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HYBRIDON, INC.,
Company
and
STATE STREET BANK AND TRUST COMPANY
Trustee
INDENTURE
Dated as of March 26, 1997
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$60,000,000
9% Convertible Subordinated Notes Due 2004
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.................. 1
Section 1.1 Definitions............................................. 1
Section 1.2 Other Definitions....................................... 7
Section 1.3 Incorporation by Reference of Trust Indenture Act....... 8
Section 1.4 Rules of Construction................................... 8
ARTICLE 2. THE NOTES................................................... 9
Section 2.1 Form and Dating......................................... 9
Section 2.2 Execution and Authentication............................ 11
Section 2.3 Registrar, Paying Agent and Conversion Agent............ 11
Section 2.4 Paying Agent to Hold Money in Trust..................... 12
Section 2.5 Holder Lists............................................ 12
Section 2.6 Transfer and Exchange................................... 13
Section 2.7 Replacement Notes....................................... 19
Section 2.8 Outstanding Notes....................................... 20
Section 2.9 Treasury Notes.......................................... 21
Section 2.10 Temporary Notes......................................... 21
Section 2.11 Cancellation............................................ 22
Section 2.12 Defaulted Interest...................................... 22
Section 2.13 Deposit of Moneys....................................... 23
ARTICLE 3. REDEMPTION.................................................. 23
Section 3.1 Notices to Trustee...................................... 23
Section 3.2 Selection of Notes to be Redeemed....................... 23
Section 3.3 Notice of Redemption.................................... 24
Section 3.4 Effect of Notice of Redemption; Definition of
Redemption Price ........................................25
Section 3.5 Deposit of Redemption Price............................. 25
Section 3.6 Notes Redeemed in Part.................................. 25
ARTICLE 4. COVENANTS................................................... 26
Section 4.1 Payment of Notes........................................ 26
Section 4.2 Stay, Extension and Usury Laws.......................... 26
Section 4.3 Continued Existence..................................... 26
Section 4.4 Reports................................................. 27
Section 4.5 Taxes................................................... 27
Section 4.6 Change of Control....................................... 27
Section 4.7 Limitation on Dividend Restrictions Affecting
Subsidiaries ........................................... 30
Section 4.8 Limitation on Line of Business.......................... 30
Section 4.9 Limitation on Restricted Payments....................... 30
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Section 4.10 Limitation on Transactions with Related Persons......... 31
Section 4.11 Compliance Certificate.................................. 32
Section 4.12 Further Assurance to the Trustee........................ 33
ARTICLE 5. SUCCESSORS.................................................. 33
Section 5.1 When Company May Merge or Sell Assets................... 33
Section 5.2 Successor Substituted................................... 34
ARTICLE 6. DEFAULTS AND REMEDIES....................................... 34
Section 6.1 Events of Default....................................... 34
Section 6.2 Acceleration............................................ 36
Section 6.3 Other Remedies.......................................... 36
Section 6.4 Waiver of Existing and Past Defaults.................... 36
Section 6.5 Control by Majority..................................... 37
Section 6.6 Limitation on Suits..................................... 37
Section 6.7 Rights of Holders to Receive Payment.................... 38
Section 6.8 Collection Suit by Trustee.............................. 38
Section 6.9 Trustee May File Proofs of Claim........................ 38
Section 6.10 Priorities.............................................. 38
Section 6.11 Undertaking for Costs................................... 39
ARTICLE 7. TRUSTEE..................................................... 39
Section 7.1 Duties of Trustee....................................... 39
Section 7.2 Rights of Trustee....................................... 40
Section 7.3 Individual Rights of Trustee............................ 41
Section 7.4 Trustee's Disclaimer.................................... 41
Section 7.5 Notice of Defaults...................................... 41
Section 7.6 Reports by Trustee to Holders........................... 41
Section 7.7 Compensation and Indemnity.............................. 42
Section 7.8 Replacement of Trustee.................................. 43
Section 7.9 Successor Trustee by Merger............................. 44
Section 7.10 Eligibility; Disqualification........................... 44
Section 7.11 Preferential Collection of Claims Against Company....... 44
ARTICLE 8. DISCHARGE OF INDENTURE...................................... 44
Section 8.1 Termination of Company's Obligations.................... 44
Section 8.2 Application of Trust Money.............................. 46
Section 8.3 Repayment to Company.................................... 46
Section 8.4 Reinstatement........................................... 46
ARTICLE 9. AMENDMENTS.................................................. 47
Section 9.1 Without Consent of Holders.............................. 47
Section 9.2 With Consent of Holders................................. 47
Section 9.3 Compliance with Trust Indenture Act..................... 49
Section 9.4 Revocation and Effect of Consents....................... 49
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Section 9.5 Notation on or Exchange of Notes........................ 49
Section 9.6 Trustee Protected....................................... 50
ARTICLE 10. CONVERSION................................................... 50
Section 10.1 Conversion Privilege.................................... 50
Section 10.2 Conversion Procedure.................................... 50
Section 10.3 Cash Payments in Lieu of Fractional Shares.............. 51
Section 10.4 Adjustment of Conversion Price.......................... 52
Section 10.5 Effect of Reclassification, Consolidation, Merger
or Sale ................................................ 57
Section 10.6 Taxes on Shares Issued.................................. 57
Section 10.7 Reservation of Shares; Shares to be Fully Paid;
Compliance with Government Requirements; Listing of
Common Stock ........................................... 58
Section 10.8 Responsibility of Trustee Requirements.................. 58
Section 10.9 Notice to Holders Prior to Certain Actions.............. 59
ARTICLE 11. SUBORDINATION................................................ 60
Section 11.1 Agreement to Subordinate................................ 60
Section 11.2 Payment Over of Proceeds Upon Dissolution, Etc.......... 60
Section 11.3 Prior Payment to Senior Indebtedness Upon
Acceleration of Notes................................... 61
Section 11.4 No Payment When Senior Indebtedness in Default.......... 61
Section 11.5 Payment Permitted If No Default......................... 62
Section 11.6 Subrogation to Rights of Holders of Senior Indebtedness. 62
Section 11.7 Provisions Solely to Define Relative Rights............. 63
Section 11.8 Trustee to Effectuate Subordination..................... 63
Section 11.9 No Waiver of Subordination Provisions................... 63
Section 11.10 Notice to Trustee....................................... 64
Section 11.11 Reliance on Judicial Order or Certificate of
Liquidating Agent ...................................... 64
Section 11.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness ........................................... 65
Section 11.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights........................ 65
Section 11.14 Article Applicable to Paying Agents..................... 65
Section 11.15 Certain Conversions Deemed Payment...................... 65
ARTICLE 12. MEETINGS OF HOLDERS.......................................... 66
Section 12.1 Action by Holders....................................... 66
Section 12.2 Purposes for Which Meetings May Be Called............... 66
Section 12.3 Manner of Calling Meetings.............................. 67
Section 12.4 Call of Meetings by the Company or Holders.............. 67
Section 12.5 Who May Attend and Vote at Meetings..................... 67
Section 12.6 Regulations May be Made by Trustee; Conduct of
the Meeting; Voting Rights; Adjournment................. 67
Section 12.7 Voting at the Meeting and Record to be Kept............. 68
Section 12.8 Exercise of Rights of Trustee or Holders May Not
Be Hindered or Delayed by Call of Meeting............... 69
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Section 12.9 Communication by Holders with Other Holders............ 69
ARTICLE 13. MISCELLANEOUS............................................... 69
Section 13.1 Trust Indenture Act Controls........................... 69
Section 13.2 Notices................................................ 69
Section 13.3 Certificate and Opinion as to Conditions Precedent..... 71
Section 13.4 Statements Required in Certificate or Opinion
of Counsel ............................................ 71
Section 13.5 Rules by Trustee and Agents............................ 72
Section 13.6 Legal Holidays......................................... 72
Section 13.7 No Recourse Against Others............................. 72
Section 13.8 Counterparts........................................... 72
Section 13.9 Governing Law.......................................... 72
Section 13.10 No Adverse Interpretation of Other Agreements.......... 72
Section 13.11 Successors............................................. 73
Section 13.12 Severability........................................... 73
Section 13.13 Table of Contents, Headings, Etc....................... 73
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Transferee Letter of Representation
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INDENTURE dated as of March 26, 1997 between Hybridon, Inc., a Delaware
corporation, and State Street Bank and Trust Company, as trustee.
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the registered holders of the Company's 9%
Convertible Subordinated Notes due April 1, 2004 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
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"AFFILIATE" of a Person means (i) any other Person which, directly or
indirectly, is in control of, is controlled by or is under common control with
such specified Person. For the purpose of this definition, "control" of a Person
means the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by ownership of voting
securities, by contract or otherwise, and "CONTROLLING" or "CONTROLLED" have
corresponding meanings.
"AGENT" means any Registrar, Paying Agent or Conversion Agent.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
duly authorized committee thereof, except that, for purposes of the definitions
of "CHANGE OF CONTROL" and "CONTINUING DIRECTORS," "BOARD OF DIRECTORS" means
only the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banking institutions in the city of New York, New York or Boston,
Massachusetts are required or authorized by law or other governmental action to
be closed.
"CAPITAL STOCK" of any Person means the Common Stock or Preferred Stock of
such Person. Unless otherwise stated herein or the context otherwise requires,
"CAPITAL STOCK" means Capital Stock of the Company.
"CHANGE OF CONTROL" means the occurrence of any of the following events
after the date of this Indenture: (i) any Person (including, without limitation,
any "person" or "group" within the meaning of Section 13(d) or 14(d) of the
Exchange Act) becomes the direct or indirect beneficial owner of shares of
Capital Stock representing greater than 50% of the combined voting power of all
outstanding shares of Capital Stock entitled to vote in the election of
directors under ordinary circumstances; (ii) the Company consolidates with or
merges into any other Person and the outstanding Common Stock is changed or
exchanged as a result (except for any merger or consolidation in which the
stockholders of the Company shall continue to hold
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shares of Capital Stock representing greater than 50% of the combined voting
power of the Capital Stock of the surviving entity and members of the Board of
Directors immediately prior to such merger or consolidation comprise a majority
of the board of directors of the surviving entity immediately after such merger
or consolidation), (iii) sale, transfer or other disposition of all or
substantially all of the collective assets of the Company and its Subsidiaries
in a single transaction or series of related transactions, (iv) at any time
Continuing Directors cease to constitute a majority of the Board of Directors
then in office; or (v) on any day the Company makes any distribution or
distributions of cash, Property or securities (other than regular quarterly
dividends, Common Stock, Preferred Stock which is substantially equivalent to
Common Stock or rights to acquire Common Stock or Preferred Stock which is
substantially equivalent to the Common Stock) to holders of Common Stock, or the
Company or any of its Subsidiaries purchases or otherwise acquires Common Stock,
and the sum of the Fair Market Value of such distribution or purchase on the
date the same is made, plus the Fair Market Value, when made, of all other such
distributions and purchases which have occurred during the 12-month period
ending on such date, in each case expressed as a percentage of the aggregate
Current Market Price of all the shares of Common Stock outstanding at the close
of business on the last Trading Day prior to the date of each such distribution
or purchase, exceeds 50%.
"COMMON STOCK" of any Person other than the Company means the common
equity (however designated), including, without limitation, common stock or
partnership or membership interests of, or participations or interests in such
Person (or equivalents thereof). "COMMON STOCK" of the Company means the Common
Stock, par value $.001 per share, of the Company, any successor class or classes
of common equity (however designated) of the Company into or for which such
Common Stock may hereafter be converted, exchanged or reclassified and any class
or classes of common equity (however designated) of the Company which may be
distributed or issued with respect to such Common Stock or successor class of
classes to holders thereof generally. Unless otherwise stated herein or the
context requires otherwise, "COMMON STOCK" means Common Stock of the Company.
"COMPANY" means Hybridon, Inc., a Delaware corporation, until a successor
replaces it in accordance with the applicable provisions of this Indenture and,
thereafter, "COMPANY" shall mean such successor.
"CONTINUING DIRECTORS" means any member of the Board of Directors who (i)
is a member of the Board of Directors on the date hereof or (ii) was nominated
for election or elected to the Board of Directors with the affirmative vote of
at least two-thirds of such members and members of the Board of Directors who
were previously so nominated or elected.
"CORPORATE TRUST OFFICE" of the Trustee means the principal office at
which the Trustee conducts its corporate business, initially at ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"CURRENT MARKET PRICE" means, when used with respect to any security as of
any date, the last sale price, regular way, or, in case no such sale takes place
on such date, the average of the closing bid and asked prices, regular way, of
such security in either case as reported for
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consolidated transactions on the New York Stock Exchange or, if such security is
not listed or admitted to trading on the New York Stock Exchange, as reported
for consolidated transactions with respect to securities listed on the principal
national securities exchange on which such security is listed or admitted to
trading or, if such security is not listed or admitted to trading on any
national securities exchange, as reported on the Nasdaq National Market, or, if
such security is not listed or admitted to trading on the Nasdaq National
Market, as reported on the Nasdaq SmallCap Market, or if such security is not
listed or admitted to trading on any national securities exchange or the Nasdaq
National Market or the Nasdaq SmallCap Market, the average of the high bid and
low asked prices of such security in the over-the-counter market as reported by
the National Association of Securities Dealers, Inc. Automated Quotations System
or such other system then in use or, if such security is not quoted by any such
organization, the average of the closing bid and asked prices of such security
furnished by a New York Stock Exchange member firm selected by the Company. If
such security is not quoted by any such organization and no such New York Stock
Exchange member firm is able to provide such prices, the Current Market Price of
such security shall be the Fair Market Value thereof.
"DEFAULT" means any event which is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Notes issued in global form, the
Trustee and any successor entity thereto or such other Person as appointed by
the Company from time to time in accordance with the provisions of this
Indenture.
"DESIGNATED TRANSACTIONS" means those transactions identified by the
Company as related party transactions in filings with the Commission made prior
to the date of this Indenture; provided, however, the amendment or modification
of the terms of any such transaction by the Company after the date of the most
recent filing by the Company with the Commission prior to the date of this
Indenture shall be deemed to be new transactions for purposes of this Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"FAIR MARKET VALUE" means, at any date as to any asset, Property or right
(including, without limitation, Capital Stock of any Person, evidences of
indebtedness or other securities, but excluding cash), the fair market value of
such item as determined in good faith by the Board of Directors, whose
determination shall be conclusive; provided, however, that such determination is
described in an Officers' Certificate filed with the Trustee and that, if there
is a Current Market Price for such item on such date, "FAIR MARKET VALUE" means
such Current Market Price (without giving effect to the last sentence of the
definition thereof).
"GAAP" means, as of any date, generally accepted accounting principles in
the United States and does not include any interpretations or regulations that
have been proposed but that have not become effective.
"HOLDER" means a Person in whose name a Note is registered on the
Register.
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"INDEPENDENT DIRECTORS" means directors that (i) are not 5% or greater
stockholders of the Company or the designees of any such stockholder; (ii) are
not officers or employees of the Company, any of its Subsidiaries or of a
stockholder referred to above in clause (i); (iii) are not Related Persons; and
(iv) do not have relationships that, in the opinion of the Board of Directors,
would interfere with their exercise of independent judgment in carrying out the
responsibilities of the directors.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time.
"INTEREST PAYMENT DATE" means April 1 and October 1 of each year,
commencing October 1, 1997.
"INVESTMENT" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or indirect
loans (including guarantees of indebtedness or other obligations), advances or
capital contributions, purchases or other acquisitions for consideration of
indebtedness, equity interests or other securities, together with all other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP.
"JUNIOR SECURITIES" means (a) shares of any and all classes of Capital
Stock of the Company and (b) securities of the Company which are subordinated in
right of payment to Senior Indebtedness at the time of issuance or delivery of
such securities to substantially the same extent as, or to a greater extent
than, the Notes are so subordinated as provided in Article 11.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary or any Vice President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers, one of whom must be the Chairman of the Board, the
President, the Treasurer or a Vice-President of the Company, that meets the
requirements of Sections 13.3 and 13.4; provided, however, that for purposes of
Section 4.11, "Officers' Certificate" means a certificate signed on behalf of
the Company by the principal executive officer, principal financial officer or
principal accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee and that meets the requirements of Sections
13.3 and 13.4. The counsel may be an employee of or counsel to the Company or to
the Trustee.
"PERSON" means any individual, corporation, partnership, association,
trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
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"PREFERRED STOCK" of any Person means the class or classes of equity,
ownership or participation interests (however designated) in such Person,
including, without limitation, stock, share, partnership and membership
interests, which are preferred as to the payment of dividends or distributions
by, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of, such Person (or equivalents thereof) over
interests of any other class of interests of such Person. Unless otherwise
stated herein or the context otherwise requires, "PREFERRED STOCK" means
Preferred Stock of the Company.
"PRINCIPAL" of a debt security means the principal of the security plus
the premium, if any, on the security. "PRINCIPAL" shall include, with respect to
the Notes, the redemption price, if any, payable thereon.
