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EXHIBIT 4.1
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SMARTALK TELESERVICES, INC.,
ISSUER,
AND
WILMINGTON TRUST COMPANY
TRUSTEE
INDENTURE
Dated as of September 17, 1997
$150,000,000
5-3/4% Convertible Subordinated Notes due 2004
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE .................................................. 1
SECTION 1.1 Definitions ..............................................................1
SECTION 1.2 Incorporation by Reference of TIA.........................................9
SECTION 1.3 Rules of Construction.....................................................10
ARTICLE II
THE SECURITIES................................................................................10
SECTION 2.1 Form and Dating...........................................................10
SECTION 2.2 Execution and Authentication..............................................11
SECTION 2.3 Registrar and Paying Agent................................................12
SECTION 2.4 Paying Agent to Hold Assets in Trust......................................12
SECTION 2.5 Securityholder Lists......................................................13
SECTION 2.6 Transfer and Exchange.....................................................13
SECTION 2.7 Replacement Securities....................................................19
SECTION 2.8 Outstanding Securities....................................................20
SECTION 2.9 Treasury Securities.......................................................20
SECTION 2.10 Temporary Securities......................................................20
SECTION 2.11 Cancellation..............................................................21
SECTION 2.12 Defaulted Interest........................................................21
ARTICLE III
REDEMPTION....................................................................................22
SECTION 3.1 Right of Redemption.......................................................22
SECTION 3.2 Notices to Trustee........................................................22
SECTION 3.3 Selection of Securities to Be Redeemed....................................23
SECTION 3.4 Notice of Redemption......................................................23
SECTION 3.5 Effect of Notice of Redemption............................................24
SECTION 3.6 Deposit of Redemption Price...............................................25
SECTION 3.7 Securities Redeemed in Part...............................................25
ARTICLE IV
COVENANTS.....................................................................................26
SECTION 4.1 Payment of Securities.....................................................26
SECTION 4.2 Maintenance of Office or Agreement........................................26
SECTION 4.3 Corporate Existence.......................................................27
SECTION 4.4 Payment of Taxes and Other Claims.........................................27
SECTION 4.5 Maintenance of Properties and Insurance...................................27
SECTION 4.6 Compliance Certificate; Notice of Default.................................28
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SECTION 4.7 Reports...................................................................29
SECTION 4.8 Limitation on Status as Investment Company................................29
SECTION 4.9 Waiver of Stay, Extension or Usury Laws...................................29
SECTION 4.10 Rule 144A Information Requirement.........................................29
ARTICLE V
SUCCESSOR CORPORATION.........................................................................30
SECTION 5.1 Limitation on Merger, Sale or Consolidation...............................30
SECTION 5.2 Successor Corporation Substituted.........................................30
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES................................................................30
SECTION 6.1 Events of Default.........................................................31
SECTION 6.2 Acceleration of Maturity Date; Rescission and Annulment...................33
SECTION 6.3 Collection of Indebtedness and Suits for
Enforcement by Trustee................................................34
SECTION 6.4 Trustee May File Proofs of Claim..........................................35
SECTION 6.5 Trustee May Enforce Claims Without Possession of Securities...............36
SECTION 6.6 Priorities................................................................36
SECTION 6.7 Limitation on Suits.......................................................36
SECTION 6.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest and Liquidated Damages...................................37
SECTION 6.9 Rights and Remedies Cumulative............................................37
SECTION 6.10 Delay or Omission Not Waiver..............................................38
SECTION 6.11 Control by Holders........................................................38
SECTION 6.12 Waiver of Past Default....................................................38
SECTION 6.13 Undertaking for Costs.....................................................39
SECTION 6.14 Restoration of Rights and Remedies........................................39
ARTICLE VII
TRUSTEE.......................................................................................39
SECTION 7.1 Duties of Trustee.........................................................39
SECTION 7.2 Rights of Trustee.........................................................41
SECTION 7.3 Individual Rights of Trustee..............................................42
SECTION 7.4 Trustee's Disclaimer......................................................42
SECTION 7.5 Notice of Default.........................................................42
SECTION 7.6 Reports by Trustee to Holders.............................................42
SECTION 7.7 Compensation and Indemnity................................................43
SECTION 7.8 Replacement of Trustee....................................................44
SECTION 7.9 Successor Trustee by Merger, Etc..........................................45
SECTION 7.10 Eligibility; Disqualification ............................................45
SECTION 7.11 Preferential Collection of Claims Against Company ........................45
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ARTICLE VIII
SATISFACTION AND DISCHARGE....................................................................45
SECTION 8.1 Satisfaction and Discharge of Indenture...................................45
SECTION 8.2 Repayment to the Company..................................................46
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS...........................................................46
SECTION 9.1 Supplemental Indentures Without Consent of Holders........................46
SECTION 9.2 Amendments, Supplemental Indentures and Waivers
with Consent of Holders...................................................47
SECTION 9.3 Compliance with TIA.......................................................48
SECTION 9.4 Revocation and Effect of Consents.........................................48
SECTION 9.5 Notation on or Exchange of Securities.....................................49
SECTION 9.6 Trustee to Sign Amendments, Etc...........................................49
ARTICLE X
MEETINGS OF SECURITYHOLDERS...................................................................49
SECTION 10.1 Purposes for Which Meetings May Be Called.................................49
SECTION 10.2 Manner of Calling Meetings................................................50
SECTION 10.3 Calling of Meetings by the Company or Holders.............................50
SECTION 10.4 Who May Attend and Vote at Meetings.......................................51
SECTION 10.5 Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment.......................................51
SECTION 10.6 Voting, at the Meeting and Record to Be Kept..............................52
SECTION 10.7 Exercise of Rights of Trustee or Securityholders May Not
Be Hindered or Delayed by Call of Meeting.................................52
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL.........................................52
SECTION 11.1 Repurchase of Securities at Option of the Holder
Upon a Change of Control..................................................52
ARTICLE XII
SUBORDINATION................................................................................55
SECTION 12.1 Securities Subordinated to Senior Indebtedness............................55
SECTION 12.2 No Payment on Securities in Certain Circumstances.........................55
SECTION 12.3 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization................57
SECTION 12.4 Securityholders to Be Subrogated to Rights of Holders of
Senior Indebtedness.......................................................58
SECTION 12.5 Obligations of the Company Unconditional..................................58
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SECTION 12.6 Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice......................................................59
SECTION 12.7 Application by Trustee of Assets Deposited with It........................59
SECTION 12.8 Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness..........................59
SECTION 12.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities...............................................60
SECTION 12.10 Right of Trustee to Hold Senior Indebtedness..............................60
SECTION 12.11 Article XII Not to Prevent Events of Default..............................60
SECTION 12.12 No Fiduciary Duty of Trustee to Holders of
Senior Indebtedness.......................................................61
ARTICLE XIII
CONVERSION OF SECURITIES......................................................................61
SECTION 13.1 Conversion Privilege......................................................61
SECTION 13.2 Exercise of Conversion Privilege..........................................61
SECTION 13.3 Fractional Interests......................................................62
SECTION 13.4 Conversion Price..........................................................63
SECTION 13.5 Adjustment of Conversion Price............................................63
SECTION 13.6 Continuation of Conversion Privilege in Case of Reclassification,
Change, Merger, Consolidation or Sale of Assets...........................68
SECTION 13.7 Notice of Certain Events..................................................69
SECTION 13.8 Taxes on Conversion.......................................................70
SECTION 13.9 Company to Provide Stock..................................................70
SECTION 13.10 Disclaimer of Responsibility for Certain Matters..........................71
SECTION 13.11 Return of Funds Deposited for Redemption of Converted
Securities................................................................71
ARTICLE XIV
MISCELLANEOUS................................................................................71
SECTION 14.1 TIA Controls..............................................................71
SECTION 14.2 Notices...................................................................72
SECTION 14.3 Communications by Holders with Other Holders..............................73
SECTION 14.4 Certificate and Opinion as to Conditions Precedent........................73
SECTION 14.5 Statements Required in Certificate or Opinion.............................73
SECTION 14.6 Rules by Trustee, Paying Agent, Registrar.................................74
SECTION 14.7 Legal Holidays............................................................74
SECTION 14.8 Governing Law.............................................................74
SECTION 14.9 No Adverse Interpretation of Other Agreements.............................74
SECTION 14.10 No Recourse Against Others................................................74
SECTION 14.11 Successors................................................................74
SECTION 14.12 Duplicate Originals.......................................................74
SECTION 14.13 Severability..............................................................75
SECTION 14.14 Table of Contents, Headings, Etc..........................................75
SECTION 14.15 Qualification of Indenture................................................75
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SECTION 14.16 Registration Rights.........................................................75
SIGNATURES................................................................................76
EXHIBIT A - FORM OF SECURITY..............................................................A-1
EXHIBIT B - FORM OF INVESTOR LETTER OF REPRESENTATION.....................................B-1
EXHIBIT C - FORM OF CONVERSION NOTICE.....................................................C-1
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CROSS REFERENCE TABLE
TIA Indenture
Section Section
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314(a)(4) ..................................................4.6
310(a)(1),(2) and (5) .....................................7.10
310(b) ....................................................7.10
311(a)(b) .................................................7.11
312(b) ....................................................14.3
312(c) ....................................................14.3
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INDENTURE, dated as of September 17, 1997, between SmarTalk TeleServices,
Inc., a California corporation (the "Company"), and Wilmington Trust Company, a
Delaware banking corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 5 3/4%
Convertible Subordinated Notes due 2004:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section
6.2.
