Exhibit (4)(D)
Execution Copy
--------------
LTX CORPORATION
and
STATE STREET BANK AND TRUST COMPANY
as Trustee
____________________
INDENTURE
Dated as of
August 8, 2001
____________________
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
_________________________________
Table of Contents
Page
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions..................................................................... 2
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Designation Amount and Issue of Notes........................................... 9
Section 2.02. Form of Notes................................................................... 9
Section 2.03. Date and Denomination of Notes; Payments of Interest............................ 10
Section 2.04. Execution of Notes.............................................................. 12
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on
Transfer; Depositary............................................................ 13
Section 2.06. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Notes...................................... 23
Section 2.07. Temporary Notes................................................................. 24
Section 2.08. Cancellation of Notes Paid, etc................................................. 24
Section 2.09. CUSIP Number.................................................................... 25
ARTICLE 3
REDEMPTION OF NOTES
Section 3.01. Optional Redemption by the Company.............................................. 25
Section 3.02. Notice of Redemptions; Selection of Notes....................................... 26
Section 3.03. Payment of Notes Called for Redemption.......................................... 28
Section 3.04. Conversion Arrangement on Call for Redemption................................... 29
Section 3.05. Redemption at Option of Holders................................................. 30
ARTICLE 4
SUBORDINATION OF NOTES
Section 4.01. Agreement of Subordination...................................................... 32
Section 4.02. Payments to Noteholders......................................................... 33
Section 4.03. Subrogation of Notes............................................................ 36
Section 4.04. Authorization to Effect Subordination........................................... 37
Section 4.05. Notice to Trustee............................................................... 38
Section 4.06. Trustee's Relation to Senior Indebtedness....................................... 39
Section 4.07. No Impairment of Subordination.................................................. 39
Section 4.08. Certain Conversions Not Deemed Payment.......................................... 39
Section 4.09. Article Applicable to Paying Agents............................................. 40
Section 4.10. Senior Indebtedness Entitled to Rely............................................ 40
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent.................. 40
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal, Premium and Interest...................................... 41
Section 5.02. Maintenance of Office or Agency................................................. 41
Section 5.03. Appointments to Fill Vacancies in Trustee's Office.............................. 42
Section 5.04. Provisions as to Paying Agent................................................... 42
Section 5.05. Existence....................................................................... 43
Section 5.06. Maintenance of Properties....................................................... 43
Section 5.07. Payment of Taxes and Other Claims............................................... 43
Section 5.08. Rule 144A Information Requirement............................................... 44
Section 5.09. Stay, Extension and Usury Laws.................................................. 44
Section 5.10. Compliance Certificate.......................................................... 45
Section 5.11. Liquidated Damages Notice....................................................... 45
ARTICLE 6
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Noteholders' Lists.............................................................. 46
Section 6.02. Preservation and Disclosure of Lists............................................ 46
Section 6.03. Reports by Trustee.............................................................. 46
Section 6.04. Reports by Company.............................................................. 47
ARTICLE 7
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default............................................................... 47
Section 7.02. Payments of Notes on Default; Suit Therefor..................................... 49
Section 7.03. Application of Monies Collected by Trustee...................................... 51
Section 7.04. Proceedings by Noteholder....................................................... 52
Section 7.05. Proceedings by Trustee.......................................................... 53
Section 7.06. Remedies Cumulative and Continuing.............................................. 53
Section 7.07. Direction of Proceedings and ▇▇▇▇▇▇ of Defaults by Majority of
Noteholders..................................................................... 53
Section 7.08. Notice of Defaults.............................................................. 54
Section 7.09. Undertaking to Pay Costs........................................................ 54
ARTICLE 8
THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee.......................................... 55
Section 8.02. Reliance on Documents, Opinions, etc............................................ 56
Section 8.03. No Responsibility for Recitals, etc............................................. 57
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes............ 57
Section 8.05. Monies to Be Held in Trust...................................................... 58
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Section 8.06. Compensation and Expenses of Trustee............................................ 58
Section 8.07. Officers' Certificate as Evidence............................................... 58
Section 8.08. Conflicting Interests of Trustee................................................ 59
Section 8.09. Eligibility of Trustee.......................................................... 59
Section 8.10. Resignation or Removal of Trustee............................................... 59
Section 8.11. Acceptance by Successor Trustee................................................. 61
Section 8.12. Succession by ▇▇▇▇▇▇, etc....................................................... 61
Section 8.13. Preferential Collection of Claims............................................... 62
Section 8.14. Trustee's Application for Instructions from the Company......................... 62
ARTICLE 9
THE NOTEHOLDERS
Section 9.01. Action by Noteholders........................................................... 63
Section 9.02. Proof of Execution by Noteholders............................................... 63
Section 9.03. Who Are Deemed Absolute Owners.................................................. 63
Section 9.04. Company-Owned Notes Disregarded................................................. 64
Section 9.05. Revocation of Consents; Future Holders Bound.................................... 64
ARTICLE 10
MEETINGS OF NOTEHOLDERS
Section 10.01. Purpose of Meetings............................................................ 64
Section 10.02. Call of Meetings by Trustee.................................................... 65
Section 10.03. Call of Meetings by Company or Noteholders..................................... 65
Section 10.04. Qualifications for Voting...................................................... 66
Section 10.05. Regulations.................................................................... 66
Section 10.06. Voting......................................................................... 66
Section 10.07. No Delay of Rights by Meeting.................................................. 67
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent Of Noteholders......................... 67
Section 11.02. Supplemental Indenture with Consent of Noteholders............................. 69
Section 11.03. Effect of Supplemental Indenture............................................... 70
Section 11.04. Notation on Notes.............................................................. 70
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee.... 70
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate, etc................................................... 71
Section 12.02. Successor Corporation to Be Substituted........................................ 71
Section 12.03. Opinion of Counsel to Be Given Trustee......................................... 72
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ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture......................................................... 72
Section 13.02. Deposited Monies to Be Held in Trust by Trustee................................ 73
Section 13.03. Paying Agent to Repay Monies Held.............................................. 73
Section 13.04. Return of Unclaimed Monies..................................................... 73
Section 13.05. Reinstatement.................................................................. 73
ARTICLE 14
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Notes Solely Corporate Obligations............................... 74
ARTICLE 15
CONVERSION OF NOTES
Section 15.01. Right to Convert............................................................... 74
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends............................ 75
Section 15.03. Cash Payment in Lieu of Fractional Shares...................................... 77
Section 15.04. Conversion Price............................................................... 77
Section 15.05. Adjustment of Conversion Price................................................. 77
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale...................... 87
Section 15.07. Taxes on Shares Issued......................................................... 89
Section 15.08. Reservation of Shares; Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock............................. 89
Section 15.09. Responsibility of Trustee...................................................... 90
Section 15.10. Notice to Holders Prior to Certain Actions..................................... 90
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.01. Provisions Binding on Company's Successors..................................... 91
Section 16.02. Official Acts by Successor Corporation......................................... 91
Section 16.03. Addresses for Notices, etc..................................................... 91
Section 16.04. Governing Law.................................................................. 92
Section 16.05. Evidence of Compliance with Conditions Precedent; Certificates To Trustee...... 92
Section 16.06. Legal Holidays................................................................. 93
Section 16.07. Trust Indenture Act............................................................ 93
Section 16.08. No Security Interest Created................................................... 93
Section 16.09. Benefits of Indenture.......................................................... 93
Section 16.10. Table of Contents, Headings, etc............................................... 93
Section 16.11. Authenticating Agent........................................................... 94
Section 16.12. Execution in Counterparts...................................................... 95
iv
Section 16.13. Severability................................................................... 95
v
Reconciliation and Tie Between the Trust Indenture Act of 1939 and Indenture,
dated as of August 8, 2001, between LTX Corporation and State Street Bank and
Trust Company, as Trustee.
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310(a)(1)....................................................... 8.09
(a)(2)...................................................... 8.09
(a)(3)...................................................... N.A.
(a)(4)...................................................... N.A.
(a)(5)...................................................... 8.09
(b)......................................................... 8.08; 8.09; 8.10; 8.11
Section 311(a).......................................................... 8.13
(b)......................................................... 8.13
(b)(2)...................................................... 8.13
Section 312(a).......................................................... 6.01;6.02(a)
(b)......................................................... 6.02(b)
(c)......................................................... 6.02(c)
Section 313(a).......................................................... 6.03(a)
(b)......................................................... 6.03(a)
(c)......................................................... 6.03(a)
(d)......................................................... 6.03(b)
Section 314(a).......................................................... 6.04
(b)......................................................... N.A.
(c)(1)...................................................... 16.05
(c)(2)...................................................... 16.05
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e)......................................................... 16.05
Section 315(a).......................................................... 8.01
(b)......................................................... 7.08
(c)......................................................... 8.01
(d)......................................................... 8.01
(d)(1)...................................................... 8.01(a)
(d)(2)...................................................... 8.01(b)
(d)(3)...................................................... 8.01(c)
(e)......................................................... 7.09
Section 316(a).......................................................... 7.07
(a)(1)(A)................................................... 7.07
(a)(1)(B)................................................... 7.07
(a)(2)...................................................... N.A.
(b)......................................................... 7.04
Section 317(a)(1)....................................................... 7.05
(a)(2)...................................................... 7.05
(b)......................................................... 5.04
Section 318(a).......................................................... 16.07
___________________
* Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
** Note: N.A. means Not Applicable.
INDENTURE
INDENTURE, dated as of August 8, 2001, between LTX Corporation, a
Massachusetts corporation (hereinafter called the "Company"), having its
principal office at LTX Park, University Avenue, Westwood, Massachusetts 02090,
and State Street Bank and Trust Company, a trust company organized under the
laws of the Commonwealth of Massachusetts, as trustee hereunder (hereinafter
called the "Trustee"), having its principal corporate trust office at Two Avenue
de Lafayette, Boston, MA 02111.
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 4 1/4 % Convertible Subordinated Notes due 2006 (hereinafter
called the "Notes"), in an aggregate principal amount not to exceed $150,000,000
(or $175,000,000 if the over-allotment option granted to the Initial Purchasers
pursuant to the Purchase Agreement dated August 2, 2001 between the Company and
the Initial Purchasers is exercised in full) and, to provide the terms and
conditions upon which the Notes are to be authenticated, issued and delivered,
the Company has duly authorized the execution and delivery of this Indenture;
and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute this Indenture a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of the execution of this
Indenture. The words "herein", "hereof", "hereunder", and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision The terms defined in this Article include the
plural as well as the singular.
"Additional Payment" has the meaning specified in Section 3.01(a).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Board Of Directors" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which the banking institutions in The City of Boston or
the city in which the Corporate Trust Office is located are authorized or
obligated by law or executive order to close or be closed.
"Closing Price" has the meaning specified in Section 15.05(h)(i).
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of
2
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to the
provisions of Section 15.06, however, shares issuable on conversion of Notes
shall include only shares of the class designated as common stock of the Company
at the date of this Indenture (namely, the Common Stock, par value $0.05 per
share) or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided, however, that if at any time there shall be more than
one such resulting class, the shares of each such class then so issuable shall
be substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 12, shall
include its successors and assigns.
"Company Notice" has the meaning specified in Section 3.05(b).
"Conversion Price" has the meaning specified in Section 15.04.
"Corporate Trust Office" or other similar term, means the designated office
of the Trustee at which at any particular time its corporate trust business
shall be administered, which office is, at the date as of which this Indenture
is dated, located at ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
"Custodian" means State Street Bank and Trust Company, as custodian with
respect to the Notes in global form, or any successor entity thereto.
"Defaulted Interest" has the meaning specified in Section 2.03.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.05(d) as the
Depositary with respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness" means the Company's obligations under any
particular Senior Indebtedness in which the instrument creating or evidencing
the same or the assumption or guarantee thereof (or related agreements or
documents to which the Company is a party) expressly provides that such Senior
Indebtedness shall be "Designated Senior Indebtedness" for purposes of this
Indenture (provided that such instrument, agreement or other
3
document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness). If any
payment made to any holder of any Designated Senior Indebtedness or its
Representative with respect to such Designated Senior Indebtedness is rescinded
or must otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Designated Senior Indebtedness effective as of the date
of such rescission or return.
"Event Of Default" means any event specified in Section 7.01(a), (b), (c),
(d) or (e).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as in effect from time to
time.
"Fundamental Change" means the occurrence of any transaction or event in
connection with which all or substantially all of the Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive, consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock (or, upon consummation of or immediately following such transaction or
event, which will be) listed on a United States national securities exchange or
approved for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
"Global Note" has the meaning set forth in Section 2.05(b).
"Indebtedness" means, with respect to any Person, and without duplication,
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease
4
obligations on the balance sheet of such Person and all obligations and other
liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of real property
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a third
party to purchase such leased property; (d) all obligations of such Person
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement; (e) all direct or
indirect guaranties or similar agreements by such Person in respect of, and
obligations or liabilities (contingent or otherwise) of such Person to purchase
or otherwise acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind described
in clauses (a) through (d); (f) any indebtedness or other obligations described
in clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby shall
have been assumed by such Person; and (g) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (a)
through (f).
"Indenture" means this instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented.
"Initial Purchasers" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Deutsche Banc
▇▇▇▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ & Company Inc.
"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Liquidated Damages" has the meaning specified for "Liquidated Damages
Amount" in Section 2(e) of the Registration Rights Agreement.
"Non-Payment Default" has the meaning specified in Section 4.02(ii).
"Non-Provisional Redemption" has the meaning specified in Section 3.01(b).
"Non-Provisional Redemption Date" has the meaning specified in Section
3.01(b).
5
"Note" or "Notes" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including the Global Note.
"Note Register" has the meaning specified in Section 2.05(a).
"Note Registrar" has the meaning specified in Section 2.05(a).
