICS,
INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK Trust
Company of Florida N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
15
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK
Trust Company of Florida N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THIS NOTE PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER
RULE 144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note Registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.05(c). If
the Restricted Security surrendered for exchange is represented by a Global Note
bearing the legend set forth in this Section 2.05(c), the principal amount of
the legended Global Note shall be reduced by the appropriate principal amount
and the principal amount of a Global Note without the legend set forth in this
Section 2.05(c) shall be increased by an equal principal amount. If a Global
Note without the legend set forth in this Section 2.05(c) is not then
outstanding, the Company shall execute and the Trustee shall authenticate and
deliver an unlegended Global Note to the Depositary.
(d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or pursuant to Rule 144 under the Securities Act or any
similar provision then in force, or such Common Stock has been issued upon
conversion of Notes that have been transferred pursuant to a registration
statement that has
16
been declared effective under the Securities Act or pursuant to Rule 144 under
the Securities Act or any similar provision then in force, or unless otherwise
agreed by the Company in writing with written notice thereof to the transfer
agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED HEREBY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT
(A) TO ATHEROGENICS, INC. OR ANY SUBSIDIARY THEREOF, (B) TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
COMPLIANCE WITH RULE 144A, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT
WILL FURNISH TO AMERICAN STOCK TRANSFER & TRUST COMPANY, AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT
WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE
1(D) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
17
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).
(e) Any Note or Common Stock issued upon the conversion of a Note
that, prior to the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), is
purchased or owned by the Company or any Affiliate thereof may not be resold by
the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Notes or Common Stock, as
the case may be, no longer being "RESTRICTED SECURITIES" (as defined under Rule
144).
(f) The Trustee shall have no responsibility or obligation to any
Agent Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Notes or with respect to the delivery to any Agent Member or other Person (other
than the Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Notes. All notices and
communications to be given to the Noteholder and all payments to be made to
Noteholders under the Notes shall be given or made only to or upon the order of
the registered Noteholders (which shall be the Depository or its nominee in the
case of a Global Note). The rights of beneficial owners in any Global Note shall
be exercised only through the Depository subject to the customary procedures of
the Depository. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Agent Members.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members in any
Global Indenture) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case,
the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be
18
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 every case of
destruction, loss or theft, the applicant shall also furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent evidence to their
satisfaction of the destruction, loss or theft of such Note and of the ownership
thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Company may require the
payment by the holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to
mature or has been tendered for redemption upon a Designated Event (and not
withdrawn) or is to be converted into Common Stock shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
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 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 such 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 in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable, any
paying agent or conversion agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion or redemption
of mutilated, destroyed, lost or stolen Notes and shall preclude any and all
other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment or
conversion or redemption of negotiable instruments or other securities without
their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
19
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay, the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form and thereupon any or all temporary Notes may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 6.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Notes an equal
aggregate principal amount of Notes in certificated form. Such exchange shall be
made by the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and delivered hereunder.
Section 2.08. Cancellation of Notes. All Notes surrendered for the
purpose of payment, redemption, conversion, exchange or registration of transfer
shall, if surrendered to the Company or any paying agent or any Note Registrar
or any conversion agent, be surrendered to the Trustee and promptly canceled by
it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee shall dispose of such canceled
Notes in accordance with its customary procedures. If the Company shall acquire
any of the Notes, such acquisition shall not operate as a redemption, or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Noteholders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION OF NOTES
Section 3.01. Reserved.
Section 3.02. Reserved.
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Section 3.03. Reserved.
Section 3.04. Reserved.
Section 3.05. Redemption At Option of Holders Upon a Designated Event.
(a) If there shall occur a Designated Event at any time prior to
maturity of the Notes, then each Noteholder shall have the right, at such
holder's option, to require the Company to redeem for cash all of such holder's
Notes, or any portion thereof that is a multiple of $1,000 principal amount, on
the date (the "DESIGNATED EVENT REDEMPTION DATE") that is thirty (30) days after
the date of the Designated Event Notice (as defined in Section 3.05(b)) of such
Designated Event (or, if such 30th day is not a Business Day, the next
succeeding Business Day) at a redemption price equal to 100% of the principal
amount thereof, together with accrued interest and Liquidated Damages, if any,
to, but excluding, the Designated Event Redemption Date. Such redemption
pursuant to this Section 3.05 shall be made at the option of the Noteholder,
upon:
(i) delivery to the Trustee (or other paying agent
appointed by the Company) by a Noteholder of a duly completed form
entitled "Option to Elect Repayment Upon A Designated Event" (the
"REDEMPTION NOTICE") in the form set forth on the reverse of the Note
during the period beginning at any time from the opening of business on
the date the Designated Event Notice is mailed until the close of
business on the Designated Event Redemption Date; and
(ii) delivery or book-entry transfer of the Note or
Notes to the Trustee (or other paying agent appointed by the Company)
at any time after delivery of the Designated Event Notice (together
with all necessary endorsements) at the Corporate Trust Office of the
Trustee (or other paying agent appointed by the Company) in the Borough
of Manhattan as provided in Section 6.02, such delivery being a
condition to receipt by the holder of the redemption price therefor;
provided that such redemption price shall be so paid pursuant to this
Section 3.05 only if the Note so delivered to the Trustee (or other
paying agent appointed by the Company) shall conform in all respects to
the description thereof in the related Redemption Notice.
The Company shall redeem, pursuant to this Section 3.05, a portion of a
Note, if the principal amount of such portion is $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to the redemption of all of a
Note also apply to the redemption of such portion of such Note. Upon
presentation of any Note redeemed in part only, the Company shall execute and,
upon the Company's written direction to the Trustee, the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Note or Notes, of authorized denominations, in
aggregate principal amount equal to the unredeemed portion of the Notes
presented.
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Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Redemption
Notice contemplated by this Section 3.05 shall have the right to withdraw such
Redemption Notice at any time prior to the close of business on the Designated
Event Redemption Date by delivery of a written notice of withdrawal to the
Trustee (or other paying agent appointed by the Company) in accordance with
Section 3.06.
The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Redemption Notice or
written notice of withdrawal thereof.
(b) On or before the tenth day after the occurrence of a
Designated Event, the Company or at its written request (which must be received
by the Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the "DESIGNATED EVENT NOTICE") of the
occurrence of such Designated Event and of the redemption right at the option of
the holders arising as a result thereof. Such notice shall be mailed by first
class mail. The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. If the Company shall give such notice, the Company shall
also deliver a copy of the Designated Event Notice to the Trustee at such time
as it is mailed to Noteholders. Concurrently with the mailing of any Designated
Event Notice, the Company shall issue a press release announcing such Designated
Event referred to in the Designated Event Notice, the form and content of which
press release shall be determined by the Company in its sole discretion. The
failure to issue any such press release or any defect therein shall not affect
the validity of the Designated Event Notice or any proceedings for the
redemption of any Note which any Noteholder may elect to have the Company redeem
as provided in this Section 3.05.
Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Redemption Date, the
price at which the Company shall be obligated to redeem Notes, that the holder
must exercise the redemption right on or prior to the close of business on the
Designated Event Redemption Date (the "DESIGNATED EVENT EXPIRATION TIME"), that
the holder shall have the right to withdraw any Notes surrendered prior to the
Designated Event Expiration Time, a description of the procedure which a
Noteholder must follow to exercise such redemption right and to withdraw any
surrendered Notes, the place or places where the holder is to surrender such
holder's Notes, the amount of interest and Liquidated Damages, if any, accrued
on each Note to the Designated Event Redemption Date and the CUSIP number or
numbers of the Notes (if then generally in use).