"Affiliate" means: (i) any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, (ii) any spouse, immediate family member or other relative who has the
same principal residence of any person described in clause (i) above, and (iii)
any trust in which any person described in clause (i) or (ii) above has a
beneficial interest. For purposes of this definition, the term "control" means
the power to direct the management and policies of a person, directly or through
one or more intermediaries, whether through the ownership of voting securities,
by contract, or otherwise.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.
"Beneficial Owner" for purposes of the definition of Change of
Control has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act (as in effect on the Issue Date), whether or not applicable, except
that a "person" shall be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time or upon the occurrence of certain
events.
"Board of Directors" means, with respect to any person, the Board
of Directors of such person or any committee of the Board of Directors of such
person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such person.
"Board Resolution" means, with respect to any person, a duly
adopted resolution of the Board of Directors of such person.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease to which
such Person is a party that is required to be classified and accounted for as a
capital lease obligation under GAAP.
"Capital Stock" means, with respect to any corporation, any and
all shares, interests, rights to purchase (other than convertible or
exchangeable Indebtedness), warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"Cash" means 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.
"Change of Control" means: (i) an event or series of events as a
result of which any "person" or "group" (as such terms are used in Sections
13(d)(3) and 14(d) of the Exchange Act) (excluding the Company or any
wholly-owned subsidiary thereof) is or becomes, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
whether or not applicable) of more than 50% of the combined voting power of the
then outstanding securities entitled to vote generally in elections of
directors, managers or trustees, as applicable, of the Company or any successor
entity; (ii) the completion of any consolidation with or merger of the Company
into any other Person, or conveyance, transfer or lease by the Company of all or
substantially all of its assets to any Person, or any merger of any other Person
into the Company in a single transaction or series of related transactions, and,
in the case of any such transaction or series of related transactions, the
outstanding Common Stock of the Company is changed or exchanged as a result,
unless as to any such consolidation, merger, conveyance, or transfer of lease
the stockholders of the Company immediately before such transaction own,
directly or indirectly, immediately following such transaction, at least a
majority of the combined voting power of the outstanding voting securities of
the Person resulting from such transaction in substantially the same proportion
as their ownership of the Voting Stock immediately before such transaction; or
(iii) such time as the Continuing Directors do not constitute a majority of the
Board of Directors of the Company (or, if applicable, a successor corporation to
the Company); provided that a Change of Control shall not be deemed to have
occurred if either (x) the last sale price of the Common Stock for any five
Trading Days during the 10 Trading Days immediately preceding the Change of
Control is at least equal to 105% of the Conversion Price in effect on such day,
or (y) with respect to a merger or consolidation otherwise constituting a Change
of Control described in clause (ii) above, at least 90% of the consideration
(excluding cash payments for dissenting and fractional shares) in such
transaction or transactions consists of common stock or securities convertible
into common stock that are, or upon issuance will be, traded on a United States
national securities exchange or approved for quotation on the Nasdaq National
Market.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's common stock, no par value, or
as such stock may be reconstituted from time to time.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the Indenture, and thereafter means such
successor.
"Continuing Director" means at any date a member of the Company's
Board of Directors who was a member of such board on the Issue Date or who was
nominated or elected by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election to the
Company's Board of Directors was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such nomination or
election.
"Conversion Price" shall have the meaning specified in Section
13.4.
"Conversion Shares" shall have the meaning specified in Section
13.5.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Date of Conversion" shall have the meaning specified in Section
13.2.
"Default" means any event or condition that is, or after notice
or passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section
2.12.
"Definitive Securities" means Securities that are in the form of
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 1 and 4 thereof.
"Depositary" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Capital Stock" means, with respect to the Company,
Capital Stock of the Company that, by its terms or by the terms of any security
into which it is convertible, exercisable or exchangeable, is, or upon the
happening of an event or the passage of time would be, required to be redeemed
or repurchased (including at the option of the holder thereof) by the Company,
in whole or in part, on or prior to the Stated Maturity of the Notes, provided,
that only the portion of such Capital Stock which is so convertible,
exercisable,
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exchangeable or redeemable or subject to repurchase prior to such Stated
Maturity shall be deemed to be Disqualified Capital Stock.
"Distribution Date" shall have the meaning specified in Section
13.5.
"DTC" shall have the meaning specified in Section 2.3.
"Event of Default" shall have the meaning specified in Section
6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Expiration Time" shall have the meaning specified in Section
13.5.
"GAAP" means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board
("FASB") or in such other statements by such other entity as approved by a
significant segment of the accounting profession which are in effect in the
United States; provided, however, that for purposes of determining compliance
with covenants in the Indenture, "GAAP" means such generally accepted accounting
principles which are in effect as of the date of determination.
"Global Security" means a Security that contains the paragraph
referred to in footnote 1 and the additional schedule referred to in footnote 4
to the form of Security attached hereto as Exhibit A.
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i) in
respect of borrowed money (whether or not the lender has recourse to all or any
portion of the assets of such person ), (ii) evidenced by credit or loan
agreements, bonds, notes, debentures or similar instruments (including, without
limitation, notes or similar instruments given in connection with the
acquisition of any business, properties or assets of any kind), (iii) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks, (iv)
for the payment of money relating to a Capitalized Lease Obligation, or (v)
evidenced by a letter of credit or a reimbursement obligation of such person
with respect to any letter of credit; (b) all obligations of such person issued
or assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (c) all net obligations of such person under Interest Swap and
Hedging Obligations; (d) all liabilities of others of the kind described in the
preceding clauses (a), (b) or (c) that such person has guaranteed or that is
otherwise its legal liability, or which is secured by a lien on property of such
person, and all obligations to purchase, redeem or acquire any Capital
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Stock; and (e) any and all deferrals, renewals, extensions, modifications,
replacements, restatements, refinancings and refundings (whether direct or
indirect) of, or any indebtedness or obligation issued in exchange for, any
liability of the kind described in any of the preceding clauses (a), (b), (c) or
(d), or this clause (e), whether or not between or among the same parties.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Purchasers" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation and Salomon Brothers Inc.
"Interest Payment Date" means the stated due date of an
installment of interest on the Securities.
"Interest Swap and Hedging Obligation" means the obligations of
any Person under any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement or other interest rate hedge agreement, interest
rate collar agreement or other similar agreement or arrangement to which such
Person is a party or beneficiary.
"Issue Date" means the date of first issuance of the Securities
under this Indenture.
"Junior Securities" means any Qualified Capital Stock and any
Indebtedness of the Company that is fully subordinated in right of payment to
the Securities and has no scheduled installment of principal due, by redemption,
sinking fund payment or otherwise, on or prior to the Stated Maturity of the
Securities.
"Last Sale Price" shall have the meaning specified in Section
13.3.
"Legal Holiday" shall have the meaning specified in Section 14.7.
"Lien" means any mortgage, lien, pledge, charge, security
interest or other encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement.
"non-electing share" shall have the meaning specified in Section
13.6.
"Non-Payment Default" shall have the meaning specified in Section
12.2.
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"Notice of Default" shall have the meaning specified in Section
6.1(3), (4) or (5)
"Offer" shall have the meaning specified in Section 13.5.
"Officer" means, with respect to the Company, the Chief Executive
Officer, the President, any Executive Vice President, any Vice President, the
Chief Financial Officer, the Treasurer, the Controller, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers or by an Officer and an Assistant Secretary
of the Company and otherwise complying with the requirements of Section 2.2, if
applicable, and Sections 14.4 and 14.5.
"Opinion of Counsel" means a written opinion from legal counsel,
who may be an employee of or counsel to the Company, and who is reasonably
acceptable to the Trustee and which complies with the requirements of Sections
14.4 and 14.5.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Payment Blockage Period" shall have the meaning specified in
Section 12.2.
"Payment Default" shall have the meaning specified in Section
12.2.
"Payment Notice" shall have the meaning specified in Section
12.2.
"Person" or "person" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust, municipality or other entity.
"principal" of any Indebtedness means the principal of such
Indebtedness plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Purchase Agreement" means that certain Purchase Agreement, dated
September 12, 1997, by and among the Company and the Initial Purchasers, as such
agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Purchased Shares" shall have the meaning specified in Section
13.5.
"Qualified Capital Stock" means any Capital Stock of the Company
that is not Disqualified Capital Stock.
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"Record Date" means a Record Date specified in the Securities
whether or not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security, which shall include, without duplication, in each case,
accrued and unpaid interest and Liquidated Damages, if any, to and including the
Redemption Date.
"Registrar" shall have the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated the date hereof, by and among the Initial Purchasers and the
Company, as such agreement may be amended, modified or supplemented from time to
time in accordance with the terms thereof.
"Repurchase Date" shall have the meaning specified in Section
11.1.
"Repurchase Offer" shall have the meaning specified in Section
11.1.
"Repurchase Offer Period" shall have the meaning specified in
Section 11.1.
"Repurchase Price" shall have the meaning specified in Section
11.1.