"Noteholder" or "Holder" as applied to any Note, or other similar terms
(but excluding the term "beneficial holder"), means any Person in whose name at
the time a particular Note is registered on the Note Registrar's books.
"Notice Date" means the date of mailing of the notice of redemption
pursuant to Section 3.02.
"Officers' Certificate", when used with respect to the Company, means a
certificate of the Company signed by both (a) the Chairman of the Board, the
Chief Executive Officer, the President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) the Treasurer or any Assistant Treasurer, the
Controller or any Assistant Controller, or the Secretary or any Assistant
Secretary of the Company.
"Opinion Of Counsel" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company, or other counsel reasonably
acceptable to the Trustee.
"Outstanding", when used with reference to Notes and subject to the
provisions of Section 9.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
(b) Notes, or portions thereof, (i) for the redemption of which monies in
the necessary amount shall have been deposited in trust with the Trustee or with
any paying agent (other than the Company) or (ii) which shall have been
otherwise defeased in accordance with Article 13;
(c) Notes in lieu of which, or in substitution for which, other Notes shall
have been authenticated and delivered pursuant to the terms of Section 2.06, and
(d) Notes converted into Common Stock pursuant to Article 15 and Notes
deemed not outstanding pursuant to Article 3.
"Payment Blockage Notice" has the meaning specified in Section 4.02(ii).
6
"Person" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.
"Provisional Redemption" has the meaning specified in Section 3.01(a).
"Provisional Redemption Date" has the meaning specified in Section 3.01(a).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of August 8, 2001, between the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
"Representative" means (a) the indenture trustee or other trustee, agent or
representative for holders of Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Responsible Officer", when used with respect to the Trustee, means an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer this Indenture.
"Restricted Securities" has the meaning specified in Section 2.05(d).
"Rule 144A" means Rule 144A as promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
7
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
"pari passu" or "junior" to the Notes. Notwithstanding the foregoing, the term
Senior Indebtedness shall not include any Indebtedness of the Company to any
Subsidiary of the Company. If any payment made to any holder of any Senior
Indebtedness or its Representative with respect to such Senior Indebtedness is
rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Indebtedness effective as of the date of such
rescission or return.
"Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Company, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Company's total consolidated
assets or (b) the total revenue of which represented 10% or more of the
Company's consolidated total revenue for the most recently completed fiscal
year.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"Trading Day" has the meaning specified in Section 15.05(h)(v).
"Trigger Event" has the meaning specified in Section 15.05(d).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
it was in force at the date of this Indenture, except as provided in
8
Section 11.03 and Section 15.06; provided, however, that, in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term "Trust
Indenture Act" shall mean, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means State Street Bank and Trust Company and its successors and
any corporation resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
The definitions of certain other terms are as specified in Section 2.05 and
3.05 and Article 15.
ARTICLE 2
Issue, Description, Execution, Registration And Exchange Of Notes
Section 2.01. Designation Amount and Issue of Notes. The Notes shall
be designated as "4 1/4 % Convertible Subordinated Notes due 2006". Except
pursuant to Section 2.05, 2.06, 3.03, 3.05 and 15.02, hereof, Notes not to
exceed the aggregate principal amount of $150,000,000 (or $175,000,000 if the
over-allotment option granted to the Initial Purchasers pursuant to the Purchase
Agreement dated August 2, 2001 between the Company and the Initial Purchasers is
exercised in full) upon the execution of this Indenture, or from time to time
thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by (a) its Chairman of
the Board, Chief Executive Officer, President or any Vice President (whether or
not designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) its Treasurer or any Assistant Treasurer, its
Controller or any Assistant Controller or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.
Section 2.02. Form of Notes. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
9
Any Global Note shall represent such of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Note shall be made to the holder of such Note.
The terms and provisions contained in the form of Note attached as Exhibit
A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.03. Date and Denomination of Notes; Payments of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve (12) 30-day months.
The Person in whose name any Note (or its Predecessor Note) is registered
on the Note Register at the close of business on any record date with respect to
any interest payment date shall be entitled to receive the interest payable on
such interest payment date, except (i) that the interest payable upon redemption
(unless the date of redemption is an interest payment date) will be payable to
the Person to whom principal is payable and (ii) as set forth in the next
succeeding sentence. In the case of any Note (or portion thereof) that is
converted into Common Stock during the period from (but excluding) a record date
to (but excluding) the next succeeding interest payment date either (x) if such
Note (or portion thereof) has been called for redemption on a redemption date
which occurs during such period, or is to be redeemed in connection with a
Fundamental Change on a Repurchase Date (as defined in Section 3.05) that occurs
during such period, the Company shall not be required to pay interest on such
interest payment date in respect of any such Note (or portion thereof) except to
the extent required to be paid upon redemption of such Note or portion thereof
pursuant to Section 3.03 or 3.05 hereof or (y) if such Note (or portion thereof)
has not been called for redemption on a redemption date that occurs during
10
such period and is not to be redeemed in connection with a Fundamental Change on
a Repurchase Date that occurs during such period, such Note (or portion thereof)
that is submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted, as provided in the penultimate paragraph of
Section 15.02 hereof. Interest shall be payable at the office of the Company
maintained by the Company for such purposes in the Borough of Manhattan, City of
New York, which shall initially be an office or agency of the Trustee and may,
as the Company shall specify to the paying agent in writing by each record date,
be paid either (i) by check mailed to the address of the Person entitled thereto
as it appears in the Note Register (provided that the holder of Notes with an
aggregate principal amount in excess of $2,000,000 shall, at the written
election of such holder, be paid by wire transfer in immediately available funds
if such holder has provided the paying agent with the necessary wire transfer
information no later than three (3) Business Days prior to the date of payment)
or (ii) by wire transfer to an account maintained by such Person located in the
United States; provided, however, that payments to the Depositary will be made
by wire transfer of immediately available funds to the account of the Depositary
or its nominee. The term "record date" with respect to any interest payment date
shall mean the February 1 or August 1 preceding the relevant February 15 or
August 15, respectively.
Subject to the rules and regulations of the Depository, any interest on any
Note which is payable, but is not punctually paid or duly provided for, on any
February 15 or August 15 (herein called "Defaulted Interest") shall forthwith
cease to be payable to the Noteholder on the relevant record date by virtue of
his having been such Noteholder, and such Defaulted Interest shall be paid by
the Company, at its election in each case, as provided in clause (i) or (ii)
below:
(i) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest to be paid on each Note and the date of the
payment (which shall be not less than twenty-five (25) days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to
an earlier date), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Person
entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall be not more than fifteen (15) days and not
less than ten (10) days prior to the date of the proposed payment, and not
less than ten (10) days after the receipt by the Trustee of the notice of
the proposed payment, the Trustee shall promptly notify the
11
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class
postage prepaid, to each Noteholder at his address as it appears in the
Note Register, not less than ten (10) days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) were registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause
(ii) of this Section 2.03.
(ii) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, and upon such notice as may be required
by such exchange or automated quotation system, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Section 2.04. Execution of Notes. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President, any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title "Vice President") or Treasurer and attested by the manual or
facsimile signature of its Secretary or any of its Assistant Secretaries or its
Treasurer or any of its Assistant Treasurers (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Notes as
shall bear thereon a certificate of authentication substantially in the form set
forth on the form of Note attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.11), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such
12
persons as, at the actual date of the execution of such Note, shall be the
proper officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Notes;
Restrictions on Transfer; Depositary.
(a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.02 being herein sometimes
collectively referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Note Register shall be in
written form or in any form capable of being converted into written form within
a reasonably prompt period of time. The Trustee is hereby appointed "Note
Registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.02.
Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note Registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
13
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be made to any holder for any registration of
transfer or exchange of Notes, but the Company may require payment by the holder
of a sum sufficient to cover any tax, assessment or other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Notes.
Neither the Company nor the Trustee nor any Note Registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed, (b) any
Notes or portions thereof called for redemption pursuant to Section 3.02, (c)
any Notes or portions thereof surrendered for conversion pursuant to Article 15
or (d) any Notes or portions thereof tendered for redemption (and not withdrawn)
pursuant to Section 3.05.
(b) So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, all Notes that, upon initial
issuance are beneficially owned by QIBs or as a result of a sale or transfer
after initial issuance are beneficially owned by QIBs, will be represented by
one or more Notes in global form registered in the name of the Depositary or the
nominee of the Depositary (the "Global Note"), except as otherwise specified
below. The transfer and exchange of beneficial interests in any such Global
Note shall be effected through the Depositary in accordance with this Indenture
and the procedures of the Depositary therefor. The Trustee shall make
appropriate endorsements to reflect increases or decreases in the principal
amounts of any such Global Note as set forth on the face of the Note ("Principal
Amount") to reflect any such transfers. Except as provided below, beneficial
owners of a Global Note shall not be entitled to have certificates registered in
their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Note. Notwithstanding the foregoing, beneficial interests in a Global
Note may be exchanged for physical definitive Notes ("Certificated Notes") upon
request but only upon at least 20 days' prior written notice given to the
Trustee by or on behalf of the Depositary in accordance with customary practice.
(c) (i) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, upon any transfer of a
Certificated Note to a QIB in accordance with Rule 144A that requests delivery
of such Note in the form of an interest in the Global Note, and upon receipt of
the Certificated Note or Notes being so transferred, together with a
certification, substantially in the form on the reverse of the Note, from the
transferor that the transfer is being made in compliance with Rule 144A (or
other evidence satisfactory to the Trustee), the Trustee shall make an
endorsement on the Global
14
Note to reflect an increase in the aggregate Principal Amount of the Notes
represented by such Global Note, and the Trustee shall cancel such Certificated
Note or Notes in accordance with the standing instructions and procedures of the
Depositary, the aggregate Principal Amount of the Notes represented by such
Global Note to be increased accordingly.
(ii) Upon any sale or transfer of a Note to the Company or any
Subsidiary thereof (other than pursuant to a registration statement that
has been declared effective under the Securities Act or after the
expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act), the transferor shall, prior to such sale
or transfer, furnish to the Company and/or Trustee such certifications,
legal opinions or other information as they may reasonably require to
confirm that the proposed transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of
the Securities Act. Upon any transfer of a beneficial interest in the
Global Note to the Company or such Subsidiary, as the case may be, the
Trustee shall make an endorsement on the Global Note to reflect a decrease
in the aggregate Principal Amount of the Notes represented by such Global
Note, and the Company shall execute a Certificated Note or Notes in
exchange therefor, and the Trustee, upon receipt of such Certificated Note
or Notes and the written order of the Company, shall authenticate and
deliver such, Certificated Note or Notes.
(iii) Upon any sale or transfer of a Note to an Institutional
Accredited Investor (other than pursuant to a registration statement that
has been declared effective under the Securities Act or after the
expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the
Trustee a signed letter containing representations and agreements relating
to restrictions on transfer substantially in the form set forth in Exhibit
B to this Indenture and the transferor shall, prior to such sale or
transfer, furnish to the Company and/or Trustee such certifications, legal
opinions or other information as they may reasonably require to confirm
that the proposed transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the
Securities Act. Upon any transfer of a beneficial interest in the Global
Note to an Institutional Accredited Investor, the Trustee shall make an
endorsement on the Global Note to reflect a decrease in the aggregate
Principal Amount of the Notes represented by such Global Note, and the
Company shall execute a Certificated Note or Notes in exchange therefor,
and the Trustee, upon receipt of such Certificated Note or Notes and the
written order of the Company, shall authenticate and deliver such,
Certificated Note or Notes.
15
(iv) Upon any sale or transfer of a Note outside the United States in
compliance with Rule 904 under the Securities Act (other than pursuant to a
registration statement that has been declared effective under the
Securities Act or after the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act), the transferor
shall, prior to such sale or transfer, furnish to the Company and/or the
Trustee such certifications, legal opinions or other information as they
may reasonably require to confirm that the proposed transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Upon any transfer of a
beneficial interest in the Global Note to such transferee, the Trustee
shall make an endorsement on the Global Note to reflect a decrease in the
aggregate Principal Amount of the Notes represented by such Global Note,
and the Company shall either (1) execute a Certificated Note or Notes in
exchange therefor, and the Trustee, upon receipt of such Certificated Note
or Notes and the written order of the Company, shall authenticate and
deliver such, Certificated Note or Notes or (2) if a Global Note with
respect to Notes transferred in compliance with Regulation S under the
Securities Act has previously been executed and authenticated, the Trustee
shall make an endorsement on such Global Note to reflect a corresponding
increase in the aggregate Principal Amount of Notes represented by such
Global Note.
(v) Upon any sale or transfer of a Note pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, the transferor
shall, prior to such sale or transfer, furnish to the Company and/or the
Trustee such certifications, legal opinions or other information as they
may reasonably require to confirm that the proposed transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Upon any transfer of a
beneficial interest in the Global Note to such transferee, the Trustee
shall make an endorsement on the Global Note to reflect a decrease in the
aggregate Principal Amount of the Notes represented by such Global Note,
and, at the request of the transferee, either (1) the Company shall execute
a Certificated Note or Notes in exchange therefor, and the Trustee, upon
receipt of such Certificated Note or Notes and the written order of the
Company, shall authenticate and deliver such, Certificated Note or Notes or
(2) if a Global Note that does not bear the legend set forth in Section
2.05(d) has previously been executed and authenticated, the Trustee shall
make an endorsement on such Global Note to reflect a corresponding increase
in the aggregate Principal Amount of Notes represented by such Global Note.
Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of
16
this Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on The Portal Market or as may be required for the Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.