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No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the redemption of the Notes pursuant to this Section 3.05.
(c) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 16.06 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or shares of common stock
of 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 stock, securities or other property or
assets (including cash) (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 (accompanied
by an Opinion of Counsel that such supplemental indenture complies with this
Indenture and the Trust Indenture Act 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 the Notes to cause the Company to redeem the Notes
following a Designated Event, including without limitation the applicable
provisions of this Section 3.05 and the definitions of Common Stock and
Designated Event, as appropriate, as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply to such other Person if different from the Company and the common stock
issued by such Person (in lieu of the Company and the Common Stock of the
Company).
(d) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the redemption rights of the holders of Notes in
the event of a Designated Event.
Section 3.06. Effect of Redemption Notice.
(a) Upon receipt by the Trustee (or other paying agent appointed
by the Company) of the Redemption Notice specified in Section 3.05(a), the
holder of the Note in respect of which such Redemption Notice was given shall
(unless such Redemption Notice is validly withdrawn) thereafter be entitled to
receive solely the redemption price with respect to such Note. Such redemption
price shall be paid to such Noteholder, subject to receipt of funds and/or Notes
by the Trustee (or other paying agent appointed by the Company), promptly
following the later of (x) the Designated Event Redemption Date with respect to
such Note (provided the holder has satisfied the conditions in Section 3.05) and
(y) the time of delivery of such Note to the Trustee (or other paying agent
appointed by the Company) by the holder thereof in the manner required by
Section 3.05. Notes in
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respect of which a Redemption Notice has been given by the holder thereof may
not be converted pursuant to Article 16 hereof on or after the date of the
delivery of such Redemption Notice unless such Redemption Notice has first been
validly withdrawn.
(b) A Redemption Notice may be withdrawn by means of a written
notice of withdrawal delivered to the office of the Trustee (or other paying
agent appointed by the Company) in accordance with the Redemption Notice at any
time prior to the close of business on the Designated Event Redemption Date,
specifying:
(i) the certificate number, if any, of the Note in
respect of which such notice of withdrawal is being submitted, or the
appropriate Depositary information if the Note in respect of which such
notice of withdrawal is being submitted is represented by a Global
Note,
(ii) the principal amount of the Note with respect to
which such notice of withdrawal is being submitted, and
(iii) the principal amount, if any, of such Note which
remains subject to the original Redemption Notice and which has been or
will be delivered for redemption by the Company.
Section 3.07. Deposit of Redemption Price. (a) Prior to 10:00 a.m. (New
York City Time) on the Business Day following the Designated Event Redemption
Date, the Company shall deposit with the Trustee (or other paying agent
appointed by the Company; or, if the Company or a Subsidiary or an Affiliate of
either of them is acting as the paying agent, shall segregate and hold in trust
as provided in Section 6.04) an amount of cash (in immediately available funds
if deposited on such Business Day), sufficient to pay the aggregate redemption
price of all the Notes or portions thereof that are to be redeemed as of the
Designated Event Redemption Date.
(b) If the Trustee or other paying agent appointed by the Company,
or the Company or a Subsidiary or Affiliate of either of them, if such entity is
acting as the paying agent, holds cash sufficient to pay the aggregate
redemption price of all the Notes, or portions thereof, that are to be redeemed
as of the Designated Event Redemption Date, on or after the Designated Event
Redemption Date (i) the Notes will cease to be outstanding, (ii) interest on the
Notes will cease to accrue, and (iii) all other rights of the holders of such
Notes will terminate, whether or not book-entry transfer of the Notes has been
made or the Notes have been delivered to the Trustee or paying agent, other than
the right to receive the redemption price upon delivery of the Notes.
Section 3.08. Repayment to the Company. The Trustee (or other paying
agent appointed by the Company) shall return to the Company any cash that
remains unclaimed as provided in Section 14.04.
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ARTICLE 4
RESERVED
ARTICLE 5
RESERVED
ARTICLE 6
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price upon
redemption pursuant to Article 3), and interest, on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes.
Section 6.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, The City of New York,
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion or redemption and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed 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, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note Registrar, Custodian and conversion agent and the Corporate Trust Office
shall be considered as one such office or agency of the Company for each of the
aforesaid purposes.
So long as the Trustee is the Note Registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 9.10(a) and the
third paragraph of Section 9.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.
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Section 6.03. 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 9.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 6.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 6.04:
(1) that it will hold all sums held by it as such agent
for the payment of the principal of and premium, if any, or interest on
the Notes (whether such sums have been paid to it by the Company or by
any other obligor on the Notes) in trust for the benefit of the holders
of the Notes;
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Notes) to make any
payment of the principal of and premium, if any, or interest on the
Notes when the same shall be due and payable; and
(3) that at any time during the continuance of an Event
of Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
(in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of, premium, if any, or interest on the
Notes, set aside, segregate and hold in trust for the benefit of the holders of
the Notes a sum sufficient to pay such principal, premium, if any, or interest
so becoming due and will promptly notify the Trustee of any failure to take such
action and of any failure by the Company (or any other obligor under the Notes)
to make any payment of the principal of, premium, if any, or interest on the
Notes when the same shall become due and payable.
(c) Anything in this Section 6.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as
26
required by this Section 6.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
(d) Anything in this Section 6.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 6.04 is subject
to Sections 14.03 and 14.04.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 6.05. Existence. Subject to Article 13, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Noteholders.
Section 6.06. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any subsidiary and not
disadvantageous in any material respect to the Noteholders.
Section 6.07. Payment of Taxes and Other Claims. The Company will pay
or discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamp taxes and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange, conversion or redemption of any Notes or with
respect to this Indenture; provided that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate,
27
have a material adverse impact on the Company, or (B) if the amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 6.08. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock designated by such
holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such further action as
any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
Section 6.09. 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 or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Notes as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 6.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
28
The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 6.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 6.11. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice
("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen (15) days prior to the proposed payment date for
the Liquidated Damages, and the Liquidated Damages Notice shall set forth the
amount of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Notes to determine the Liquidated Damages, or with respect to the nature,
extent or calculation of the amount of Liquidated Damages when made, or with
respect to the method employed in such calculation of the Liquidated Damages.
ARTICLE 7
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01. Noteholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each March 1 and September 1 in each year beginning
with March 1, 2004, and at such other times as the Trustee may request in
writing, within thirty (30) 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 as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Note Registrar.
Section 7.02. Preservation And Disclosure Of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes contained in
the most recent list furnished to it as provided in Section 7.01 or maintained
by the Trustee in its capacity as Note Registrar or co-registrar in respect of
the Notes, if so acting. The
29
Trustee may destroy any list furnished to it as provided in Section 7.01 upon
receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes made
pursuant to the Trust Indenture Act.
Section 7.03. Reports By Trustee. (a) Within sixty (60) days after May
15 of each year commencing with the year 2004, the Trustee shall transmit to
holders of Notes such reports dated as of May 15 of the year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. In the event that no events have occurred
under the applicable sections of the Trust Indenture Act the Trustee shall be
under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission
to holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the Company.
The Company will promptly notify the Trustee in writing when the Notes are
listed on any stock exchange or automated quotation system or delisted
therefrom.
Section 7.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Notes, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Notes are governed by such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with or otherwise be made available to the Trustee within fifteen
(15) days after the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officers' Certificates).