"Repurchase Put Date" shall have the meaning specified in Section
11.1.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the 5-3/4% Convertible
Subordinated Notes due 2004, as supplemented from time to time in accordance
with the terms hereof, issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Senior Indebtedness" means all obligations of the Company to pay
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
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connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, any Indebtedness of the Company, whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company, unless the instrument
creating or evidencing such Indebtedness provides that such Indebtedness is not
senior or superior in right of payment to the Securities or which is pari passu
with, or subordinated to, the Securities; provided that in no event shall Senior
Indebtedness include (a) Indebtedness of the Company owed or owing to any
Subsidiary of the Company or any officer, director or employee of the Company or
any Subsidiary of the Company, (b) Indebtedness representing or with respect to
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 or (c) any liability for taxes owed or owing by the Company or any
Subsidiary of the Company.
"Shelf Registration Statement" shall have the meaning specified
in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which is a
"significant subsidiary" of the Company within the meaning of Rule 1.02(w) of
Regulation S-X promulgated by the Commission as in effect as of the date of the
Indenture.
"Special Record Date" for payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means
September 15, 2004.
"Subsidiary" with respect to any person, means: (i) a corporation
a majority of whose Capital Stock with voting power normally entitled to vote in
the election of directors is at the time, directly or indirectly, owned by such
person, by such person and one or more Subsidiaries of such person or by one or
more Subsidiaries of such person; (ii) a partnership in which such person or a
Subsidiary of such person is, at the time, a general partner and owns alone or
together with one or more Subsidiaries of such person a majority of the
partnership interests; or (iii) any other person (other than a corporation) in
which such person, one or more Subsidiaries of such person, or such person and
one or more Subsidiaries of such person, directly or indirectly, at the date of
determination thereof, has at least a majority ownership interest.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the Nasdaq
National Market (or, if the Common Stock is not admitted to trading thereon, on
the principal national securities exchange on which the Common Stock is at that
time listed or admitted to trading).
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"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.6 hereof.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
division (or any successor group) of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"U.S. Government Obligations" means direct non-callable
obligations of, or noncallable obligations guaranteed by, the United States of
America for the payment of which obligation or guarantee the full faith and
credit of the United States of America is pledged.
"Voting Stock" means the combined voting power of the then
outstanding securities entitled to vote generally in election of directors,
managers or trustees, as applicable, of the Company or any successor entity.
SECTION 1.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them thereby.
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SECTION 1.3 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating.
The Securities and the Trustee's certificate of authentication,
in respect thereof, shall be substantially in the form of Exhibit A hereto,
which Exhibit is part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not contained
in the form of Security attached as Exhibit A hereto shall be delivered in
writing to the Trustee. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the forms of Securities
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.
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SECTION 2.2 Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall be impressed, affixed, imprinted or
reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless and
the Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate the Securities for original issue in
the aggregate principal amount of up to $150,000,000 upon a written order of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Securities to be authenticated and the date on which the
Securities are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $150,000,000, except as provided in
Section 2.7; provided, that Securities in excess of $125,000,000 shall not be
issued other than pursuant to the over-allotment option granted by the Company
to the Initial Purchasers as provided in the Purchase Agreement. Upon the
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Securities in substitution of Securities originally
issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of their respective Subsidiaries.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Security is registered as the
owner of such Security for the purposes of receiving payment of principal of and
(subject to the provisions of this Indenture and the Securities with respect to
record dates) interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice of the
contrary.
Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
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SECTION 2.3 Registrar and Paying Agent.
The Company shall maintain or cause to be maintained through the
Trustee an office or agency in the Borough of Manhattan, The City of New York,
where Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent") and where notices and demands to or upon the Company in
respect of the Securities may be served. The Company may act as Registrar or
Paying Agent. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may have one or more co-Registrars and one or
more additional Paying Agents. The term "Paying Agent" includes any additional
Paying Agent. The Company hereby initially appoints the Trustee as Registrar,
Paying Agent and conversion agent, and the Trustee hereby initially agrees so to
act.
The Company shall enter into an appropriate written agency
agreement with any Agent not a party to this Indenture, which agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
SECTION 2.4 Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders all assets held by the Paying Agent for the payment of principal of,
premium, if any, interest on or Liquidated Damages, if any, with respect to, the
Securities (whether such assets have been distributed to it by the Company or
any other obligor on the Securities), and shall notify the Trustee in writing of
any Default in making any such payment. If either of the Company or a Subsidiary
of the Company acts as Paying Agent, it shall, on or prior to the due date for
any such payment, segregate such assets and hold them as a separate trust fund
for the benefit of the Holders. The Company at any time may require a Paying
Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent shall
have no further liability for such assets.
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SECTION 2.5 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the fifth Business Day preceding each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee reasonably may require of the names and
addresses of Holders.
SECTION 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar or a co-Registrar with a
request: (x) to register the transfer of such Definitive Securities; or (y) to
exchange such Definitive Securities for an equal principal amount of Definitive
Securities of other authorized denominations; the Registrar or co-Registrar
shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the
Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) in the case of a Definitive Security that is a
Transfer Restricted Security, shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Definitive Security is being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect (in substantially the form set forth on the reverse
of the Security); or
(B) if such Definitive Security is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act, a certification to that effect (in substantially
the form set forth on the reverse of the Security); or
(C) if such Definitive Security is being transferred
in accordance with Regulation S under the Securities Act, a
certification to that effect (in substantially the form set forth
on the reverse of the Security) and if either the Registrar or
the Company so requests, an Opinion of Counsel satisfactory to
the Registrar or the Company, as the case may be, to the effect
that such transfer is in compliance with the Securities Act;
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(D) if such Definitive Security is being transferred
to an institutional investor that is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, a certification to that effect (in substantially
the form set forth on the reverse of the Security) accompanied by
a certificate in the form of Exhibit B to the Indenture to the
Trustee and if either the Registrar or the Company so requests,
an Opinion of Counsel satisfactory to the Registrar or the
Company, as the case may be, to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such Definitive Security is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form set forth on the reverse of the
Security) and if either the Registrar or the Company so requests,
an Opinion of Counsel satisfactory to the Registrar or the
Company, as the case may be, to the effect that such transfer is
in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer in form reasonably satisfactory to the Company and the Trustee, duly
executed by the Holder thereof or his attorney duly authorized in writing,
together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the
reverse of the Security, that such Definitive Security is being
transferred (x) to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under the
Securities Act or (y) in accordance with Regulation S under the
Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to make,
or to direct the Securities Custodian to make, an endorsement on the
Global Security to reflect an increase in the aggregate principal amount
of the Securities represented by the applicable Global Security;
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the appropriate Global
Security to be increased accordingly. If no Global Securities are then
outstanding, the Company shall execute and, upon receipt of an authentication
order in the form of an Officers' Certificate, the Trustee shall authenticate an
appropriate new Global Security in the appropriate principal amount.
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(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture (including
the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Security for
a Definitive Security.
(i) Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depositary from
the Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Security and upon receipt by the Trustee
of a written order or such other form of instructions as is customary
for the Depositary or the Person designated by the Depositary as having
such a beneficial interest in a Global Security only, the following
additional information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depositary as being the
Beneficial Owner, a certification from such person to that effect
(in substantially the form set forth on the reverse of the
Security); or
(B if such beneficial interest is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act, a certification to that effect from the
transferor (in substantially the form set forth on the reverse of
the Security); or
(C) if such beneficial interest is being transferred
in accordance with Regulation S under the Securities Act, a
certification to that effect (in substantially the form set forth
on the reverse of the Security) and if either the Registrar or
the Company so requests, an Opinion of Counsel satisfactory to
the Registrar or the Company, as the case may be, to the effect
that such transfer is in compliance with the Securities Act;
(D) if such beneficial interest is being transferred
to an institutional investor that is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, a certification to that effect (in substantially
the form set forth on the reverse of the Security) accompanied by
a certificate in the form of Exhibit B to the Indenture to the
Trustee and if either the Registrar or the Company so requests,
an Opinion of Counsel satisfactory to the Registrar or the
Company, as the case may be, to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the
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Securities Act, a certification to that effect from the
transferee or transferor (in substantially the form set forth
on the reverse of the Security) and if either the Registrar or
the Company so requests, an Opinion of Counsel satisfactory to
the Registrar or the Company, as the case may be, to the effect
that such transfer is in compliance with the Securities Act;
then the Registrar or the Securities Custodian, at the direction of the Trustee
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an authentication order
in the form of an Officers' Certificate, the Trustee will authenticate and
deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to subsection (d) this
Section 2.6 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
in writing. The Trustee shall deliver such Definitive Securities to the
persons in whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of
Depositary. If at any time:
(i) the Depositary for the Securities notifies the Company
and the Company notifies the Trustee in writing that the Depositary is
no longer willing or able to continue as Depositary for the Global
Securities and a successor Depositary for the Global Securities is not
appointed by the Company within 90 days after delivery of such notice;
or
(ii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause all Securities under this
Indenture to be in the form of Definitive Securities;
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will authenticate and deliver Definitive Securities, in an aggregate principal
amount equal to the principal amount of the Global Securities, in exchange for
such Global Securities.
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(g) Legends.