(d) Every Note that bears or is required under this Section 2.05(d) to bear
the legend set forth in this Section 2.05(d) (together with any Common Stock
issued upon conversion of the Notes and required to bear the legend set forth in
Section 2.05(e), collectively, the "Restricted Securities") shall be subject to
the restrictions on transfer set forth in this Section 2.05(d) (including those
set forth in the legend set forth below) unless such restrictions on transfer
shall be waived by written consent of the Company, and the holder of each such
Restricted Security, by such Noteholder's acceptance thereof, agrees to be bound
by all such restrictions on transfer. As used in Section 2.05(d) and 2.05(e),
the term "transfer" encompasses any sale, pledge, loan, transfer or other
disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.05(e), if
applicable) shall bear a legend in substantially the following form, unless such
Note has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer), or unless otherwise agreed by the Company in writing,
with written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
PERIOD
17
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO LTX CORPORATION OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") WHICH, PRIOR TO
SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) AGREES THAT PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(F) ABOVE), IT
WILL FURNISH TO EACH OF LTX CORPORATION AND STATE STREET BANK AND
TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED ▇▇▇▇▇▇ IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
18
TO CLAUSE 2(E) OR (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND
TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE).
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE (2)(E) OR (F) ABOVE OR UPON
ANY TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to conditions for removal of the foregoing legend set forth therein
have been satisfied may, upon surrender of such Note for exchange to the Note
Registrar in accordance with the provisions of this Section 2.05, be exchanged
for a new Note or Notes, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.05(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the last sentence of Section 2.05(b), Section 2.05(c),
with respect to transfers of beneficial interests in the Global Note, and in
this Section 2.05(d)), a Global Note 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.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Notes in global form. Initially, the Global Note
shall be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Custodian for Cede & Co.
19
If at any time the Depositary for a Global Note notifies the Company that
it is unwilling or unable to continue as Depositary for such Note, the Company
may appoint a successor Depositary with respect to such Note. If a successor
Depositary is not appointed by the Company within ninety (90) days after the
Company receives such notice, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication and delivery of
Notes, will authenticate and deliver, Notes in certificated form, in aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note.
If a Note in certificated form is issued in exchange for any portion of a
Global Note after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such Certificated Note,
but will be payable on such interest payment date, subject to the provisions of
Section 2.03, only to the Person to whom interest in respect of such portion of
such Global Note is payable in accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for all or a part of a Global
Note pursuant to this Section 2.05 shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. Upon
execution and authentication, the Trustee shall deliver such Notes in
certificated form to the Persons in whose names such Notes in certificated form
are so registered.
At such time as all interests in a Global Note have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred to
a transferee who receives Notes in certificated form thereof, such Global Note
shall, upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a Global
Note is exchanged for Notes in certificated form, redeemed, converted,
repurchased or canceled, or transferred to a transferee who receives Notes in
certificated form therefor or any Note in certificated form is exchanged or
transferred for part of a Global Note, the principal amount of such Global Note
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, and an endorsement shall be made on such Global Note, by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
stock certificate representing Common Stock issued upon conversion of any Note
20
shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. THE HOLDER HEREOF AGREES THAT, UNTIL THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON
STOCK EVIDENCED HEREBY EXCEPT (A) TO LTX CORPORATION OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
COMPLIANCE WITH RULE 144A, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") THAT PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK
AND TRUST COMPANY, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT,
AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F)
PURSUANT TO
21
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (1)(F) ABOVE), IT WILL FURNISH TO EACH OF LTX
CORPORATION AND STATE STREET BANK AND TRUST COMPANY, AS TRANSFER AGENT
(OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 1(E) OR (F) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY PURSUANT TO CLAUSE (1)(E) OR (F) ABOVE OR UPON ANY TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(e).
(f) Any Note or Common Stock issued upon the conversion or exchange of a
Note that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
is purchased or owned by the Company or any Affiliate thereof may
22
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such Notes
or Common Stock, as the case may be, no longer being "restricted securities" (as
defined under Rule 144).
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case
the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in every case of destruction, loss or theft, the applicant shall also furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the case
may be, of satisfactory security or indemnity and evidence, as described in the
preceding paragraph, the Trustee or such authenticating agent may authenticate
any such substituted Note and make available for delivery such Note. Upon the
issuance of any substituted Note, the Company may require the payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or has been tendered for redemption (and not withdrawn) or
is to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Note), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, the Trustee and, if applicable, any paying
agent or conversion agent evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.
23
Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Global Note) may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 5.02 and the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Notes an equal aggregate principal amount of Notes in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in certificated form authenticated and delivered hereunder.
Section 2.08. Cancellation of Notes Paid, etc. All Notes surrendered
for the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
Registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of such
canceled Notes in accordance with its customary procedures. If the Company
shall acquire
24
any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP Number. The Company in issuing the Notes may use a
"CUSIP" number (if then generally in use), and, if so, the Trustee shall use a
"CUSIP" number in notices of redemption as a convenience to Noteholders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such number either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such number. The Company
will promptly notify the Trustee of any change in the "CUSIP" number.
ARTICLE 3
Redemption Of Notes
Section 3.01. Optional Redemption by the Company.
(a) Provisional Redemption by the Company. The Notes may be redeemed by
the Company, in whole or in part, at any time prior to August 19, 2004 (a
"Provisional Redemption"), upon notice as set forth in Section 3.02, at a
redemption price equal to $1,000 per $1,000 aggregate principal amount of Notes
to be redeemed plus accrued and unpaid interest, if any (including Liquidated
Damages, if any), to the date of redemption (the "Provisional Redemption Date")
if (i) the Closing Price of the Common Stock shall have exceeded 150% of the
Conversion Price then in effect for at least 20 Trading Days in any consecutive
30-Trading Day period and (ii) if the redemption would occur before August 8,
2003, the Shelf Registration Statement (as defined in the Registration Rights
Agreement) covering resales of the Notes, and the Common Stock issuable upon
conversion of the Notes, is effective and available for use and is expected to
remain effective and available for use until the 30/th/ day immediately
following the Provisional Redemption Date.
Upon any such Provisional Redemption, the Company shall make an additional
payment (the "Additional Payment") with respect to the Notes called for
redemption to holders as of the Notice Date in an amount equal to the total
aggregate amount of interest that would have been payable on the Notes from the
Provisional Redemption Date to August 19, 2004. The Company shall make the
Additional Payment on all Notes called for Provisional Redemption, including any
Notes converted into Common Stock pursuant to the terms hereof after the Notice
date and prior to the Provisional Redemption Date.
25
(b) Non-Provisional Redemption By The Company. At any time on or after
August 19, 2004, and prior to maturity, the Notes may be redeemed at the option
of the Company (a "Non-Provisional Redemption"), in whole or in part, upon
notice as set forth in Section 3.02, at the following redemption prices
(expressed as percentages of the principal amount), together in each case with
accrued and unpaid interest, if any (including Liquidated Damages, if any) to,
but excluding, the date fixed for redemption (the "Non-Provisional Redemption
Date"):
PERIOD REDEMPTION PRICE
Beginning on August 19, 2004 and ending on August 14, 2005................. 101.70%
Beginning on August 15, 2005 and ending on August 14, 2006................. 100.85%
and 100% on August 15, 2006; provided, however, that if the date fixed for
redemption is on a February 15 or August 15, then the interest payable on such
date shall be paid to the holder of record on the preceding February 1 or August
1, respectively.
Section 3.02. Notice of Redemptions; Selection of Notes. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.01, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the date fixed for redemption to the holders of Notes so to be
redeemed as a whole or in part at their last addresses as the same appear on the
Note Register; provided, however, that in the event of a Provisional Redemption,
notice of such redemption shall be mailed within five Trading Days after the
consecutive 30 Trading Day period, and provided further that if the Company
shall give such notice, it shall also give written notice, and written notice of
the Notes to be redeemed, to the Trustee. Such mailing shall be by first class
mail. The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Note designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Note. Concurrently with the mailing of any such notice of redemption, the
Company shall issue a press release announcing such redemption, the form and
content of which press release shall be determined by the Company in its sole
discretion. The failure to issue any such press release or any defect therein
shall not affect the validity of the redemption notice or any of the proceedings
for the redemption of any Note called for redemption.
26
Each such notice of redemption shall specify the aggregate principal amount
of Notes to be redeemed, the CUSIP number of the Notes being redeemed, the date
fixed for redemption (which shall be a Business Day in accordance with Section
16.06), the redemption price at which Notes are to be redeemed, the place or
places of payment, that payment will be made upon presentation and surrender of
such Notes, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, and that on and after said date interest thereon or
on the portion thereof to be redeemed will cease to accrue. Such notice shall
also state the current Conversion Price and the date on which the right to
convert such Notes or portions thereof into Common Stock will expire. If such
redemption is a Provisional Redemption, such notice shall also state the amount
of Additional Payment. If fewer than all the Notes are to be redeemed, the
notice of redemption shall identify the Notes to be redeemed (including the
CUSIP number, if any). In case any Note is to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that, on and after the date fixed for redemption,
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion thereof will be issued.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.02, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
5.04) an amount of money in immediately available funds sufficient to redeem on
the redemption date all the Notes (or portions thereof) so called for redemption
(other than those theretofore surrendered for conversion into Common Stock) at
the appropriate redemption price, together with accrued interest to, but
excluding, the date fixed for redemption; provided, however, that if such
payment is made on the redemption date it must be received by the Trustee or
paying agent, as the case may be, by 10:00 a.m. New York City time on such date.
The Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this Section 3.02 in
excess of amounts required hereunder to pay the redemption price together with
accrued interest to, but excluding, the date fixed for redemption. If any Note
called for redemption is converted pursuant hereto prior to such redemption, any
money deposited with the Trustee or any paying agent or so segregated and held
in trust for the redemption of such Note shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such
trust; provided that, with respect to a Provisional Redemption, any money so
deposited for payment of the Additional Payment shall remain segregated and held
in trust for payment of the Additional Payment which shall be made on all Notes
called for Provisional Redemption, including Notes converted into shares of
Common Stock after the Notice Date and prior to the Provisional Redemption Date.
Whenever any Notes are to be redeemed, the Company will give the Trustee written
notice in the form of an Officers' Certificate not fewer than forty-five (45)
days (or such shorter
27
period of time as may be acceptable to the Trustee) prior to the redemption date
as to the aggregate principal amount of Notes to be redeemed.
If less than all of the outstanding Notes are to be redeemed, the Trustee
shall select the Notes or portions thereof of the Global Note or the Notes in
certificated form to be redeemed (in principal amounts of $1,000 or integral
multiples thereof) by lot, on a pro rata basis or by another method the Trustee
deems fair and appropriate. If any Note selected for partial redemption is
submitted for conversion in part after such selection, the portion of such Note
submitted for conversion shall be deemed (so far as may be) to be the portion to
be selected for redemption. The Notes (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Note is submitted for conversion in part before the mailing of the
notice of redemption.
Upon any redemption of less than all of the outstanding Notes, the Company
and the Trustee shall solely for purposes of determining the pro rata allocation
among such Notes as are unconverted and outstanding at the time of redemption,
treat as outstanding any Notes surrendered for conversion during the period of
fifteen (15) days next preceding the mailing of a notice of redemption and
shall treat as outstanding any Note authenticated and delivered during such
period in exchange for the unconverted portion of any Note converted in part
during such period.
Section 3.03. Payment of Notes Called for Redemption. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption and, with respect to the Notes called for Provisional
Redemption (including Notes converted into Common Stock pursuant to the terms
hereof after the Notice Date and prior to the Provisional Redemption Date), the
Additional Payment, and on and after said date (unless the Company shall default
in the payment of such Notes at the redemption price, together with interest
accrued to said date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and, after the close of business on the
Business Day next preceding the date fixed for redemption, such Notes shall
cease to be convertible into Common Stock and, except as provided in Section
8.05 and Section 13.04, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such Notes
except the right to receive the redemption price thereof and unpaid interest to
(but excluding) the date fixed for redemption and, with respect to the Notes
called for Provisional Redemption (including Notes converted into Common Stock
pursuant to the terms hereof after the Notice Date and prior to the Provisional
Redemption Date), the Additional
28
Payment. On presentation and surrender of such Notes at a place of payment in
said notice specified, the said Notes or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with interest accrued thereon to (but excluding) the date fixed for redemption;
and, with respect to the Notes called for Provisional Redemption (including
Notes converted into Common Stock pursuant to the terms hereof after the Notice
Date and prior to the Provisional Redemption Date), the Additional Payment,
provided, however, that if the applicable redemption date is an interest payment
date, the semi-annual payment of interest becoming due on such date shall be
payable to the holders of such Notes registered as such on the relevant record
date instead of the holders surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of redemption during the continuance of a default in payment of
interest or premium, if any, on the Notes. If any Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal and
premium, if any, shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the principal and premium, if any
and interest shall have been paid or duly provided for.
Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the date fixed for redemption, an amount
not less than the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, of such Notes and in connection
with a Provisional Redemption, the Additional Payment. Notwithstanding anything
to the contrary contained in this Article 3, the obligation of the Company to
pay the redemption price of such Notes, together with interest accrued to (but
excluding) the date fixed for redemption and in connection with a Provisional
Redemption, the Additional Payment, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, a copy of which will be filed with the Trustee prior
to the date fixed for redemption, any Notes not duly surrendered for conversion
by the holders thereof may, at the option of the Company, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such holders
upon payment to such holders of the applicable
29
redemption price together with accrued interest and any Additional Payment
(notwithstanding anything to the contrary contained in Article 15) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Notes shall be extended through such time), subject to payment of the above
amount as aforesaid (including the Additional Payment, if any, with respect to
all Notes called for Provisional Redemption). At the direction of the Company,
the Trustee shall hold and dispose of any such amount paid to it in the same
manner as it would monies deposited with it by the Company for the redemption of
Notes. Without the Trustee's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Notes shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture.
Section 3.05. Redemption at Option of Holders. (a) If there shall occur
a Fundamental Change at any time prior to maturity of the Notes, then each
Noteholder shall have the right, at such holder's option, to require the Company
to redeem all of such holder's Notes, or any portion thereof that is an integral
multiple of $1,000 principal amount, on the date (the "Repurchase Date") that is
thirty (30) days after the date of the Company Notice (as defined in Section
3.05(b) below) of such Fundamental Change (or, if such 30th day is not a
Business Day, the next succeeding Business Day) at a redemption price equal to
100% of the principal amount thereof, together with accrued interest to (but
excluding) the Repurchase Date; provided, however, that, if such Repurchase Date
is a February 15 or August 15, then the interest payable on such date shall be
paid to the holders of record of the Notes on the next preceding February 1 or
August 1, respectively.
Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company's written direction to the Trustee, the Trustee
shall authenticate and deliver to the holder thereof, at the expense of the
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unredeemed portion of the Notes so presented.
(b) On or before the tenth day after the occurrence of a Fundamental
Change, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Fundamental Change a notice (the "Company Notice") of the occurrence
of such Fundamental Change and of the redemption right at the option of the
holders arising as a result thereof. Such notice shall be mailed in the manner
and with the effect set forth in the first paragraph of Section 3.02 (without
regard for the time limits set forth therein). If the Company shall give such
notice, the Company
30
shall also deliver a copy of the Company Notice to the Trustee at such time as
it is mailed to Noteholders. Concurrently with the mailing of any Company
Notice, the Company shall issue a press release announcing such Fundamental
Change referred to in the Company Notice, the form and content of which press
release shall be determined by the Company in its sole discretion. The failure
to issue any such press release or any defect therein shall not affect the
validity of the Company Notice or any proceedings for the redemption of any Note
which any Noteholder may elect to have the Company redeem as provided in this
Section 3.05.
Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the price at which the Company shall be
obligated to redeem Notes, that the holder must exercise the redemption right on
or prior to the close of business on the Repurchase Date (the "Fundamental
Change Expiration Time"), that the holder shall have the right to withdraw any
Notes surrendered prior to the Fundamental Change Expiration Time, a description
of the procedure which a Noteholder must follow to exercise such redemption
right and to withdraw any surrendered Notes, the place or places where the
holder is to surrender such holder's Notes, the amount of interest accrued on
each Note to the Repurchase Date and the "CUSIP" number or numbers of the Notes
(if then generally in use).
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the redemption of the Notes pursuant to this Section 3.05.
(c) For a Note to be so redeemed at the option of the holder, the Company
must receive at the office or agency of the Company maintained for that purpose
or, at the option of such holder, the Corporate Trust Office, such Note with the
form entitled "Option to Elect Repayment Upon A Fundamental Change" on the
reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.
(d) On or prior to the first Business Day after the Repurchase Date, the
Company will deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 5.04) an amount of money sufficient to redeem all
the Notes to be redeemed on the Repurchase Date at the appropriate redemption
price, together with accrued interest to (but excluding) the Repurchase Date;
provided, however, that the payment must be received by the Trustee or paying
agent, as the case may be, by 10:00 a.m. New York City time, on the first
Business Day after the Repurchase Date. Payment for Notes surrendered for
31
redemption (and not withdrawn) prior to the Fundamental Change Expiration Time
will be made promptly (but in no event more than five (5) Business Days)
following the Repurchase Date by mailing checks for the amount payable to the
holders of such Notes entitled thereto as they shall appear on the registry
books of the Company.
(e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.06 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company in good faith, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or which acquires such assets that
is the issuer of such common stock, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture (accompanied by an Opinion of
Counsel that such supplemental indenture complies with the Trust Indenture Act
as in force at the date of execution of such supplemental indenture) modifying
the provisions of this Indenture relating to the right of holders of the Notes
to cause the Company to repurchase the Notes following a Fundamental Change,
including without limitation the applicable provisions of this Section 3.05 and
the definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to such other Person if different
from the Company and the common stock issued by such Person (in lieu of the
Company and the Common Stock of the Company).
(f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Notes in the event of a
Fundamental Change.
ARTICLE 4
Subordination Of Notes
Section 4.01. Agreement of Subordination. The Company covenants and
agrees, and each holder of Notes issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article 4, and each Person holding any Note, whether upon
32
original issue or upon registration of transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest (including
Liquidated Damages, if any) on all Notes (including, but not limited to, the
redemption price and Additional Payment, if any, with respect to the Notes
called for redemption in accordance with Section 3.02 or submitted for
redemption in accordance with Section 3.05, as the case may be, as provided in
this Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article 4 shall prevent the occurrence of any default
or Event of Default hereunder.
Section 4.02. Payments to Noteholders. No payment shall be made with
respect to the principal of, premium, if any, or interest (including Liquidated
Damages, if any) on the Notes (including, but not limited to, the redemption
price, and Additional Payment, if any, with respect to the Notes to be called
for redemption in accordance with Section 3.02 or submitted for redemption in
accordance with Section 3.05, as the case may be, as provided in this
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 4.05, if:
(i) a default in the payment of principal, premium, if any, interest,
rent or other obligations in respect of Designated Senior Indebtedness
occurs and is continuing (or, in the case of Designated Senior Indebtedness
for which there is a period of grace, in the event of such a default that
continues beyond the period of grace, if any, specified in the instrument
or lease evidencing such Designated Senior Indebtedness) (a "Payment
Default"); or
(ii) a default, other than a Payment Default, on any Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity (or in the case
of any lease that is a Designated Senior Indebtedness, a default occurs and
is continuing that permits the lessor to either terminate the lease or
require the Company to make an irrevocable offer to terminate the lease
following an event of default thereunder) and the Trustee receives a notice
of the default (a "Payment Blockage Notice") from a holder of Designated
Senior Indebtedness or a Representative of Designated Senior Indebtedness
(a "Non-Payment Default").
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If the Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section 4.02 unless and until at least 365 days shall have elapsed since
the initial effectiveness of the immediately prior Payment Blockage Notice. No
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in respect
of the Notes (including, but not limited to, the redemption price and Additional
Payment, if any, with respect to the Notes to be called for redemption) upon the
earlier of:
(1) the date upon which any such Payment
Default is cured or waived or ceases to exist, or
(2) in the case of a Non-Payment Default,
the earlier of (a) the date upon which such
default is cured or waived or ceases to exist or
(b) 179 days after the applicable Payment Blockage
Notice is received by the Trustee if the maturity
of such Designated Senior Indebtedness has not
been accelerated (or in the case of any lease, 179
days after notice is received if the Company has
not received notice that the lessor under such
lease has exercised its right to terminate the
lease or require the Company to make an
irrevocable offer to terminate the lease following
an event of default thereunder), unless this
Article 4 otherwise prohibits the payment or
distribution at the time of such payment or
distribution.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes (except payments made pursuant to
Article 13 from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding up, liquidation or
reorganization), and upon any such dissolution or winding up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
similar proceeding, any payment by the Company, or distribution of assets of the
Company of any
34
kind or character, whether in cash, property or securities, to which the holders
of the Notes or the Trustee would be entitled, except for the provisions of this
Article 4, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Notes or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, or as otherwise required by
law or a court order) or their Representative or Representatives, as their
respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full, in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Notes or to the Trustee.
For purposes of this Article 4, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article 4 with respect to
the Notes to the payment of all Senior Indebtedness which may at the time be
outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article 12 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.02 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article 12.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes (including, but not limited to, the
redemption price and Additional Payment, if any with respect to the Notes called
for redemption in accordance with Section 3.02 or submitted for redemption in
accordance with Section 3.05, as the case may be, as provided in this
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 4.05, until all Senior Indebtedness
has been paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness or
35
such acceleration is rescinded in accordance with the terms of this Indenture.
If payment of the Notes is accelerated because of an Event of Default, the
Company or, at the Company's request and expense, the Trustee shall promptly
notify holders of Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing provisions in this Section 4.02, shall
be received by the Trustee or the holders of the Notes before all Senior
Indebtedness is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, as
their respective interests may appear, as calculated by the Company, for
application to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.02 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.06. This Section 4.02 shall be subject to
the further provisions of Section 4.05.
Section 4.03. Subrogation of Notes. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Notes 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 4 (equally and
ratably with the holders of all Indebtedness of the Company which by its express
terms is subordinated to other Indebtedness of the Company to substantially the
same extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any, and
interest (including Liquidated Damages, if any) on the Notes shall be paid in
full, and, for the purposes of such subrogation, no payments or distributions to
the holders of the Senior Indebtedness of any cash, property or securities to
which the holders of the Notes or the Trustee would be entitled except for the
provisions of this Article 4, and no payment pursuant to the provisions of this
Article 4, to or for the benefit of the holders of Senior Indebtedness by
holders of the Notes or the Trustee, shall, as among the Company, its creditors
other than holders of Senior Indebtedness, and the holders of the Notes, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness, and no payments or distributions of cash,
36
property or securities to or for the benefit of the holders of the Notes
pursuant to the subrogation provisions of this Article 4, which would otherwise
have been paid to the holders of Senior Indebtedness, shall be deemed to be a
payment by the Company to or for the account of the Notes. It is understood that
the provisions of this Article 4 are intended solely for the purposes of
defining the relative rights of the holders of the Notes, on the one hand, and
the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 4 or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, premium, if any, and interest (including
Liquidated Damages, if any) on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holders of the Notes and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or, subject to Section 7.04, the holder of any Note
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 4 of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee, subject to the provisions of Section 8.01, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 4.
Section 4.04. Authorization to Effect Subordination. Each holder of a Note
by the holder's acceptance thereof authorizes and directs the Trustee on the
holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.02 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
37
Section 4.05. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article 4,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if on a
date not less than two Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest
(including Liquidated Damages, if any) on any Note) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
4.05, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.
Notwithstanding anything in this Article 4 to the contrary, nothing shall
prevent any payment by the Trustee to the Noteholders of monies deposited with
it pursuant to Section 13.01, if a Responsible Officer of the Trustee shall not
have received written notice at the Corporate Trust Office on or before two
Business Days prior to the date such payment is due that such payment is not
permitted under Section 4.01 or 4.02.
The Trustee, subject to the provisions of Section 8.01, shall be entitled
to rely on the delivery to it of a written notice by a Representative or a
person representing himself to be a holder of Senior Indebtedness (or a trustee
on behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders. The Trustee shall not be required to make any payment
or distribution to or on behalf of a holder of Senior Indebtedness pursuant to
this Article 4 unless it has received satisfactory evidence 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 4.
38
Section 4.06. Trustee's Relation to Senior Indebtedness. The Trustee, in
its individual capacity, shall be entitled to all the rights set forth in this
Article 4 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver money to holders of Notes,
the Company or any other Person in compliance with this Article 4.
Section 4.07. No Impairment of Subordination. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed or extended and holders of Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness, including, without limitation, any waiver of default
thereunder, without any notice to or consent from the holders of the Notes or
the Trustee. No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of the Senior Indebtedness or
any terms or conditions of any instrument creating or evidencing such Senior
Indebtedness shall in any way alter or affect any of the provisions of this
Article 4 or the subordination of the Notes provided thereby.
Section 4.08. Certain Conversions Not Deemed Payment. For the purposes
of this Article 4 only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article 15 and (2) the payment, issuance
or delivery of cash, property or securities upon conversion of a Note as a
result of any transaction specified in Section 15.06 shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on Notes or on account
of the purchase or other acquisition of Notes. For the purposes of this Section
4.08, the term "junior securities" means (a) shares of any stock of any class of
the Company or (b) securities of the Company that are subordinated in right of
39
payment to all Senior Indebtedness that may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Notes are so subordinated as provided in this
Article 4. Nothing contained in this Article 4 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 Noteholders, the right,
which is absolute and unconditional, of the Holder of any Note to convert such
Note in accordance with Article 15.
Section 4.09. Article Applicable to Paying Agents. If 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 4 shall
(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 4 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
4.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or inactions of any
other paying agents (including the Company if acting as its own paying agent)
and shall have no control of any funds held by such other paying agents.
Section 4.10. Senior Indebtedness Entitled to Rely. The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article 4, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the Noteholders 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, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Noteholders, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of 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 4.
40
ARTICLE 5
Particular Covenants Of The Company
Section 5.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price and
Additional Payment, if any, upon redemption pursuant to Article 3), and interest
(including Liquidated Damages, if any), on each of the Notes at the places, at
the respective times and in the manner provided herein and in the Notes.
Section 5.02. Maintenance of Office or Agency. The Company will maintain
an office or agency in the Borough of Manhattan, the City of New York, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office of agency of
the Trustee in The Borough of Manhattan The City of New York (which shall
initially be located at State Street Bank and Trust Company, N.A., ▇▇ ▇▇▇▇▇▇▇▇,
▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇).
The Company may also from time to time designate co-registrars and one or
more offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
Registrar, Custodian and conversion agent and each of the Corporate Trust Office
and the office of agency of the Trustee in The Borough of Manhattan, The City of
New York (which shall initially be located at State Street Bank and Trust
Company, N.A., ▇▇ ▇▇▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇), shall be
considered as one such office or agency of the Company for each of the aforesaid
purposes.
So long as the Trustee is the Note Registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Notes it can identify from its records.
41
Section 5.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.04. Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee, or
if the Trustee shall appoint such a paying agent, the Company will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.04:
(i) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest (including
Liquidated Damages, if any) on the Notes (whether such sums have been paid
to it by the Company or by any other obligor on the Notes) in trust for the
benefit of the holders of the Notes;
(ii) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of the
principal of and premium, if any, or interest on the Notes when the same
shall be due and payable; and
(iii) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all sums
so held in trust.
The Company shall, on or before each due date of the principal of, premium,
if any, or interest on the Notes, deposit with the paying agent a sum (in funds
which are immediately available on the due date for such payment) sufficient to
pay such principal, premium, if any, or interest, and (unless such paying agent
is the Trustee) the Company will promptly notify the Trustee of any failure to
take such action; provided, however, that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes, set aside, segregate and hold in trust
for the benefit of the holders of the Notes a sum sufficient to pay such
principal, premium, if any, or interest (including Liquidated Damages, if any)
so becoming due and will promptly notify the Trustee of any failure to take such
action and of any failure by the Company (or any other obligor under the Notes)
to make any payment of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes when the same shall become due and
payable.