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ARTICLE 8
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT
Section 8.01. Events Of Default. In case one or more of the following Events of
Default (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of any installment of interest or
Liquidated Damages upon any of the Notes as and when the same shall become due
and payable, and continuance of such default for a period of thirty (30) days;
or
(b) default in the payment of the principal of or premium, if any,
on any of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption pursuant to Article 3, by
acceleration or otherwise; or
(c) default in the Company's obligation to convert any Notes
following the exercise by the Noteholder of the right to convert such Notes into
Common Stock pursuant to and in accordance with Article 16; or
(d) default in the Company's obligation to provide a Designated
Event Notice upon a Designated Event as provided in Section 3.05; or
(e) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the Notes
or in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 8.01 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 10.04; or
(f) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
31
(g) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive days; or
(h) default in the payment of principal when due at stated
maturity or resulting in acceleration of other Indebtedness of the Company for
borrowed money where the aggregate principal amount with respect to which the
default or acceleration has occurred exceeds $10 million and such acceleration
has not been rescinded or annulled within a period of 30 days after written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or to the Company and the Trustee by
the holders of at least 25% in aggregate principal amount of the Notes at the
time outstanding determined in accordance with Section 10.04;
then, and in each and every such case (other than an Event of Default specified
in Section 8.01(f) or 8.01(g)), unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the holders of not
less than twenty-five percent (25%) in aggregate principal amount of the Notes
then outstanding hereunder determined in accordance with Section 10.04, by
notice in writing to the Company (and to the Trustee if given by Noteholders),
may declare the principal of and premium, if any, on all the Notes and the
interest and Liquidated Damages, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 8.01(f) or 8.01(g) occurs, the principal of all the Notes and the
interest and Liquidated Damages, if any, accrued thereon shall be immediately
and automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest and Liquidated Damages, if any, upon all Notes and the principal of and
premium, if any, on any and all Notes which shall have become due otherwise than
by acceleration (with interest on overdue installments of interest and
Liquidated Damages, if any (to the extent that payment of such interest is
enforceable under applicable law) and on such principal and premium, if any, at
the rate borne by the Notes, to the date of such payment or deposit) and amounts
due to the Trustee pursuant to Section 9.06, and if any and all defaults under
this Indenture, other than the nonpayment of principal of and premium, if any,
and accrued interest and Liquidated Damages, if any, on Notes which shall have
become due by acceleration, shall have been cured or waived pursuant to
32
Section 8.07, then and in every such case the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
and to the Trustee, may waive all defaults or Events of Default and rescind and
annul such declaration and its consequences; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon. The Company shall notify
in writing a Responsible Officer of the Trustee, promptly upon becoming aware
thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.
Section 8.02. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest or Liquidated Damages, if any, upon any of the Notes as
and when the same shall become due and payable, and such default shall have
continued for a period of thirty (30) days, or (b) in case default shall be made
in the payment of the principal of or premium, if any, on any of the Notes as
and when the same shall have become due and payable, whether at maturity of the
Notes or in connection with any redemption, by or under this Indenture,
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Notes, the whole amount
that then shall have become due and payable on all such Notes for principal and
premium, if any, or interest and Liquidated Damages, if any, as the case may be,
with interest upon the overdue principal and premium, if any, and (to the extent
that payment of such interest is enforceable under applicable law) upon the
overdue installments of interest and Liquidated Damages, if any, at the rate
borne by the Notes, plus 1% and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 9.06. Until such demand by the
Trustee, the Company may pay the principal of and premium, if any, and interest
and Liquidated Damages, if any, on the Notes to the registered holders, whether
or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
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any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 8.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest and Liquidated Damages, if any, owing
and unpaid in respect of the Notes, and, in case of any judicial proceedings, to
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 of the Noteholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Notes, its or their creditors, or its or their property, and to
collect and receive any monies or other property payable or deliverable on any
such claims, and to distribute the same after the deduction of any amounts due
the Trustee under Section 9.06, and to take any other action with respect to
such claims, including participating as a member of any official committee of
creditors, as it reasonably deems necessary or advisable, and, unless prohibited
by law or applicable regulations, and any receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, custodian or similar official is
hereby authorized by each of the Noteholders to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the making of such
payments directly to the Noteholders, to pay to the Trustee any amount due it
for reasonable compensation, expenses, advances and disbursements, including
counsel fees and expenses incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall,
34
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
Section 8.03. Application of Monies Collected By Trustee. Any monies
collected by the Trustee pursuant to this Article 8 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
9.06;
SECOND: In case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of interest on the Notes in default in
the order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the rate borne by the Notes, such payments
to be made ratably to the Persons entitled thereto;
THIRD: In case the principal of the outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Notes for principal and premium, if any,
and interest, with interest on the overdue principal and premium, if any, and
(to the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by the Notes, and in case
such monies shall be insufficient to pay in full the whole amounts so due and
unpaid upon the Notes, then to the payment of such principal and premium, if
any, and interest without preference or priority of principal and premium, if
any, over interest, or of interest over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of any Note
over any other Note, ratably to the aggregate of such principal and premium, if
any, and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
Section 8.04. Proceedings by Noteholder. No Noteholder shall have any
right by virtue of or by reference to any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder
35
previously shall have given to the Trustee written notice of an Event of Default
and of the continuance thereof, as hereinbefore provided, and unless also the
holders of not less than twenty-five percent (25%) in aggregate principal amount
of the Notes then outstanding shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable security or
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 8.07; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other taker and
holder and the Trustee, that no one or more Noteholders shall have any right in
any manner whatever by virtue of or by reference to any provision of this
Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all Noteholders
(except as otherwise provided herein). For the protection and enforcement of
this Section 8.04, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any Noteholder to receive payment of the principal of
and premium, if any (including the redemption price upon redemption pursuant to
Article 8), and accrued interest on such Note, on or after the respective due
dates expressed in such Note or in the event of redemption, or to institute suit
for the enforcement of any such payment on or after such respective dates
against the Company shall not be impaired or affected without the consent of
such Noteholder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, any Noteholder, without the consent of either the Trustee or
any other Noteholder, in its own behalf and for its own benefit, may enforce,
and may institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.
Section 8.05. Proceedings By Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
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Section 8.06. Remedies Cumulative And Continuing. Except as provided
in Section 2.06, all powers and remedies given by this Article 8 to the Trustee
or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Noteholders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Noteholder to exercise any right or power accruing upon any default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or any
acquiescence therein, and, subject to the provisions of Section 8.04, every
power and remedy given by this Article 8 or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
Section 8.07. Direction of Proceedings and Waiver of Defaults By
Majority of Noteholders. The holders of a majority in aggregate principal amount
of the Notes at the time outstanding determined in accordance with Section 10.04
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that (a) such direction shall not be in
conflict with any rule of law or with this Indenture, (b) the Trustee may take
any other action which is not inconsistent with such direction, (c) the Trustee
may decline to take any action that would benefit some Noteholder to the
detriment of other Noteholders and (d) the Trustee may decline to take any
action that would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 10.04 may, on behalf of the holders of all
of the Notes, waive any past default or Event of Default hereunder and its
consequences except (i) a default in the payment of Interest or premium, if any,
on, or the principal of, the Notes, (ii) a failure by the Company to convert any
Notes into Common Stock, (iii) a default in the payment of the redemption price
pursuant to Article 3 or (iv) a default in respect of a covenant or provisions
hereof which under Article 12 cannot be modified or amended without the consent
of the holders of each or all Notes then outstanding or affected thereby. Upon
any such waiver, the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder; but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon. Whenever any default or Event of Default hereunder
shall have been waived as permitted by this Section 8.07, said default or Event
of Default shall for all purposes of the Notes and this Indenture be deemed to
have been cured and to be not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 8.08. Notice of Defaults. The Trustee shall, within ninety
(90) days after a Responsible Officer of the Trustee has knowledge of the
occurrence
37
of a default, mail to all Noteholders, as the names and addresses of such
holders appear upon the Note Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that except in the case of Default in the
payment of the principal of, or premium, if any, or interest or Liquidated
Damages on any of the Notes, the Trustee shall be protected in withholding such
notice if and so long as a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Noteholders.