(i) Except as permitted by the following paragraph (ii),
each Transfer Restricted Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or substitution thereof) shall bear a legend in
substantially the following form:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THE SECURITIES EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF
AGREES THAT SUCH SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 UNDER THE SECURITIES ACT AND THAT IT AND ANY
SUBSEQUENT HOLDER WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) PURSUANT TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR," WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
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INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act or an
effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Security or that is represented by a Global
Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer
Restricted Security (1) in the case of a sale or transfer
pursuant to Rule 144 under the Securities Act, after delivery of
a customary opinion of counsel satisfactory to the Company to the
effect that such transfer is in compliance with the Securities
Act or (2) in the case of a sale or transfer pursuant to an
effective registration statement under the Securities Act; and
(B) any such Transfer Restricted Security represented
by a Global Security shall not be subject to the provisions set
forth in (i) above (such sales or transfers being subject only to
the provisions of subsection (c) of this Section 2.6 hereof).
(h) Cancellation and/or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to or retained and canceled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Security
is exchanged for Definitive Securities, redeemed, repurchased or canceled, the
principal amount of Securities represented by such Global
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Security shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction of the
Registrar, to reflect such reduction.
(i) Obligations with respect to Transfers and Exchanges of
Definitive Securities and Global Securities.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-Registrar's
written request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments, or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.10, 3.7, 9.5, or 11.1
(final paragraph)).
(iii) The Registrar or co-Registrar shall not be required
to register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III,
except the unredeemed portion of any Definitive Security being redeemed
in part, or (b) any Security for a period beginning 15 days before the
mailing of a notice of an offer to repurchase pursuant to Article XI
hereof or the mailing of a notice of redemption of Securities pursuant
to Article III hereof and ending at the close of business on the day of
such mailing.
SECTION 2.7 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security has
been lost, destroyed or wrongfully taken, the Company shall execute and, upon
receipt of an authentication order in the form of an Officers' Certificate, the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met. If required by the Trustee or the Company, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge such Holder for its reasonable, out-of-pocket expenses in replacing a
Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the conditions set forth in the preceding
paragraph.
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Every replacement Security issued pursuant to this Section 2.7 in
lieu of any mutilated, destroyed, lost or stolen Security shall constitute an
additional contractual obligation of the Company.
The provisions of this Section 2.7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies of any Holder with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 2.8 Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date the Paying Agent (other than the Company or
an Affiliate of the Company) holds Cash or U.S. Government Obligations (or if
the Company, acting as its own Paying Agent, shall have set aside and segregated
in trust, as provided in Section 2.4, Cash or U.S. Government Obligations)
sufficient to pay all of the principal and interest due on the Securities
payable on that date in accordance with Section 3.6 hereof and payment of the
Securities called for redemption is not otherwise prohibited pursuant to Article
XII hereof or otherwise, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.9 Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or an Affiliate of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that the Trustee knows are so owned shall be
disregarded.
SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be
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substantially in the form of definitive Securities but may have variations that
the Company reasonably and in good faith considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as permanent Securities
authenticated and delivered hereunder.
SECTION 2.11 Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, at the written direction of the Company,
shall dispose of all Securities surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.7, the Company may not issue new Securities
to replace Securities that have been paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 2.11, except as expressly
permitted in the form of Securities and as permitted by this Indenture.
SECTION 2.12 Defaulted Interest.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the person
in whose name that Security (or one or more predecessor Securities) is
registered at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (collectively,
herein called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant Record Date, and such Defaulted Interest may
be paid by the Company, at its election in each case, as provided in clause (1)
or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the Securities (or
their respective predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Paying
Agent an amount of Cash equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such Cash when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as provided
in this clause (1).
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Thereupon the Company, with the written consent of Trustee, shall fix a
Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee, in
the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at
his address as it appears in the Security register not less than 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
mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names the Securities (or their respective predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Security shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security.
ARTICLE III
REDEMPTION
SECTION 3.1 Right of Redemption.
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with Paragraph 5 of the Securities and
this Article III. The Company will not have the right to redeem any Securities
prior to September 15, 2000. On or after September 15, 2000, the Company will
have the right to redeem all or any part of the Securities at the Redemption
Prices specified in Paragraph 5 therein under the caption "Redemption," in each
case including accrued and unpaid interest and Liquidated Damages, if any, to,
but excluding, the Redemption Date.
SECTION 3.2 Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph
5 of the Securities, it shall deliver to the Trustee an Officers' Certificate,
setting forth the Redemption
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Date, the Redemption Price and the principal amount of Securities to be redeemed
and whether it wants the Trustee to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of
Securities to be redeemed pursuant to Paragraph 5 of the Securities by crediting
against any such redemption Securities it has not previously delivered to the
Trustee for cancellation, it shall deliver to the Trustee an officers'
Certificate, setting forth the amount of the reduction and deliver such
Securities with such Officers' Certificate.
The Company shall deliver each Officers' Certificate to the
Trustee provided for in this Section 3.2 at least 45 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee). Any such
notice may be canceled at any time prior to notice of such redemption being
mailed to any Holder and shall thereby be void and of no effect.
SECTION 3.3 Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
pro rata basis, by lot or by such other method as the Trustee shall determine to
be fair and appropriate and in such manner as complies with any applicable
depositary, legal and stock exchange or automated quotation system requirements.
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall promptly notify
the Company in writing of the Securities selected for redemption and, in the
case of any Security selected for partial redemption, the principal amount
thereof to be redeemed. Securities in denominations of $1,000 may be redeemed
only in whole. The Trustee may select for redemption portions (equal to $1,000
or any integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.4 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall send a notice of redemption to the Trustee and each
Holder whose Securities are to be redeemed. At the Company's request, the
Trustee shall give the notice of redemption in the Company's name and at the
Company's expense. Each notice for redemption shall identify the Securities to
be redeemed and shall state:
(1) the Redemption Date, and that the Securities
called for redemption may not be converted after the fifth Business Day
prior to the Redemption Date;
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(2) the Redemption Price, including the amount of
accrued and unpaid interest and Liquidated Damages, if any, to be paid
upon such redemption;
(3) the name, address and telephone number of the
Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice
to collect the Redemption Price;
(5) that, unless (a) the Company defaults in its
obligation to deposit Cash with the Paying Agent in accordance with
Section 3.6 hereof or (b) such redemption payment is prohibited pursuant
to Article XII hereof or otherwise, interest on, and Liquidated Damages,
if any, with respect to, Securities called for redemption cease to
accrue on and after the Redemption Date and the only remaining right of
the Holders of such Securities is to receive payment of the Redemption
Price, including accrued and unpaid interest and Liquidated Damages, if
any, to, but excluding, the Redemption Date, upon surrender to the
Paying Agent of the Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the
portion of the principal amount, equal to $1,000 or any integral
multiple thereof, of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if less than all the Securities are to be
redeemed, the identification of the particular Securities (or portion
thereof) to be redeemed, as well as the aggregate principal amount of
such Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be
redeemed; and
(9) that the notice is being sent pursuant to this
Section 3.4 and pursuant to the redemption provisions of Paragraph 5 of
the Securities.
SECTION 3.5 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price, including accrued and unpaid interest and Liquidated
Damages, if any, to, but excluding, the Redemption Date; provided that if the
Redemption Date is after a regular Record Date and on or prior to the
corresponding Interest
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Payment Date, the accrued interest and Liquidated Damages, if any, shall be
payable to the Holder of the redeemed Securities registered on the relevant
Record Date; and provided, further, that if a Redemption Date is a Legal
Holiday, payment shall be made on the next succeeding Business Day and no
interest or Liquidated Damages, if any, shall accrue for the period from such
Redemption Date to such succeeding Business Day.
SECTION 3.6 Deposit of Redemption Price.
Prior to the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company is acting as its own Paying Agent, on or prior
to the Redemption Date, set aside, segregate and hold in trust as provided in
Section 2.4) Cash sufficient to pay the Redemption Price of, including accrued
and unpaid interest on, and Liquidated Damages, if any, with respect to, all
Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation). The Paying Agent shall promptly
return to the Company any Cash so deposited which is not required for that
purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited under Article XII or otherwise, interest and
Liquidated Damages, if any, on the Securities to be redeemed will cease to
accrue on and after the applicable Redemption Date, whether or not such
Securities are presented for payment. Notwithstanding anything herein to the
contrary, if any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, Liquidated
Damages, if any, shall continue to accrue and be paid from the Redemption Date
if so required pursuant to Section 3 of the Registration Rights Agreement and
interest shall continue to accrue and be paid from the Redemption Date until
such payment is made on the unpaid principal, and, to the extent lawful, on any
interest not paid on such unpaid principal, in each case at the rate and in the
manner provided in Section 4.1 hereof and the Security.
SECTION 3.7 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities.
The Company shall pay the principal of, interest on, and Liquidated
Damages, if any, with respect to, the Securities on the dates and in the manner
provided in the Securities and the Registration Rights Agreement, as applicable.