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(c) Anything in this Section 5.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
(d) Anything in this Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to
Section 13.03 and 13.04.
The Trustee shall not be responsible for the actions of any other paying
agents (including the Company if acting as its own paying agent) and shall have
no control of any funds held by such other paying agents.
Section 5.05. Existence. Subject to Article 12, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Noteholders.
Section 5.06. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any subsidiary and
not disadvantageous in any material respect to the Noteholders.
Section 5.07. Payment of Taxes and Other Claims. The Company will pay
or discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all
43
stamps and other duties, if any, which may be imposed by the United States or
any political subdivision thereof or therein in connection with the issuance,
transfer, exchange or conversion of any Notes or with respect to this Indenture;
provided, however, that, in the case of clauses (i) and (ii), the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim (A) if the failure to do so will not, in the
aggregate, have a material adverse impact on the Company, or (B) if the amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
Section 5.08. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock designated by such
holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such further action as
any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
Section 5.09. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
44
Section 5.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware of
(i) any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 or Section 4.05
shall be delivered to a Responsible Officer of the Trustee at its Corporate
Trust Office. In the event that the payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly provide written notice to the
Trustee specifying the names and addresses of the holders of Senior Indebtedness
if the Trustee (and not the Company) is to provide holders of Senior
Indebtedness notice of such acceleration under Section 4.02 of the Indenture.
Section 5.11. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice
("Liquidated Damages Notice") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen days prior to the proposed payment date for the
Liquidated Damages, and the Liquidated Damages Notice shall set forth the amount
of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Notes to determine the Liquidated Damages, or with respect to the nature,
extent or calculation of the amount of Liquidated Damages when made, or with
respect to the method employed in such calculation of the Liquidated Damages.
Unless the Trustee receives a Liquidated Damages Notice within the time period
specified above, the Trustee is entitled to assume that no Liquidated Damages
are due and payable.
45
ARTICLE 6
Noteholders' Lists And Reports By The Company And The Trustee
Section 6.01. Noteholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each February 1 and August 1 in each year beginning
with February 1, 2002, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Note Registrar.
Section 6.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes contained in
the most recent list furnished to it as provided in Section 6.01 or maintained
by the Trustee in its capacity as Note Registrar or co-registrar in respect of
the Notes, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 6.01 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of Notes
with respect to their rights under this Indenture or under the Notes, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
Section 6.03. Reports by Trustee.
(a) Within sixty (60) days after May 15 of each year commencing with the
year 2002, the Trustee shall transmit to holders of Notes such reports dated as
of May 15 of the year in which such reports are made concerning the Trustee and
its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
46
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will promptly notify the Trustee in writing when the Notes are listed on
any stock exchange or automated quotation system or delisted therefrom.
Section 6.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Notes, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Notes are governed by such
Act; provided, however, that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within fifteen (15) days after the same is
so required to be filed with the Commission. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
ARTICLE 7
Remedies Of The Trustee And Noteholders On An Event Of Default
Section 7.01. Events of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest (including
Liquidated Damages, if any) upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for a period of thirty
(30) days, whether or not such payment is permitted under Article 4 hereof; or
(b) default in the payment of the principal of or premium, if any
(including the Additional Payment if any), on any of the Notes as and when the
same shall become due and payable either at maturity or in connection with any
redemption pursuant to Article 3, by acceleration or otherwise, whether or not
such payment is permitted under Article 4 hereof; or
(c) failure on the part of the Company or any other obligor party to the
Indenture pursuant to Section 15.06 duly to observe or perform any other of the
47
covenants or agreements on the part of the Company in the Notes or in this
Indenture (other than a covenant or agreement a default in whose performance or
whose breach is elsewhere in this Section 7.01 specifically dealt with)
continued for a period of sixty (60) days after the date on which written notice
of such failure, requiring the Company to remedy the same, shall have been given
to the Company by the Trustee, or the Company and a Responsible Officer of the
Trustee by the holders of at least twenty-five percent (25%) in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.04; or
(d) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to the Company
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced against the
Company seeking liquidation, reorganization or other relief with respect to the
Company or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.01(d) or (e)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than twenty-five percent (25%) in aggregate principal amount of the Notes then
outstanding hereunder determined in accordance with Section 9.04, by notice in
writing to the Company (and to the Trustee if given by Noteholders), may declare
the principal of and premium, if any, on all the Notes and the interest accrued
thereon (including Liquidated Damages, if any) to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.01(d) or (e) occurs, the principal of all the Notes and the interest
accrued thereon shall (including Liquidated Damages, if any) be immediately and
automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the
48
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon (including Liquidated Damages, if any) all
Notes and the principal of and premium, if any, on any and all Notes which shall
have become due otherwise than by acceleration (with interest on overdue
installments of interest (including Liquidated Damages, if any) (to the extent
that payment of such interest is enforceable under applicable law) and on such
principal and premium, if any, at the rate borne by the Notes, to the date of
such payment or deposit) and amounts due to the Trustee pursuant to Section
8.06, and if any and all defaults under this Indenture, other than the
nonpayment of principal of and premium, if any, and accrued interest on
(including Liquidated Damages, if any) Notes which shall have become due by
acceleration, shall have been cured or waived pursuant to Section 7.07, then and
in every such case the holders of a majority in aggregate principal amount of
the Notes then outstanding, by written notice to the Company and to the Trustee,
may waive all defaults or Events of Default and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or Event of Default, or
shall impair any right consequent thereon. The Company shall notify a
Responsible Officer of the Trustee, promptly upon becoming aware thereof, of any
Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
Section 7.02. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon (including Liquidated Damages, if any) any of the
Notes as and when the same shall become due and payable, and such default shall
have continued for a period of thirty (30) days, or (b) in case default shall be
made in the payment of the principal of or premium, if any, on any of the Notes
as and when the same shall have become due and payable, whether at maturity of
the Notes or in connection with any redemption, by or under this Indenture or by
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Notes, the whole amount
that then shall have become due and payable on all such Notes for principal and
premium, if any, or interest (including Liquidated Damages, if any), as the case
may be, with interest upon the overdue principal and premium, if any, and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, and, in addition thereto, such further amount as
shall be
49
sufficient to cover the costs and expenses of collection, including reasonable
compensation to the Trustee, its agents, attorneys and counsel, and all other
amounts due the Trustee under Section 8.06. Until such demand by the Trustee,
the Company may pay the principal of and premium, if any, and interest
(including Liquidated Damages, if any) on the Notes otherwise in accordance with
the provisions of this Indenture, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under Title 11
of the United States Code, or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, or in the case of any other judicial proceedings relative to the
Company or such other obligor upon the Notes, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 7.02, shall be entitled
and empowered, by intervention in such proceedings or otherwise, to file and
prove a claim or claims for the whole amount of principal, premium, if any, and
interest (including Liquidated Damages, if any) owing and unpaid in respect of
the Notes, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or
their creditors, or its or their property, and to collect and receive any monies
or other property payable or deliverable on any such claims, and to distribute
the same after the deduction of any amounts due the Trustee under Section 8.06,
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Noteholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment
50
of reasonable compensation, expenses, advances and disbursements out of the
estate in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 7.03. Application of Monies Collected by Trustee. Any monies
and properties collected by the Trustee pursuant to this Article 7 shall be
applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such monies, upon presentation of the several Notes, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 8.06;
SECOND: Subject to the provisions of Article 4, in case the principal of
the outstanding Notes shall not have become due and be unpaid, to the payment of
interest on (including Liquidated Damages, if any) the Notes in default in the
order of the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest (including Liquidated Damages, if any) at the
rate borne by the Notes, such payments to be made ratably to the Persons
entitled thereto;
THIRD: Subject to the provisions of Article 4, in case the principal of
the outstanding Notes shall have become due, by declaration or otherwise, and be
unpaid to the payment of the whole amount then owing and unpaid upon the Notes
for principal and premium, if any, and interest (including Liquidated Damages,
if any), with interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon overdue
51
installments of interest (including Liquidated Damages, if any) at the rate
borne by the Notes, and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and premium, if any, and interest (including Liquidated Damages, if
any) without preference or priority of principal and premium, if any, over
interest (including Liquidated Damages, if any), or of interest (including
Liquidated Damages, if any) over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of any Note
over any other Note, ratably to the aggregate of such principal and premium, if
any, and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article 4, to the payment of the
remainder, if any, to the Company or any other Person lawfully entitled thereto.
Section 7.04. Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by reference to any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.07; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by reference to any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided herein).
For the protection and enforcement of this Section 7.04, each and every
Noteholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any (including the redemption price upon redemption
52
pursuant to Article 3), and accrued interest on (including Liquidated Damages,
if any) such Note, on or after the respective due dates expressed in such Note
or in the event of redemption, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in its own behalf and for its own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.
Section 7.05. Proceedings by Trustee. In case of an Event of Default
known to a Responsible Officer of the Trustee, the Trustee may, in its
discretion, proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as are necessary to protect
and enforce any of such rights, either by suit in equity or by action at law or
by proceeding in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.
Section 7.06. Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 7 to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein, and, subject to the provisions of Section
7.04, every power and remedy given by this Article 7 or by law to the Trustee or
to the Noteholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Noteholders.
Section 7.07. Direction of Proceedings and ▇▇▇▇▇▇ of Defaults by
Majority of Noteholders. The holders of a majority in aggregate principal
amount of the Notes at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, however, that (a) such
direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action which is not inconsistent with such
direction and (c) the
53
Trustee may decline to take any action that would benefit some Noteholder to the
detriment of other Noteholders or that involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the Notes
at the time outstanding determined in accordance with Section 9.04 may, on
behalf of the holders of all of the Notes, waive any past default or Event of
Default hereunder and its consequences except (i) a default in the payment of
interest (including Liquidated Damages, if any) or premium, if any, on, or the
principal of, the Notes, (ii) a failure by the Company to convert any Notes
pursuant to Article 15, (iii) a default in the payment of redemption price or
Additional Payment pursuant to Article 3 or (iv) a default in respect of a
covenant or provisions hereof which under Article 11 cannot be modified or
amended without the consent of the holders of each or all Notes then outstanding
or affected thereby. Upon any such waiver, the Company, the Trustee and the
holders of the Notes shall be restored to their former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
7.07, said default or Event of Default shall for all purposes of the Notes and
this Indenture be deemed to have been cured and to be not continuing; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
Section 7.08. Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Noteholders, as the names and addresses of such
holders appear upon the Note Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided, however, that except in the case of default
in the payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.
Section 7.09. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided, however, that the provisions of this
Section 7.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted
54
by any Noteholder, or group of Noteholders, holding in the aggregate more than
ten percent in principal amount of the Notes at the time outstanding determined
in accordance with Section 9.04, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or premium, if any, or
interest on any Note on or after the due date expressed in such Note or to any
suit for the enforcement of the right to convert any Note in accordance with the
provisions of Article 15.
ARTICLE 8
The Trustee
Section 8.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Indenture and no implied covenants or obligations shall be read into
this Indenture and the Trust Indenture Act against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates
or opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture;
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(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless the Trustee
was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction
of the holders of not less than a majority in principal amount of the Notes at
the time outstanding determined as provided in Section 9.04 relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture;
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters relating to
payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes; and
(f) if any party fails to deliver a notice relating to an event the fact
of which, pursuant to this Indenture, requires notice to be sent to the Trustee,
the Trustee may conclusively rely on its failure to receive such notice as
reason to act as if no such event occurred.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.02. Reliance on Documents, Opinions, etc. Except as otherwise
provided in Section 8.01:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution
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of the Board of Directors may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Noteholders pursuant to the provisions of this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
Section 8.03. No Responsibility for Recitals, etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The Trustee, any paying agent, any conversion agent or Note
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note Registrar.
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Section 8.05. Monies to Be Held in Trust. Subject to the provisions of
Section 13.04 and Section 4.02, all monies and properties received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as may be agreed in writing from time to time by
the Company and the Trustee.
Section 8.06. Compensation and Expenses of Trustee. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually agreed to from
time to time in writing between the Company and the Trustee, and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee), in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any and all loss, liability, claim or expense incurred without negligence,
willful misconduct, recklessness or bad faith on the part of the Trustee or such
officers, directors, employees and agent or authenticating agent, as the case
may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim of liability in the
premises. The obligations of the Company under this Section 8.06 to compensate
or indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the Notes
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular Notes. The
obligation of the Company under this Section shall survive the satisfaction and
discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 7.01(d) or (e)
with respect to the Company occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
Section 8.07. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this
58
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, the
Trustee may request the delivery of an Officers' Certificate and such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or willful misconduct on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee.
Section 8.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 8.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
meeting the requirements of Section 8.09 and having no conflicting interests
within the meaning of Section 8.08 by written instrument, in duplicate, executed
by order of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
sixty (60) days after the mailing of such notice of resignation to the
Noteholders, the resigning Trustee may, upon ten (10) business days' notice to
the Company and the Noteholders, appoint a successor identified in such notice
or may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor trustee, or, if any Noteholder
who has been a bona fide holder of a Note or Notes for at least six (6) months
may, subject to the provisions of Section 7.09, on behalf of himself and all
others similarly situated,
59
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 8.08 after written
request therefor by the Company or by any Noteholder who has been a bona
fide holder of a Note or Notes for at least six (6) months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.09 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided,
however, that if no successor Trustee shall have been appointed and have
accepted appointment sixty (60) days after either the Company or the Noteholders
has removed the Trustee, the Trustee so removed may petition any court of
competent jurisdiction for an appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Notes at
the time outstanding may at any time remove the Trustee and nominate a successor
trustee which shall be deemed appointed as successor trustee unless, within ten
(10) days after notice to the Company of such nomination, the Company objects
thereto, in which case the Trustee so removed or any Noteholder, or if such
Trustee so removed or any Noteholder fails to act, the Company, upon the terms
and conditions and otherwise as in Section 8.10(a) provided, may petition any
court of competent jurisdiction for an appointment of a successor trustee.