Section 8.09. Undertaking To Pay Costs. All parties to this Indenture
agree, and each Noteholder by his acceptance thereof shall be deemed to have
agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided that the provisions of this Section 8.09
(to the extent permitted by law) shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than ten percent in principal amount of the Notes
at the time outstanding determined in accordance with Section 10.04, or to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal of or premium, if any, or interest on any Note on or after the due
date expressed in such Note or to any suit for the enforcement of the right to
convert any Note in accordance with the provisions of Article 16.
ARTICLE 9
THE TRUSTEE
Section 9.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
38
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(ii) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein);
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Notes at the time outstanding determined as provided in Section 10.04 relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Notes;
(f) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred; and
39
(g) the Trustee shall not be deemed to have knowledge of any
Default or Event of Default hereunder unless it shall have been notified in
writing of such Default or Event of Default by the Company or the holders of at
least 10% in aggregate principal amount of the Notes.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 9.02. Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 9.01:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, Note, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(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 be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
Note or other paper or document, but the Trustee may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent
40
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder;
(g) the Trustee shall not be liable for any action taken, suffered
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder;
(i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded;
(j) any permissive right or authority granted to the Trustee shall
not be construed as a mandatory duty; and
(k) in no event shall the Trustee be responsible or liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
Section 9.03. No Responsibility For Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes. The Trustee, any paying agent, any conversion agent or Note
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note Registrar.
41
Section 9.05. Monies to Be Held in Trust. Subject to the provisions of
Section 14.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.
Section 9.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee and any predecessor Trustee (and any officer,
director or employee of the Trustee), in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any and all loss, liability, damage, claim or expense including taxes (other
than taxes based on the income of the Trustee) incurred without negligence or
bad faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim (whether asserted by the Company, any holder or any other
Person) or liability in connection with enforcing the provisions of the Section
9.06, except to the extent that such loss, damage, claim, liability or expense
is due to its own negligence or bad faith. The obligations of the Company under
this Section 9.06 to compensate or indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Notes. The obligation of the Company under this Section shall survive
the satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(f) or (g) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
42
Section 9.07. Officers' Certificate As Evidence. Except as otherwise
provided in Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 9.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 9.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 9.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 9.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may, upon
ten (10) Business Days' notice to the Company and the Noteholders, appoint a
successor identified in such notice or may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee, or, if any Noteholder who has been a bona fide holder of a Note or
Notes for at least six (6) months may, subject to the provisions of Section
8.09, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
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(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 9.08
after written request therefor by the Company or by any Noteholder who
has been a bona fide holder of a Note or Notes for at least six (6)
months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.09 and shall fail to resign after
written request therefor by the Company or by any such Noteholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 8.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided that
if no successor Trustee shall have been appointed and have accepted appointment
sixty (60) days after either the Company or the Noteholders has removed the
Trustee, or the Trustee resigns, the Trustee so removed may petition, at the
expense of the Company, any court of competent jurisdiction for an appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten (10) days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or if
such Trustee so removed or any Noteholder fails to act, the Company, upon the
terms and conditions and otherwise as in Section 9.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.
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(e) Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 9.06 shall continue for
the benefit of the retiring Trustee.
Section 9.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 9.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
9.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 9.06.
No successor trustee shall accept appointment as provided in this
Section 9.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 9.08 and be eligible under
the provisions of Section 9.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 9.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note Register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 9.12. Succession By Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 9.08 and eligible
under the provisions of Section 9.09.
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In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided that the right to adopt the certificate
of authentication of any predecessor Trustee or authenticate Notes in the name
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 9.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE 10
THE NOTEHOLDERS
Section 10.01. Action By Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article 11, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 10.02. Proof of Execution by Noteholders. Subject to the
provisions of Sections 9.01, 9.02 and 11.05, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding
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of Notes shall be proved by the registry of such Notes or by a certificate of
the Note Registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 11.06.
Section 10.03. Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Note Registrar may deem
the Person in whose name such Note shall be registered upon the Note Register to
be, and may treat it as, the absolute owner of such Note (whether or not such
Note shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by any Person other than the Company or any Note Registrar)
for the purpose of receiving payment of or on account of the principal of,
premium, if any, and interest on such Note, for conversion of such Note and for
all other purposes; and neither the Company nor the Trustee nor any paying agent
nor any conversion agent nor any Note Registrar shall be affected by any notice
to the contrary. All such payments so made to any holder for the time being, or
upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.
Section 10.04. Company-owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent, waiver or other action,
only Notes which a Responsible Officer actually knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 10.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or any Affiliate of the Company or any such other obligor. In the case of
a dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee. Upon request of the Trustee,
the Company shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Notes, if any, known by the Company to be owned or
held by or for the account of any of the above described Persons, and, subject
to Section 9.01, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Notes not listed therein are outstanding for the purpose of any
such determination.
Section 10.05. Revocation Of Consents, Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 10.01, of the taking of any action by the holders of the percentage in
aggregate
47
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 10.02, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE 11
MEETINGS OF NOTEHOLDERS
Section 11.01. Purpose Of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 11 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee
or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Noteholders pursuant to any of the provisions
of Article 8;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article 9;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
12.02; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture or under
applicable law.
Section 11.02. Call Of Meetings By Trustee. The Trustee may at any
time call a meeting of Noteholders to take any action specified in Section
11.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Noteholders, setting forth the time and the place
of such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 10.01,
shall be mailed to holders of Notes at their addresses as they shall appear on
the Note Register. Such notice shall also be mailed to the Company. Such notices
shall be mailed not less than twenty (20) nor more than ninety (90) days prior
to the date fixed for the meeting.
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Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 11.03. Call Of Meetings By Company Or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
11.01, by mailing notice thereof as provided in Section 11.02.
Section 11.04. Qualifications For Voting. To be entitled to vote at
any meeting of Noteholders a person shall (a) be a holder of one or more Notes
on the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
Section 11.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 11.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Notes represented at the meeting and entitled to vote
at the meeting.
Subject to the provisions of Section 10.04, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Note challenged as not
outstanding and ruled by the
49
chairman of the meeting to be not outstanding. The chairman of the meeting
shall have no right to vote other than by virtue of Notes held by him or
instruments in writing as aforesaid duly designating him as the proxy to vote on
behalf of other Noteholders. Any meeting of Noteholders duly called pursuant to
the provisions of Section 11.02 or 11.03 may be adjourned from time to time by
the holders of a majority of the aggregate principal amount of Notes represented
at the meeting, whether or not constituting a quorum, and the meeting may be
held as so adjourned without further notice.
Section 11.06. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 11.02. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 11.07. No Delay Of Rights By Meeting. Nothing contained in
this Article 11 shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Noteholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Noteholders under any of the provisions of this Indenture or of the Notes.