An installment of principal of, interest on, or Liquidated Damages, if any, with
respect to, the Securities shall be considered paid on the date it is due if the
Trustee or Paying Agent holds for the benefit of the Holders (or if the Company
is acting as its own Paying Agent, the Company shall have set aside, segregated
and held in trust as provided in Section 2.4), on or before 10:00 a.m. New York
City time on that date, Cash deposited and designated for and sufficient to pay
the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
On or prior to the effective date of this Indenture, the Trustee
shall establish a segregated non-interest bearing corporate trust account (the
"Payment Account") maintained by the Trustee for the benefit of the Holders in
which, at any time while the Trustee is Paying Agent, all amounts paid to the
Trustee for the benefit of the Holders in respect of the Securities will be held
and from which the Trustee (if the Trustee is Paying Agent) shall make payments
to the Holders in accordance with this Indenture and the Securities. The Trustee
and any agent of the Trustee shall have exclusive control and sole right of
withdrawal with respect to the Payment Account for the purpose of making
deposits in and withdrawals from the Payment Account in accordance with this
Indenture. All monies and other property deposited or held from time to time in
the Payment Account shall be held by the Trustee in the Payment Account for the
exclusive benefit of the Holders, subject to subordination to Senior
Indebtedness in accordance with Article 11 hereof.
SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and for conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. 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 address of the Trustee set forth in Section 14.2.
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The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company shall
give prompt written notice to the Trustee 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 corporate trust office of the Trustee in
the Borough of Manhattan, The City of New York, as such office.
SECTION 4.3 Corporate Existence.
Subject to Article V, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate or other existence of each of its Significant
Subsidiaries in accordance with the respective organizational documents of each
of them and the rights (charter and statutory) and corporate franchises of the
Company and each of its Significant Subsidiaries; provided, however, that the
Company shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Significant Subsidiaries, any such
existence, right or franchise, if the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
such entity.
SECTION 4.4 Payment of Taxes and Other Claims.
Except with respect to immaterial items, the Company shall, and
shall cause each of its Significant Subsidiaries to, pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or any of its Significant Subsidiaries or any of their respective properties and
assets and (ii) all lawful claims, whether for labor, materials, supplies,
services or anything else, which have become due and payable and which by law
have or may become a Lien upon the property and assets of the Company or any of
its Significant Subsidiaries; provided, however, that neither the Company nor
any Significant Subsidiary shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
SECTION 4.5 Maintenance of Properties and Insurance.
The Company shall cause all material properties used or useful to
the conduct of its business and the business of each of its Significant
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its reasonable
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judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.5 shall prevent the Company or any Significant
Subsidiary from discontinuing any operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Company, desirable in the conduct of the business of such
entity.
The Company shall provide, or cause to be provided, for itself and
each of its Significant Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith judgment of the Company is adequate and appropriate for the conduct
of the business of the Company and such Significant Subsidiaries in a prudent
manner, with (except for self-insurance) reputable insurers or with the
government of the United States of America or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall be
customary, in the reasonable, good faith judgment of the Company and adequate
and appropriate for the conduct of the business of the Company and such
Significant Subsidiaries in a prudent manner for entities similarly situated in
the industry, unless failure to provide such insurance (together with all other
such failures) would not have a material adverse effect on the financial
condition or results of operations of the Company and such Significant
Subsidiaries taken as a whole.
SECTION 4.6 Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within
120 days after the end of its fiscal year an Officers' Certificate complying
with Section 314(a)(4) of the TIA and stating that a review of its activities
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, whether or
not the signer knows of any failure by the Company to comply with any conditions
or covenants in this Indenture and, if such ▇▇▇▇▇▇ does know of such a failure
to comply, the certificate shall describe such failure with particularity,
including a description of what action the Company is taking or proposes to take
with respect thereto. For purposes of this Section 4.6, such compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the
Securities are outstanding, deliver to the Trustee, promptly upon becoming aware
of any Default, Event of Default or fact which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, an Officers'
Certificate specifying such Default, Event of Default or fact and what action
the Company is taking or proposes to take with respect thereto. The Trustee
shall not be deemed to have knowledge of any Default, any Event of Default or
any such fact unless one of its Trust Officers receives notice thereof from the
Company or any of the Holders.
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SECTION 4.7 Reports.
Whether or not the Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall deliver or cause
to be delivered to the Trustee within 15 days after it is or would have been
required to file such with the SEC, annual and quarterly consolidated financial
statements substantially equivalent to financial statements that would have been
included in reports filed with the SEC if the Company was subject to the
requirements of Section 13 or 15(d) of the Exchange Act, including, with respect
to annual information only, a report thereon by the Company's certified
independent public accountants as such would be required in such reports to the
SEC and, in each case, together with a management's discussion and analysis of
financial condition and results of operations which would be so required.
SECTION 4.8 Limitation on Status as Investment Company.
Neither the Company nor any of its Subsidiaries shall become an
"investment company" (as that term is defined in the Investment Company Act of
1940, as amended), or otherwise become subject to regulation under the
Investment Company Act.
SECTION 4.9 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of, premium of, interest on, or Liquidated
Damages, if any, with respect to, the Securities 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 (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.10 Rule 144A Information Requirement.
If at any time there are Transfer Restricted Securities outstanding
and the Company shall cease to have a class of equity securities registered
under Section 12(g) of the Exchange Act or shall cease to be subject to Section
15(d) of the Exchange Act, the Company shall furnish to the Holders or
beneficial holders of the Securities or the underlying Common Stock and
prospective purchasers of Securities or the underlying Common Stock designated
by the Holders of Transfer Restricted Securities, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act until such time as the Shelf Registration Statement has become
effective under the Securities Act. The Company shall also furnish such
information during the pendency of any suspension of effectiveness of the Shelf
Registration Statement.
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ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 Limitation on Merger, Sale or Consolidation.
(a) The Company shall not, directly or indirectly,
consolidate with or merge with or into another Person or sell, lease, convey or
transfer all or substantially all of its assets (other than to its wholly-owned
Subsidiaries), whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons, unless (i)
either (a) in the case of a merger or consolidation, the Company is the
surviving entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Securities and the
Indenture; and (ii) no Default or Event of Default shall occur immediately after
giving effect to such transaction.
(b) For purposes of clause (a) of this Section 5.1 and
Section 13.6, the sale, lease, conveyance, assignment, transfer, or other
disposition of all or substantially all of the properties and assets of one or
more Subsidiaries of the Company, which properties and assets, if held by the
Company instead of such Subsidiaries, would constitute all or substantially all
of the properties and assets of the Company on a consolidated basis, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger or any sale, lease, conveyance or
transfer of all or substantially all of the assets of the Company in accordance
with the foregoing, the successor corporation formed by such consolidation or
into which the Company is merged or to which such sale, lease, conveyance or
transfer is made, shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture with the same effect
as if such successor corporation had been named therein as the Company, and when
a successor corporation duly assumes all of the obligations of the Company
pursuant hereto and pursuant to the Securities, the predecessor shall be
released from such obligations (except with respect to any obligations that
arise from or as a result of such transaction).
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, 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):
(1) failure by the Company to pay any installment of
interest on, or Liquidated Damages, if any, with respect to, the
Securities as and when the same becomes due and payable, or failure by
the Company to perform any conversion of the Securities required under
this Indenture, and the continuance of such failure for a period of 30
days, whether or not such payment is prohibited by Article XII;
(2) failure by the Company to pay all or any part of
the principal of, or premium, if any on the Securities when and as the
same become due and payable at maturity, redemption, by acceleration or
otherwise, including, without limitation, failure to pay all or any part
of the Repurchase Price on the Repurchase Date in accordance with
Article XI, whether or not such payment is prohibited by Article XII;
(3) failure by the Company to observe or perform any
covenant or agreement contained in the Securities or this Indenture
(other than a default in the performance of any covenant or agreement
which is specifically dealt with elsewhere in this Section 6.1), and
continuance of such failure for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee,
or to the Company and the Trustee by Holders of at least 25% in
aggregate principal amount of the then outstanding Securities, a written
notice specifying such failure, requesting it to be remedied and stating
that such notice is a "Notice of Default" hereunder;
(4) failure by the Company or any Significant
Subsidiary to pay principal, premium or interest when due (after giving
effect to any applicable period of grace) at maturity of any
Indebtedness (other than non-recourse obligations), in an amount in
excess of $10 million and the continuance of such failure for 30 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the then outstanding
Securities, a written notice specifying such default, requesting that it
be remedied and stating that such notice is a "Notice of Default"
hereunder;
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(5) default by the Company or any Significant
Subsidiary with respect to any Indebtedness (other than non-recourse
obligations), which default results in the acceleration of Indebtedness
having a principal amount in excess of $10 million without such
Indebtedness having been discharged or such acceleration having been
rescinded or annulled for 30 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities, a written notice
specifying such default, requesting that it be remedied and stating that
such notice is a "Notice of Default" hereunder;
(6) a decree, judgment, or order by a court of
competent jurisdiction shall have been entered adjudging the Company or
any of its Significant Subsidiaries as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the
Company or any of its Significant Subsidiaries under any bankruptcy or
similar law, and such decree, judgment, or order shall have continued
undischarged and unstayed for a period of 60 days; or a decree or order
of a court of competent jurisdiction over the appointment of a receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of the
Company, any of its Significant Subsidiaries, or of the property of any
such Person, or for the winding up or liquidation of the affairs of any
such Person, shall have been entered, and such decree, judgment, or
order shall have remained in force undischarged and unstayed for a
period of 60 days;
(7) the Company or any of its Significant
Subsidiaries shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking
reorganization under any bankruptcy or similar law or similar statute,
or shall consent to the filing of any such petition, or shall consent to
the appointment of a Custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of it or any of its assets or
property, or shall make a general assignment for the benefit of
creditors; or take any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing; or
(8) final unsatisfied judgments not covered by
insurance, aggregating in excess of $10,000,000 at any one time shall
have been rendered against the Company or any of its Significant
Subsidiaries and not have been stayed, bonded or discharged for a period
(during which execution shall not be effectively stayed) of 60 days (or,
in the case of any such final judgment which provides for payment over
time, which shall so remain unstayed, unbonded or undischarged beyond
any applicable payment date provided therein).