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(d) Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.10 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.11.
Section 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.06.
No successor trustee shall accept appointment as provided in this Section
8.11 unless, at the time of such acceptance, such successor trustee shall be
qualified under the provisions of Section 8.08 and be eligible under the
provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, the Company (or the former trustee, at the written direction of
the Company) shall mail or cause to be mailed notice of the succession of such
trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note Register. If the Company fails to mail such notice within
ten (10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by ▇▇▇▇▇▇, etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all
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of the corporate trust business of the Trustee, such corporation shall be
qualified under the provisions of Section 8.08 and eligible under the provisions
of Section 8.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
Section 8.14. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Notes or holders of
Senior Indebtedness under this Indenture, including, without limitation, under
Article 4 hereof) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three (3) Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
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ARTICLE 9
The Noteholders
Section 9.01. Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article 10, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 9.02. Proof of Execution by Noteholders. Subject to the
provisions of Section 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note Registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.06.
Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Note Registrar may deem the
Person in whose name such Note shall be registered upon the Note Register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Note Registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note Registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.
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Section 9.04. Company-Owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided, however, that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.04 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or any Affiliate of the Company or any such other obligor. In the case of
a dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee. Upon request of the Trustee,
the Company shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Notes, if any, known by the Company to be owned or
held by or for the account of any of the above described Persons, and, subject
to Section 8.01, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Notes not listed therein are outstanding for the purpose of any
such determination.
Section 9.05. Revocation of Consents; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.02, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note
shall be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE 10
Meetings Of Noteholders
Section 10.01. Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 10 for any of the following purposes:
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(i) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article 7;
(ii) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article 8;
(iii) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(iv) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law.
Section 10.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.01, to
be held at such time and at such place as the Trustee shall determine. Notice
of every meeting of the Noteholders, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 9.01, shall
be mailed to holders of Notes at their addresses as they shall appear on the
Note Register. Such notice shall also be mailed to the Company. Such notices
shall be mailed not less than twenty (20) nor more than ninety (90) days prior
to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.03. Call of Meetings by Company or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
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Section 10.04. Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
Section 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Notes represented at the meeting and entitled to vote
at the meeting.
Subject to the provisions of Section 9.04, at any meeting each Noteholder
or proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note 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
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.02 or 10.03 may be adjourned from time
to time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
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shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.02. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.07. No Delay of Rights by Meeting. Nothing contained in this
Article 10 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE 11
Supplemental Indentures
Section 11.01. Supplemental Indentures Without Consent Of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the holders
of Notes pursuant to the requirements of Section 15.06 and the redemption
obligations of the Company pursuant to the requirements of Section 3.05(e);
(b) subject to Article 4, to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 12;
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(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in coupon form
(including Notes registrable as to principal only) and to provide for
exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualifications of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of
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the holders of any of the Notes at the time outstanding, notwithstanding any of
the provisions of Section 11.02.
Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of Noteholders. With
the consent (evidenced as provided in Article 9) of the holders of not less than
a majority in aggregate principal amount of the Notes at the time outstanding,
the Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided, however, that no such supplemental indenture
shall (i) extend the fixed maturity of any Note, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount thereof
or premium, if any, thereon, or reduce any amount payable on redemption thereof,
or impair the right of any Noteholder to institute suit for the payment thereof,
or make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Notes, or modify the
provisions of this Indenture with respect to the subordination of the Notes in a
manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to redeem any Note upon the happening of a Fundamental
Change in a manner adverse to the holder of Notes, or impair the right to
convert the Notes pursuant to the terms set forth herein, including Section
15.06, in each case, without the consent of the holder of each Note so affected,
or (ii) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.02 to approve the particular form of any proposed supplemental
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indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
11.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 11, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.04. Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 11 may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 16.11)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto is
authorized or permitted by this Indenture and complies with the requirements of
Indenture, including this Article 11.
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ARTICLE 12
Consolidation, Merger, Sale, Conveyance And Lease
Section 12.01. Company May Consolidate, etc. on Certain Terms. Subject
to the provisions of Section 12.02, nothing contained in this Indenture or in
any of the Notes shall prevent any consolidation or merger of the Company with
or into any other Person or Persons (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company and its consolidated
Subsidiaries, taken as a whole, to any other Person (whether or not affiliated
with the Company), authorized to acquire and operate the same and that shall be
organized under the laws of the United States of America, any state thereof or
the District of Columbia; provided, however, that upon any such consolidation,
merger, sale, conveyance or lease, the due and punctual payment of the principal
of and premium, if any, and interest (including Liquidated Damages, if any) on
all of the Notes, according to their tenor and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person that shall have
acquired or leased such property, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Section 15.06. No such
consolidation, merger, sale, conveyance or lease shall be permitted that is not
in compliance with this Section 12.01.
Section 12.02. Successor Corporation to Be Substituted. In case of any
such consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of LTX
Corporation any or all of the Notes, issuable hereunder that theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor Person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Notes that
such successor
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Person thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Notes so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Notes theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Notes had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale or conveyance, the Person named as the "Company" in
the first paragraph of this Indenture or any successor that shall thereafter
have become such in the manner prescribed in this Article 12 may (except in the
case of any lease or in the case of any such consolidation, merger, sale or
conveyance to a Subsidiary of the Company) be dissolved, wound up and liquidated
at any time thereafter and such Person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article 12.
ARTICLE 13
Satisfaction And Discharge Of Indenture
Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption of all of the Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of maturity or
redemption date, as the case may be, accompanied by a verification report, as to
the sufficiency of the deposited amount, from an independent certified
accountant or other financial professional satisfactory to the Trustee, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company, then this Indenture shall cease
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to be of further effect (except as to (i) rights of registration of transfer,
substitution and exchange and conversion of Notes, (ii) rights hereunder of
Noteholders to receive payments of principal of and premium, if any, and
interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on written demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 16.05 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Notes.
Section 13.02. Deposited Monies to Be Held in Trust by Trustee. Subject
to Section 13.04, all monies deposited with the Trustee pursuant to Section
13.01, provided that such deposit was not in violation of Article 4, shall be
held in trust for the sole benefit of the Noteholders and not to be subject to
the subordination provisions of Article 4, and such monies shall be applied by
the Trustee to the payment, either directly or through any paying agent (other
than the Company), to the holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 13.03. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 13.04. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
Section 13.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or
73
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 13.01 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.02;
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.
ARTICLE 14
Immunity Of Incorporators, Stockholders, Officers And Directors
Section 14.01. Indenture and Notes Solely Corporate Obligations. To the
extent permitted by law, no recourse for the payment of the principal of or
premium, if any, or interest on any Note, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Notes.
ARTICLE 15
Conversion Of Notes
Section 15.01. Right to Convert. Subject to and upon compliance with
the provisions of this Indenture, including, without limitation, Article 4, the
holder of any Note shall have the right, at its option, at any time after the
original issuance of the Notes hereunder through the close of business on the
final maturity date of the Notes (except that, with respect to any Note or
portion of a Note that shall be called for redemption, such right shall
terminate, except as provided in Section 15.02, Section 3.02 or Section 3.04, at
the close of business on the Business Day next preceding the date fixed for
redemption of such Note or portion of a Note unless the Company shall default in
payment due upon redemption thereof) to convert the principal amount of any such
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be
74
constituted) obtained by dividing the principal amount of the Note or portion
thereof surrendered for conversion by the Conversion Price in effect at such
time, by surrender of the Note so to be converted in whole or in part in the
manner provided, together with any required funds, in Section 15.02. A Note in
respect of which a holder is exercising its option to require redemption upon a
Fundamental Change pursuant to Section 3.05 may be converted only if such holder
withdraws its election to exercise in accordance with Section 3.05. A holder of
Notes is not entitled to any rights of a holder of Common Stock until such
holder has converted his Notes to Common Stock, and only to the extent such
Notes are deemed to have been converted to Common Stock under this Article 15.
Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Note in certificated form,
the holder of any such Note to be converted in whole or in part shall surrender
such Note, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.02, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.02, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the office or agency that the holder elects to
convert such Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 15.07. Each such Note surrendered for
conversion shall, unless the shares issuable on conversion are to be issued in
the same name as the registration of such Note, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest
in a Global Note, the beneficial holder must complete, or cause to be completed,
the appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program, deliver, or cause to be delivered, by book-entry
delivery an interest in such Global Note, furnish appropriate endorsements and
transfer documents if required by the Company or the Trustee or conversion
agent, and pay the funds, if any, required by this Section 15.02 and any
transfer taxes if required pursuant to Section 15.07.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such Noteholder at the office or agency maintained by the Company for such
purpose
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pursuant to Section 5.02, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof as determined by the Company in accordance with the provisions of this
Article 15 and a check or cash in respect of any fractional interest in respect
of a share of Common Stock arising upon such conversion, calculated by the
Company as provided in Section 15.03. In case any Note of a denomination greater
than $1,000 shall be surrendered for partial conversion, and subject to Section
2.03, the Company shall execute and the Trustee shall authenticate and deliver
to the holder of the Note so surrendered, without charge to him, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.02 have been satisfied as to such Note (or portion thereof), and
the Person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; provided,
however, that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
No adjustment in respect of interest on any Note converted or dividends on
any shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence and except as provided with respect to
Additional Payments pursuant to Section 3.01(a). If a Note (or portion thereof)
is surrendered for conversion during the period from the close of business on
any record date for the payment of interest to the close of business on the
Business Day preceding the following interest payment date and (x) has not been
called for redemption on a redemption date that occurs during such period and
(y) is not to be redeemed in connection with a Fundamental Change on a
Repurchase Date that occurs during such period, such Note (or portion thereof
being converted) must be accompanied by an amount, in New York Clearing House
funds or other funds acceptable to the Company, equal to the interest payable on
such interest payment date on the principal amount being converted; provided,
however, that no such payment shall be required if there shall exist at the time
of conversion a default in the payment of interest on the Notes.
Upon the conversion of an interest in a Global Note, the Trustee (or other
conversion agent appointed by the Company), or the Custodian at the direction of
the Trustee (or other conversion agent appointed by the Company), shall make a
notation on such Global Note as to the reduction in the principal amount
76
represented thereby. The Company shall notify the Trustee in writing of any
conversions of Notes effected through any conversion agent other than the
Trustee.
Section 15.03. Cash Payment in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes. The current market price of a share of Common Stock shall
be the Closing Price on the last Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
Section 15.04. Conversion Price. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article 15.
Section 15.05. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect at the opening
of business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number of shares of the Common
Stock outstanding at the close of business on the date fixed for such
determination, and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. For
the purpose of this paragraph (a), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company.
The Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company. If any dividend or
distribution of the type described in this Section 15.05(a) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the Conversion
Price that would then be in effect if such dividend or distribution had not been
declared.
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(b) In case the Company shall issue rights or warrants to all holders of its
outstanding shares of Common Stock entitling them (for a period expiring within
forty-five (45) days after the date fixed for determination of stockholders
entitled to receive such rights or warrants) to subscribe for or purchase shares
of Common Stock at a price per share less than the Current Market Price (as
defined below) on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders entitled to receive
such rights or warrants plus the number of shares that the aggregate offering
price of the total number of shares so offered would purchase at such Current
Market Price, and the denominator of which shall be the number of shares of
Common Stock outstanding on the date fixed for determination of stockholders
entitled to receive such rights or warrants plus the total number of additional
shares of Common Stock offered for subscription or purchase. Such adjustment
shall be successively made whenever any such rights or warrants are issued, and
shall become effective immediately after the opening of business on the day
following the date fixed for determination of stockholders entitled to receive
such rights or warrants. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the Conversion Price
shall be readjusted to the Conversion Price that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants and any amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to be determined by the Board
of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
78
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
(other than any dividends or distributions to which Section 15.05(a) applies) or
evidences of its indebtedness or assets (including securities, but excluding any
rights or warrants referred to in Section 15.05(b), and excluding any dividend
or other distribution referred to in Section 15.05(e) (any of the foregoing
hereinafter in this Section 15.05(d) called the "Securities")), then, in each
such case (unless the Company elects to reserve such Securities for distribution
to the Noteholders upon the conversion of the Notes so that any such holder
converting Notes will receive upon such conversion, in addition to the shares of
Common Stock to which such holder is entitled, the amount and kind of such
Securities which such holder would have received if such holder had converted
its Notes into Common Stock immediately prior to the Record Date (as defined in
Section 15.05(h)(iv) for such distribution of the Securities)), the Conversion
Price shall be reduced so that the same shall be equal to the price determined
by multiplying the Conversion Price in effect on the Record Date with respect to
such distribution by a fraction, the numerator of which shall be the Current
Market Price per share of the Common Stock on such Record Date less the fair
market value (as determined by the Board of Directors, whose good faith
determination shall be conclusive, and described in a resolution of the Board of
Directors) on the Record Date of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator of which shall be
the Current Market Price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day following such
Record Date; provided, however, that in the event the then fair market value (as
so determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of Securities such holder would have received
had such holder converted each Note immediately prior to such Record Date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such dividend or distribution had not been declared. If
the Board of Directors determines the fair market value of any distribution for
purposes of this Section 15.05(d) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price of
the Common Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
79
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.05 (and no adjustment to the Conversion Price under
this Section 15.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.05(b) or Section 15.05(d). If any such
right or warrant, including any such existing rights or warrants distributed
prior to the date of this Indenture, are subject to events, upon the occurrence
of which such rights or warrants become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the date of the
occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 15.05
was made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
No adjustment of the Conversion Price shall be made pursuant to this
Section 15.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Stock and will not
expire prior to the maturity of the Notes.
For purposes of this Section 15.05(d) and Section 15.05(a) and (b), any
dividend or distribution to which this Section 15.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
80
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock without regard to such shares of Common Stock or rights or
warrants (and any Conversion Price reduction required by this Section 15.05(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Section 15.05(a) and (b) with respect to such dividend or distribution shall
then be made), except (A) the Record Date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Section 15.05(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 15.05(a).