ARTICLE 12
SUPPLEMENTAL INDENTURES
Section 12.01. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
50
(a) make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 16.06 and the
redemption obligations of the Company pursuant to the requirements of Section
3.05(c);
(b) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Notes, any property or assets;
(c) to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 13;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to change, eliminate or add any new provisions in
regard to matters or questions arising under this Indenture that shall not
materially and adversely affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is
51
hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 12.02.
Section 12.02. Supplemental Indenture With Consent Of Noteholders.
With the consent (evidenced as provided in Article 10) of the holders of at
least a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided that no such supplemental indenture
shall, without the consent of the holder of each Note so affected, (i) extend
the fixed maturity of any Note, (ii) reduce the rate or extend the time of
payment of interest or Liquidated Damages, if any, thereon, (iii) reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption thereof, (iv) impair the right of any Noteholder to
institute suit for the payment thereof, (v) make the principal thereof or
interest, Liquidated Damages or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, (vi) change the obligation of
the Company to redeem any Note upon the happening of a Designated Event in a
manner adverse to the Noteholders, (vii) impair the right to convert the Notes
or reduce the number of shares of Common Stock or the amount of any other
property receivable upon conversion, subject to the terms set forth herein,
including Section 16.06, in each case, (viii) modify any of the provisions of
this Section 12.02 or Section 8.07, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the holder of each Note so affected, (ix) change
any obligation of the Company to maintain an office or agency in the places and
for the purposes set forth in Section 6.02, (x) reduce the quorum or voting
requirements set forth in Article 11 or (xi) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental
52
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 12.03. Effect Of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 12 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
12.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 12, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 12.04. Notation On Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 12 may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 17.10)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.
Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be
Furnished To Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 12 and is otherwise
authorized or permitted by this Indenture.
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ARTICLE 13
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 13.01. Company May Consolidate On Certain Terms. Subject to
the provisions of Section 13.02, the Company shall not consolidate or merge with
or into any other Person or Persons (whether or not affiliated with the
Company), nor shall the Company or its successor or successors be a party or
parties to successive consolidations or mergers, nor shall the Company sell,
convey, transfer or lease the property and assets of the Company substantially
as an entirety, to any other Person (whether or not affiliated with the
Company), unless: (i) the Company is the surviving Person, or the resulting,
surviving or transferee Person is organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia; (ii)
upon any such consolidation, merger, sale, conveyance, transfer or lease, the
due and punctual payment of the principal of and premium, if any, and interest
on all of the Notes, according to their tenor and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the Person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 16.06; and (iii) immediately after giving effect to the transaction
described above, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing.
Section 13.02. Successor To Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of AtheroGenics, Inc. any or all of the Notes, issuable hereunder
that theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued
54
in accordance with the terms of this Indenture as though all of such Notes had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, upon compliance with
the provisions of this Article 13, the Person named as the "COMPANY" in the
first paragraph of this Indenture or any successor that shall thereafter have
become such in the manner prescribed in this Article 13 may be dissolved, wound
up and liquidated at any time thereafter and such Person shall be released from
its liabilities as obligor and maker of the Notes and from its obligations under
this Indenture.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Notes thereafter to be issued as may be appropriate.
Section 13.03. Opinion Of Counsel To Be Given To Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 13.
ARTICLE 14
SATISFACTION AND DISCHARGE OF INDENTURE
Section 14.01. Discharge Of Indenture. When the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes that have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, and
the Company shall deposit with the Trustee, in trust, funds sufficient to pay
all of the Notes (other than any Notes that shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Notes shall have been authenticated and delivered) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and premium, if
any, and interest and Liquidated Damages, if any, due, and if the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to ERROR!
BOOKMARK NOT DEFINED. rights hereunder of Noteholders to receive payments of
principal of and premium, if any, and interest and Liquidated Damages, if any,
on, the Notes and the other rights, duties and obligations of Noteholders, as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and ERROR! BOOKMARK NOT DEFINED. the rights, obligations and immunities
of the Trustee hereunder), and the Trustee, on written demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 17.05 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
55
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 Notes.
Section 14.02. Deposited Monies To Be Held In Trust By Trustee.
Subject to Section 14.04, all monies deposited with the Trustee pursuant to
Section 14.01, shall be held in trust for the sole benefit of the Noteholders,
and such monies shall be applied by the Trustee to the payment, either directly
or through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular 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 14.03. Paying Agent To Repay Monies Held. Upon the
satisfaction and discharge of this Indenture, all monies then held by any paying
agent of the Notes (other than the Trustee) shall, upon written request of the
Company, 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 14.04. 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 Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall 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 Notes shall thereafter look
only to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
Section 14.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 14.02 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 Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 14.01 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 14.02;
provided that if the Company makes any payment of interest on or principal of
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the holders of such Notes to receive such payment
from the money held by the Trustee or paying agent.
56
ARTICLE 15
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01. Indenture And Notes Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or Interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE 16
CONVERSION OF NOTES
Section 16.01. Right To Convert.
(a) Subject to and upon compliance with the provisions of this
Indenture, at any time prior to the close of business on September 1, 2008, the
holder of any Note shall have the right, at such holder's option, to convert the
principal amount of the Note, or any portion of such principal amount which is a
multiple of $1,000, into fully paid and non-assessable shares of Common Stock
(as such shares shall then be constituted) at the Conversion Rate in effect at
such time, by surrender of the Note so to be converted in whole or in part,
together with any required funds, in the manner provided in Section 16.02.
(b) A Note in respect of which a holder is electing to exercise
its option to require redemption upon a Designated Event pursuant to Section
3.05 may be converted only if such holder withdraws its Redemption Notice in
accordance with Section 3.06. A holder of Notes is not entitled to any rights of
a holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article 16.
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common
Stock On Conversion; No Adjustment For Interest Or Dividends.
(a) In order to exercise the conversion privilege with respect to
any Note in certificated form, the Company must receive at the office or agency
of the Company maintained for that purpose or, at the option of such holder, the
Corporate Trust Office, such Note with the original or facsimile of the form
57
entitled "CONVERSION NOTICE" on the reverse thereof, duly completed and manually
signed, together with such Notes duly endorsed for transfer, accompanied by the
funds, if any, required by Section 16.02(c). 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 shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer or similar
taxes, if required pursuant to Section 16.07.
In order to exercise the conversion privilege with respect to any
interest in a Global Note, the beneficial holder must complete, or cause to be
completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Note, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by Section 16.02(c) and
any transfer taxes if required pursuant to Section 16.07.
(b) As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Noteholder (as if such transfer were a transfer of
the Note or Notes (or portion thereof) so converted), the Company shall issue
and shall deliver to such Noteholder at the office or agency maintained by the
Company for such purpose pursuant to Section 6.02, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such Note or portion thereof as determined by the Company in accordance with the
provisions of this Article 16 and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion,
calculated by the Company as provided in Section 16.03. In case any Note of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.03, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 16.02 have been satisfied as to such Note (or portion thereof),
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which such
Note shall be surrendered.
58
(c) Any Note or portion thereof surrendered for conversion during
the period from the close of business on the record date for any interest
payment date to the close of business on the Business Day preceding the
following interest payment date shall be accompanied by payment, in immediately
available funds or other funds acceptable to the Company, of an amount equal to
the interest otherwise payable on such interest payment date on the principal
amount being converted; provided that no such payment need be made (1) if the
Company has specified a redemption date following a Designated Event that is
during such period, or (2) to the extent of any overdue interest at the time of
conversion with respect to such Note. Except as provided above in this Section
16.02, no payment or other adjustment shall be made for interest accrued on any
Note converted or for dividends on any shares issued upon the conversion of such
Note as provided in this Article 16.