Notwithstanding the 60-day period and notice requirement contained
in Section 6.1(3) above, with respect to a default under Article XI the 60-day
period referred to in Section 6.1(3) shall be deemed to have begun as of the
date the Change of Control notice is required to be sent in the event that the
Company has not complied with the provisions of
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Section 11.1 and the Trustee or Holders of at least 25% in principal amount of
the outstanding Securities thereafter give the Notice of Default referred to in
Section 6.1(3) to the Company and, if applicable, the Trustee; provided,
however, that if the breach or default is a result of a default in the payment
when due of the Repurchase Price on the Repurchase Date, such Event of Default
shall be deemed, for purposes of this Section 6.1, to arise no later than on the
last Repurchase Date.
SECTION 6.2 Acceleration of Maturity Date; Rescission and
Annulment.
If an Event of Default (other than an Event of Default specified in
Section 6.1(6) or (7) relating to the Company) occurs and is continuing, then,
and in every such case, unless the principal of all of the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of then outstanding Securities, by a
notice in writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Securities (or
the Repurchase Price if the Event of Default includes failure to pay the
Repurchase Price, determined as set forth below), including in each case accrued
interest thereon and Liquidated Damages, if any, with respect thereto, to be due
and payable immediately. If an Event of Default specified in Section 6.1(6) or
(7) relating to the Company occurs, all principal, accrued interest thereon and
Liquidated Damages, if any, with respect thereto will be immediately due and
payable on all outstanding Securities without any declaration or other act on
the part of Trustee or the Holders.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided in this Article VI, the Holders of no
less than a majority in aggregate principal amount of then outstanding
Securities, by written notice to the Company and the Trustee, may rescind, on
behalf of all Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the
Trustee Cash sufficient to pay
(A) all overdue interest on, and
Liquidated Damages, if any, with respect to, all
Securities,
(B) the principal of (and premium, if
any, applicable to) any Securities which would then be
due otherwise than by such declaration of
acceleration, and interest thereon at the rate borne
by the Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest and
Liquidated Damages, if any, at the rate borne by the
Securities,
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(D) all sums paid or advanced by the
Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee,
its agents and counsel, and
(2) all Events of Default, other than the non-payment
of the principal of, premium, if any, interest on and Liquidated Damages, if
any, with respect to Securities that have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 6.12,
including, if applicable, any Event of Default relating to the covenants
contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event. No such waiver shall cure or waive any subsequent Default or Event of
Default or impair any right consequent thereon.
SECTION 6.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default in payment of
principal, premium, interest or Liquidated Damages, if any, specified in clause
(1) or (2) of Section 6.1 occurs and is continuing, the Company shall, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal, premium (if any), interest, Liquidated Damages, if any, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any), Liquidated Damages, if any, and on
any overdue interest, at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the reasonable
costs and expenses of collection, including compensation to, and reasonable
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust in favor
of the Holders, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in
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this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 6.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, interest or Liquidated
Damages, if any) shall be entitled and empowered, by intervention in such
proceeding or otherwise to take any and all actions under the TIA, including:
(1) to file and prove a claim for the whole amount
of principal (and premium, if any), interest and Liquidated Damages, if
any, owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agent and counsel and any amounts due the Trustee under Section 7.7) and
of the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute the
same in accordance with Section 6.6;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 out of the estate in any such
proceeding 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,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization,
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arrangement, adjustment, or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.5 Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust in favor of the Holders, and any
recovery of judgment shall, after provision for the payment of reasonable
compensation to, and reasonable expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.
SECTION 6.6 Priorities.
Any money or other consideration collected by the Trustee pursuant
to this Article VI shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal, premium (if any), interest or Liquidated Damages, if any, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 6.4 or 7.7;
SECOND: To the holders of Senior Indebtedness of the Company to the
extent provided in Article XII;
THIRD: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), interest on and Liquidated Damages, if any,
with respect to, the Securities in respect or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any), interest and Liquidated Damages, if any, respectively; and
FOURTH: The remainder, if any, to the Company.
SECTION 6.7 Limitation on Suits.
No Holder of any Security shall have any right to institute or
order or direct the Trustee to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless:
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(A) such Holder has previously given
written notice to the Trustee of a continuing Event of
Default;
(B) the Holders of not less than 25% in
principal amount of then outstanding Securities shall
have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(C) such Holder or Holders have offered
to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
(E) no direction inconsistent with such
written request has been given to the Trustee during
such 60-day period by the Holders of a majority in
principal amount of then outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest and Liquidated Damages.
Notwithstanding any other provision of this Indenture but subject
to the provisions of Article XII, the Holder of any Security shall have the
right, which is absolute and unconditional, to receive payment of the principal
of, and premium (if any), accrued and unpaid interest on and Liquidated Damages,
if any, with respect to, such Security when due (including, in the case of
redemption, the Redemption Price on the applicable Redemption Date, and in the
case of the Repurchase Price, on the applicable Repurchase Date) and to
institute suit for the enforcement of any such payment after such respective
dates, and such rights shall not be impaired without the consent of such Holder.
SECTION 6.9 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right
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or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.10 Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event of Default shall
impair the exercise of any such right or remedy or constitute a waiver of any
such Event of Default. Every right and remedy given by this Article VI or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 6.11 Control by Holders.
The Holder or Holders of no less than a majority in aggregate
principal amount of then outstanding Securities 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 upon the Trustee,
provided, that
(1) such direction shall not be in conflict with any
rule of law or with this Indenture,
(2) the Trustee shall not determine that the action
so directed would be unjustly prejudicial to the Holders not taking part
in such direction, and
(3) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
SECTION 6.12 Waiver of Past Default.
The Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, on behalf of all Holders,
prior to the declaration of acceleration of the maturity of the Securities,
waive any past default hereunder and its consequences, except a default:
(A) in the payment of the principal of,
premium, if any, interest on, or Liquidated Damages,
if any, with respect to, any Security not yet cured as
specified in Section 6.1, or
(B) in respect of a covenant or provision
hereof which, under Article IX, cannot be modified or
amended without the consent of the Holder of each
outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this
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Indenture; but no such waiver shall extend to any subsequent or other default or
impair the exercise of any right arising therefrom.
SECTION 6.13 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security 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, suffered or omitted to be taken 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, 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; but the provisions of this Section 6.13 shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate principal amount of then outstanding Securities, or to any
suit instituted by any Holder for enforcement of the payment of principal of,
premium (if any), interest on or Liquidated Damages, if any, with respect to,
any Security on or after the respective Stated Maturity of such Security
(including, in the case of redemption, on or after the Redemption Date).
SECTION 6.14 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his own affairs.
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(b) Except during the continuance of an Event of
Default:
(1) The Trustee need perform only those duties as
are specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this Indenture
which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which, by any provision hereof, are required to be furnished to
the Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) 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:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.11.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or omit
to take any action under this Indenture or at the request, order or direction of
the Holders or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of
this Section 7.1.
(f) The Trustee shall not be liable for interest on
any assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
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SECTION 7.2 Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, or both, which shall conform to Sections 14.4 and 14.5. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel (a copy
of which shall be promptly provided by the Trustee to the Company) shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, 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.
(f) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders, pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(h) The Trustee shall have no duty to inquire as to
the performance of the Company's covenants herein. In addition, the Trustee
shall not be deemed to have
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knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.1(1) or 6.1(2), or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge. The Trustee shall promptly notify the Company in
writing of any Default or Event of Default of which the Trustee has knowledge;
provided that any failure to do so shall not affect any rights of the Trustee or
the Holders hereunder.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any of
its Subsidiaries, or their respective Affiliates with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds received
by a Paying Agent other than the Trustee.
SECTION 7.5 Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Securityholder notice
of the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (of, premium, if any) or, interest on or Liquidated
Damages, if any, with respect to, any Security (including the payment of the
Repurchase Price on the Repurchase Date and the payment of the Redemption Price
on the Redemption Date), the Trustee may withhold the notice if and so long as a
Trust Officer in good faith determines that withholding the notice is in the
interest of the Securityholders.
SECTION 7.6 Reports by Trustee to Holders.
Within 60 days after each March 15 beginning with the March 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder as their names and addresses appear on the Company's
register of Securities, a brief report dated as of such March 15 that complies
with TIA Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA Sections 313(b) and
313(c).
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A copy of each report, at the time of its mailing to
Securityholders, shall be mailed to the Company and filed with the SEC, if
required by law, and each stock exchange, if any, on which the Securities are
listed.
The Company shall notify the Trustee when the Securities are listed
on any stock exchange or any delisting thereof.