(e) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding (x) any quarterly cash dividend on
the Common Stock to the extent the aggregate cash dividend per share of Common
Stock in any fiscal quarter does not exceed the greater of (A) the amount per
share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 15.05(e)
(as adjusted to reflect subdivisions, or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Price (determined as set
forth in Section 15.05(h)) during the ten Trading Days (as defined in Section
15.05(h)) immediately prior to the date of declaration of such dividend, and (y)
any dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the Record Date for such dividend or distribution by
a fraction, the numerator of which shall be the Current Market Price of the
Common Stock on such Record Date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock, and the
denominator of which shall be such Current Market Price of the Common Stock,
such reduction to be effective immediately prior to the opening of business on
the day following such Record Date; provided, however, that in the event the
portion of the cash so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price of the Common Stock on such
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Noteholder shall have the right to receive upon conversion the
amount of cash such holder would have received had such holder converted each
Note immediately prior to such Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to
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be the Conversion Price that would then be in effect if such dividend or
distribution had not been declared. If any adjustment is required to be made as
set forth in this Section 15.05(e) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as set forth
in this Section 15.05(e) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.
(f) In case a tender or exchange offer made by the Company or any Subsidiary
for all or any portion of the Common Stock shall expire and such tender or
exchange offer (as amended upon the expiration thereof) shall require the
payment to stockholders of consideration per share of Common Stock having a fair
market value (as determined by the Board of Directors, whose good faith
determination shall be conclusive and described in a resolution of the Board of
Directors) that as of the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it may be amended)
exceeds the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the Expiration Time by a fraction the numerator of
which shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator of which shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the Trading Day
following the Expiration Time. In the event that the Company or any such
Subsidiary, as the case may be, is obligated to purchase shares pursuant to any
such tender or exchange offer, but the Company, or any such Subsidiary, as the
case may be, is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price that would then be in effect if such
tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other than the
Company or any Subsidiary for an amount that increases the offeror's ownership
of Common Stock to more than twenty-five percent (25%) of the
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Common Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose good faith determination shall be
conclusive, and described in a resolution of the Board of Directors) that as of
the last time (the "Offer Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended) that
exceeds the Current Market Price of the Common Stock on the Trading Day next
succeeding the Offer Expiration Time, and in which, as of the Offer Expiration
Time the Board of Directors is not recommending rejection of the offer, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the Offer Expiration Time by a fraction the numerator of which shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Offer Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time and the denominator of which shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Offer Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Accepted Purchased Shares") and
(y) the product of the number of shares of Common Stock outstanding (less any
Accepted Purchased Shares) at the Offer Expiration Time and the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time, such reduction to become effective immediately prior to the
opening of business on the Trading Day following the Offer Expiration Time. In
the event that such Person is obligated to purchase shares pursuant to any such
tender or exchange offer, but such Person is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such tender or exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this Section 15.05(g)
shall not be made if, as of the Offer Expiration Time, the offering documents
with respect to such offer disclose a plan or intention to cause the Company to
engage in any transaction described in Article 12.
(h) For purposes of this Section 15.05, the following terms shall have the
meaning indicated:
(i) "Closing Price" with respect to any security on any day shall mean
the closing sale price, regular way, on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case as quoted on the Nasdaq National Market
or, if such security is not quoted or listed or admitted to trading on such
Nasdaq National Market, on the principal national
83
securities exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(ii) "Current Market Price" shall mean the average of the daily Closing
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question except as hereinafter provided
for purposes of any computation under Section 15.05(f) or (g); provided,
however, that (1) if the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such computation and
other than the tender or exchange offer requiring such computation under
Section 15.05(f) or (g)) that requires an adjustment to the Conversion
Price pursuant to Section 15.05(a), (b), (c), (d), (e), (f) or (g) occurs
during such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be adjusted
by multiplying such Closing Price by the same fraction by which the
Conversion Price is so required to be adjusted as a result of such other
event, (2) if the "ex" date for any event (other than the issuance or
distribution requiring such computation and other than the tender or
exchange offer requiring such computation under Section 15.05(f) or (g))
that requires an adjustment to the Conversion Price pursuant to Section
15.05(a), (b), (c), (d), (e), (f) or (g) occurs on or after the "ex" date
for the issuance or distribution requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and after
the "ex" date for such other event shall be adjusted by multiplying such
Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, and
(3) if the "ex" date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of this proviso, the
Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value
(as determined by the Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee thereof in a manner consistent
with any determination of such value for purposes of Section 15.05(d), (f)
or (g), whose good faith determination shall be conclusive and described in
a resolution of the Board of Directors or such duly
84
authorized committee thereof, as the case may be) of the evidences of
indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the
day before such "ex" date. For purposes of any computation under Section
15.05(f) or (g), the "Current Market Price" of the Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per share of
Common Stock for such day and the next two succeeding Trading Days;
provided, however, that if the "ex" date for any event (other than the
tender or exchange offer requiring such computation under Section 15.05(f)
or (g)) that requires an adjustment to the Conversion Price pursuant to
Section 15.05(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
Expiration Time or Offer Expiration Time, as the case may be, for the
tender or exchange offer requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex" date
for such other event shall be adjusted as provided in clauses (1), (2) and
(3) of the proviso contained in the first sentence of this Section
15.05(h)(ii). For purposes of this paragraph, the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first date on
which the Common Stock trades, regular way, on the relevant exchange or in
the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used with respect
to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades, regular way, on such exchange
or in such market after the time at which such subdivision or combination
becomes effective, and (3) when used with respect to any tender or exchange
offer means the first date on which the Common Stock trades, regular way,
on such exchange or in such market after the Expiration Time or the Offer
Expiration Time of such offer.
(iii) "fair market value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's-length transaction.
(iv) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(v) "Trading Day" shall mean (x) if the applicable security is quoted
on the Nasdaq National Market, a day on which trades may be made thereon or
(y) if the applicable security is listed or admitted for trading on the New
York Stock Exchange or another national securities
85
exchange, a day on which the New York Stock Exchange or such other national
securities exchange is open for business or (z) if the applicable security
is not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 15.05(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such price; provided, however, that any adjustments that by reason of this
Section 15.05(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
15 shall be made by the Company and shall be made to the nearest cent or to the
nearest one-hundredth (1/100) of a share, as the case may be. No adjustment
need be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume that the last
Conversion Price of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the date on which each adjustment becomes effective and shall mail such
86
notice of such adjustment of the Conversion Price to the holder of each Note at
his last address appearing on the Note Register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.05 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 15.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 15.05(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section 15.05(f), or (5) the Offer Expiration Time
for a tender or exchange offer pursuant to Section 15.05(g) (each a
"Determination Date"), the Company may elect to defer until the occurrence of
the relevant Adjustment Event (as hereinafter defined) (x) issuing to the holder
of any Note converted after such Determination Date and before the occurrence of
such Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 15.03. For purposes of this
Section 15.05(l), the term "Adjustment Event" shall mean:
(a) in any case referred to in clause (1) hereof, the occurrence of
such event,
(b) in any case referred to in clause (2) hereof, the date any such
dividend or distribution is paid or made,
(c) in any case referred to in clause (3) hereof, the date of
distribution of such rights or warrants, and
(d) in any case referred to in clause (4) or clause (5) hereof, the
date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 15.05, the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur, namely (i) any reclassification or change
of
87
the outstanding shares of Common Stock (other than a subdivision or combination
to which Section 15.05(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company and its consolidated Subsidiaries, taken as
a whole, to any other Person as a result of which holders of Common Stock shall
be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that such Note shall be convertible into the kind and
amount of shares of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of a number of shares of
Common Stock issuable upon conversion of such Notes (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock are available
to convert all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise his rights of election, if any, as to the kind or
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance (provided that, if the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 15.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
15.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note Register provided for in Section 2.05 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
88
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05
shall not apply.
Section 15.07. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Note converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
Section 15.08. Reservation of Shares; Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock. The Company shall
reserve and provide, free from preemptive rights, out of its authorized but
unissued shares or shares held in treasury, sufficient shares of Common Stock to
provide for the conversion of the Notes from time to time as such Notes are
presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Notes will upon issue be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company further covenants that, if at any time the Common Stock shall
be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
89
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.
Section 15.09. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Price or whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article 15. 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 15.06 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.06 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.01, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 15.10. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on its
Common Stock that would require an adjustment in the Conversion Price pursuant
to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par
90
value to par value), or of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the Company
and its consolidated Subsidiaries, taken as a whole; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note Register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
ARTICLE 16
Miscellaneous Provisions
Section 16.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 16.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 16.03. Addresses for Notices, etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company shall be deemed
to have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box
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addressed (until another address is filed by the Company with the Trustee) to
LTX Corporation, LTX Park, University Avenue, Westwood, Massachusetts 02090,
Attention: General Counsel. Any notice, direction, request or demand hereunder
to or upon the Trustee shall be given or served by being deposited, postage
prepaid, by registered or certified mail in a post office letter box addressed
to the Corporate Trust Office, which office is, at the date as of which this
Indenture is dated, located at ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Department (LTX Corp. Subordinated Notes).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
Register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it; provided, however, that any
notice or communication to the Trustee shall be deemed given only upon receipt.
Section 16.04. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to the conflict of laws provisions thereof.
Section 16.05. Evidence of Compliance with Conditions Precedent;
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to
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whether or not such covenant or condition has been complied with; and (4) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Section 16.06. Legal Holidays. In any case in which the date of maturity
of interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest on such payment shall
accrue for the period from and after such date.
Section 16.07. Trust Indenture Act. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act required
to be part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that this Section 16.07 shall not require this Indenture or
the Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
Section 16.08. No Security Interest Created. Nothing in this Indenture or
the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction in which property of the
Company and its Subsidiaries is located, other than the security interest
granted to the Trustee in Section 8.06.
Section 16.09. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note Registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 16.10. Table of Contents, Headings, etc. The table of contents
and the titles and headings of the articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
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Section 16.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Section 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.09.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any authenticating agent, shall be the successor
of the authenticating agent hereunder, if such successor corporation is
otherwise eligible under this Section 16.11, without the execution or filing of
any paper or any further act on the part of the parties hereto or the
authenticating agent or such successor corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Section 8.02, 8.03, 8.04, 9.03 and this Section 16.11
shall be applicable to any authenticating agent.
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Section 16.12. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 16.13. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
State Street Bank and Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.
95
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
LTX CORPORATION
By:___________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:___________________________
Name:
Title:
EXHIBIT A
For Global Note only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) (THE "DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE
CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
If required pursuant to Section 2.05(d): THE NOTE EVIDENCED HEREBY HAS NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT); (2)
AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
LTX CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") WHICH, PRIOR TO SUCH TRANSFER, FURNISHES
TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE
A-1
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR
A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (3) AGREES THAT PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (2)(F) ABOVE), IT WILL FURNISH TO EACH OF LTX CORPORATION AND
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) OR (F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE (2)(E) OR (F) ABOVE OR UPON ANY
TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
LTX CORPORATION
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
CUSIP: _____________
A-2
ISIN: _____________
No. $_______________
LTX Corporation, a corporation duly organized and validly existing under
the laws of the Commonwealth of Massachusetts (herein called the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to
__________________ or its registered assigns, the principal sum of
_________________million dollars ($___________) on August 8, 2006, at the office
or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually on February 15 and August 15
of each year, commencing February 15, 2002, on said principal sum at said office
or agency, in like coin or currency, at the rate per annum of 4 1/4%, from the
February 15 or August 15, as the case may be, next preceding the date of this
Note to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Note, or unless no interest has been paid or duly
provided for on the Notes, in which case from August 8, 2001, until payment of
said principal sum has been made or duly provided for; provided, however, that
if the Company shall default in the payment of interest due on such February 15
or August 15, then this Note shall bear interest from the next preceding
February 15 or August 15 to which interest has been paid or duly provided for
or, if no interest has been paid or duly provided for on such Note, from August
8, 2001. The Company further hereby promises to pay, at said office or agency,
in like coin or currency, any Liquidated Damages that it may from time to time
be required to pay pursuant to Section 2(e) of the Registration Rights Agreement
at the same time and in the same manner as payments of interest as specified
above. Except as otherwise provided in the Indenture, the interest and
Liquidated Damages payable on this Note pursuant to the Indenture on any
February 15 or August 15 will be paid to the Person entitled thereto as it
appears in the Note Register at the close of business on the record date, which
shall be the February 1 or August 1 (whether or not a Business Day) next
preceding such February 15 or August 15, as provided in the Indenture; provided,
however, that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. Interest and Liquidated Damages may,
at the option of the Company, be paid either (i) by check mailed to the
registered address of such Person (provided that the holder of Notes with an
aggregate principal amount in excess of $2,000,000 shall, at the written
election of such holder, be paid by wire transfer of immediately available funds
if such holder has provided the paying agent with the necessary wire transfer
information no later than three (3) Business Days prior to the date of payment)
or (ii) by transfer to an account maintained by such Person located in the
United States; provided, however, that payments to the Depositary
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will be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the State
of New York, and for all purposes shall be construed in accordance with and
governed by the laws of the State of New York, without regard to principles of
conflicts of laws.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
LTX CORPORATION
By:_________________________
Name:
Title:
Dated:
Attest: __________________
Name:
Title:
Dated:
A-4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:_____________________
Name:
Title:
Dated:
A-5
REVERSE OF NOTE
LTX CORPORATION
4 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4 1/4% Convertible Subordinated Notes due 2006 (herein
called the "Notes"), limited to the aggregate principal amount of $150,000,000
(or $175,000,000 if the over-allotment option granted to the Initial Purchasers
pursuant to the Purchase Agreement dated August 2, 2001 between the Company and
the Initial Purchasers is exercised in full) all issued or to be issued under
and pursuant to an Indenture dated as of August 8, 2001 (herein called the
"Indenture"), between the Company and State Street Bank and Trust Company, as
trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest (including Liquidated Damages (as defined in the Registration Rights
Agreement), if any) on all Notes may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Notes; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable upon redemption thereof, or impair the right of any Noteholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Notes, or modify the provisions of the Indenture with
respect to the subordination of the Notes in a manner adverse to the Noteholders
in any material respect, or change the obligation of the Company to redeem any
Note upon the happening of a Fundamental Change (as defined in the Indenture) in
a manner adverse to the holder of the Notes, or impair the right to convert the
Notes pursuant to the terms set forth in the Indenture, including Section 15.06
thereof,
A-6
without the consent of the holder of each Note so affected or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to consent to
any such supplemental indenture, without the consent of the holders of all Notes
then outstanding. Subject to the provisions of the Indenture, the holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in the payment
of interest (including Liquidated Damages, if any) or any premium on, or the
principal of, any of the Notes, or a failure by the Company to convert any Notes
pursuant to Article 15 of the Indenture, or a default in the payment of the
redemption price or any Additional Payment (as defined in the Indenture)
pursuant to Article 3 of the Indenture, or a default in respect of a covenant or
provisions of the Indenture which under Article 11 of the Indenture cannot be
modified without the consent of the holders of each or all Notes then
outstanding or affected thereby. Any such consent or waiver by the holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Note and
any Notes which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.