Upon the conversion of a Note, that portion of the accrued but unpaid
interest, with respect to the converted Note shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
holder thereof through delivery of the Common Stock (together with the cash
payment, if any, in lieu of fractional shares) in exchange for the Note being
converted pursuant to the provisions hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for and in satisfaction of our obligation to pay the principal amount
of the converted Note, the accrued but unpaid interest, and the balance, if any,
of such fair market value of such Common Stock (and any such cash payment) shall
be treated as issued in exchange for and in satisfaction of the right to convert
the Note being converted pursuant to the provisions hereof.
(d) Upon the conversion of an interest in a Global Note, the
Trustee (or other conversion agent appointed by the Company), or the Custodian
at the direction of the Trustee (or other conversion agent appointed by the
Company), shall make a notation on such Global Note as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Notes effected through any conversion agent other
than the Trustee.
Section 16.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip certificates representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash at the current price thereof to
the holder of Notes. The current price of a share of Common Stock shall be the
Closing Sale Price on the last Trading Day immediately preceding the day on
59
which the Notes (or specified portions thereof) are deemed to have been
converted.
Section 16.04. Conversion Rate. Each $1,000 principal amount of the
Notes shall be convertible into 65.1890 shares of Common Stock (herein called
the "CONVERSION RATE"), subject to adjustment as provided in this Article 16.
Section 16.05. Adjustment Of Conversion Rate. The Conversion Rate
shall be adjusted from time to time by the Company as follows:
(a) In case 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 Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate 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 by a
fraction,
(i) the numerator of which shall be the sum of the number
of shares of Common Stock outstanding at the close of business on the
date fixed for the determination of stockholders entitled to receive
such dividend or other distribution plus the total number of shares of
Common Stock constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purpose of this
clause (a), the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Company. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company. If any dividend or distribution of the type described
in this Section 16.05(a) is declared but not so paid or made, the Conversion
Rate shall again be adjusted to the Conversion Rate that would then be in effect
if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction,
60
(i) the numerator of which shall be the number of shares
of Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the total
number of additional shares of Common Stock offered for subscription or
purchase, and
(ii) the denominator of which shall be the sum of the
number of shares of Common Stock outstanding at the close of business
on the date fixed for determination of stockholders entitled to receive
such rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase
at such Current Market Price.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that 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
Rate shall again be adjusted to be the Conversion Rate that 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 by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or combination
becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company or evidences of its indebtedness or assets (including
securities, but excluding any
61
rights or warrants referred to in Section 16.05(b), and excluding any dividend
or distribution (x) paid exclusively in cash or (y) referred to in Section
16.05(a) (any of the foregoing hereinafter in this Section 16.05(d)) called the
"SECURITIES")), then, in each such case, the Conversion Rate shall be increased
so that the same shall be equal to the rate determined by multiplying the
Conversion Rate in effect on the Record Date with respect to such distribution
by a fraction,
(i) the numerator of which shall be the Current Market
Price on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record 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 the Record Date
of the portion of the Securities so distributed applicable to one share
of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that if 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 Noteholder shall have the right to receive
upon conversion the amount of Securities such holder would have received had
such holder converted each Note on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate that 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 16.05(d) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price on the applicable Record Date.
If the dividend or distribution requiring an adjustment pursuant to
this clause (d) consists of capital stock of any class or series, or similar
equity interests, of or relating to a Subsidiary or other business unit of the
Company, for purposes of making such adjustment, (i) the Current Market Price
shall be determined as of the date (the "EX-DIVIDEND DATE") on which
"ex-dividend trading" commences for such distribution on the NASDAQ National
Market or such other national or regional exchange or market on which such
securities are then listed or quoted, based on the average of the Closing Sale
Prices of the Common Stock for the ten (10) Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date and (ii) the Fair
Market Value of such dividend or distribution shall equal the number of
securities distributed in respect of each share of Common Stock multiplied by
the average of the closing sale prices of those securities distributed for the
ten (10) Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date.
62
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 16.05 (and no adjustment to the Conversion Rate under
this Section 16.05 will 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 (if any is required) to the Conversion
Rate shall be made under this Section 16.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 16.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate 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 that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
For purposes of this Section 16.05(d) and Section 16.05(a) and (b), any
dividend or distribution to which this Section 16.05(d) is applicable that also
includes shares of Common Stock, or such rights or warrants to subscribe for or
purchase shares of Common Stock of the type described in Section 16.05(b) (or
both), shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock other than such
shares of Common Stock or rights or warrants (and any Conversion Rate adjustment
required by this Section 16.05(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 such rights or warrants (and any further
Conversion Rate adjustment required by Sections 16.05(a) and 16.05(b) with
63
respect to such dividend or distribution shall then be made), except (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", "the date fixed for the determination of stockholders
entitled to receive such rights or warrants" and "the date fixed for such
determination" within the meaning of Section 16.05(a) and 16.05(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 16.05(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash, then, in such case, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on such Record Date by a fraction,
(i) the numerator of which shall be the Current Market
Price on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record Date less the amount of cash so distributed (and
not excluded as provided above) applicable to one share of Common
Stock,
such adjustment to be effective immediately prior to the opening of business on
the day following the record date; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Noteholder shall have
the right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Note on the Record Date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. If any adjustment is required to
be made as set forth in this Section 16.05(e) as a result of a distribution that
is a quarterly dividend, such adjustment shall be based upon the amount by which
such distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this Section 16.05(e) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors)
that as of the last time (the "EXPIRATION TIME") tenders or exchanges
64
may be made pursuant to such tender or exchange offer (as it may be amended)
exceeds the Closing Sale Price of a share of Common Stock on the Trading Day
next succeeding the Expiration Time, the Conversion Rate shall be increased so
that the same shall equal the rate determined by multiplying the Conversion Rate
in effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "PURCHASED SHARES") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Sale Price of a share of
Common Stock on the Trading Day next succeeding the Expiration Time,
and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Closing Sale Price of
a share of Common Stock on the Trading Day next succeeding the
Expiration Time
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.
(g) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a Fair Market Value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "OFFER
EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) exceeds the Closing Price of a
share of Common Stock on the Trading Day next succeeding the Offer Expiration
Time, and in which, as of the Offer Expiration Time the Board of Directors is
not recommending rejection of the offer, the Conversion Rate shall be increased
so that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to the Offer Expiration Time by a fraction
65
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Offer Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "ACCEPTED PURCHASED SHARES") and (y)
the product of the number of shares of Common Stock outstanding (less
any Accepted Purchased Shares) at the Offer Expiration Time and the
Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Offer Expiration Time, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Offer Expiration Time multiplied by the Closing Sale
Price of a share of Common Stock on the Trading Day next succeeding the
Offer Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Offer Expiration Time. If such Person is obligated to
purchase shares pursuant to any such tender or exchange offer, but such Person
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 16.05(g) shall not be made if, as of the Offer Expiration Time,
the offering documents with respect to such offer disclose a plan or intention
to cause the Company to engage in any transaction described in Article 13.
(h) For purposes of this Section 16.05, the following terms shall
have the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the
daily Closing Sale Prices per share of Common Stock for the ten
consecutive Trading Days ending on the earlier of such date of
determination and the day before the "EX" date with respect to the
issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question. For purpose of
this clause (i), 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 Sale Price was obtained without the right
to receive such issuance or distribution, and (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.