SECTION 7.7 Compensation and Indemnity.
The Company agrees to pay to the Trustee from time to time such
reasonable compensation as the Company and the Trustee shall from time to time
agree in writing for all services rendered by it hereunder. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and counsel.
The Company agrees to indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by it without negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
the administration of this trust and its rights or duties hereunder including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity, but failure by the
Trustee to promptly notify the Company shall not relieve the Company of its
obligations hereunder unless such failure prejudices the Company. The Company
need not pay for any settlement made without its written consent, which consent
shall not be unreasonably withheld. The Company need not reimburse any expense
or indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7,
the Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal and premium, if any, of or interest or Liquidated
Damages, if any, on particular Securities pursuant to Article III.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article VIII of this
Indenture and any rejection or termination of this Indenture under any
Bankruptcy Law.
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SECTION 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in principal amount of then outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(C) a receiver, Custodian, or other public officer
takes charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 have been paid, the retiring Trustee shall transfer all property held by it
as trustee to the successor Trustee, subject to the lien provided in Section
7.7, the resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
any Holder or Holders of at least 10% in principal amount of then outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder or
Holders of at least 10% in principal amount of then outstanding Securities may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee with respect to expenses and liabilities arising from
matters prior to such replacement, and the Company shall pay to any such
replaced or removed Trustee all such amounts owed under Section 7.7 upon such
replacement or removal.
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SECTION 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee, provided such
corporation shall be otherwise eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent
indicated. The provisions of TIA Section 311 shall apply to the Company, as
obligor on the Securities.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge of Indenture.
The Company may terminate its obligations under this Indenture
(subject to the provisions of this Article VIII) when it shall have delivered to
the Trustee for cancellation all Securities theretofore authenticated (other
than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Article II hereof) and the
following conditions shall be satisfied:
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(1) The Company has paid all sums payable under the
Indenture; and
(2) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel in the United States,
each stating that all conditions precedent have been complied with as
contemplated by this Section 8.1.
SECTION 8.2 Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, for the payment of the principal of, premium, if any,
interest on or Liquidated Damages, if any, with respect to any Security and
remaining unclaimed for two years after such principal, premium, if any,
interest or Liquidated Damages, if any, has become due and payable shall be paid
to the Company on its request; and the Holder of such Security shall thereafter
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money shall thereupon cease.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by
Board Resolutions, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency,
or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided, that such action pursuant to
this clause (1) does not adversely affect the rights of any Holder;
(2) to create additional covenants of the Company
for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company or to make any other change that does
not adversely affect the rights of any Holder, provided, that the
Company has delivered to the Trustee an Opinion of Counsel stating that
such change pursuant to this clause (2) does not adversely affect the
rights of any Holder;
(3) to provide for collateral for or guarantors of
the Securities;
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(4) to evidence the succession of another Person to
the Company and the assumption by any such successor of the obligations
of the Company herein and in the Securities in accordance with Article
V; or
(5) to comply with the TIA.
SECTION 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders.
Subject to the last sentence of this paragraph, with the consent of
the Holders of not less than a majority in aggregate principal amount of then
outstanding Securities, by written act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by Board Resolutions, and the
Trustee may amend or supplement this Indenture or the Securities or 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 the Securities or of modifying in any manner the rights of the
Holders under this Indenture or the Securities. Subject to the last sentence of
this paragraph, the Holder or Holders of not less than a majority in aggregate
principal amount of then outstanding Securities may, in writing, waive
compliance by the Company with any provision of this Indenture or the
Securities. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby:
(1) change the Stated Maturity of any Security or
reduce the principal amount thereof or the rate (or extend the time for
payment) of interest thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency
in which, any Security or any premium or the interest thereon or
Liquidated Damages, if any, with respect thereto is payable, or impair
the right to institute suit for the enforcement of any such payment or
the conversion of any Security on or after the due date thereof
(including, in the case of redemption, on or after the Redemption Date),
or reduce the Repurchase Price, or alter the terms of this Indenture
regarding a Repurchase Offer or redemption provisions in a manner
adverse to the Holders;
(2) reduce the percentage in principal amount of the
outstanding Securities, the consent of whose Holders is required for any
such amendment, supplemental indenture or waiver provided for in the
Indenture;
(3) adversely affect the right of such Holder to
convert Securities; or
(4) provide that other provisions of the Indenture
cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby.
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It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2 or
Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or (at the option of the
Company) to all Holders, consideration for consent to such amendment, supplement
or waiver.
SECTION 9.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Company or the Person designated by the Company as the Person to whom
consents should be sent if such revocation is received by the Company or such
Person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company. If a record date is fixed, then notwithstanding the last sentence of
the immediately preceding paragraph, those Persons who were Holders at such
record date, and only those Persons (or their duly designated proxies), shall be
entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
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After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (4) of Section 9.2, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest on and Liquidated Damages, if any, with
respect to a Security, on or after the respective dates set for such amounts to
become due and payable as then expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates.
SECTION 9.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.6 Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Officers' Certificate or an Opinion of Counsel
stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article IX is authorized or permitted by this Indenture and
that all conditions precedent have been satisfied.
ARTICLE X
MEETINGS OF SECURITYHOLDERS
SECTION 10.1 Purposes for Which Meetings May Be Called.
A meeting of Securityholders may be called at any time and from
time to time pursuant to the provisions of this Article X for any of the
following purposes:
(a) to give any notice to the Company or to the
Trustee, or to give any directions to the Trustee, or to waive or to consent to
the waiving of any Default or
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Event of Default hereunder and its consequences, or to take any other action
authorized to be taken by Securityholders pursuant to any of the provisions of
Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant to
the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to
provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holder or Holders of any specified aggregate principal amount of
the Securities under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate in
connection with the administration of this Indenture.
SECTION 10.2 Manner of Calling Meetings.
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 10.1, to be held at such time and at such place
in the City of New York, New York or elsewhere as the Trustee shall determine.
Notice of every meeting of Securityholders, setting forth the time and place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed by the Trustee, first-class postage prepaid, to the
Company and to the Holders at their last addresses as they shall appear on the
registration books of the Registrar, not less than 10 nor more than 60 days
prior to the date fixed for a meeting.
Any meeting of Securityholders shall be valid without notice if the
Holders of all Securities then outstanding are present in Person or by proxy, or
if notice is waived before or after the meeting by the Holders of all Securities
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 10.3 Calling of Meetings by the Company or Holders.
In case at any time the Company or the Holders of not less than 10% in
aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a meeting of Securityholders to take any action
specified in Section 10.1, 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 20 days after receipt of such request,
then the Company or the Holders of Securities in the amount above specified may
determine the time and place in the City of New York, New York or elsewhere for
such meeting and may call such meeting for the purpose of taking such action, by
mailing or causing to be mailed notice thereof as provided in Section 10.2, or
by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a newspaper
or newspapers printed in the English language, customarily
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published at least five days a week of a general circulation in the City of New
York, State of New York, the first such publication to be not less than 10 nor
more than 60 days prior to the date fixed for the meeting.
SECTION 10.4 Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Securityholders, a Person shall
(a) be a registered Holder of one or more Securities, or (b) be a Person
appointed by an instrument in writing as proxy for the registered Holder or
Holders of Securities. The only Persons who shall be entitled to be present or
to speak at any meeting of Securityholders 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 10.5 Regulations May Be Made by Trustee; Conduct of the
Meeting, Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any action by or
any meeting of Securityholders, in regard to proof of the holding of Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, and 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 appropriate. Such regulations may fix a
record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those Persons who
are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
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 Securityholders as provided in Section 10.3, in which case the
Company or the Securityholders 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 Securities represented at the meeting and entitled to
vote.
At any meeting each Securityholder or proxy shall be entitled to one
vote for each $1,000 principal amount of Securities held or represented by him;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and ruled by the
chairman of the meeting to be not then outstanding. The chairman of the meeting
shall have no right to vote other than by virtue of Securities held by him or
instruments in writing as aforesaid duly designating him as the proxy to vote on
behalf of other Securityholders. Any meeting of Securityholders duly called
pursuant to the provisions of Section 10.2 or Section 10.3 may be adjourned from
time to time by vote of the Holder or Holders of a majority in aggregate
principal amount of the Securities represented at
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the meeting and entitled to vote, and the meeting may be held as so adjourned
without further notice.
SECTION 10.6 Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Securityholders
shall be by written ballots on which shall be subscribed the signatures of the
Holders of Securities or of their representatives by proxy and the principal
amount of the Securities voted by the ballot. The permanent chairman of the
meeting shall appoint two inspectors of votes, who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to such record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts, setting forth a copy of the notice of the meeting
and showing that such notice was mailed as provided in Section 10.2 or published
as provided in Section 10.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7 Exercise of Rights of Trustee or Securityholders May Not Be
Hindered or Delayed by Call of Meeting.
Nothing contained in this Article X shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Securityholders 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 Securityholders under any of the provisions of
this Indenture or of the Securities.
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE UPON A CHANGE OF CONTROL
SECTION 11.1 Repurchase of Securities at Option of the Holder Upon a
Change of Control.