"PROPERTY" of any Person means any and all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included on the most recent consolidated balance sheet of such Person in
accordance with GAAP.
"QUALIFIED STOCK" means Capital Stock of the Company which is not, and
which is not convertible into or exercisable or exchangeable for Capital Stock
which is, subject to repurchase or redemption at the option of the holder or
mandatorily by the Company prior to December 31, 2004 or exchangeable or
convertible into debt securities of the Company or any of its Subsidiaries at
the option of the holder or mandatorily prior to December 31, 2004.
"RELATED PERSON" means an individual related to an officer, director or,
to the Company's knowledge, employee of the Company or any of its Affiliates
which relation is by blood, marriage or adoption and not more remote than first
cousin.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SENIOR INDEBTEDNESS" means the principal of (and premium, if any) and
accrued interest on (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such proceeding) (a)
indebtedness of the Company (including indebtedness of other Persons guaranteed
by the Company), other than the Notes, outstanding on the date of this Indenture
which is (i) for money borrowed or (ii) evidenced by a note, debenture or
similar instrument given in connection with the acquisition of any business,
Property or assets, (b) obligations of the Company, whether outstanding on the
date of this Indenture or hereafter created, incurred or assumed, as lessee
under leases required to be capitalized on the balance sheet of the lessee under
GAAP and leases of Property or assets made as part of any sale and leaseback
transaction to which the Company is a party, (c) all reimbursement obligations
and other liabilities
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(contingent or otherwise) with respect to letters of credit, bank guarantees or
bankers' acceptances, (d) amendments, renewals, extensions, modifications and
refundings of any such indebtedness or obligation and (e) indebtedness of the
Company (including indebtedness of other Persons guaranteed by the Company)
created, incurred or assumed after the date of this Indenture which is (i) for
money borrowed or (ii) evidenced by a note, debenture or similar instrument
given in connection with the acquisition of any business, Property or assets and
amendments, renewals, extensions, modifications and refundings thereof, if the
instrument creating or evidencing such indebtedness provides by its terms that
such indebtedness or obligation is senior in right of payment to the Notes (all
of which indebtedness will have the benefit of the subordination provisions of
Article 11); provided, however, that indebtedness of the Company (including
indebtedness of other Persons guaranteed by the Company) created, incurred or
assumed after the date of this Indenture which is (i) for money borrowed or (ii)
evidenced by a note, debenture or similar instrument and which, in either case,
by its terms is convertible or exchangeable into Capital Stock, and amendments,
renewals, extensions, modifications and refundings thereof, will rank pari passu
with the Notes, unless the instruments creating or evidencing such indebtedness
provide by their terms that such indebtedness is junior in right of payment to
the Notes. "SENIOR INDEBTEDNESS" shall not include indebtedness or amounts owed
(except to banks or other financial institutions) for compensation to employees,
or for goods or materials purchased or services utilized, in the ordinary course
of business of the Company or of any other Person from whom such indebtedness or
amount was assumed or for whom such indebtedness was guaranteed.
"SUBSIDIARY" of a Person on any date means any other Person of whom such
Person owns, directly or indirectly through a Subsidiary or Subsidiaries of such
Person, Capital Stock with voting power, acting independently and under ordinary
circumstances, entitling such Person to elect a majority of the board of
directors or other governing body of such other Person. Unless otherwise stated
herein or the context otherwise requires, "SUBSIDIARY" means a Subsidiary of the
Company.
"TIA" or "TRUST INDENTURE ACT OF 1939" means the Trust Indenture Act of
1939 (U.S. Code ▇▇.▇▇. 77aaa-77bbbb) as amended and as in effect on the date of
this Indenture; provided, however, that if the TIA is amended after such date,
"TIA" or "TRUST INDENTURE ACT OF 1939" means, to the extent required by any such
amendments, the TIA as so amended.
"TRADING DAY" means (i) if the applicable security is listed or admitted
for trading on a national security exchange, a day on which such exchange is
open for business, (ii) if the applicable security is quoted on the Nasdaq Stock
Market, a day on which trades may be made thereon or (iii) if the applicable
security is not so listed, admitted for trading or quoted, any Business Day.
"TRANSFER RESTRICTED SECURITIES" means Notes that bear or are required to
bear the legend set forth in Section 2.6(g) hereof.
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"TRUSTEE" means the party identified in the title of this Indenture as
trustee until a successor replaces it in accordance with the applicable
provisions of this Indenture and, thereafter, "TRUSTEE" means such successor.
"TRUST OFFICER" means any officer or corporate trust officer or assistant
corporate trust officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"UNRESTRICTED SUBSIDIARIES" means any Subsidiaries of the Company which
(i) are not wholly-owned by the Company, (ii) are designated as Unrestricted
Subsidiaries by the Board of Directors (as evidenced by minutes of a meeting or
written consent of directors) and (iii) at the time of any Investment by the
Company in any such Subsidiary, in the aggregate hold or comprise less than 20%
of the Company's assets as shown on the Company's consolidated balance sheet
prepared in accordance with GAAP as at the time of such Investment.
"U.S. GOVERNMENT OBLIGATIONS" means non-callable (i) direct obligations
(or certificates representing an ownership interest in such obligations) of the
United States for which its full faith and credit are pledged and (ii)
obligations of a Person controlled or supervised by, and acting as an agency or
instrumentality of, the United States, the payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States.
SECTION 1.2 OTHER DEFINITIONS.
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TERM DEFINED IN SECTION
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"Agent Members"......................................................2.1
"Aggregate Consideration"...........................................10.4
"Bankruptcy Law".....................................................6.1
"Change of Control Date".............................................4.6
"Change of Control Notice"...........................................4.6
"Change of Control Offer"............................................4.6
"Change of Control Payment"..........................................4.6
"Change of Control Payment Date".....................................4.6
"Code"..............................................................10.4
"Conversion Agent"...................................................2.3
"Conversion Price"..................................................10.1
"Custodian"..........................................................6.1
"Definitive Securities"..............................................2.1
"DTC"...............................................................10.4
"Equity Securities".................................................10.4
"Event of Default"...................................................6.1
"Expiration Time"...................................................10.4
"Global Security"....................................................2.1
"Notice of Default"..................................................6.1
"Paying Agent".......................................................2.3
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"Purchase Agreement".................................................2.1
"Purchased Shares"..................................................10.4
"Register"...........................................................2.3
"Registrar"..........................................................2.3
"Restricted Payment".................................................4.9
"Rule 144A"..........................................................2.1
"Significant Subsidiary".............................................6.1
"Trigger Event".....................................................10.4
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
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This Indenture is subject to the mandatory provisions of the TIA, which
are incorporated by reference in and made a part of this Indenture. Such
provisions shall apply to this Indenture at all times, notwithstanding that at
any time or from time to time this Indenture is not required to be qualified
under the TIA.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the SEC;
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes means the Company and any successor obligor on
the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
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Unless the context otherwise requires or unless otherwise stated herein:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
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(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) references to sections of or rules under the Securities Act, the
Exchange Act or the TIA shall be deemed to include substitute,
replacement or successor sections or rules;
(6) references to Sections or Articles mean Sections or Articles of
this Indenture; and
(7) solely for purposes of this Indenture and the Notes, a
determination, approval or other action by the Board of Directors
shall not be deemed to have been made, given or taken unless it
is set forth in a written resolution or resolutions (or
comparable written instrument) duly adopted thereby.
ARTICLE 2.
THE NOTES
SECTION 2.1 FORM AND DATING.
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The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Note shall be dated
the date of its authentication. The terms of the Notes set forth in Exhibit A
are part of the terms of this Indenture. The Notes are general unsecured
obligations of the Company limited to $60,000,000 in the aggregate principal
amount, subject to Section 2.7.
(a) GLOBAL SECURITIES. The Notes are being offered and sold by the Company
pursuant to a Purchase Agreement, dated concurrently herewith, between the
Company and Forum Capital Markets L.P. (the "Purchase Agreement").
Notes offered and sold to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act ("Rule 144A")) in reliance on Rule 144A as
provided in the Purchase Agreement, shall be issued initially in the form of one
or more permanent global securities in definitive, fully registered form without
interest coupons and with the Global Securities Legend and, unless removed in
accordance with Section 2.6(g), the Restricted Securities Legend set forth in
Exhibit A hereto (each, a "Global Security"), which shall be deposited on behalf
of the
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purchasers of the Notes represented thereby with the Trustee, at its Corporate
Trust Office, as custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to any
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially one or more Global Securities
that (i) shall be registered in the name of the Depositary for such Global
Security or Global Securities or the nominee of the Depositary and (ii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of the
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in Section 2.10, owners of
beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Notes. Notes offered and sold to Persons who
are not "qualified institutional buyers" shall be issued in certificated Notes
in definitive, fully registered form without interest coupons, with the
Restricted Securities Legend and, if such Person is an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act), the Institutional Accredited Investor Legend, but without the Schedule of
Exchanges of Global Security for Definitive Securities, set forth in Exhibit A
hereto ("Definitive Securities"); provided, however, that upon transfer of such
Definitive Securities to a "qualified institutional buyer," such Definitive
Securities will, unless the Global Security has previously been exchanged, be
exchanged for an interest in a Global Security pursuant to the provisions of
Section 2.6 and provided that any such certificate may be initially issued in a
temporary global form, to be promptly re-registered as provided in this Section
2.1(c).
After a transfer of any Notes pursuant to an effective registration
statement under the Securities Act with respect to the Notes, all requirements
pertaining to legends on such Notes will cease to apply, the requirements
requiring any such Notes issued to certain Holders to be issued in global form
will cease to apply, and a certificated Note without legends will be
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available to the transferee of the Holder of such Notes upon exchange of such
transferring Holder's certificated Notes or directions to transfer such Holder's
interest in the Global Security, as applicable.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
----------- ----------------------------
Two Officers shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Notes and may be in
facsimile form.
Any Note bearing the manual or facsimile signature of an individual shall
be valid notwithstanding that such individual ceased to be an Officer prior to
authentication of the Note or ceased to hold the office of Company ascribed to
such individual on the Note.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence, and the only evidence,
that the Note has been authenticated under this Indenture.
The Trustee shall authenticate Notes for original issue up to the
aggregate principal amount stated in Paragraph 4 of the Notes, upon delivery of
(i) a written order of the Company signed by an Officer directing the Trustee to
authenticate the Notes and (ii) an Officers' Certificate certifying that all
conditions precedent to the issuance of the Notes contained herein have been
complied with. The aggregate principal amount of Notes outstanding at any time
may not exceed such amount, except as provided in Section 2.7.
The Trustee may appoint an authenticating agent upon the approval and at
the expense of the Company to authenticate Notes. Unless limited by the terms of
such appointment, an authenticating agent shall be authorized to authenticate
Notes at such times and upon such conditions as the Trustee is so authorized.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent.
SECTION 2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
----------- --------------------------------------------
The Company shall maintain in the City of New York, New York or the City
of Boston, Massachusetts an office or agency where Notes may be presented for
registration of transfer or for exchange (the "REGISTRAR"), an office or agency
where Notes may be presented for payment (the "PAYING AGENT") and an office or
agency where the Notes may be presented for conversion (the "CONVERSION AGENT").
The Registrar shall keep a register of the Notes (the "REGISTER") and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents upon the reasonable approval of the other
Registrar or Registrars or Paying Agent or Paying Agents, as the case may be,
and at the expense of the Company. The term "REGISTRAR" includes any
co-registrar or co-registrars and the term "PAYING AGENT" includes any
additional paying agent or paying agents. The Company may change any Paying
Agent, Conversion Agent or Registrar without notice to any Holder. The Company
shall
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promptly notify the Trustee in writing of the name and address of any Agent not
a party to this Indenture. The Company or any Subsidiary may act as Paying Agent
(except for purposes specified in Sections 2.8 and 4.1), Conversion Agent or
Registrar. If the Company fails to appoint or maintain itself or another Person
as Registrar, Conversion Agent or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.7.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the terms of the
TIA. The agreement shall implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent.
The Company initially appoints the office of the Trustee at the Corporate
Trust Office, and through it the offices of its agent, State Street Bank and
Trust Company, N.A., ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as
the offices or agencies for each of the purposes designated in this Section 2.3
to act as Registrar, Paying Agent and Conversion Agent with respect to the
Notes.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
----------- -----------------------------------
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
Principal or repurchase price, if any, of or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee and account for any money disbursed by it.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee and account for any money disbursed by it. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary of the
Company) shall have no further liability for the money delivered to the Trustee.
If the Company or an Affiliate of the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
SECTION 2.5 HOLDER LISTS.
----------- ------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish or the
Company shall cause the Registrar to furnish to the Trustee at least ten
Business Days before each Interest Payment Date, and at such other times as the
Trustee may request in writing within five Business Days after such request, a
list in such form and as of such date as the Trustee may reasonably require, and
upon which the Trustee
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may conclusively rely, of the names and addresses of, and principal amount of
Notes held by, the Holders.
SECTION 2.6 TRANSFER AND EXCHANGE.
----------- ---------------------
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented to the Registrar with the request:
(x) to register the transfer of the Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met and subject to compliance with
applicable securities laws; provided, however, that the Definitive Securities
presented or surrendered for register of transfer or exchange:
i) shall be duly endorsed or accompanied by a written
instruction of transfer in form and substance satisfactory
to the Registrar duly executed by the Holder thereof or by
his or her attorney, duly authorized in writing; and
ii) in the case of Transfer Restricted Securities that are
Definitive Securities, shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered
to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification
from such Holder to that effect (in the form set forth
on the reverse of the Notes); or
(B) if such Transfer Restricted Security is being
transferred to the Company or a "qualified
institutional buyer" (as defined in Rule 144A) in
accordance with Rule 144A, a certification to that
effect (in the form set forth on the reverse of the
Notes); or
(C) if such Transfer Restricted Securities are being
transferred (w) pursuant to an exemption from
registration in accordance with Rule 144 or Regulation
S under the Securities Act; or (x) to an institutional
"accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or
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(7) under the Securities Act that is acquiring the
security for its own account, or for the account of
such an institutional accredited investor, in each case
in a minimum principal amount of Notes of $100,000 for
investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in
violation of the Securities Act; or (y) in reliance on
another exemption from the registration requirements of
the Securities Act: (i) a certification to that effect
(in the form set forth on the reverse of the Notes),
(ii) if the Company, Trustee or Registrar so requests,
an Opinion of Counsel reasonably acceptable to the
Company, Trustee and Registrar to the effect that such
transfer is in compliance with the Securities Act and
(iii) in the case of clause (x), a signed letter in
substantially the form of Exhibit B hereto.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below and subject to compliance with
applicable securities laws. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form of
Exhibit B hereto, that such Definitive Security is being
transferred to a "qualified institutional buyer" (as defined
in Rule 144A) in accordance with Rule 144A; and
ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the
Trustee to make, or to direct the Notes Custodian to make,
an endorsement on the Global Security to reflect an increase
in the aggregate principal amount of the Notes represented
by the Global Security,
then the Trustee shall cancel such Definitive Security in accordance with
Section 2.11 hereof and cause, or direct the Notes Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Notes Custodian, the aggregate principal amount of Notes
represented by the Global Security to be increased accordingly. If no Global
Security is then outstanding, the Company shall arrange for the execution and
delivery of an agreement with the Depositary upon customary terms reasonably
satisfactory to the Trustee, and shall issue and the Trustee shall authenticate
a new Global Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITY. The transfer and
exchange of a Global Security or beneficial interests therein shall be effected
through the Depositary in
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accordance with this Indenture (including the restrictions on transfer set forth
herein) and the procedures of the Depositary therefor and subject to compliance
with applicable securities laws.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
i) Any Person having a beneficial interest in a Global Security
that is being exchanged or transferred pursuant to an
effective registration statement under the Securities Act or
pursuant to clause (A), (B) or (C) below may upon request,
and if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Security
of the same aggregate principal amount subject to compliance
with applicable securities laws. Upon receipt by the Trustee
of written instructions or such other form of instructions
as is customary for the Depositary, from the Depositary, or
its nominee on behalf of any Person having a beneficial
interest in a Global Security, and upon receipt by the
Trustee of a written order or such other form of
instructions, and, in the case of a Transfer Restricted
Security only, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the
beneficial owner, a certification from such Person to
that effect (in the form set forth on the reverse of
the Notes); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule
144A) in accordance with Rule 144A, a certification to
that effect from the transferor (in the form set forth
on the reverse of the Notes); or
(C) if such beneficial interest is being transferred (w)
pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the
Securities Act; or (x) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act that is acquiring
the security for its own account, or for the account of
such an institutional accredited investor, in each case
in a minimum principal amount of Notes of $100,000 for
investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in
violation of the Securities Act; or (y) in reliance on
another exemption from the registration requirements of
the Securities Act: (i) a certification to that effect
from the transferee or transferor (in the form set
forth on the reverse of the Notes), (ii) if the
Company, Trustee or Registrar so requests, an Opinion
of Counsel from the transferee or transferor reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in
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compliance with the Securities Act, and (iii) in the
case of clause (x), a signed letter in substantially
the form of Exhibit B hereto,
then the Trustee or the Notes Custodian, at the direction of
the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary
and the Notes Custodian, the aggregate principal amount of
the Global Security to be reduced on its books and records
and, following such reduction, the Company will execute and,
upon receipt of written instructions from the Company, the
Trustee will authenticate and deliver to the transferee a
Definitive Security in the appropriate principal amount.
ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Security pursuant to this Section
2.6(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to
instructions from the Agent Members or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Definitive Securities to the Persons in whose names such
Notes are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITY.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in Section 2.6(f)), a Global Security may not be
transferred as a whole or in part except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSITARY.
If at any time:
i) the Depositary notifies the Company that the Depositary is
unwilling or unable to continue as Depositary for the Global
Securities and a successor Depositary for the Global
Securities is not appointed by the Company within 90 days
after delivery of such notice; or
ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive
Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate, in accordance with Section 2.2, requesting the authentication and
delivery of Definitive Securities, will authenticate and deliver Definitive
Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.
(g) LEGENDS.
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i) Except as permitted by the following paragraph (ii), each
Note certificate evidencing the Global Securities and the
Definitive Securities (and all Notes issued in exchange
therefor or in substitution thereof and all Common Stock
issued upon conversion thereof) shall bear a legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, SOLD, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
"THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (IV) TO THE COMPANY OR (V) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities
Act or an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Security that is
a Definitive Security, the Registrar shall permit the
Holder thereof (unless such Holder is an Affiliate of
the Company) to exchange such Transfer
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Restricted Security for a Definitive Security that does
not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted
Security; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions
set forth in (i) above (such sales or transfers being
subject only to the provisions of Section 2.6(e));
provided, however, that with respect to any request for
an exchange of a Transfer Restricted Security that is
represented by a Global Security for a Definitive
Security that does not bear a legend, which request is
made in reliance upon Rule 144 under the Securities
Act, the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to
Rule 144 under the Securities Act (such certification
to be in the form set forth on the reverse of the
Notes).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such time
as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained
and cancelled by the Trustee in accordance with Section 2.11. At
any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities,
redeemed, repurchased or cancelled, the principal amount of Notes
represented by such Global Security shall be reduced accordingly
and the books and records of the Trustee or the Notes Custodian
shall be marked, by the Trustee or the Notes Custodian, at the
direction of the Trustee, to reflect such reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF DEFINITIVE
SECURITIES.
i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
Definitive Securities and a Global Security at the
Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments
or similar governmental charge payable in connection
therewith.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive
Security selected for redemption in whole or in part
pursuant to Article 3, except the unredeemed portion of any
Definitive Security being redeemed in part, or (b) any Note
during the 15 day period preceding the mailing of a notice
of redemption or an offer to repurchase or redeem Notes or
the 15 day period preceding an Interest Payment Date.
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(iv) Prior to the due presentation for registration of transfer
of any Note, the Company, the Trustee, the Paying Agent,
the Registrar or any co- registrar may deem and treat the
Person in whose name a Note is registered as the absolute
owner of such Note for the purpose of receiving payment of
Principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue,
and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice
to the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this
Indenture as the Notes surrendered upon such transfer or
exchange.
(j) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or
a participant in the Depositary or other Person with
respect to the accuracy of the records of the Depositary 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 participant, member,
beneficial owner 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 Holders and all payments to be made to Holders
under the Notes shall be given or made only to or upon the
order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Depositary
subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the
Depositary with respect to its members, participants and
any beneficial owners.
(ii) 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 the
Agent Members or beneficial owners in any Global Security)
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.
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SECTION 2.7 REPLACEMENT NOTES.
----------- -----------------
Upon surrender of a mutilated Note at the office or agency of the
Registrar, the Company shall execute, and the Trustee shall authenticate and
deliver, a replacement Note in the name of the Holder of such mutilated Note, of
like principal amount and dated the date of such mutilated Note.
Upon surrender of written notice by a Holder or a Holder's attorney duly
authorized in writing at the office or agency of the Registrar that a Note has
been lost, destroyed or wrongfully taken, the Company shall execute, and the
Trustee shall authenticate and deliver, a replacement Note in the name of such
Holder, of like principal amount and dated the date of such lost, destroyed or
wrongfully taken Note; provided, however, that, unless such requirement is
waived by the Company, such notice shall be accompanied by an indemnity or
indemnity bond from an acceptable issuer that is sufficient in the judgment of
the Trustee and the Company to protect the Company, the Trustee, any Agent and
any authenticating agent from any loss which any of them may suffer by reason of
such Note's replacement.
The Company may charge the Holder for its expenses in replacing a Note.
Every replacement Note shall be an obligation of the Company and shall be
entitled to all benefits of this Indenture equally and proportionately with all
other Notes duly issued hereunder.
SECTION 2.8 OUTSTANDING NOTES.
----------- -----------------
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in the Global Security effected
by the Trustee hereunder and those described in this Section 2.8 as not
outstanding. Except as set forth in Section 2.9, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a holder in due course.
If the principal amount of any Note is considered paid under Section 4.1,
it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, any Subsidiary or an
Affiliate of any thereof) segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to redeem or
pay Notes payable on that date, and is not prohibited from paying such money to
the Holders thereof pursuant to the terms of this Indenture, then on and after
such redemption date or maturity date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
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SECTION 2.9 TREASURY NOTES.
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In determining whether the Holders of the required aggregate principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Affiliate of the Company shall be considered as though
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes as to which a Trust Officer of the Trustee knows are so owned shall be so
disregarded.
SECTION 2.10 TEMPORARY NOTES.
------------ ---------------
(a) Until definitive Notes are ready for delivery, the Company may
prepare and execute and the Trustee shall authenticate and deliver temporary
Notes upon a written order of the Company signed by an Officer and delivered to
a Trust Officer. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers appropriate
for temporary Notes. If temporary Notes are issued, the Company shall, without
unreasonable delay, prepare definitive Notes which may be exchanged for
temporary Notes.
After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Registrar, without charge to Holders. Upon surrender for
cancellation of one or more temporary Notes, the Company shall execute and the
Trustee upon a written order of the Company signed by an Officer shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes.
(b) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof only if such transfer complies with
Section 2.6 and (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor Depositary is not appointed by the Company within 90 days after
such notice or (ii) an Event of Default has occurred and is continuing.
(c) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.10 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount of Notes of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. Any Note delivered in
exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.6(b), bear the restricted securities legend set forth in
Exhibit A hereto.
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(d) Subject to the provisions of Section 2.10(c), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
(e) In the event of the occurrence of either of the events specified
in Section 2.10(b), the Company will promptly make available to the Trustee, at
the Company's expense, a reasonable supply of certificated Notes in definitive,
fully registered form without interest coupons.
SECTION 2.11 CANCELLATION.
------------ ------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, Conversion Agent and Paying Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer,
exchange, conversion or payment. The Trustee shall promptly cancel and destroy
(in accordance with the standard document destruction policies of the Trustee)
all Notes so delivered and certify to the Company their destruction unless by a
written order signed by an Officer, the Company shall direct that cancelled
Notes be returned to it. The Company may not issue new Notes to replace Notes
that have matured or been converted or redeemed.
SECTION 2.12 DEFAULTED INTEREST.
------------ ------------------
If the Company defaults in a payment of interest on the Notes, the
Company shall pay defaulted interest (plus interest on such defaulted interest,
to the extent lawful, at the rate borne by this Note) in any lawful manner. The
Company shall pay the defaulted interest to the Persons who are Holders on a
subsequent special record date. The Company shall fix or cause to be fixed (or
upon the Company's failure to do so the Trustee shall fix) any such special
record date and payment date to the reasonable satisfaction of the Trustee,
which specified record date shall not be less than 10 days prior to the payment
date for such defaulted interest, and shall promptly mail or cause to be mailed
to each Holder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid with respect to such defaulted interest or shall make arrangements
reasonably satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, which money when so deposited shall be held in trust for the
benefit of the Person entitled to such defaulted interest as provided in this
Section 2.12.
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SECTION 2.13 DEPOSIT OF MONEYS.
------------ -----------------
Prior to 10:00 a.m., New York City time, on each Interest Payment Date
and the maturity date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or maturity date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or maturity date, as the case may be.
ARTICLE 3.
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE.
----------- ------------------
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Paragraph 5 of the Notes, it shall notify the Trustee in writing
of the redemption date, the principal amount of Notes to be redeemed and the
redemption price at least 15 days prior to mailing any notice of redemption to
the Holders (unless the Trustee consents to a shorter period). Such notice shall
be in the form of an Officers' Certificate from the Company and will state that
such redemption will comply with the conditions herein.
If less than all the Notes are to be redeemed, the record date relating
to such redemption shall be selected by the Company and given to the Trustee,
which record date shall be not less than 15 days after the date of notice to the
Trustee.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
----------- ---------------------------------
If less than all the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are quoted or listed or
admitted to trading or, if the Notes are not so quoted or listed or admitted to
trading, on a pro rata basis, by lot or by such other method that complies with
applicable legal requirements and that the Trustee considers fair and
appropriate. The Trustee shall make the selection not more than 60 days and not
less than 30 days before the redemption date from Notes outstanding and not
previously called for redemption. The Trustee may select for redemption portions
of the principal amount of Notes that have denominations larger than $1,000. The
Trustee will make the selection from Notes outstanding and not previously called
for redemption. Notes and portions thereof selected by the Trustee shall be in
amounts of $1,000 or integral multiples of $1,000. If less than all of the Notes
are to be redeemed and a Note is converted in accordance with Article 10 after
the date on which notice of redemption is given pursuant to Section 3.3 and
prior to the time and date specified in Section 3.5, such Note shall, for
purposes of determining the amount of such Notes which have been redeemed, be
deemed to have been redeemed. Provisions of this Indenture that apply to Notes
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called for redemption also apply to portions of Notes called for redemption. The
Trustee shall notify the Company promptly of the Notes or portions of Notes to
be called for redemption.
SECTION 3.3 NOTICE OF REDEMPTION.
----------- --------------------
At least 30 days but not more than 60 days before a redemption date, the
Company or, upon written notice to the Trustee by the Company, the Trustee shall
give a notice of redemption to the Holders.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the Conversion Price;
(d) the name and address of the Paying Agent and Conversion
Agent;
(e) that Notes called for redemption may be converted at any
time before the close of business on the Business Day immediately
preceding the redemption date in accordance with Article 10;
(f) that Holders who want to convert Notes must satisfy the
requirements in Paragraph 8 of the Notes;
(g) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(h) the CUSIP number of the Notes;
(i) if fewer than all of the outstanding Notes are to be
redeemed, the certificate numbers and principal amounts of the particular
Notes to be redeemed;
(j) if any Note is being redeemed in part, that, after the
redemption date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued; and
(k) that unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such redemption
payment pursuant to the terms of this Indenture, interest on Notes called
for redemption ceases to accrue on and after the redemption date.
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If the Trustee gives such notice of redemption, it shall do so in the
Company's name and at the Company's expense and the Company shall provide the
Trustee with the information required to give such notice of redemption.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION; DEFINITION OF REDEMPTION PRICE.
----------- --------------------------------------------------------------
Notice of redemption given in accordance with Sections 3.3 and 13.2 to
each Holder shall be deemed to have been duly given, whether or not any
particular Holder receives such notice. Once notice of redemption is so mailed,
Notes called for redemption become due and payable on the redemption date at the
redemption price set forth in the Notes. A notice of redemption may not be
conditional. Upon surrender to the Trustee or the Paying Agent, such Notes
called for redemption shall be paid at the redemption price. References in this
Indenture to the "redemption price" mean the redemption price set forth in the
Notes plus the interest payable as provided in the Notes on Notes called for
redemption.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
----------- ---------------------------
On or before 10:00 a.m., New York City time, on any redemption date, the
Company shall deposit with the Trustee or with the Paying Agent immediately
available funds sufficient to pay the redemption price of all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption which prior thereto have been delivered by the Company to the Trustee
for cancellation or have been converted; provided, however, that any such
deposit shall be a payment with respect to the Notes on such date and shall be
subject to the provisions of Article 11 and shall be permitted on such date only
if payment would be permitted on such date under Article 11. The Trustee or the
Paying Agent shall return to the Company any money not required for the purpose
of paying such redemption price.
SECTION 3.6 NOTES REDEEMED IN PART.
----------- ----------------------
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
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ARTICLE 4.
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
----------- ----------------
The Company shall pay the Principal and repurchase price, if any, of and
interest on the Notes on the dates and in the manner provided in the Notes and
this Indenture. Principal and interest shall be considered paid on the date due
if the Paying Agent (other than the Company or a Subsidiary) on that date holds
money in accordance with this Indenture designated for and sufficient to pay in
cash all Principal and interest then due and the Paying Agent is not prohibited
from paying such money to Holders on that date pursuant to the terms of this
Indenture.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue Principal and repurchase price, if any, of the Notes at the rate borne
by the Notes and (ii) overdue installments of interest at the same rate.
SECTION 4.2 STAY, EXTENSION AND USURY LAWS.
----------- ------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.3 CONTINUED EXISTENCE.
----------- -------------------
Subject to Article 5, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
corporation and the corporate existence of the Subsidiaries and will refrain or
cause the Subsidiaries to refrain from taking any action that would cause its
corporate existence or the corporate existence of any of the Subsidiaries to
cease, including without limitation any action that would result in the
liquidation, winding up or dissolution of it or any of the Subsidiaries;
provided, however, that the Company shall not be required to preserve the
existence of any Subsidiary if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and the Subsidiaries and that the loss thereof to the Company taken
as a whole is not disadvantageous in any material respect to the Holders.
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SECTION 4.4 REPORTS.
----------- -------
(a) The Company shall file with the Trustee copies of all reports and
other information and documents that the Company is required to file with the
SEC pursuant to the Exchange Act. Each such report or other information or
document shall be filed with the Trustee within 15 days after filing of such
report or other information or document with the SEC. The Company will mail or
cause to be mailed to all Holders copies of all of (a) its annual reports to
stockholders and (b) quarterly reports to stockholders which are mailed to its
institutional stockholders.
(b) If the Company is at any time no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will
prepare (i) for the first three quarters of each fiscal year of the Company,
quarterly financial statements substantially equivalent to the financial
statements required to be included in a report on Form 10-Q under the Exchange
Act, and (ii) annually, complete audited consolidated financial statements,
including, but not limited to, a balance sheet, a statement of operations, a
statement of stockholders' equity and all appropriate notes. All such financial
statements will be prepared in accordance with GAAP, except for changes with
which the Company's independent accountants concur and except that quarterly
financial statements may be subject to year-end adjustments. The Company will
file or cause to be filed with the Trustee and will mail or cause to be mailed
to the Holders a copy of such financial statements within 50 days after the end
of each of the first three quarters of each fiscal year of the Company and
within 95 days after the close of each fiscal year of the Company, respectively.
Notwithstanding the foregoing, if the Company is no longer subject to such
reporting requirements by reason of the acquisition of Capital Stock by, or
merger or consolidation of the Company with, a Person which is subject to such
reporting requirements or a Subsidiary of such a Person and such Person has
unconditionally and irrevocably guaranteed payment in full when due of all
amounts payable with respect to the Notes, then the Company need not prepare,
file or mail the financial statements described in this Section 4.4(b);
provided, however, that such Person complies with Section 4.4(a) as if
references therein to the Company were references to such Person.
SECTION 4.5 TAXES.
----------- -----
The Company shall, and shall cause each of the Subsidiaries to, pay or
discharge prior to delinquency all taxes, assessments and governmental levies,
except as contested in good faith and by appropriate proceedings.
SECTION 4.6 CHANGE OF CONTROL.