66
If another issuance, distribution, subdivision or combination
to which Section 16.05 applies occurs during the period applicable for
calculating "CURRENT MARKET PRICE" pursuant to the definition in the
preceding paragraph, "CURRENT MARKET PRICE" shall be calculated for
such period in a manner determined by the Board of Directors to reflect
the impact of such issuance, distribution, subdivision or combination
on the Closing Sale Price of the Common Stock during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.
(iii) "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).
(iv) "TRADING DAY" shall mean (x) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades
may be made thereon or (y) 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 (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.
(i) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 16.05(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the increase at least fifteen (15) days prior to the date the
increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.
67
(j) No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in such rate; provided that any adjustments that by reason of this Section
16.05(j) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article 16
shall be made by the Company and shall be made to the nearest cent or to the
nearest one-ten thousandth (1/10,000) of a share, as the case may be. No
adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest or for any issuance of
Common Stock or convertible or exchangeable securities or rights to purchase
Common Stock or convertible or exchangeable securities. To the extent the Notes
become convertible into cash, assets, property or securities (other than capital
stock of the Company), no adjustment need be made thereafter as to the cash,
assets, property or such securities. Interest will not accrue on any cash into
which the Notes are convertible.
(k) Whenever the Conversion Rate 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 Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Note at his last
address appearing on the Note Register provided for in Section 2.05 of this
Indenture, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.
(l) In any case in which this Section 16.05 provides that an
adjustment shall become effective immediately after (1) a Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 16.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 16.05(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section 16.05(f), or (5) the Offer Expiration Time
for a tender or exchange offer pursuant to Section 16.05(g)(i) (each a
"DETERMINATION DATE"), the Company may elect to defer until the occurrence of
the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
holder of any Note converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and
68
(y) paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 16.03. For purposes of this Section 16.05(l), the term "ADJUSTMENT
EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5)
hereof, the date a sale or exchange of Common Stock pursuant to such
tender or exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 16.05, 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
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
Section 16.06. Effect Of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 16.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other 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 all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other 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 Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that each Note shall be convertible
into the kind and amount of shares of stock, other securities or other
69
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 such Notes
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock are available to convert all such Notes) immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of stock, other securities or other property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance (provided that, if the
kind or amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purposes of this Section 16.06 the kind and
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, 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 16.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note Register provided for in Section 2.05 of this Indenture, within twenty (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 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 16.06 applies to any event or occurrence, Section 16.05
shall not apply.
Section 16.07. Taxes On Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the holder of any
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 16.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance With Governmental Requirements; 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 of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.
70
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Notes, the Company will 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 Rate.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue 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 covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Commission (or any successor thereto), endeavor
to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Notes into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.
Section 16.09. Responsibility Of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Rate or whether any facts exist
which may require any adjustment of the Conversion Rate, 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 and any other
conversion agent 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 Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock
71
or stock certificates or other securities or property or cash upon the surrender
of any Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article 16.
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 16.06 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 16.06 or
to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 9.01, 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 16.10. Notice To Holders Prior To Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 16.05; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its 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) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note Register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) 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,
72
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.
Section 16.11. Stockholder Rights Plans. If the rights provided for in
the Company's Rights Agreement dated November 9, 2001, as amended, or in any
future rights plan adopted by the Company have separated from the shares of
Common Stock in accordance with the provisions of the applicable stockholder
rights agreement so that the holders of the Notes would not be entitled to
receive any rights in respect of Common Stock issuable upon conversion of the
Notes, the Conversion Rate will be adjusted as provided in Section 16.05(d).
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding On Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 17.02. Official Acts By Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 17.03. Addresses For Notices, Etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company shall be deemed
to have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box or sent by telecopier transmission addressed as follows: to
AtheroGenics, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Telecopier
No.: (678) 336 - 2501, Attention: Chief Financial Officer. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited, postage prepaid, by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed as follows: The
Bank of New York Trust Company of Florida N.A., Towermarc Plaza, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, Telecopier No.: (904) 645 - 1972,
Attention: Corporate Trust Trustee Administration.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
73
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note Register and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 17.04. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.
Section 17.05. Evidence Of Compliance With Conditions Precedent,
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture 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 statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him 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.
Section 17.06. Legal Holidays. In any case in which the date of
maturity of interest on or principal of the Notes or the redemption date of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the redemption date, and no interest shall accrue for the period
from and after such date.
Section 17.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture
74
Act; provided that unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
provided further that this Section 17.07 shall not require this Indenture or the
Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
Section 17.08. No Security Interest Created. Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
Section 17.09. Benefits Of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note Registrar and their
successors hereunder and the holders of Notes any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 17.10. Table Of Contents, Headings, Etc. The table of contents
and the titles 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.
Section 17.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.04, 2.05, 2.06, 2.07 and 3.05, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 9.09.
75
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
17.11 shall be applicable to any authenticating agent.
Section 17.12. Execution In Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 17.13. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Trustee hereby accepts the trusts in this Indenture declared and
provided, upon the terms and conditions herein above set forth.
76
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
ATHEROGENICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President of
Finance and Chief
Executive Officer and
Secretary
THE BANK OF NEW YORK TRUST
COMPANY OF FLORIDA N.A., as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
[Include only for Global Notes:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include only for Notes that are Restricted Securities]
[THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS NOTE OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE EXCEPT (A) TO ATHEROGENICS,
INC. OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK Trust
Company of Florida N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK
Trust Company of Florida N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(D) ABOVE OR UPON ANY TRANSFER OF THIS
NOTE UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION.]
A-2
ATHEROGENICS, INC.
4 1/2% CONVERTIBLE NOTE DUE 2008
CUSIP: 047439 AA2
No. 1 $_______________
AtheroGenics, Inc., a corporation duly organized and validly existing
under the laws of the State of Georgia (herein called the "COMPANY", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to Cede & Co., as the
nominee of The Depository Trust Company, or its registered assigns, [the
principal sum of _____________ DOLLARS] [the principal sum set forth on Schedule
I hereto](1) on September 1, 2008 at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest, semiannually on March 1 and September 1 of each year, commencing March
1, 2004, on said principal sum, in like coin or currency, at the rate per annum
of 4 1/2%, from the March 1 or September 1, as the case may be, next preceding
the date of this Note to which interest has been paid or duly provided for,
unless the date hereof is a date to which interest has been paid or duly
provided for, in which case from the date of this Note, or unless no interest
has been paid or duly provided for on the Notes, in which case from August 19,
2003, until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any February 15 or
August 15, as the case may be, and before the following March 1 or September 1,
this Note shall bear interest from such March 1 or September 1; provided that if
the Company shall default in the payment of interest due on such March 1 or
September 1, then this Note shall bear interest from the next preceding March 1
or September 1 to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for on such Note, from August 19, 2003.
Except as otherwise provided in the Indenture, the interest payable on this Note
pursuant to the Indenture on any March 1 or September 1 will be paid to the
Person entitled thereto as it appears in the Note Register at the close of
business on the record date, which shall be the February 15 or August 15
(whether or not a Business Day) next preceding such March 1 or September 1, as
provided in the Indenture; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in Section 2.03 of the
Indenture. Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
----------------------------------------
(1) For Global Notes Only.
A-3
The Company shall pay interest (i) on any Notes in certificated form by
check mailed to the address of the Person entitled thereto as it appears in the
Note Register (or, upon written notice by such Person, by wire transfer in
immediately available funds, if such Person is entitled to interest on aggregate
principal in excess of $2.0 million) or (ii) on any Global Note by wire transfer
of immediately available funds to the account of the Depositary or its nominee.