The indebtedness evidenced by the Notes is, to the extent and in the manner
provided in the Indenture, expressly subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of the Indenture or thereafter incurred, and
this Note is issued subject to the provisions of the Indenture with respect to
such subordination. Each holder of this Note, by accepting the same, agrees to
and shall be bound by such provisions and authorizes the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact for such
purpose.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
(including Liquidated Damages, if any) on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any integral multiple of $1,000. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
A-7
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.
The Notes may be provisionally redeemed by the Company, in whole or in
part, at any time prior to August 19, 2004, at a redemption price equal to
$1,000 per $1,000 aggregate principal amount of Notes to be redeemed plus
accrued and unpaid interest, if any (including Liquidated Damages, if any) to
the date of redemption if (i) the Closing Price of the Common Stock shall have
exceeded 150% of the Conversion Price then in effect for at least 20 Trading
Days in any consecutive 30-Trading Day period and (ii) if the redemption would
occur before August 8, 2003, the Shelf Registration Statement (as defined in the
Registration Rights Agreement) covering resales of the Notes, and the Common
Stock issuable upon conversion of the Notes, is effective and available for use
and is expected to remain effective and available for use until the 30/th/ day
immediately following the date of redemption. The Company shall mail notice of
any provisional redemption within five Trading Days of a consecutive 30-Trading
Day period.
Upon any such provisional redemption, the Company shall make an Additional
Payment with respect to the Notes called for redemption to holders as of the
date of mailing of the notice of provisional redemption in an amount equal to
the total aggregate amount of interest that would have been payable on the Notes
from the date of redemption to August 19, 2004. The Company shall make the
Additional Payment on all Notes called for provisional redemption, including any
Notes converted after the date of mailing of the notice of provisional
redemption and prior to the date of redemption.
At any time on or after August 19, 2004, and prior to maturity, the Notes
may be redeemed at the option of the Company, in whole or in part, upon notice
as set forth in Section 3.02 of the Indenture, at the following redemption
prices (expressed as percentages of the principal amount), together in each case
with accrued and unpaid interest, if any (including Liquidated Damages, if any)
to, but excluding, the date fixed for redemption:
PERIOD REDEMPTION PRICE
Beginning on August 19, 2004 and ending on August 14, 2005.......... 101.70%
Beginning on August 15, 2005 and ending on August 14, 2006.......... 100.85%
and 100% on August 15, 2006; provided, however, that if the date fixed for
redemption is on a February 15 or August 15, then the interest payable on such
date shall be paid to the holder of record on the preceding February 1 or August
1, respectively.
The Company may not give notice of any redemption of the Notes if a default
in the payment of interest or premium, if any, on the Notes has occurred and is
continuing.
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The Notes are not subject to redemption through the operation of any
sinking fund.
If a Fundamental Change occurs at any time prior to maturity of the Notes,
the Notes will be redeemable on the 30th day after notice thereof (the
"Repurchase Date") at the option of the holder of the Notes at a redemption
price equal to 100% of the principal amount thereof, together with accrued
interest to (but excluding) the date of redemption; provided, however, that, if
such Repurchase Date is a February 15 or August 15, the interest payable on such
date shall be paid to the holder of record of the Notes on the preceding
February 1 or August 1, respectively. The Notes will be redeemable in multiples
of $1,000 principal amount. The Company shall mail to all holders of record of
the Notes a notice of the occurrence of a Fundamental Change and of the
redemption right arising as a result thereof on or before the 10th day after the
occurrence of such Fundamental Change. For a Note to be so redeemed at the
option of the holder, the Company must receive at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, such Note with the form entitled "Option to Elect Repayment Upon a
Fundamental Change" on the reverse thereof duly completed, together with such
Note, duly endorsed for transfer, on or before the 30th day after the date of
such notice of a Fundamental Change (or if such 30th day is not a Business Day,
the immediately succeeding Business Day).
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after the original issuance of any Notes
through the close of business on the final maturity date of the Notes, or, as to
all or any portion hereof called for redemption, prior to the close of business
on the Business Day immediately preceding the date fixed for redemption (unless
the Company shall default in payment due upon redemption thereof), to convert
the principal hereof or any portion of such principal which is $1,000 or an
integral multiple thereof into that number of shares of the Company's Common
Stock (as such shares shall be constituted at the date of conversion) obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $29.04, as may adjusted from time to time as provided
in the Indenture, upon surrender of this Note, together with a conversion notice
as provided in the Indenture (the form entitled "Conversion Notice" on the
reverse hereof), to the Company at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or at
the option of such holder, the Corporate Trust Office, and, unless the shares
issuable on conversion are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. No
adjustment in respect of interest on any Note converted or dividends on any
shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence and with respect to Additional Payments
as specified above. If this Note (or
A-9
portion hereof) is surrendered for conversion during the period from the close
of business on any record date for the payment of interest to the close of
business on the Business Day preceding the following interest payment date and
(x) has not been called for redemption on a redemption date that occurs during
such period and (y) is not to be redeemed in connection with a Fundamental
Change on a Repurchase Date that occurs during such period, this Note (or
portion hereof being converted) must be accompanied by an amount, in New York
Clearing House funds or other funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted; provided, however, that no such payment shall be required if there
shall exist at the time of conversion a default in the payment of interest on
the Notes. No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Note or Notes for conversion. A Note in respect of which a
holder is exercising its right to require redemption upon a Fundamental Change
may be converted only if such holder withdraws its election to exercise such
right in accordance with the terms of the Indenture. Any Notes called for
redemption, unless surrendered for conversion by the holders thereof on or
before the close of business on the Business Day preceding the date fixed for
redemption, may be deemed to be purchased from the holders of such Notes for an
amount equal to the applicable redemption price, together with accrued but
unpaid interest (including Liquidated Damages, if any) to (but excluding) the
date fixed for redemption, by one or more investment banks or other purchasers
who may agree with the Company (i) to purchase such Notes from the holders
thereof and convert them into shares of the Company's Common Stock and (ii) to
make payment for such Notes as aforesaid to the Trustee in trust for the
holders.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof; subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note Registrar may deem and treat the registered holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note Registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note Registrar shall be affected by any notice to the contrary. All payments
made
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to or upon the order of such registered holder shall, to the extent of the sum
or sums paid, satisfy and discharge liability for monies payable on this Note.
To the extent permitted by law, no recourse for the payment of the
principal of or any premium or interest on this Note, or for any claim based
hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or any
supplemental indenture or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
This Note shall be deemed to be a contract made under the laws of New York,
and for all purposes shall be construed in accordance with the laws of New York,
without regard to principles of conflicts of laws.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
A-11
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations.
TEN COM = tenants in common
UNIF GIFT MIN ACT = Uniform Gift to Minors Act
TEN ENJ = tenants by the entireties
CUST = custodian
JT TEN = joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
A-12
CONVERSION NOTICE
TO: LTX CORPORATION
STATE STREET BANK AND TRUST COMPANY
The undersigned registered owner of this Note hereby irrevocably exercises
the option to convert this Note, or the portion thereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of LTX
Corporation in accordance with the terms of the Indenture referred to in this
Note, and directs that the shares issuable and deliverable upon such conversion,
together with any check in payment for fractional shares and any Notes
representing any unconverted principal amount hereof, be issued and delivered to
the registered holder hereof unless a different name has been indicated below.
If shares or any portion of this Note not converted are to be issued in the name
of a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Note.
Dated: _______________
_____________________
_____________________
Signature(s)
Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
________________________
Signature Guarantee
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Fill in the registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the registered
holder:
__________________________________
(Name)
__________________________________
(Street Address)
__________________________________
(City, State and Zip Code)
__________________________________
Please print name and address
Principal amount to be converted
(if less than all):
__________________________________
Social Security or Other Taxpayer
Identification Number:
__________________________________
A-14
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
TO: LTX CORPORATION
STATE STREET BANK AND TRUST COMPANY
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from LTX Corporation (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note at the price of 100% of such entire principal amount or portion thereof,
together with accrued interest to, but excluding, such repayment date, to the
registered holder hereof.
Dated: _____________
___________________
___________________
Signature(s)
NOTICE: The above signatures of the holder(s)
hereof must correspond with the name as written
upon the face of the Note in every particular
without alteration or enlargement or any change
whatever.
Principal amount to be repaid (if less than all):
______________________________
______________________________
Social Security or Other Taxpayer
Identification Number
A-15
ASSIGNMENT
For value received __________________________________________ hereby
sell(s) assign(s) and transfer(s) unto ______________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
____________________________________ attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.
In connection with any transfer of the Note prior to the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant to
a registration statement that has been declared effective under the Securities
Act), the undersigned confirms that such Note is being transferred:
[_] To LTX Corporation or a subsidiary thereof; or
[_] Inside the United States pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
[_] Inside the United States to an Institutional Accredited Investor pursuant to
and in compliance with the Securities Act of 1933, as amended; or
[_] Outside the United States in compliance with Rule 904 under the Securities
Act of 1933, as amended; or
[_] Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
[_] The transferee is an Affiliate of the Company.
Dated: _________________
_____________________________
_____________________________
Signature(s)
Signature(s) must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the Note
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program
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("STAMP") or such other "signature
guarantee program" as may be determined
by the Note Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.
__________________________
Signature Guarantee
NOTICE: The signature of the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
A-17
EXHIBIT B
LTX Corporation
LTX Park
University Avenue
Westwood, Massachusetts 02090
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
Ladies and Gentlemen:
In connection with our proposed purchase of 4 1/4 % Convertible
Subordinated Notes due 2006 (the "Notes") of LTX Corporation, a Massachusetts
corporation (the "Company"), we confirm that:
(i) we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities
Act"), or an entity in which all of the equity owners are accredited investors
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
(an "Institutional Accredited Investor");
(ii) (A) any purchase of Notes by us will be for our own account or for the
account of one or more other Institutional Accredited Investors or as fiduciary
for the account of one or more trusts, each of which is an "accredited investor"
within the meaning of Rule 501(a)(7) under the Securities Act and for each of
which we exercise sole investment discretion or (B) we are a "bank," within the
meaning of Section 3(a)(2) of the Securities Act, or a "savings and loan
association" or other institution described in Section 3(a)(5)(A) of the
Securities Act that is acquiring Notes as fiduciary for the account of one or
more institutions for which we exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
Notes; and
(iv) we are not acquiring Notes with a view to distribution thereof or
with any present intention of offering or selling Notes or the Common Stock of
the Company issuable upon conversion thereof, except as permitted below;
provided that the disposition of our property and property of any accounts for
which we are acting as fiduciary shall remain at all times within our control.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
B-1
Securities Act and that the Notes and the Common Stock of the Company issuable
upon conversion thereof have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we acquire
any Notes, that if in the future we decide to resell or otherwise transfer such
Notes or the Common Stock of the Company issuable upon conversion thereof, such
Notes or Common Stock of the Company may be resold or otherwise transferred only
(i) to the Company or any subsidiary thereof, (ii) inside the United States to a
person who is a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in a transaction meeting the requirements of Rule 144A,
(iii) inside the United States to an Institutional Accredited Investor which,
prior to such transfer, furnishes to the Trustee for the Notes (or in the case
of Common Stock of the Company, the transfer agent therefor) a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of such securities (the form of which letter can be obtained from
the Trustee or the transfer agent, as the case may be), (iv) outside the United
States in a transaction meeting the requirements of Rule 904 under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if applicable), or (vi) pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer), and in each case, in
accordance with any applicable securities law of any state of the United States
and in accordance with the legends set forth on the Notes or the Common Stock of
the Company issuable upon conversion thereof. We further agree to provide any
person purchasing any of the Notes or the Common Stock of the Company issuable
upon conversion thereof (other than pursuant to clause (v) or (vi) above) from
us a notice advising such purchaser that resales of such securities are
restricted as stated herein. We understand that the Trustee and transfer agent
for the Notes and the Common Stock of the Company will not be required to accept
for registration of transfer any Notes or any Common Stock of the Company issued
upon conversion of the Notes, except upon presentation of evidence satisfactory
to the Company that the foregoing restrictions on transfer have been complied
with. We further understand that any Notes and any Common Stock of the Company
issued upon conversion of the Notes will be in the form of definitive physical
certificates and that such certificates will bear a legend reflecting the
substance of this paragraph other than certificates transferred pursuant to (v)
or (vi) above.
The Company and the Trustee and their respective counsel are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
B-2
(Name of Purchaser)
By: ______________________________
Name: ____________________________
Title: ___________________________
Address: _________________________
__________________________________
B-3