----------- -----------------
(a) In the event of a Change of Control, the Company shall give or
cause to be given written notice in the form of an Officers' Certificate (the
"CHANGE OF CONTROL NOTICE") to all Holders, the Trustee and the Paying Agent of
such event and shall make an offer to purchase (as the same may be extended in
accordance with applicable law, the "CHANGE OF CONTROL OFFER")
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all then outstanding Notes at a purchase price equal to 150% of the principal
amount thereof plus accrued and unpaid interest thereon to the Change of Control
Payment Date. The Change of Control Notice shall be given in accordance with
Section 13.2 and the Change of Control Offer shall be made not more than 30 days
following the date of the Change of Control (the "CHANGE OF CONTROL DATE"),
unless the Company has previously given a notice of optional redemption by the
Company of all of the Notes in accordance with this Indenture. The Change of
Control Notice shall set forth:
(i) a statement that a Change of Control has occurred and, unless
the Notes are subject to a notice of optional redemption described
above, that the Company is offering to repurchase all of the
outstanding Notes;
(ii) a brief description of such Change of Control and, to the
extent readily available to the Company, information with respect
to pro forma historical consolidated income, cash flow and
capitalization of the Company after giving effect to such Change
of Control and such other financial information relating to the
Company with respect to such Change of Control as the Company may,
in its sole discretion, deem relevant to a decision whether to
convert or hold Notes or tender Notes in connection with such
Change of Control Offer;
(iii) the repurchase price (the "CHANGE OF CONTROL PAYMENT");
(iv) the expiration date of the Change of Control Offer, which
shall be no earlier than 30 days nor later than 60 days from the
date the Change of Control Notice is mailed;
(v) the date such purchase shall be effected, which shall be no
later than 30 days after the expiration date of the Change of
Control Offer (the "CHANGE OF CONTROL PAYMENT DATE");
(vi) a statement that any Notes not accepted for payment pursuant
to the Change of Control Offer shall continue to accrue interest;
(vii) a statement that unless the Company defaults in the payment
of the Change of Control Payment, all Notes or portions thereof
accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest on and after the Change of Control
Payment Date;
(viii) the Conversion Price as then in effect;
(ix) the name and address of the Paying Agent and the Conversion
Agent;
(x) a statement that Notes (duly endorsed for transfer to the
Company), together with the form of "Option of Holder to Elect
Repurchase" thereon completed and signed, must be surrendered to
the Paying Agent prior to the
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expiration of the Change of Control Offer to collect the Change of
Control Payment; and
(xi) any other information required by applicable law to be
included therein and any other procedures that a Holder must
follow in order to have Notes repurchased.
(b) The Change of Control Offer shall remain open until the close of
business on the expiration date of the Change of Control Offer. Each Holder
shall have the right to withdraw his tender in accordance with applicable rules
promulgated by the SEC under the Exchange Act.
(c) In the event that the Company is required to make a Change of
Control Offer, the Company will comply with any applicable securities laws and
regulations, including, to the extent applicable, Section 14(e) of, and Rule
14e-1 and any other tender offer rules under, the Exchange Act which may then be
applicable in connection with any offer by the Company to purchase Notes at the
option of the Holders; provided that in event such laws and regulations conflict
with any of the provisions hereof, such laws and regulations shall supersede
such provisions.
(d) On the Change of Control Payment Date, the Company shall, to the
extent lawful:
(i) accept for payment Notes or portions thereof tendered pursuant
to the Change of Control Offer;
(ii) deposit with the Paying Agent in immediately available funds
an amount equal to the Change of Control Payment with respect to
all Notes or portions thereof so accepted; and
(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the Notes
or portions thereof tendered to the Company.
(e) The Paying Agent shall promptly (but in any case not later than
five Business Days after the Change of Control Payment Date) mail to each Holder
of Notes so accepted payment in an amount equal to the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail to each
Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered by such Holder, if any; provided, that each such new Note
shall be in principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of all repurchases pursuant to this
Section 4.6 on or as soon as practicable after the Change of Control Payment
Date.
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SECTION 4.7 LIMITATION ON DIVIDEND RESTRICTIONS AFFECTING SUBSIDIARIES.
----------- ----------------------------------------------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction of any kind on the ability of any Subsidiary other than
Unrestricted Subsidiaries to (a) pay to the Company dividends or make to the
Company any other distribution on its Capital Stock, (b) pay any debt owed to
the Company or any of the Subsidiaries, (c) make loans or advances to the
Company or any of the Subsidiaries or (d) transfer any of its property or assets
to the Company or any of the Subsidiaries, other than such encumbrances or
restrictions existing or created under or by reason of (i) applicable law, (ii)
this Indenture, (iii) covenants or restrictions contained in any instrument
governing debt of the Company or any of the Subsidiaries existing on the date of
this Indenture or hereafter, provided that in the absence of a default under any
such loan documents, no such restriction shall prevent a Subsidiary from paying
dividends or otherwise distributing funds to the Company in amounts sufficient
to enable the Company to make interest and principal payments on the Notes as
and when due, (including pursuant to any Change of Control Offer), (iv)
customary provisions restricting subletting, assignment and transfer of any
lease governing a leasehold interest of the Company or any of the Subsidiaries
or in any license or other agreement entered into in the ordinary course of
business, (v) any agreement governing debt of a Person acquired by the Company
or any of the Subsidiaries in existence at the time of such acquisition (but not
created in connection with or in contemplation thereof), which encumbrances or
restrictions are not applicable to any Person, or the property or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, or (vi) any restriction with respect to a Subsidiary imposed pursuant
to an agreement entered into in accordance with the terms of this Indenture for
the sale or disposition of Capital Stock or property or assets of such
Subsidiary, pending the closing of such sale or disposition.
SECTION 4.8 LIMITATION ON LINE OF BUSINESS.
----------- ------------------------------
For so long as the Notes are outstanding, the Company and its
Subsidiaries will engage solely in the manufacturing, marketing, research,
development and sale of products or services in or related to the pharmaceutical
or biotechnology industries.
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS.
----------- ---------------------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, (i) declare or pay any distribution or dividend on or in
respect of any class or series of its Capital Stock (except dividends or
distributions payable by wholly-owned Subsidiaries of the Company and dividends
and distributions payable in Qualified Stock of the Company or in options,
warrants or other rights to purchase Qualified Stock of the Company); or (ii)
purchase, repurchase, prepay, redeem, defease or otherwise acquire or retire for
value (other than in Qualified Stock of the Company or in options, warrants or
other rights to purchase Qualified Stock of the Company) any Capital Stock of
the Company or any of its Subsidiaries (other than a wholly-owned Subsidiary of
the Company), except for the repurchase by the Company of any
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shares of Common Stock held by employees, directors or officers of, or
consultants or advisors to, the Company or any of its Subsidiaries pursuant to
the terms of any stock restrictions, stock repurchase or similar agreement at a
price per share that is less than 95% of the then Current Market Price of the
Common Stock (any such prohibited declaration, payment, distribution, purchase,
repurchase, prepayment, redemption, defeasance or other acquisition or
retirement or investment referred to in clauses (i) or (ii) above being
hereinafter referred to as a "Restricted Payment"), unless at the time of and
after giving effect to such proposed Restricted Payment (the value of such
payment, if other than cash, as determined by the Board of Directors, including
the affirmative vote of a majority of the Independent Directors, whose
determination shall be conclusive and evidenced by a resolution of the Board of
Directors) (A) no Event of Default (and no event that, after notice or lapse of
time or both, would become an Event of Default) shall have occurred and be
continuing and (B) (I) the value of such Restricted Payment, together with all
other Restricted Payments made during the fiscal year in which such Restricted
Payment is to be made, does not exceed 50% of the Company's consolidated net
income with respect to the immediately preceding fiscal year or (II) the Current
Market Price of the Common Stock is at least $14.025 for each of the 10 Trading
Days preceding the approval by the Board of Directors of such Restricted Payment
and the Company's market capitalization at the time of such approval (defined as
the average Current Market Price of the Common Stock for the ten Trading Day
period preceding such approval multiplied by the number of outstanding shares of
Common Stock at such time) is at least 400% of the Company's outstanding debt
(as shown on the Company's consolidated balance sheet) immediately prior to and
immediately after such Restricted Payment and all Restricted Payments under this
clause (II) do not exceed $5.0 million in any fiscal year of the Company.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.9 were computed, which calculations may
by based upon the Company's latest available financial statements.
SECTION 4.10 LIMITATION ON TRANSACTIONS WITH RELATED PERSONS.
------------ -----------------------------------------------
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with (a) any beneficial owner of 5% or
more of the outstanding voting securities of the Company (determined in
accordance with Section 13(d) of the Exchange Act) at the time of such
transaction, (b) any officer, director or employee of the Company, or any of its
Subsidiaries or any such beneficial owner of 5% or more of the outstanding
voting securities of the Company as described in clause (a) above or (c) any
Related Person, unless such transaction or series of related transactions (A) is
on terms that are no less favorable to the Company or any such Subsidiary, as
the case may be, than would be available in a comparable transaction with an
unrelated third party or (B)(x) if such transaction or series of related
transactions involve aggregate payments in excess of $60,000, the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction complies with clause (A) above and such transaction or series of
related transactions
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is approved by a majority of the Independent Directors or (y) if such
transaction or series of related transactions involve aggregate payments in
excess of $1.0 million, the Company obtains an opinion as to the fairness to the
Company or such Subsidiary from a financial point of view issued by an
investment banking firm, appraisal firm or accounting firm, in each case of
national standing. Notwithstanding the foregoing, the provisions of this Section
4.9 shall not apply to (i) any transaction entered into between the Company and
its Subsidiaries (but excluding transactions with any Subsidiary of which more
than 5% of the outstanding voting securities (as determined in accordance with
Section 13(d) under the Exchange Act) are beneficially owned by Persons who are
(a) officers, directors or employees of the Company or any of its Subsidiaries
or any beneficial owner of 5% or more of the outstanding voting securities of
the Company (as determined in accordance with Section 13(d) under the Exchange
Act) at the time of such transaction, (b) a beneficial owner of 5% or more of
the outstanding voting securities of the Company (as determined in accordance
with Section 13(d) under the Exchange Act) or (c) Related Persons), (ii) the
payment of compensation and provision of benefits to officers and employees of
the Company and loans and advances made in the ordinary course of business, or
any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise (including the grant of stock options or similar rights
to officers, employees and directors of the Company or any Subsidiary) pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans or other benefit plans approved by a majority of the Independent
Directors; any Designated Transactions and (iv) transactions with any Person who
is a Director of the Company or any of its Subsidiaries and who is not (a) the
beneficial owner of 5% or more of the outstanding voting securities of the
Company (as determined in accordance with Section 13(d) under the Exchange Act)
or (b) an officer or employee of the Company or any of its Subsidiaries or any
such beneficial owner of 5% or more of the outstanding voting securities of the
Company at the time of such transaction.
SECTION 4.11 COMPLIANCE CERTIFICATE.
------------ ----------------------
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officer
with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to such
Officer, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant and condition
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Event of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto), and that, to the
best of his or her knowledge, no event has occurred and remains in existence by
reason of which payments on account of the Principal of or interest on the Notes
are prohibited.
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SECTION 4.12 FURTHER ASSURANCE TO THE TRUSTEE.
------------ --------------------------------
The Company shall, upon reasonable request of the Trustee, execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the provisions of this
Indenture.
ARTICLE 5.
SUCCESSORS
SECTION 5.1 WHEN COMPANY MAY MERGE OR SELL ASSETS.
----------- -------------------------------------
The Company shall not consolidate with or merge into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets to, any
Person in a single transaction or series of related transactions, without the
consent of Holders of the majority in aggregate principal amount of Notes then
outstanding, unless:
(a) the Company is the continuing corporation or the Person formed by
or surviving any such consolidation or merger (if other than the Company), or to
which such sale, lease, conveyance or other disposition of assets shall have
been made, is organized and existing under the laws of the United States, any
state thereof or the District of Columbia and such Person (if other than the
Company) expressly assumes by supplemental indenture executed and delivered to
the Trustee and in a form reasonably satisfactory to the Trustee, all the
obligations of the Company under the Notes and this Indenture, including,
without limitation, conversion rights in accordance with Article 10;
(b) immediately before and immediately after giving effect to the
transaction no Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have occurred and be
continuing;
(c) immediately after giving effect to such transaction, the Notes and
this Indenture (as supplemented by any such supplemental indenture) will be
valid and enforceable obligations of the Company or such successor; and
(d) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such proposed
transaction and such supplemental indenture do not conflict with the applicable
provisions of this Indenture and, with respect to such Officers' Certificate
only, that all conditions precedent herein provided for relating to such
transaction have been satisfied.
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SECTION 5.2 SUCCESSOR SUBSTITUTED.
----------- ---------------------
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the Person formed by such consolidation or into or
with which the Company is merged or to which such sale, lease, conveyance or
other disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person has been named as the Company herein;
provided, however that in the case of a sale, lease, conveyance or other
disposition the Company shall not be released from the obligation to pay the
Principal of and interest on the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
----------- -----------------
The following shall constitute an "EVENT OF DEFAULT":
(a) failure to pay any Principal or repurchase price, if any,
of any Note when due and payable, whether at maturity, upon redemption, upon a
Change of Control Offer or otherwise, whether or not such payment is prohibited
by the subordination provisions of this Indenture;
(b) failure to pay any interest on any Note when due and
payable, which failure continues for ten days, whether or not such payment is
prohibited by the subordination provisions of this Indenture;
(c) failure to perform the other covenants of the Company in
this Indenture, which failure continues for 60 days after written notice as
provided in the last paragraph of this Section 6.1;
(d) a default occurs (after giving effect to any applicable
grace periods or any extension of any maturity date) in the payment when due of
Principal of, or an acceleration of, any indebtedness for money borrowed by the
Company or any of its Subsidiaries (other than an Unrestricted Subsidiary which
is not a Significant Subsidiary and provided there is no recourse against the
Company or any other Subsidiary with respect to the obligations of such
Unrestricted Subsidiary arising as a result of such default) in excess of $2
million, individually or in the aggregate, if such indebtedness is not
discharged, or such acceleration is not annulled, within 30 days after written
notice as provided in the last paragraph of this Section 6.1;
(e) the Company or any of its Significant Subsidiaries,
pursuant to or within the meaning of any Bankruptcy Law:
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(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property, and such Custodian
is not discharged within 30 days,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing that it is generally unable to pay
its debts as the same become due;
(f) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief in an involuntary case against the
Company or any Significant Subsidiary,
(ii) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of the
property of the Company or any Significant Subsidiary, or
(iii) orders the liquidation of the Company or any
Significant Subsidiary,
and, in each case, the order or decree remains unstayed and in effect for 60
consecutive days.
The term "BANKRUPTCY LAW" means Title 11 of the U.S. Code or any similar
federal, foreign or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, examiner or similar official
under any Bankruptcy Law. The term "SIGNIFICANT SUBSIDIARY" has the same meaning
as significant subsidiary has under Regulation S- X under the Securities Act as
in effect on the date hereof.
A Default under clause (c) of this Section 6.1 (other than a Default
under Section 5.1, which Default shall be an Event of Default with the notice
but without the passage of time specified in clause (c) of this Section 6.1) or
clause (d) of this Section 6.1 shall not be an Event of Default until (i) the
Trustee shall have notified the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding shall have notified the
Company and the Trustee, of the Default and (ii) the Company shall have failed
to cure the Default under such clause (c) within 60 days after receipt of the
notice or under such clause (d) within 10 days after receipt of the notice,
respectively. Any such notice must specify the Default, demand that it be
remedied and state that the notice is a "NOTICE OF DEFAULT."
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SECTION 6.2 ACCELERATION.
----------- ------------
If an Event of Default (other than an Event of Default specified in
clauses (e) and (f) of Section 6.1) occurs and is continuing, the Trustee (by
notice to the Company), or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding (by notice to the Company and the Trustee),
may declare the unpaid Principal of and accrued interest on all the Notes then
outstanding to be due and payable. Upon any such declaration, such Principal and
accrued interest shall be due and payable immediately. If an Event of Default
specified in clause (e) or (f) of Section 6.1 occurs, such an amount shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if (a) the Company
has paid or deposited with the Trustee a sum sufficient to pay (i) all overdue
interest on all Notes then outstanding and (ii) the Principal or repurchase
price, if any, of the Notes then outstanding which have become due otherwise
than by such declaration of acceleration and accrued interest thereon at a rate
borne by the Notes and (b) the rescission would not conflict with any judgment
or decree and if all existing Events of Default have been cured or waived except
nonpayment of Principal or interest that has become due solely because of the
acceleration. No such recision shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.3 OTHER REMEDIES.
----------- --------------
If an Event of Default occurs and is continuing, the Trustee may pursue
any remedy available under applicable law to collect the payment of Principal or
repurchase price, if any, of or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
SECTION 6.4 WAIVER OF EXISTING AND PAST DEFAULTS.
----------- ------------------------------------
The Holders of a majority in aggregate principal amount of the Notes then
outstanding held by Persons who are not Affiliates of the Company by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except (i) a continuing Default or Event of Default in the payment
of the Principal of or the interest on any Note or (ii) a Default or Event of
Default with respect to a provision that under Section 9.2 cannot be amended
without the consent of each Holder affected. Upon any such waiver, such Default
shall cease to exist and any Event of Default arising therefrom shall be deemed
to have been cured
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for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
----------- -------------------
Notwithstanding anything contained in Section 6.3 to the contrary, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it; provided, however, that the Trustee may refuse to follow any
direction that conflicts with applicable law or this Indenture or that the
Trustee determines is unduly prejudicial to the rights of other Holders or would
involve the Trustee in personal liability; provided further, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Prior to taking any action or following any direction pursuant to this
Article 6, the Trustee shall be entitled to request indemnification from the
requesting Holders satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction. If the Trustee
makes such request, it shall be entitled to delay taking such action or
following such direction until it has received such indemnification.