The Company promises to pay interest on overdue principal, premium, if
any, and (to the extent that payment of such interest is enforceable under
applicable law) interest and Liquidated Damages, if any, at the rate of 1%, per
annum.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions giving the holder
of this Note the right to convert this Note into Common Stock of the Company on
the terms and subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York, without regard to conflicts
of laws principles thereof.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.
ATHEROGENICS, INC.
By:_______________________________________
By:_______________________________________
A-5
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
Dated:
THE BANK OF NEW YORK TRUST
COMPANY OF FLORIDA N.A., as Trustee
By:_______________________________________
Authorized Signatory
, or
By:_______________________________________
As Authenticating Agent
(if different from Trustee)
By:_______________________________________
Authorized Signatory
A-6
FORM OF REVERSE OF NOTE
ATHEROGENICS, INC.
4 1/2% CONVERTIBLE NOTE DUE 2008
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4 1/2% Convertible Notes Due 2008 (herein called the "NOTES"),
limited in aggregate principal amount to $80,000,000, issued and to be issued
(or if the Company sells an additional $20,000,000 principal amount of its Notes
pursuant to the option of the Initial Purchasers granted pursuant to the
Purchase Agreement dated as of August 13, 2003 between the Company and the
Initial Purchasers, limited in aggregate amount to $100,000,000) under and
pursuant to an Indenture dated as of August 19, 2003 (herein called the
"INDENTURE"), between the Company and The Bank of New York Trust Company of
Florida N.A., as trustee (herein called the "TRUSTEE"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Notes.
The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any multiple of $1,000. Upon due
presentment for registration of transfer of this Note at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange thereof,
subject to the limitations provided in the Indenture, without charge except for
any tax, assessment or other governmental charge imposed in connection
therewith.
The Notes are not subject to redemption through the operation of any
sinking fund and may not be redeemed at the option of the Company prior to
maturity.
If a Designated Event occurs at any time prior to maturity of the
Notes, this Note will be redeemable at the option of the holder of this Note at
a redemption price equal to 100% of the principal amount hereof, together with
accrued interest and Liquidated Damages, if any to (but excluding) the
redemption date, as provided in Article 3 of the Indenture.
Subject to compliance with the provisions of the Indenture, prior to
the close of business on the final maturity date of the Notes, the holder hereof
has the right, at its option, to convert each $1,000 principal amount of this
Note into 65.1890 shares (the "CONVERSION RATE") of the Company's Common Stock,
as such shares shall be constituted at the date of conversion and subject to
adjustment from time to time as provided in the Indenture.
A-7
No adjustment in respect of interest on any Note converted or dividends
on any shares issued upon conversion of such Note will be made upon any
conversion except as set forth in the next sentence. If this Note (or portion
hereof) is surrendered for conversion during the period from the close of
business on any record date for the payment of interest to the close of business
on the Business Day preceding the following interest payment date, this Note (or
portion hereof being converted) must be accompanied by payment, in immediately
available funds or other funds acceptable to the Company, of an amount equal to
the interest otherwise payable on such interest payment date on the principal
amount being converted; provided that no such payment shall be required (1) if
the Company has specified a redemption date following a Designated Event that is
after a record date and on or prior to the next interest payment date or (2) to
the extent of any overdue interest at the time of conversion with respect to
this Note.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Note or Notes for conversion.
A Note in respect of which a holder is exercising its right to require
redemption upon a Designated Event may be converted only if such holder
withdraws its Redemption Notice in accordance with the terms of the Indenture.
In case an Event of Default shall have occurred and be continuing, the
principal of, premium, if any, and accrued interest, on all Notes may be
declared by either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding, and upon said declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Notes at the time outstanding, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Notes, subject to the exceptions
set forth in Section 12.02 of the Indenture. Subject to the provisions of the
Indenture, the holders of a majority in aggregate principal amount of the Notes
at the time outstanding may on behalf of the holders of all of the Notes waive
any past default or Event of Default, subject to the exceptions set forth in the
Indenture. Any such consent or waiver by the holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such holder
and upon all future holders and owners of this Note and any Notes which may be
issued in exchange or substitution hereof, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.
A-8
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest, on this Note at the place, at the respective times, at the rate and in
the coin or currency herein prescribed.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note Registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note Registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note Registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
A-9
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants in common ____________________________
(State)
Additional abbreviations may also be used though not in the above list.
CONVERSION NOTICE
TO: ATHEROGENICS, INC.
THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA N.A.
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
AtheroGenics, Inc. in accordance with the terms of the Indenture referred to in
this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest accompanies this Note.
Dated: ______________________
___________________________
___________________________
Signature(s)
Signature(s) must be
guaranteed by an "ELIGIBLE
GUARANTOR INSTITUTION"
meeting the requirements of
the Note Registrar, which
requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"SIGNATURE GUARANTEE
PROGRAM" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.
___________________________
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the registered
holder:
_______________________________
(Name)
_______________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
_______________________________
(City, State and Zip Code)
_______________________________
Please print name and address
Principal amount to be converted
(if less than all):
$_______________________________
Social Security or Other Taxpayer
Identification Number:
_______________________________
OPTION TO ELECT REDEMPTION
UPON A DESIGNATED EVENT
TO: ATHEROGENICS, INC.
THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA N.A.
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from AtheroGenics, Inc. (the "COMPANY") as to
the occurrence of a Designated Event with respect to the Company and requests
and instructs the Company to redeem the entire principal amount of this Note, or
the portion thereof (which is $1,000 or a multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note at the price
of 100% of such entire principal amount or portion thereof, together with
accrued interest and Liquidated Damages, if any, to, but excluding, the
Designated Event Redemption Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture.
Dated: ______________________
_____________________________
_____________________________
Signature(s)
NOTICE: The above
signatures of the holder(s)
hereof must correspond with
the name as written upon
the face of the Note in
every particular without
alteration or enlargement
or any change whatever.
Principal amount to be
redeemed (if less than all):
_____________________________
_____________________________
Social Security or Other
Taxpayer Identification
Number
ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Note prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant to
a registration statement that has been declared effective under the Securities
Act), the undersigned confirms that such Note is being transferred:
[ ] To AtheroGenics, Inc. or a subsidiary thereof; or
[ ] To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule
144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and
which continues to be effective at the time of transfer;
and unless the Note has been transferred to AtheroGenics, Inc. or a subsidiary
thereof, the undersigned confirms that such Note is not being transferred to an
"AFFILIATE" of the Company as defined in Rule 144 under the Securities Act of
1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof.
Dated: ______________________
___________________________
___________________________
Signature(s)
Signature(s) must be
guaranteed by an "ELIGIBLE
GUARANTOR INSTITUTION"
meeting the requirements of
the Note
Registrar, which
requirements include
membership or participation
in the Security Transfer
Agent Medallion Program
("STAMP") or such other
"SIGNATURE GUARANTEE
PROGRAM" as may be
determined by the Note
Registrar in addition to,
or in substitution for,
STAMP, al in accordance
with the Securities
Exchange Act of 1934, as
amended.
___________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Option to Elect Redemption
Upon a Designated Event, or the Assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
Schedule I
[Include Schedule I only for a Global Note]
ATHEROGENICS, INC.
4 1/2% Convertible Note Due 2008
No. _______
Notation Explaining Principal Authorized Signature of
Date Principal Amount Amount Recorded Trustee or Custodian
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