SECTION 6.6 LIMITATION ON SUITS.
----------- -------------------
A Holder may pursue a remedy with respect to this Indenture or the Notes
only if:
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the Notes then outstanding make a written request to the Trustee to
pursue the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in
aggregate principal amount of the Notes then outstanding do not give the
Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
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SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
----------- ------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of Principal or repurchase price, if any, of
and interest on such Note, on or after the respective due dates expressed in the
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to bring suit for the enforcement of the right to convert such
Note shall not be impaired or affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
----------- --------------------------
If an Event of Default specified in Section 6.1(a) or 6.1(b) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of Principal or
repurchase price, if any, of and interest accrued on the Notes and interest on
overdue Principal or repurchase price, if any, of and accrued interest on the
Notes and for such further amount as shall be sufficient to cover the costs and,
to the extent lawful, expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
----------- --------------------------------
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Except as provided in this Indenture, nothing
contained herein shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder or to authorize the Trustee to vote with respect to the
claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
------------ ----------
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 6.8 or 7.7;
Second: to holders of Senior Indebtedness to the extent required by
Article 11;
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Third: to Holders for amounts due and unpaid on the Notes for Principal
and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
Principal and interest, respectively; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders and, if it does so, will give prompt prior written notice thereof to the
Registrar.
At least 15 days before any such record date, the Trustee shall give or
cause to be given to each Holder a notice that states such record date, such
payment date and the amount to be paid.
SECTION 6.11 UNDERTAKING FOR COSTS.
------------ ---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7, or a suit by Holders of more than 10% in aggregate principal amount of the
then outstanding Notes or any suit for the enforcement of the right to convert
any Note in accordance with Article 10.
ARTICLE 7.
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
----------- -----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties that are
specifically set forth in this Indenture or the TIA and no others; and
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(ii) in the absence of negligence, willful misconduct or bad
faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture. However, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to
the requirements of this Indenture, but the Trustee need not verify the
contents thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this Section 7.1(c) does not limit the effect of Section
7.1(b);
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to the provisions of the TIA and Sections 7.1(a), 7.1(b),
7.1(c) and 7.1(e).
(e) The Trustee may refuse to perform any duty or exercise any right
or power hereunder unless it receives indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it hereunder, except as the Trustee may agree in writing with the Company.
Money held by the Trustee in trust hereunder need not be segregated from other
funds, except to the extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE.
----------- -----------------
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters to the extent reasonably deemed necessary by it.
(b) Before the Trustee acts or refrains from acting pursuant to the
terms of this Indenture or otherwise, it may require an Officers' Certificate or
an Opinion of Counsel, or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel.
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(c) The Trustee may act through agents and attorneys and shall not be
responsible for the willful misconduct or gross negligence of any agents and
attorneys appointed with due care.
(d) Subject to the provisions of Section 7.1(c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers conferred by this
Indenture.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
----------- ----------------------------
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to and must
comply with Sections 7.10 and 7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
----------- --------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or any statement in the Notes other
than its authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
---------- -------------------
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to the Company and each
Holder a notice of the Default or Event of Default within 90 days after it
occurs, unless such Default or Event of Default shall have been cured or waived.
Except in the case of a Default or Event of Default in payment on any Note under
Section 6.1(a) or 6.1(b), the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding the
notice is in the best interests of Holders.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
----------- -----------------------------
Within 60 days after each May 15, commencing, May 15, 1997, the Trustee
shall mail to the Company and each Holder, at the Company's expense, a brief
report dated as of such reporting date that complies with TIA [Section]313(a)
(but if no event described in TIA [Section]313(a) has occurred within the 12
months preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA [Section]313(b)(2) to the extent applicable. The
Trustee shall also transmit by mail all reports as required by TIA
[Section]313(c).
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Provided that this Indenture shall have been qualified under the TIA, a
copy of each report at the time of its mailing to Holders shall be filed with
the SEC and each stock exchange or market on which the Notes are listed or
admitted to trading. The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange or admitted to trading on any market and
of any delisting thereof.
SECTION 7.7 COMPENSATION AND INDEMNITY.
----------- --------------------------
The Company shall pay to the Trustee (in its capacities as Trustee,
Conversion Agent, Paying Agent and Registrar) from time to time such
compensation as may be agreed in writing between the Company and the Trustee for
its services hereunder. The Trustee's compensation shall not be (to the extent
permitted by law) limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it in accordance with any provision of this
Indenture. Such expenses may include the reasonable compensation and
out-of-pocket expenses of the Trustee's agents and counsel, except such
disbursements, advances and expenses as may be attributable to its negligence,
willful misconduct or bad faith. Any "float" earned on any money disbursed
hereunder shall be considered additional compensation to the Trustee.
The Company shall indemnify the Trustee (in its capacity as Trustee,
Conversion Agent, Paying Agent and Registrar) and each of its officers,
directors, employees, attorneys-in-fact and agents for, and hold each of such
Persons harmless against, any claim, demand, expense (including, but not limited
to, reasonable disbursements and expenses of the Trustee's agents and counsel),
loss or liability incurred by any of them without negligence, willful misconduct
or bad faith on such Person's part, arising out of or in connection with the
administration of this trust and the rights or duties of the Trustee hereunder,
including the reasonable costs and expenses of such Person's defense against any
claim or liability in connection with the exercise or performance of any of the
Trustee's powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Company shall defend the claim and the Trustee shall provide
reasonable cooperation at the Company's expense in the defense. The Trustee may
engage separate counsel at its own expense and participate in the defense,
provided that the Company shall bear the reasonable expenses of such separate
counsel which is reasonably acceptable to the Company if the defendants
regarding such claim include both the Trustee and the Company and the Company
and the Trustee shall have been advised in writing by the Trustee's separate
counsel that representation of the Trustee and the Company would be
inappropriate under applicable standards of professional responsibility due to
actual or potential differing interests between them. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
The Company need not pay for any settlement made without its consent, which
consent shall not be unreasonable withheld.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses or
renders services after an Event
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of Default specified in Section 6.1(e) or 6.1(f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
----------- ----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign by so notifying the Company in writing at least 30
days prior to the date of the proposed resignation; provided, however, that no
such resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.8. The Holders of a majority in aggregate
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company. The Company shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee is not appointed or does not take office within 30
days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to the Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee upon payment of all amounts due it hereunder.
Notwithstanding the
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replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee with respect to expenses and liabilities incurred by it prior to such
replacement.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER.
----------- ---------------------------
Except as otherwise provided in Section 7.8(a) or 7.8(d), if the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
------------ -----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a). The Trustee shall always have a combined capital and surplus
as stated in its most recent published annual report of condition of at least
$100 million. The Trustee shall comply with TIA ss. 310(b). In the event the
Trustee shall cease to be eligible in accordance with this Section 7.10, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 7.8.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
------------ -------------------------------------------------
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.1 TERMINATION OF COMPANY'S OBLIGATIONS.
----------- ------------------------------------
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.7 and 8.3 shall survive) when all
outstanding Notes theretofore authenticated and issued (other than destroyed,
lost or stolen Notes which have been replaced or paid) have been delivered to
the Trustee for cancellation and the Company has paid all sums payable
hereunder. In addition, the Company shall be discharged from all of its
obligations under Section 2.13 and Sections 4.3 through 4.12 while the Notes
remain outstanding if all outstanding Notes will become due and payable at their
scheduled maturity within one year and the following conditions have been
satisfied:
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(a) the Company has deposited, or caused to be deposited, irrevocably
with the Trustee as trust funds specifically pledged as security for, and
dedicated solely for, such purpose, (i) money in an amount, (ii) non-callable
U.S. Government Obligations which through the payment of Principal and interest
in accordance with their terms (without the reinvestment of such interest or
Principal) will provide not later than one day before the due date of any
payment money in an amount, or (iii) a combination thereof, sufficient with
respect to clauses (ii) and (iii) in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee at or prior to the time of such deposit, to pay the
Principal and discharge each installment of interest on the outstanding Notes.
(b) no Default or Event of Default with respect to the Notes has
occurred and is continuing on the date of such deposit or shall occur as a
result of such deposit or at any time during the period ending on the 91st day
after the date of such deposit, as evidenced to the Trustee by an Officer's
Certificate delivered to the Trustee concurrently with such deposit.
(c) such defeasance does not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound, and is not prohibited by Article 11,
as evidenced to the Trustee by an Officers' Certificate delivered to the Trustee
concurrently with such deposit.
(d) the Company has delivered to the Trustee a private Internal
Revenue Service ruling or an Opinion of Counsel that Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to federal income tax on
the same amount, in the same manner, and at the same times, as would have been
the case if such deposit, defeasance and discharge had not occurred.
(e) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the deposit shall not result in the Company, the Trustee or the
trust being deemed to be an "investment company" under the Investment Company
Act of 1940, as amended.
(f) 91 days pass after the deposit is made and during such 91 day
period no event of Default specified in Section 6.1(e) or (f) shall occur and be
continuing at the end of such period.
(g) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such deposit, defeasance and
discharge does not conflict with the applicable provisions of this Indenture.
(h) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions precedent under this Indenture relating to such
deposit, defeasance and discharge have been complied with.
Notwithstanding the foregoing, the Company's obligations to pay Principal and
interest on the Notes shall continue until the Internal Revenue Service ruling
or Opinion of Counsel referred to in clause (d) above is provided. If the
Company exercises such option to discharge such
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provisions of the Indenture, payment of the Notes may not be accelerated because
of an event of default specified in Sections 6.1(c) with respect to the failure
to perform any of the covenants set forth in Section 2.13 and Section 4.3
through 4.12, or Section 6.1(d).
After a deposit made pursuant to this Section 8.1, the Trustee upon
request shall acknowledge in writing the discharge of the Company's obligations
specified above under this Indenture.
SECTION 8.2 APPLICATION OF TRUST MONEY.
----------- --------------------------
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.1. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of Principal and interest on the
Notes. Money and securities so held in trust are not subject to Article 11.
SECTION 8.3 REPAYMENT TO COMPANY.
----------- --------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money held by them for the payment of Principal,
repurchase price or interest that remains unclaimed for one year after the date
upon which such payment shall have become due; provided, however, that the
Company shall have first caused notice of such payment to the Company to be
mailed to each Holder entitled thereto no less than 30 days prior to such
payment. After payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.
SECTION 8.4 REINSTATEMENT.
----------- -------------
If the Trustee or Paying Agent is unable to apply any money in accordance
with Section 8.2 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 8.1 until such
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.2; provided, however 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.
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ARTICLE 9.
AMENDMENTS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.
----------- --------------------------
The Company and the Trustee may amend this Indenture or the Notes without
the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided
such amendment does not adversely affect the rights of any Holder;
(b) to comply with Section 5.1 or 10.5;
(c) to provide for uncertificated Notes in addition to or in
lieu of certificated Notes;
(d) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the Holders, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement
of all or any of the several remedies provided in this Indenture or in
the Notes as herein set forth;
(e) to make any change that does not adversely affect the
rights hereunder of any Holder; or
(f) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
provided, however, that, in each case, the Company has delivered to the Trustee
an Officers' Certificate stating that such amendment complies with the
provisions of this Section 9.1 and an Opinion of Counsel stating that adoption
of such amendment does not conflict with the provisions of this Section 9.1.
SECTION 9.2 WITH CONSENT OF HOLDERS.
----------- -----------------------
Subject to the provisions of Sections 6.4 and 6.7, the Company and the
Trustee may amend or modify this Indenture or the Notes with the written consent
of the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and the Holders of a majority in aggregate principal amount
of the Notes then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Notes; provided,
however, that, without the consent of each Holder affected, an amendment,
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modification or waiver under this Section 9.2 may not (with respect to any Notes
held by a nonconsenting Holder):
(a) change the stated maturity of, or any installment of
interest on, or waive a default in the payment of Principal or repurchase
price, if any, of or interest on any Note;
(b) reduce the principal amount of any Note or reduce the rate
or extend the time of payment of interest on any Note;
(c) increase the Conversion Price (other than in connection
with a combination described in Section 10.4(a)(iii));
(d) change the place or currency of payment of Principal or
repurchase price, if any, of or interest on any Note;
(e) impair the right to institute suit for the enforcement of
any payment on or with respect to any Note;
(f) adversely affect the right to exchange or convert Notes;
(g) reduce the percentage of the aggregate principal amount of
outstanding Notes, the consent of the Holders of which is necessary to
amend this Section 9.2, consent to a merger, consolidation or conveyance,
sale, transfer or lease of assets as described in Section 5.1 or modify
or amend any other provision of this Indenture;
(h) reduce the percentage of the aggregate principal amount of
outstanding Notes, the consent of the Holders of which is necessary for
waiver of compliance with certain provisions of this Indenture or for
waiver of certain defaults;
(i) modify the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Holders;
(j) except as otherwise permitted under Article 5, consent to
the assignment or transfer by the Company of any of its rights and
obligations under this Indenture; or
(k) modify the provisions of this Indenture with respect to the
obligation of the Company to repurchase Notes in a manner adverse to the
Holders.
To secure a consent of the Holders under this Section 9.2, it shall not
be necessary for the Holders to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section 9.2 becomes effective,
the Company shall mail to Holders a notice briefly describing the amendment or
waiver. Any failure of the
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Company to mail such notices, or any defect therein, shall not, however, in any
way, impair or affect the validity of any such amendment or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
----------- -----------------------------------
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
----------- ---------------------------------
Until an amendment, supplemental indenture or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by such Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as such consenting Holder's Note, even if notation of the consent is not
made on any Note. However, prior to becoming effective, any such Holder or
subsequent Holder may revoke the consent as to its Notes or a portion thereof if
the Trustee receives written notice of revocation before the consent of Holders
of the requisite aggregate principal amount of Notes then outstanding has been
obtained and not revoked.
The Company may, but shall not be obligated to, fix a record date
pursuant to Section 12.1 for the purpose of determining the Holders entitled to
consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
principal amount of Notes required hereunder for such amendment or waiver to be
effective shall have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (a) through (k) of
Section 9.2. In such case, the amendment or waiver shall bind each Holder of a
Note who has consented to it and every subsequent Holder of a Note that
evidences the same debt as the consenting Holder's Note.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.
----------- --------------------------------
The Trustee (in accordance with the written direction of the Company) may
(at the Company's expense) place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver. Failure to make
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the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE PROTECTED.
----------- -----------------
The Trustee shall sign all supplemental indentures authorized by this
Indenture, except that the Trustee need not sign any supplemental indenture that
adversely affects its rights. In signing or refusing to sign such supplemental
indenture, the Trustee shall be entitled to receive an Officers' Certificate and
Opinion of Counsel to the effect that such supplemental indenture is authorized
or permitted by this Indenture and will be valid and binding on the Company in
accordance with its terms.
ARTICLE 10.
CONVERSION
SECTION 10.1 CONVERSION PRIVILEGE.
------------ --------------------
Each Holder may, at such Holder's option, at any time prior to the close
of business on April 1, 2004, unless earlier redeemed or repurchased, convert
such Holder's Notes, in whole or in part (in denominations of $1,000 or
multiples thereof), at 100% of the principal amount so converted, into shares of
Common Stock at a conversion price per share equal to $7.0125, as such
conversion price may be adjusted from time to time in accordance with this
Article 10 (the "CONVERSION PRICE").
SECTION 10.2 CONVERSION PROCEDURE.
------------ --------------------
To convert a Note, the Holder thereof must (1) complete and sign the
"Form of Election to Convert" thereon (unless such Holder is The Depository
Trust Company ("DTC") or its nominee, in which case the customary procedures of
DTC will apply), (2) surrender such Note to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent and (4) pay any transfer or similar tax if required by
Section 10.6. The Company's delivery to the Holder of a fixed number of shares
of Common Stock (and any cash in lieu of fractional shares of Common Stock into
which such Note is converted) shall be deemed to satisfy the Company's
obligation to pay the principal amount of such Note and, except as provided in
the next two sentences, all accrued interest on such Note. Prior to April 1,
2000, a Holder who surrenders such Note for conversion (including a Note which
has been called for redemption and even if a Change of Control Offer has been
made) will be paid promptly after such conversion interest accrued but not paid
from the most recent date on which interest has been paid or, if no interest has
been paid, from the date of original issuance of such Note through the date of
such conversion. In addition, if such Note (including a Note which has been
called for redemption and even if a Change of Control
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Offer has been made) is converted after a regular interest payment record date
and prior to the related Interest Payment Date (regardless of whether such
conversion occurs before or after April 1, 2000), the full interest installment
on such Note scheduled to be paid on such Interest Payment Date shall be payable
on such Interest Payment Date to the Holder of record at the close of business
on such record date.
As promptly as practicable after the surrender of a Note in compliance
with this Section 10.2, the Company shall issue and deliver at the office or
agency of the Registrar or the Conversion Agent to such Holder, or on such
Holder's written order, a certificate or certificates for the full number of
whole shares of Common Stock issuable upon the conversion of such Note in
accordance with the provisions of this Article 10 and a check or cash with
respect to any fractional share of Common Stock arising upon such conversion as
provided in Section 10.3. In case any Note of a denomination greater than $1,000
shall be surrendered for partial conversion, then, subject to Article 2, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of the Note so surrendered, without charge to such Holder, 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 on the date on
which such Note shall have been surrendered in compliance with this Section
10.2, 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 of Common Stock
represented thereby for all purposes; provided, however, that no surrender of a
Note on any date when the stock transfer books of the Company shall be closed
shall be effective to constitute the Person or Persons entitled to receive such
shares upon such conversion as the record holder or holders of such shares on
such date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open and, in any such case, such conversion shall
be at the Conversion Price in effect on the date on which such Note shall have
been surrendered.
If the last day on which a Note may be converted is not a Business Day,
the Note may be surrendered to that Conversion Agent on the next succeeding
Business Day.
Provisions of this Indenture that apply to conversion of all of a Note
also apply to conversion of a portion of such Note.
SECTION 10.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
------------ ------------------------------------------
No fractional shares of Common Stock or scrip representing fractional
shares of Common Stock 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
full number of whole shares of Common Stock which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
Notes (or specified portions thereof to the extent permitted hereby) so
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surrendered. If any fractional share of Common Stock would be issuable upon the
conversion of any Note or Notes, the Company shall make an adjustment therefor
in cash at the Current Market Price of the Common Stock as of the close of
business on the Business Day prior to such conversion.
SECTION 10.4 ADJUSTMENT OF CONVERSION PRICE.
------------ ------------------------------
(a) If the Company shall (i) pay a dividend or other distribution, in
Common Stock, on any class of Capital Stock of the Company, (ii) subdivide the
outstanding Common Stock into a greater number of shares by any means or (iii)
combine the outstanding Common Stock into a smaller number of shares by any
means (including, without limitation, a reverse stock split), then in each such
case the Conversion Price in effect immediately prior thereto shall be adjusted
so that the Holder of any Note thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that such Holder would
have owned or have been entitled to receive upon the happening of such event had
such Note been converted immediately prior to the relevant record date or, if
there is no such record date, the effective date of such event. An adjustment
made pursuant to this Section 10.4(a) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date of such subdivision or combination, as the case may be.
(b) If the Company shall (i) issue or distribute (at a price per share
less than the Current Market Price per share of such Capital Stock on the date
of such issuance or distribution) Capital Stock generally to holders of Common
Stock or to holders of any class or series of Capital Stock which is convertible
into or exchangeable or exercisable for Common Stock (excluding an issuance or
distribution of Common Stock described in Section 10.4(a)) or (ii) issue or
distribute generally to such holders rights, warrants, options or convertible or
exchangeable securities entitling the holder thereof to subscribe for, purchase,
convert into or exchange for Capital Stock at a price per share less than the
Current Market Price per share of such Capital Stock on the date of issuance or
distribution, then, in each such case, at the earliest of (A) the date the
Company enters into a firm contract for such issuance or distribution, (B) the
record date for the determination of stockholders entitled to receive any such
Capital Stock or any such rights, warrants, options or convertible or
exchangeable securities or (C) the date of actual issuance or distribution of
any such Capital Stock or any such rights, warrants, options or convertible or
exchangeable securities, the Conversion Price shall be reduced by multiplying
the Conversion Price in effect immediately prior to such earliest date by:
(x) if such Capital Stock is Common Stock, a fraction the numerator of
which is the number of shares of Common Stock outstanding on such
earliest date plus the number of shares of Common Stock which could be
purchased at the Current Market Price per share of Common Stock on the
date of such issuance or distribution with the aggregate consideration
(based on the Fair Market Value thereof) received or receivable by the
Company either (A) in connection with such issuance or distribution or
(B) upon the conversion, exchange, purchase or subscription of all such
rights, warrants, options or
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convertible or exchangeable securities (the "AGGREGATE CONSIDERATION"),
and the denominator of which is the number of shares of Common Stock
outstanding on such earliest date plus the number of shares of Common
Stock to be so issued or distributed or to be issued upon the conversion,
exchange, purchase or subscription of all such rights, warrants, options
or convertible or exchangeable securities; or
(y) if such Capital Stock is other than Common Stock, a fraction the
numerator of which is the Current Market Price per share of Common Stock
on such earliest date minus an amount equal to (A) the difference between
(1) the Current Market Price per share of such Capital Stock multiplied
by the number of shares of such Capital Stock to be so issued and (2) the
Aggregate Consideration, divided by (B) the number of shares of Common
Stock outstanding on such date, and the denominator of which is the
Current Market Price per share of Common Stock on such earliest date.
Such adjustment shall be made successively whenever any such Capital Stock,
rights, warrants, options or convertible or exchangeable securities are so
issued or distributed. In determining whether any rights, warrants, options or
convertible or exchangeable securities entitle the holders thereof to subscribe
for, purchase, convert into or exchange for shares of such Capital Stock at less
than such Current Market Price, there shall be taken into account the Fair
Market Value of any consideration received or receivable by the Company for such
rights, warrants, options or convertible or exchangeable securities. If any
right, warrant, option or convertible or exchangeable securities, the issuance
of which resulted in an adjustment in the Conversion Price pursuant to this
Section 10.4(b), shall expire and shall not have been exercised, the Conversion
Price shall immediately upon such expiration be recomputed to the Conversion
Price which would have been in effect if such right, warrant, option or
convertible or exchangeable securities had never been distributed or issued.
Notwithstanding anything contained in this paragraph to the contrary, (i) the
issuance of Capital Stock upon the exercise of such rights, warrants or options
or the conversion or exchange of such convertible or exchangeable securities
will not cause an adjustment in the Conversion Price if no such adjustment would
have been required at the time such right, warrant, option or convertible or
exchangeable security was issued or distributed; provided, however, that, if the
consideration payable upon such exercise, conversion or exchange and/or the
Capital Stock receivable thereupon are changed after the time of the issuance or
distribution of such right, warrant, option or convertible or exchangeable
security, then such change shall be deemed to be the expiration thereof without
having been exercised and the issuance or distribution of new options, rights,
warrants or convertible or exchangeable securities and (ii) the issuance of
convertible preferred stock of the Company as a dividend on convertible
preferred stock of the Company will not cause an adjustment in the Conversion
Price if no such adjustment would have been required at the time such underlying
convertible preferred stock was issued (or as a result of any subsequent
modification to the terms thereof) and the conversion provisions of such
convertible stock so issued as a dividend are the same as in such underlying
convertible preferred stock.
Notwithstanding anything contained in this Indenture to the contrary,
options, rights or warrants issued or distributed by the Company, including
options, rights or warrants distributed prior to the date of this Indenture, to
holders of Common Stock generally which, until the
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occurrence of a specified event or events (a "TRIGGER EVENT"), (i) are deemed to
be transferred with Common Stock, (ii) are not exercisable and (iii) are also
issued on a pro rata basis with respect to future issuances of Common Stock,
shall be deemed not to have been issued or distributed for purposes of this
Section 10.4 (and no adjustment to the Conversion Price under this Section 10.4
will be required) until the occurrence of the earliest Trigger Event. Upon the
occurrence of a Trigger Event, such options, rights or warrants shall continue
to be deemed not to have been issued or distributed for purposes of this Section
10.4 (and no adjustment to the Conversion Price under this Section 10.4 will be
required) if and for so long as each Holder who thereafter converts such
Holder's Notes shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversion, a number of such
options, rights or warrants, as the case may be, equal to the number of options,
rights or warrants to which a holder of the number of shares of Common Stock
equal to the number of shares of Common Stock issuable upon conversion of such
Holder's Notes is entitled to receive at the time of such conversion in
accordance with the terms and provisions of and applicable to such options,
rights or warrants. Upon the expiration of any such options, rights or warrants
or at such time, if any, as a Holder is not entitled to receive such options,
rights or warrants upon conversion of such Holder's Notes, an adjustment (if any
is required) to the Conversion Price shall be made in accordance with this
Section 10.4(b) with respect to the issuance of all such options, rights and
warrants as of the date of issuance thereof, but subject to the provisions of
the preceding paragraph. If any such option, right or warrant, including any
such options, rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such options,
rights or warrants become exercisable to purchase different securities,
evidences of indebtedness, cash, Properties or other assets or different amounts
thereof, then, subject to the preceding provisions of this paragraph, 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 options, rights or warrants
with such new purchase rights (and a termination or expiration of the existing
options, rights or warrants without exercise thereof). In addition, in the event
of any distribution (or deemed distribution) of options, rights or warrants, or
any Trigger Event or other event of the type described in the preceding
sentence, that required (or would have required but for the provisions of
Section 10.4(e) or this paragraph) an adjustment to the Conversion Price under
this Section 10.4 and such options, rights or warrants shall thereafter have
been redeemed or repurchased without having been exercised, then the Conversion
Price shall be adjusted upon such redemption or repurchase to give effect to
such distribution, Trigger Event or other event, as the case may be, as though
it had instead been a cash distribution, equal on a per share basis to the
result of the aggregate redemption or repurchase price received by holders of
such options, rights or warrants divided by the number of shares of Common Stock
outstanding as of the date of such repurchase or redemption, made to holders of
Common Stock generally as of the date of such redemption or repurchase.
Notwithstanding anything contained in this Section 10.4(b) to the
contrary, no adjustment shall be made in the Conversion Price pursuant to this
Section 10.4(b) with respect to the issuance of Common Stock or options or other
rights to purchase Common Stock pursuant to any employee stock purchase, bonus,
award, grant, option or ownership plan (including, without limitation, an
employee stock ownership plan which is part of an employee benefit plan
qualified under Section 401 of the Internal Revenue Code of 1986, as amended
(the "CODE"), an employee
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stock option or incentive stock option plan qualified under Section 422 of the
Code and a restricted stock plan), including the issuance of Common Stock upon
the exercise of such options; provided, that, for purposes of this paragraph,
the term "employee" includes directors, consultants and advisors and the term
"plan" means a plan, program or arrangement in which 5 or more Persons are
eligible to participate (or, if only directors or outside directors of the
Company are eligible to participate and there are fewer than 5 such directors or
outside directors, as the case may be, in which all of such directors or outside
directors, as the case may be, are eligible to participate).
(c) If the Company shall pay or distribute, as a dividend or
otherwise, generally to holders of Common Stock or any class or series of
Capital Stock which is convertible into or exercisable or exchangeable for
Common Stock any assets, Properties or rights (including, without limitation,
evidences of indebtedness of the Company, any Subsidiary or any other Person,
cash or Capital Stock or other securities of the Company, any Subsidiary or any
other Person, but excluding payments and distributions as described in Section
10.4(a) or 10.4(b), dividends and distributions in connection with the
liquidation, dissolution or winding up of the Company in its entirety and
distributions consisting solely of cash described in Section 10.4(d)), then in
each such case the Conversion Price shall be reduced by multiplying the
Conversion Price in effect immediately prior to the date of such payment or
distribution by a fraction, the numerator of which is the Current Market Price
per share of Common Stock on the record date for the determination of
stockholders entitled to receive such payment or distribution less the Fair
Market Value per share on such record date of the assets, Properties or rights
so paid or distributed, and the denominator of which is the Current Market Price
per share of Common Stock on such record date. Such adjustment shall become
effective immediately after such record date. For purposes of this Section
10.4(c), such Fair Market Value per share shall equal the aggregate Fair Market
Value on such record date of the assets, Properties or rights so paid or
distributed divided by the number of shares of Common Stock outstanding on such
record date.
(d) If the Company shall, by dividend or otherwise, make a
distribution (other than in connection with the liquidation, dissolution or
winding up of the Company in its entirety), generally to holders of Common Stock
or any class or series of Capital Stock which is convertible into or exercisable
or exchangeable for Common Stock, consisting solely of cash where (x) the sum of
(i) the aggregate amount of such cash plus (ii) the aggregate amount of all cash
so distributed (by dividend or otherwise) to such holders within the 12-month
period ending on the record date for determining stockholders entitled to
receive such distribution with respect to which no adjustment has been made to
the Conversion Price pursuant to this Section 10.4(d) exceeds (y) 10% of the
result of the multiplication of (1) the Current Market Price per share of Common
Stock on such record date times (2) the number of shares of Common Stock
outstanding on such record date, then the Conversion Price shall be reduced,
effective immediately prior to the opening of business on the day following such
record date, by multiplying the Conversion Price in effect immediately prior to
the close of business on the day prior to such record date by a fraction, the
numerator of which is the Current Market Price per share of Common Stock on such
record date less the aggregate amount of cash per share so distributed and the
denominator of which is such Current Market Price; provided, however, that,
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if the aggregate amount of cash per share is equal to or greater than such
Current Market Price, then, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion (with respect to each share of Common Stock issued upon such
conversion and in addition to the Common Stock issuable upon conversion) the
aggregate amount of cash per share such Holder would have received had such
Holder's Note been converted immediately prior to such record date. In no event
shall the Conversion Price be increased pursuant to this Section 10.4(d);
provided, however, that if such distribution is not so made, the Conversion
Price shall be adjusted to be the Conversion Price which would have been in
effect if such distribution had not been declared. For purposes of this
paragraph of this Section 10.4(d), such aggregate amount of cash per share shall
equal such sum divided by the number of shares of Common Stock outstanding on
such record date.
(e) The provisions of this Section 10.4 shall similarly apply to all
successive events of the type described in this Section 10.4. Notwithstanding
anything contained herein to the contrary, no adjustment in the Conversion Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Conversion Price then in effect; provided, however, that
any adjustments which by reason of this Section 10.4(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article 10 shall be made by the Company
and shall be made to the nearest cent or to the nearest one hundredth of a
share, as the case may be, and the Trustee shall be entitled to rely
conclusively thereon. Notwithstanding anything contained in this Section 10.4 to
the contrary, the Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this Section 10.4, as it in
its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable.
Except as provided in this Article 10, no adjustment in the Conversion Price
will be made for the issuance of Common Stock or any securities convertible into
or exchangeable for Common Stock or carrying the right to purchase Common Stock
or any securities so convertible or exchangeable.
(f) Whenever the Conversion Price is adjusted as provided herein, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price in
effect after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such Officers'
Certificate, the Company shall give or cause to be given to each Holder a notice
of such adjustment of the Conversion Price setting forth the adjusted Conversion
Price and the date on which such adjustment becomes effective.
(g) Notwithstanding anything contained herein to the contrary, in any
case in which this Section 10.4 provides that an adjustment in the Conversion
Price shall become effective immediately after a record date for an event, the
Company may defer until the occurrence of such event (i) issuing to the Holder
of any Note converted after such record date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the number of
shares of Common Stock issuable upon such conversion before giving effect to
such adjustment and (ii)
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paying to such Holder any amount in cash in lieu of any fractional share of
Common Stock pursuant to Section 10.3.
SECTION 10.5 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
------------ ---------------------------------------------------------
In the event of (i) any reclassification (including, without limitation,
a reclassification effected by means of an exchange or tender offer by the
Company or any Subsidiary) or change of outstanding Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), (ii) any
consolidation, merger or combination of the Company with another corporation as
a result of which holders of Common Stock shall be entitled to receive
securities or other Property (including cash) with respect to or in exchange for
Common Stock or (iii) any sale or conveyance of the Property of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive securities or other
Property (including cash) with respect to or in exchange for Common Stock, then
the Company or the successor or purchasing corporation, as the case may be,
shall enter into a supplemental indenture providing that each Note shall be
convertible into the kind and amount of securities or other Property (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance which the Holder of such Note would have
received if such Note had been converted immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance. 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 10.
Whenever a supplemental indenture is entered into as provided herein, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth a brief statement of the
facts requiring such supplemental indenture. Promptly after delivery of such
Officers' Certificate, the Company shall give or cause to be given to each
Holder a notice of the execution of such supplemental indenture.
The provisions of this Section 10.5 shall similarly apply to all
successive events of the type described in this Section 10.5.
SECTION 10.6 TAXES ON SHARES ISSUED.
------------ ----------------------
The issuance of a certificate or certificates on conversions of Notes
shall be made without charge to the Holders of such Notes for any tax or charge
with respect to the issuance thereof. The Company shall not, however, be
required to pay any tax or charge which may be payable with respect to any
transfer involved in the issuance and delivery of a certificate or certificates
in any name other than that of the Holders of such Notes, and the Company shall
not be required to issue or deliver any such certificate or certificates unless
and until the Person or Persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or charge
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or shall have established to the satisfaction of the Company that such tax or
charge has been paid.
SECTION 10.7 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH
------------ ---------------------------------------------------------------
GOVERNMENT REQUIREMENTS; LISTING OF COMMON STOCK.
------------------------------------------------
The Company shall reserve, out of its authorized but unissued Common
Stock or its Common Stock held in treasury, sufficient shares of Common Stock to
provide for the conversion of all of the Notes that are outstanding from time to
time.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock issuable
upon conversion of 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 Common Stock at such adjusted Conversion Price.
The Company covenants that all Common Stock which may be issued upon
conversion of Notes will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the Company's issuance and delivery thereof.
The Company covenants that if any Common Stock issued or delivered upon
conversion of Notes hereunder require registration with or approval of any
governmental authority under any applicable federal or state law (excluding
federal or state securities laws) before such Common Stock may be lawfully
issued, the Company will in good faith and as expeditiously as possible endeavor
to secure such registration or approval, as the case may be.
The Company covenants that it will not take any action which would cause
the exemption from the registration requirement of Section 5 of the Securities
Act afforded by Section 3(a)(9) of the Securities Act to be unavailable with
respect to the issuance and delivery of Common Stock upon the conversion of
Notes in accordance with this Indenture.
SECTION 10.8 RESPONSIBILITY OF TRUSTEE REQUIREMENTS.
------------ --------------------------------------
The Trustee and any other Conversion Agent shall not at any time be under
any duty or responsibility to any Holder to determine whether any fact exists
which may require any adjustment of the Conversion Price or other adjustment, or
with respect to the nature, 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 any such adjustment, or with
respect to the correctness thereof. The Trustee and any other Conversion Agent
shall not be accountable with respect to the validity, value, kind or amount of
any item at any time issued or delivered upon the conversion of any Note, and
neither the Trustee nor any other Conversion Agent makes any representations
with respect thereto. Subject to Section 7.1,
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neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to issue, transfer or deliver any item upon the surrender
of any Note for conversion or to comply with any of the duties, responsibilities
or covenants of the Company contained in this Article 10. 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 10.5,
but, subject to the provisions of Section 7.1, may accept as conclusive evidence
of the correctness of any such provisions, and shall be protected in relying
upon, the Officers' Certificate with respect thereto.
SECTION 10.9 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.
------------ ------------------------------------------
In the event that:
(a) the Company shall declare or authorize any event which could
reasonably be anticipated to result in an adjustment in the Conversion Price
under Section 10.4 or require the execution of a supplemental indenture under
Section 10.5; or
(b) the Company shall authorize the granting to the holders of Common
Stock generally of rights, options or warrants to subscribe for or purchase any
shares of any class or series of Capital Stock of the Company or any Subsidiary
or any other rights, options or warrants, the reclassification of Common Stock
(other than a subdivision or combination of outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par value to
par value), the combination, consolidation or merger of the Company for which
approval of any stockholders of the Company is required, the sale or transfer of
all or substantially all of the assets of the Company or the voluntary or
involuntary dissolution, liquidation or winding-up of the Company in whole or in
part;
then, in each such case, the Company shall file or cause to be filed with the
Trustee and shall give or cause to be given to each Holder, as promptly as
possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating the date on which a record is to be
taken for the purpose of determining the holders of outstanding Common Stock
entitled to participate in such event, the date on which such event is expected
to become effective or occur and the date on which it is expected that holders
of outstanding Common Stock of record shall be entitled to surrender their
shares, or receive any items, in connection with such event. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such event.
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ARTICLE 11.
SUBORDINATION
SECTION 11.1 AGREEMENT TO SUBORDINATE.
------------ ------------------------
The Company covenants and agrees, and each Holder, by such Holder's
acceptance of a Note, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 11, the indebtedness
represented by the Notes and the payment of the Principal and repurchase price,
if any, of and interest on each and all of the Notes are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness.
No provision of this Article 11 shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 11.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
------------ ----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other
winding-up of the Company, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshalling of assets and liabilities of the Company,
then and in any such event the holders of Senior Indebtedness shall be entitled
to receive payment in full of all amounts due or to become due on or with
respect to all Senior Indebtedness, or provision shall be made for such payment
in money or money's worth, before the Holders are entitled to receive any
payment on account of Principal or repurchase price, if any, of or interest on
the Notes, and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, which may be
payable or deliverable with respect to the Notes in any such case, proceeding,
liquidation, dissolution or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section 11.2, the Trustee or any Holder shall have received any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, before all Senior Indebtedness is paid in full or
payment thereof provided for, then and in such event such payment or
distribution shall be held in trust by such recipient and shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application in the form received to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
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The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an entirety
to another Person upon the terms and conditions set forth in Article 5 shall not
be deemed a dissolution, winding-up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section 11.2 if the Person formed by such consolidation
or into which the Company is merged or the Person which acquires by conveyance
or transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article 5.
SECTION 11.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF NOTES.
------------ ---------------------------------------------------------------
In the event that any Notes are declared due and payable before their
stated maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Notes so become due and payable shall be entitled
to receive payment in full of all amounts due or to become due on or with
respect to such Senior Indebtedness, or provision shall be made for such payment
in money or money's worth, before the Holders are entitled to receive any
payment by the Company on account of the Principal or repurchase price, if any,
of or interest on the Notes or on account of the purchase or other acquisition
of Notes.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or to any Holder prohibited by the foregoing
provision of this Section 11.3, then and in such event such payment shall be
held in trust by such recipient and shall be paid over and delivered forthwith
to the Company in the form received.
The provisions of this Section 11.3 shall not apply to any payment with
respect to which Section 11.2 would be applicable.
SECTION 11.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
------------ ----------------------------------------------
(a) In the event and during the continuation of any default in the
payment of principal of or interest on any Senior Indebtedness beyond any
applicable grace period with respect thereto, or in the event that any event of
default with respect to any Senior Indebtedness shall have occurred and be
continuing (or would arise by reason of a payment required hereunder by the
Company with respect to the Principal or repurchase price, if any, of or
interest on the Notes) permitting the holders of such Senior Indebtedness (or a
trustee on behalf of the holders thereof) to declare such Senior Indebtedness
due and payable prior to the date on which it would otherwise have become due
and payable, unless and until such event of default shall have been cured or
waived or shall have ceased to exist or the Company and the Trustee shall have
received written notice from the Representative of the Senior Indebtedness with
respect to which such event of default relates approving payment on the Notes,
then no payment shall be made by the Company with respect to the Principal or
repurchase price, if any, of or
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interest on the Notes or to acquire any of the Notes; provided that no such
default will prevent any payment on, or with respect to, the Notes for more than
120 days unless the maturity of such Senior Indebtedness has been accelerated.
Not more than one such 120 day delay may be made in any consecutive 360 day
period with respect to a covenant default, irrespective of the number of
defaults with respect to Senior Indebtedness during such period.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or to any Holder prohibited by the foregoing
provision of this Section 11.4, then and in such event such payment shall be
held in trust by such recipient and shall be paid over and delivered forthwith
to the Company in the form received.
The provisions of this Section 11.4 shall not apply to any payment with
respect to which Section 11.2 would be applicable.
SECTION 11.5 PAYMENT PERMITTED IF NO DEFAULT.
------------ -------------------------------
Nothing contained in this Article 11 or elsewhere in this Indenture or in
any of the Notes shall prevent (a) the Company, at any time except when any of
the conditions described in Section 11.2, 11.3 or 11.4 exist, from making
payments at any time of Principal or repurchase price, if any, of or interest on
the Notes or (b) the application by the Trustee of any money deposited with it
hereunder to the payment of or on account of the Principal or repurchase price,
if any, of or interest on the Notes or the retention of any such payment by the
Holders, except if, at the time of the application by the Trustee, any of the
conditions described in Section 11.2, 11.3 or 11.4 exist; provided that the
Trustee shall have no responsibility to refrain from so applying such money
unless it shall have actual knowledge of the existence of such condition.
SECTION 11.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
------------ -------------------------------------------------------
Subject to the payment in full of all Senior Indebtedness, the Holders
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article
11 (equally and ratably with the holders of all indebtedness of the Company
which is not Senior Indebtedness and which is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the Principal or repurchase price, if any, of and
interest on the Notes shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Holders or the Trustee would be entitled
except for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Indebtedness by Holders or
the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders be deemed to be a payment or distribution by
the Company to or on account of Senior Indebtedness.
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SECTION 11.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
------------ -------------------------------------------
The provisions of this Article 11 are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article 11 or elsewhere in this Indenture or in the Notes is intended to or
shall: (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional (and which, subject to the rights under this Article
11 of the holders of Senior Indebtedness, is intended to rank equally with all
other general obligations of the Company), to pay to the Holders the Principal
or repurchase price, if any, of and interest on the Notes as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders and creditors of the Company
other than the holders of Senior Indebtedness; or (c) prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
11 of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 11.8 TRUSTEE TO EFFECTUATE SUBORDINATION.
------------ -----------------------------------
Each Holder of a Note by acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 11 and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.
SECTION 11.9 NO WAIVER OF SUBORDINATION PROVISIONS.
------------ -------------------------------------
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act by the Company or by any act
or failure to act, in good faith, by any such holder, or by any non-compliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article 11 or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the
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collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 11.10 NOTICE TO TRUSTEE.
------------- -----------------
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee with respect to the Notes. Notwithstanding the provisions of this
Article 11 or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee with respect to the Notes, unless and
until the Trustee shall have received written notice thereof from the Company or
a holder of Senior Indebtedness or from any Representative therefor, and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.1, shall be entitled in all respects to assume that no
such facts exist; the fact that the Trustee may so rely does not relieve the
Holders of their obligations under Section 11.3 to hold in trust any payments
received in contravention of Sections 11.2, 11.3 or 11.4.
Subject to the provisions of Section 7.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a Representative therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a Representative therefor). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 11, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 11, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 11.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
------------- --------------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee, subject to the provisions of Section 7.1, and the
Holders shall be entitled to rely upon any order or decree entered by any court
of competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding-up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 11.
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SECTION 11.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
------------- --------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to, or be
subject to any implied covenants or obligations in favor of, the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders or to the Company or to
any other Person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article 11 or otherwise.
SECTION 11.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
------------- ---------------------------------------------------
PRESERVATION OF TRUSTEE'S RIGHTS.
--------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 11 with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
SECTION 11.14 ARTICLE APPLICABLE TO PAYING AGENTS.
------------- -----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "TRUSTEE"
as used in this Article 11 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 11 in addition to or in place of the Trustee; provided,
however, that Section 11.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 11.15 CERTAIN CONVERSIONS DEEMED PAYMENT.
------------- ----------------------------------
For the purposes of this Article 11 only, (a) the issuance and delivery
of Junior Securities upon conversion of Notes in accordance with Article 10
shall not be deemed to constitute a payment or distribution on account of the
Principal or repurchase price, if any, of or interest on Notes or on account of
the purchase or other acquisition of Notes and (b) the payment, issuance or
delivery of cash, property or securities (other than Junior Securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
Principal of such Note. Nothing contained in this Article 11 or elsewhere in
this Indenture or in the Notes is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the
Holders, the right, which is absolute and unconditional, of a Holder to convert
any Note in accordance with Article 10.
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ARTICLE 12.
MEETINGS OF HOLDERS
SECTION 12.1 ACTION BY HOLDERS.
------------ -----------------
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 Holders in person or by proxy appointed in writing or
(b) by the record of the Holders voting in favor thereof at any meeting of
Holders called and held in accordance with the provisions of this Article 12.
Whenever the Company or the Trustee solicits the taking of action by the
Holders, 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. If
a record date is fixed, those and only those Persons who are Holders at the
record date so fixed, or their proxies, shall be entitled to take such action
regardless of whether they are Holders at the time of such action.
SECTION 12.2 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
------------ -----------------------------------------
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article 12 for any of the following purposes:
(a) to give any notice to the Company, or the Trustee, or to
give any directions to the Trustee, or to waive or to consent to the
waiving of any Default hereunder and its consequences, or to take any
other action authorized to be taken by Holders pursuant to any of the
provisions of Article 6;
(b) to remove the Trustee or to appoint a successor Trustee
pursuant to the provisions of Article 7;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to Section 9.2; or
(d) to take any other action (i) 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 authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate
in connection with the administration of this Indenture.
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SECTION 12.3 MANNER OF CALLING MEETINGS.
------------ --------------------------
The Trustee may at any time call a meeting of Holders to take any action
specified in Section 12.2, to be held at such time and at such place in the City
of New York, New York or such other place as the Trustee shall determine. Notice
of every meeting of Holders, setting forth the time and place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given by the Trustee, to the Company and to each Holder not less than 10 nor
more than 60 days prior to the date fixed for such meeting.
Any meeting of Holders 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 all of the Holders and if the Company and
the Trustee are either present by duly authorized representatives or have,
before or after the meeting, waived notice.
SECTION 12.4 CALL OF MEETINGS BY THE COMPANY OR HOLDERS.
------------ ------------------------------------------
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Notes then outstanding, shall have requested
the Trustee to call a meeting of Holders to take any action specified in Section
12.2, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have given the notice of
such meeting within 20 days after receipt of such request, then the Company or
the Holders of Notes in the amount above specified may determine the time and
place in the City of New York, New York or the City of Boston, Massachusetts for
such meeting and may call such meeting for the purpose of taking such action, by
giving or causing to be given notice thereof as provided in Section 12.3.
SECTION 12.5 WHO MAY ATTEND AND VOTE AT MEETINGS.
------------ -----------------------------------
To be entitled to vote at any meeting of Holders, a person shall be (a) a
Holder on the record date for such meeting or, if there is no such record date,
on the date of such meeting or (b) a Person appointed by an instrument in
writing as proxy for one or more of such Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders 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 12.6 REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE MEETING;
------------ -----------------------------------------------------------
VOTING RIGHTS; ADJOURNMENT.
--------------------------
Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders, 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
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evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate.
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 Holders as provided in Section 12.4, in which case the Company or
the Holders 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 any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Notes held or represented by such Holder or
proxy, as the case may be; provided, however, that no vote shall be cast or
counted at any meeting with respect to any Notes challenged as not outstanding
and ruled by the 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
such chairman or instruments in writing as aforesaid duly designating such
chairman as the proxy to vote on behalf of other Holders. At any meeting of
Holders, the presence (in person or by proxy) of Persons holding or representing
a majority in aggregate principal amount of the Notes then outstanding shall be
sufficient for a quorum. Any meeting of Holders duly called pursuant to the
provisions of Section 12.3 or 12.4 may be adjourned from time to time by vote of
the Holders of a majority in aggregate principal amount of the Notes represented
at the meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
SECTION 12.7 VOTING AT THE MEETING AND RECORD TO BE KEPT.
------------ -------------------------------------------
The vote upon any resolution submitted to any meeting of Holders shall be
by written ballots on which shall be subscribed the signatures of the Holders or
of their representatives by proxy and the principal amount of the Notes voted by
the ballot. 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 Holders shall be prepared by
the secretary of the meeting and there shall be attached to such 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 such notice was given
as provided in Section 12.3 or 12.4. The record shall be signed and verified by
the affidavits of the permanent chairman and the 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.
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SECTION 12.8 EXERCISE OF RIGHTS OF TRUSTEE OR HOLDERS MAY NOT BE HINDERED
------------ ------------------------------------------------------------
OR DELAYED BY CALL OF MEETING.
-----------------------------
Nothing contained in this Article 12 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders 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 Holders under any of the provisions of this Indenture or of
the Notes.
SECTION 12.9 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
------------ -------------------------------------------
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
ARTICLE 13.
MISCELLANEOUS
SECTION 13.1 TRUST INDENTURE ACT CONTROLS.
------------ ----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required or deemed to be included in this Indenture
by the TIA, the required or deemed provision shall control.
SECTION 13.2 NOTICES.
------------ -------
Any notice or communication by the Company or the Trustee to the other
shall be deemed to have been duly given if given in writing and delivered in
person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery
addressed as follows:
if to the Company:
Hybridon, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ & ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
State Street Bank and Trust Company
Corporate Trust Department
Two International Place - 4th Floor
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇:
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Peabody and ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be in writing and shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its last address
shown on the Register. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is given in the manner provided above within
the time prescribed, it shall be deemed to have been duly given, whether or not
received by the addressee.
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If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 13.3 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
------------ --------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) at the Trustee's request, an Opinion of Counsel stating
that, in the opinion of such counsel, the proposed action does not
conflict with this Indenture.
SECTION 13.4 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION OF COUNSEL.
------------ --------------------------------------------------------
Each Officers' Certificate or Opinion of Counsel with respect to
compliance or conflicts with a condition or covenant in this Indenture shall
include:
(a) a statement that each Person executing such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such Officers' Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such Person, such
examination or investigation has been made as is necessary to enable it
to express an informed opinion as to whether or not such covenant or
condition has been complied with or whether the proposed action is not in
conflict with this Indenture, as the case may be; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with or such action
does not conflict with this Indenture, as the case may be; provided,
however, that an Opinion of Counsel may be based, insofar as it relates
to factual matters, on a certificate or certificates of public officials,
a legal opinion of counsel employed by the Company or a Subsidiary or a
certificate of or representations by an Officer or Officers unless
counsel rendering such Opinion of Counsel actually knows that such
certificate, legal opinion or representation is erroneous.
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SECTION 13.5 RULES BY TRUSTEE AND AGENTS.
------------ ---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 13.6 LEGAL HOLIDAYS.
------------ --------------
If a payment date is not a Business Day at a place of payment, payment
may be made at such place of payment on the next succeeding Business Day, and no
additional interest shall accrue for the intervening period.
SECTION 13.7 NO RECOURSE AGAINST OTHERS.
------------ --------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or this Indenture or for any claim based on, with respect to or by reason of
such obligations or their creation including with respect to any certificate
delivered thereunder or hereunder. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release contained in this Section
13.7 are part of the consideration for the Company's issuance of the Notes.
SECTION 13.8 COUNTERPARTS.
------------ ------------
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 13.9 GOVERNING LAW.
------------ -------------
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE
AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 13.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
------------- ---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
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SECTION 13.11 SUCCESSORS.
------------- ----------
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12 SEVERABILITY.
------------- ------------
In case any provision of this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.13 TABLE OF CONTENTS, HEADINGS, ETC.
------------- --------------------------------
The Table of Contents and headings of the Articles and Sections 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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
executed as of the day and year first above written.
HYBRIDON, INC.
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III
---------------------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III
Title: Chairman, President and Chief
Executive Officer
STATE STREET BANK AND TRUST COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
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EXHIBIT A
[Face of Note]
HYBRIDON, INC.
9% CONVERTIBLE SUBORDINATED NOTES DUE 2004
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 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 SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (IV) TO THE COMPANY OR (V)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
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[Institutional Accredited Investor Legend]
IN CONNECTION WITH ANY TRANSFER OF THIS NOTE, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
CUSIP No.__________
No._________ $_____________
Hybridon, Inc. promises to pay to ______________________________________
______________ or registered assigns, the principal sum of___________________
________ Dollars on April 1, 2004.
Interest Payment Dates: April 1 and October 1, commencing October 1, 1997.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
HYBRIDON, INC.
By:
----------------------------------
President
(SEAL)
ATTEST:
By:
----------------------------------
Secretary
Authentication:
This is one of the Notes referred to
in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------
Authorized Signature
Dated:
-------------------------
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[Reverse Side]
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Indenture dated as of March 26, 1997 between Hybridon,
Inc., a Delaware corporation, and State Street Bank and Trust Company, as
trustee, as amended from time to time in accordance with its terms (the
"Indenture").
1. INTEREST.
(a) The Company shall pay interest on the outstanding principal
amount of this Note at the rate of 9% per annum from the date of original
issuance of any Notes under the Indenture until maturity. The Company will pay
interest semi-annually on April 1 and October 1 of each year commencing October
1, 1997, or if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Notes will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from the date of
original issuance of any Notes under the Indenture; provided, however, that if
there is no existing Default in the payment of interest and this Note is
authenticated between a record date shown on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(b) To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
(i) overdue Principal or repurchase price, if any, of the Notes at the rate
borne by the Notes and (ii) overdue installments of interest on the Notes at the
rate borne by the Notes.
2. METHOD OF PAYMENT. The Company will pay interest (except defaulted
interest) on the Notes to those persons who are Holders at the close of business
on the record date shown on the face hereof next preceding the applicable
Interest Payment Date (even if such Notes are cancelled after such record date
and on or before such Interest Payment Date), except as provided in Section 10.2
of the Indenture. Defaulted interest shall be paid to Holders as of a special
record date established for purposes of determining the Holders entitled
thereto. The Notes will be payable as to Principal, repurchase price, if any,
and interest at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, as set forth in the Indenture,
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the Register, and provided
that payment by wire transfer of immediately available funds will be required
with respect to Principal of and interest on the Global Security. Such payment
shall be in the currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, the
Trustee will act as Paying Agent, Registrar and Conversion Agent. The Company
may change any Paying Agent, Registrar or Conversion Agent without notice to any
Holder. The Company or any Subsidiary may act in any such capacity.
4. INDENTURE. The Company issued the Notes under the Indenture. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939. The Notes are
subject to all such terms, and Holders are referred to the Indenture and the
Trust Indenture Act of 1939 for a statement of such terms. The Notes are general
unsecured obligations of the Company limited to $60,000,000 in aggregate
principal amount, subject to Section 2.7 of the Indenture.
5. OPTIONAL REDEMPTION BY THE COMPANY. The Notes are not subject to
redemption at the option of the Company prior to April 1, 2000. Thereafter, the
Notes will be redeemable at any time prior to maturity at the option of the
Company, in whole or in part from time to time, upon not less than 30 days' nor
more than 60 days' prior notice to the Holders at the redemption prices
(expressed as percentages of principal amount) set forth below, in each case
together with accrued but unpaid interest, if any, up to but not including the
redemption date:
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AFTER APRIL 1, PERCENTAGE
-------------- ----------
2000 104.5
2001 103.0
2002 101.5
2003 100.0
provided that from April 1, 2000 to March 31, 2001 the Notes may not be redeemed
unless the Current Market Price of the Common Stock equals or exceeds 150% of
the Conversion Price for a period of at least 20 out of 30 consecutive trading
days and the Notes are redeemed within 60 days after any such trading period.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below,
the Company shall not be required to make mandatory redemptions with respect to
the Notes.
7. REPURCHASE AT THE OPTION OF HOLDER. Upon a Change of Control, the
Company shall offer to repurchase all then outstanding Notes at a repurchase
price equal to 150% of the principal amount thereof, plus accrued and unpaid
interest to the Change of Control Payment Date, if any. Within 30 days after a
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture. A Holder may tender or refrain from tendering all or any portion of
such Holder's Notes, at such Holder's discretion, by completing and signing the
form entitled "Option of Holder to Elect Repurchase" below and delivering such
form, together with the Notes with respect to which the repurchase right is
being exercised, duly endorsed for transfer to the Company, to the Paying Agent.
Any partial tender of Notes must be made in an integral multiple of $1,000.
8. CONVERSION. To convert a Note, the Holder thereof must (i)
complete and sign the "Form of Election to Convert" below (unless such Holder is
DTC, in which case the customary procedures of DTC will apply), (ii) surrender
such Note to the Conversion Agent, (iii) furnish appropriate endorsements and
transfer documents if required by the Registrar or the Conversion Agent and (iv)
pay any transfer or similar tax if required by Section 10.6 of the Indenture.
Prior to April 1, 2000, a Holder who surrenders this Note for conversion (even
if this Note has been called for redemption or a Change of Control Offer has
been made) will be paid promptly after such conversion interest accrued but not
paid from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of original issuance of this Note through
the date of such conversion. In addition, if this Note (even if this Note has
been called for redemption or a Change of Control Offer has been made) is
converted after a regular interest payment record date and prior to the related
Interest Payment Date (regardless of whether such conversion occurs before or
after April 1, 2000), the full interest installment on this Note scheduled to be
paid on such Interest Payment Date shall be payable on such Interest Payment
Date to the Holder of this Note at the close of business on such record date. No
fractional shares of Common Stock will be issued upon conversion, but an
adjustment in cash will be made, as provided in the Indenture, with respect to
any fractional share which would otherwise be issuable upon conversion. A Holder
is not entitled to any rights of a holder of Common Stock until such Holder has
converted its Notes into Common Stock as provided in the Indenture.
9. SUBORDINATION. The Notes are subordinated to Senior Indebtedness.
To the extent provided in the Indenture, Senior Indebtedness must be paid before
the Notes may be paid. The Company agrees, and each Holder by accepting a Note
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give effect to such provisions, and each Holder
appoints the Trustee its attorney-in-fact for any and all such purposes.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. A Holder may transfer or exchange Notes as provided in the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the exchange
or transfer of any Notes (or portion thereof) during the 15 day period (or
shorter) preceding the mailing of a notice of redemption or any Notes (or
portion thereof) with respect to which a repurchase
A-4
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election has been tendered and not withdrawn by the Holder thereof in accordance
with Section 4.6 of the Indenture.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENTS AND WAIVERS. Subject to certain exceptions for which
the consent of each Holder is required, the Indenture or the Notes may be
amended with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding and any existing Default (except
a payment default) may be waived with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding. Without
the consent of any Holder, the Company and the Trustee may amend or supplement
the Indenture or the Notes to (i) cure any ambiguity, defect or inconsistency,
provided that such amendment does not in the opinion of the Trustee adversely
affect the rights of any Holder, (ii) provide for uncertificated Notes in
addition to or in lieu of certificated Notes, (iii) comply with Sections 5.1 and
10.5 of the Indenture, (iv) make any change that does not adversely affect the
rights of any Holder, (v) comply with requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the TIA and (vi) add to the
covenants of the Company.
13. DEFAULTS AND REMEDIES. Events of Default include: (a) failure to
pay any Principal or repurchase price, if any, of any Note when due and payable,
whether at maturity, upon redemption, upon a Change of Control Offer or
otherwise, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (b) failure to pay any interest on any Note when
due and payable, which failure continues for ten days, whether or not such
payment is prohibited by the subordination provisions of the Indenture; (c)
failure to perform the other covenants of the Company in the Indenture, which
failure continues for 60 days after written notice as provided in the Indenture;
(d) default in payment when due of Principal of, or acceleration of, any
indebtedness for money borrowed by the Company or any Subsidiary (other than an
Unrestricted Subsidiary which is not a Significant Subsidiary and provided there
is no recourse against the Company or any other Subsidiary with respect to the
obligations of such Unrestricted Subsidiary arising as a result of such default)
in excess of $2 million, individually or in the aggregate, if such indebtedness
is not discharged, or such acceleration is not annulled, within 30 days after
written notice as provided in the Indenture; and (e) certain events of
bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary. If an Event of Default shall occur and be continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may accelerate the maturity of all Notes, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes shall immediately so accelerate. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Notes at the request or direction of any of the Holders. Subject to certain
limitations, the Holders of a majority in aggregate principal amount of the
outstanding Notes will 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. The Company must furnish an annual
compliance certificate to the Trustee.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if were not Trustee; provided, however, that if the Trustee
acquires any conflicting interest as described in the Trust Indenture Act of
1939, it must eliminate such conflict or resign.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, with respect to, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release contained in Article 13 of the Indenture are
part of the consideration for the Company's issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
▇-▇
▇▇
▇▇. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to
Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of the date hereof between the Company
and Forum Capital Markets L.P. as representative of the Holders of Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and such Registration Rights Agreement. Requests
may be made to:
Hybridon, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
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SCHEDULE OF EXCHANGES OF GLOBAL SECURITY
FOR DEFINITIVE SECURITIES
The following exchanges of this Global Security for Definitive Securities
have been made:
Amount of Principal Amount
decrease in Amount of increase of this Global Signature of
Principal Amount in Principal Security following authorized officer
of this Global Amount of this such decrease or of Trustee or Notes
Date of Exchange Security Global Security increase) Custodian
-----------------------------------------------------------------------------------------------
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FORM OF ELECTION TO CONVERT
I (we) hereby irrevocably exercise the option to convert this Note, or the
portion below designated, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Note, and direct that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned
registered Holder hereof, unless a different name has been indicated below. If
shares are to be issued in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Portion of this Note
to be converted (if partial
conversion, $1,000 or an
integral multiple thereof): $______________
Signature:___________________________________
(exactly as your name appears on
the face of this Note)
Name:_______________________________________
Title:______________________________________
Address:____________________________________
Phone No.:__________________________________
Date:_______________________________________
If shares are to be issued and registered in the name of a Person other than the
undersigned, please print the name and address, including zip code, and social
security or other taxpayer identification number of such Person below.
Name: ________________________________________
Address:______________________________________
TIN/Social Security No:_______________________
Signature Guaranteed (if Common Stock
to be issued to other than registered
holders):
By: ___________________________________
This signature shall be guaranteed by
an eligible guarantor institution (a
bank or trust company having an office
or correspondent in the United States
or a broker or dealer which is a member
of a registered securities exchange or
the National Association of Securities
Dealers, Inc.) with membership in an
approved signature guaranty medallion
program pursuant to SEC Rule 17Ad-15.
A-8
87
ASSIGNMENT FORM
(I) or (we) assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________________ agent
to transfer this Note on the Register. The agent may substitute another to act
for him.
Date:_________
Signature:__________________________________
(exactly as your name appears on
the face of this Note)
Name:_______________________________________
Title:______________________________________
Address:____________________________________
Phone No.:__________________________________
Date:_______________________________________
Signature Guaranteed:
By:_____________________________________
This signature shall be guaranteed by
an eligible guarantor institution (a
bank or trust company having an office
or correspondent in the United States
or a broker or dealer which is a member
of a registered securities exchange or
the National Association of Securities
Dealers, Inc.) with membership in an
approved signature guaranty medallion
program pursuant to SEC Rule 17Ad-15.
======================================
[THE FOLLOWING IS APPLICABLE ONLY IF A RESTRICTED SECURITIES LEGEND APPEARS ON
THE FACT OF THIS NOTE]
In connection with any transfer or exchange of any of the Notes evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date, if any,
on which such Notes were owned by the Company or any Affiliate of the Company,
the undersigned confirms that such Notes are being:
[CONTINUED ON NEXT PAGE]
▇-▇
▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇:
[ ] (1) acquired for the undersigned's own account, without transfer (in
satisfaction of Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of
the Indenture; or
[ ] (2) transferred to the Company; or
[ ] (3) transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
[ ] (4) transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
[ ] (5) transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933), that has furnished to the Company and the Trustee a signed
letter containing certain representations and agreements (the form
of which letter appears as Exhibit C to the Indenture); or
[ ] (6) transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any Person other than the
registered holder thereof; provided, however, that if box (4), (5) or (6) is
checked, the Company, Trustee or Registrar may require, prior to registering any
such transfer of the Notes, in their sole discretion, such legal opinions,
certifications and other information as the Company, Trustee or Registrar has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, including but not limited to the
exemption provided by Rule 144 under such Act.
Your Name:________________________________________
(exactly as your name appears
on the face of this Note)
By:_______________________________________________
Title:____________________________________________
Date:_____________________________________________
Signature Guaranteed:
By:______________________________________
This signature shall be guaranteed by
an eligible guarantor institution (a
bank or trust company having an office
or correspondent in the United States
or a broker or dealer which is a member
of a registered securities exchange or
the National Association of Securities
Dealers, Inc.) with membership in an
approved signature guaranty medallion
program pursuant to SEC Rule 17Ad-15.
A-10
89
OPTION OF HOLDER TO ELECT REPURCHASE
To elect to have all or part of this Note repurchased by the Company
pursuant to Section 4.6 of the Indenture in connection with a Change of Control
Offer, state the amount you elect to have repurchased (if all, write "ALL"):
$_____________________.
Your Name:________________________________________
(exactly as your name appears
on the face of this Note)
By:_______________________________________________
Title:____________________________________________
Date:_____________________________________________
Signature Guaranteed:
By:______________________________________
This signature shall be guaranteed by
an eligible guarantor institution (a
bank or trust company having an office
or correspondent in the United States
or a broker or dealer which is a member
of a registered securities exchange or
the National Association of Securities
Dealers, Inc.) with membership in an
approved signature guaranty medallion
program pursuant to SEC Rule 17Ad-15.
A-11
90
EXHIBIT B
TRANSFEREE LETTER OF REPRESENTATION
Hybridon, Inc.
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and Trust Company
Corporate Trust Department
Two International Place - 4th Floor
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Donoghy
Dear Sirs:
This Certificate is delivered to request a transfer of $__________________
principal amount of the 9% Convertible Subordinated Notes due 2004 (the "Notes")
of Hybridon, Inc. (the "Company").
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name:________________________________________________________
Address:_____________________________________________________
Taxpayer ID Number:__________________________________________
The undersigned represents and warrant to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial
business matters as to be capable of evaluating the merits and risk of our
investment in the Notes and invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date"), unless as of such date we are an affiliate of
the Company inn which case the Resale Restriction Termination Date shall be the
date three months after we cease to be an affiliate of the Company, only (a) so
long as the Notes are eligible for resale pursuant to Rule 144A un the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer, as defined in Rule 144A under the Securities Act (a "QIB") in a
transaction complying with the requirements of Rule 144A, (b) in an offshore
transaction in accordance with Regulation S under the Securities Act, (c)
pursuant to a registration statement which has been declared effective under the
Securities Act, (d) to the Company, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Notes of $250,000 or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor
B-1
91
account or accounts be at all times within our or their control and in
compliance with any applicable state securities laws. The foregoing restrictions
on resale will not apply subsequent to the Resale Restriction Termination Date.
If any resale or other transfer of the Notes is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Company and the Trustee, which shall provide, among other
things, that the transferee is an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it
is acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Company
and the Trustee reserve the right prior to any offer, sale or other transfer
prior to the Resale Termination Date of the Notes pursuant to clause (b), (e) or
(f) above, to require the delivery of an opinion of counsel, certifications
and/or other information satisfactory to the Company and the Trustee.
TRANSFEREE:____________________________________________
BY:____________________________________________________
B-2