(a) In the event that a Change of Control occurs, each Holder
shall have the right, at such Holder's option, subject to the terms and
conditions of this Indenture,
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to require the Company to repurchase all or any part of such Holder's Securities
(provided, that the principal amount of such Securities must be $1,000 or an
integral multiple thereof) on a date to be established by the Company (the
"Repurchase Date") that is no later than 50 Business Days (as such date may be
extended pursuant to clause (2) of subsection (b) of this Section 11.1) after
the occurrence of such Change of Control, at a cash price (the "Repurchase
Price") equal to 100% of the principal amount thereof, together with accrued and
unpaid interest and Liquidated Damages, if any, to, but excluding, the
Repurchase Date.
(b) In the event that, pursuant to this Section 11.1, the Company
shall be required to commence an offer to purchase Securities (a "Repurchase
Offer"), the Company shall follow the procedures set forth in this Section 11.1
as follows:
(1) the Repurchase Offer shall commence within 25 Business
Days following a Change of Control;
(2) the Repurchase Offer shall remain open for 20 Business
Days following its commencement, except to the extent that a longer
period is required by applicable law, but in any case the Repurchase
Offer must be completed and the Repurchase Date must occur not more than
60 Business Days following the Change of Control (the "Repurchase Offer
Period");
(3) upon the expiration of a Repurchase Offer, the Company
shall purchase all Securities tendered in response to the Repurchase
Offer;
(4) if the Repurchase Date is on or after an interest
payment record date and on or before the related Interest Payment Date,
any accrued interest and Liquidated Damages, if any, will be paid to the
Person in whose name a Security is registered at the close of business
on such record date, and no additional interest or Liquidated Damages,
if any, will be payable to Securityholders who tender Securities
pursuant to the Repurchase Offer;
(5) the Company shall provide the Trustee with notice of the
Repurchase Offer at least 5 Business Days before the commencement of any
Repurchase Offer; and
(6) on or before the commencement of any Repurchase Offer,
the Company or the Trustee (upon the request and at the expense of the
Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture)
shall govern the terms of the Repurchase Offer and shall state:
(i) that the Repurchase Offer is being made pursuant
to such notice and this Section 11.1 and that all Securities, or
portions thereof, tendered will be accepted for payment;
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(ii) the Repurchase Price (including the amount of
accrued and unpaid interest and Liquidated Damages, if any), the
Repurchase Date and the Repurchase Put Date;
(iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest and
Liquidated Damages, if any;
(iv) that, unless the Company defaults in depositing
Cash with the Paying Agent in accordance with the last paragraph of this
clause (b) or such payment is prevented pursuant to Article XII, any
Security, or portion thereof, accepted for payment pursuant to the
Repurchase Offer shall cease to accrue interest and Liquidated Damages,
if any, after the Repurchase Date;
(v) that Holders electing to have a Security, or
portion thereof, purchased pursuant to a Repurchase Offer will be
required to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security completed, to
the Paying Agent at the address specified in the notice prior to the
close of business on the earlier of (a) the third Business Day prior to
the Repurchase Date and (b) the third Business Day following the
expiration of the Repurchase Offer (such earlier date being the
"Repurchase Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent receives, up to the
close of business on the Repurchase Put Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder is withdrawing and a
statement that such Holder is withdrawing his election to have such
principal amount of Securities purchased; and
(vii) a brief description of the events resulting in
such Change of Control.
Any such Repurchase Offer shall comply with all applicable provisions of
Federal and state laws, including those regulating tender offers, if applicable,
and any provisions of this Indenture which conflict with such laws shall be
deemed to be superseded by the provisions of such laws.
On or before the Repurchase Date, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the
Repurchase Offer on or before the Repurchase Put Date, (ii) deposit with the
Paying Agent Cash sufficient to pay the Repurchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities or
portions thereof so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate listing the Securities or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to Holders of Securities so accepted payment in an amount equal to the
Repurchase Price (together with accrued and
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unpaid interest and Liquidated Damages, if any), and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Security or Securities
equal in principal amount to any unpurchased portion of the Securities
surrendered. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Repurchase Offer on or as soon as practicable after
the Repurchase Date.
ARTICLE XII
SUBORDINATION
SECTION 12.1 Securities Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Securities, agree that
(a) the payment of the principal of and interest on the Securities and (b) any
other payment in respect of the Securities, including on account of the
acquisition or redemption of the Securities by the Company and any premium and
Liquidated Damages, if any, (including, without limitation, pursuant to Article
XI) is subordinated, to the extent and in the manner provided in this Article
XII, to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of this Indenture or thereafter created,
incurred, assumed or guaranteed, and that these subordination provisions are for
the benefit of the holders of Senior Indebtedness.
This Article XII shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
SECTION 12.2 No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages, if any, with
respect to, the Securities, or to acquire any of the Securities (including
repurchases of Securities at the option of the Holder pursuant to a Repurchase
Offer) for cash or property (other than Junior Securities), or on account of the
redemption provisions of the Securities, (i) upon the maturity of any Senior
Indebtedness of the Company by lapse of time, acceleration (unless waived) or
otherwise, unless and until all principal of, premium, if any, and interest on
such Senior Indebtedness are first paid in full (or such payment is duly
provided for), or (ii) in the event of default in the payment of any principal
of, premium, if any, or interest on any Senior Indebtedness of the Company when
it becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise (a "Payment Default"), unless and
until such Payment Default has been cured or waived or otherwise has ceased to
exist.
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(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits, or would permit, with (w) the passage of time,
(x) the giving of notice, (y) the making of any payment in respect of the
Securities then required to be made, or (z) any combination thereof
(collectively, a "Non-Payment Default"), the holders of Senior Indebtedness
having a principal amount then outstanding in excess of $3 million (or with
respect to which Senior Indebtedness the holders are obligated to lend the
Company in excess of $3 million principal amount) or their representative
immediately to accelerate its maturity and (ii) written notice of such
Non-Payment Default given to the Company and the Trustee by the holders of an
aggregate of at least $3 million principal amount outstanding of such Senior
Indebtedness (or holders of commitments to lend an aggregate of at least $3
million principal amount of Senior Indebtedness) or their representative (a
"Payment Notice"), then, unless and until such Non-Payment Default has been
cured or waived or otherwise has ceased to exist, no payment (by set-off or
otherwise) may be made by or on behalf of the Company on account of the
principal of, premium, if any, interest on, or Liquidated Damages, if any, with
respect to, the Securities, or to acquire or repurchase any of the Securities
for cash or property, or on account of the redemption provisions of the
Securities, in any such case other than payments made with Junior Securities.
Notwithstanding the foregoing, unless (i) the Senior Indebtedness in respect of
which such Non-Payment Default exists has been declared due and payable in its
entirety within 179 days after the Payment Notice is delivered as set forth
above (the "Payment Blockage Period"), and (ii) such declaration has not been
rescinded or waived, at the end of the Payment Blockage Period, the Company
shall be required to pay all sums not paid to the Holders of the Securities
during the Payment Blockage Period due to the foregoing prohibitions and to
resume all other payments as and when due on the Securities. Not more than one
Payment Notice may be given in any consecutive 365-day period, irrespective of
the number of defaults with respect to Senior Indebtedness during such period.
In no event, however, may the total number of days during which any Payment
Blockage Period or Payment Blockage Periods are in effect exceed 179 days in the
aggregate during any consecutive 365-day period.
(c) In the event that, notwithstanding the foregoing provisions of
this Section 12.2, any payment or distribution of assets of the Company (other
than Junior Securities) shall be received by the Trustee or the Holders or any
Paying Agent at a time when such payment or distribution is prohibited by the
provisions of this Section 12.2, then such payment or distribution (subject to
the provisions of Section 12.7) shall be received and held in trust by the
Trustee or such Holder or Paying Agent for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders or such Paying Agent, as the case may be, to the holders of Senior
Indebtedness of the Company remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness of the Company may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness of the
Company held or represented by each, for application to the payment of all
Senior Indebtedness of the Company remaining unpaid to the extent necessary to
pay or to provide for the payment of all such Senior Indebtedness of the Company
in full after giving effect to any concurrent payment and distribution to the
holders of such Senior Indebtedness.
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SECTION 12.3 Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or a
similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities:
(a) the holders of all Senior Indebtedness of the Company shall
first be entitled to receive payments in full (or have such payment duly
provided for) before the Holders are entitled to receive any payment on account
of the principal of, premium, if any, interest on, and Liquidated Damages, if
any, with respect to, the Securities (other than Junior Securities);
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Junior
Securities) to which the Holders or the Trustee on behalf of the Holders would
be entitled (by setoff or otherwise), except for the provisions of this Article
XII, shall be paid by the liquidating trustee or agent or other Person making
such a payment or distribution directly to the holders of Senior Indebtedness of
the Company or their representative to the extent necessary to make payment in
full of all such Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution, or provision therefor to the holders of
such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior Securities), shall be received by the
Trustee or the Holders or any Paying Agent (or, if the Company or any Affiliate
of the Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) on account of the principal
of, premium, if any, interest on and Liquidated Damages if any, with respect to,
the Securities before all Senior Indebtedness of the Company is paid in full,
such payment or distribution (subject to the provisions of Section 12.7) shall
be received and held in trust by the Trustee or such Holder or Paying Agent for
the benefit of the holders of such Senior Indebtedness, or their respective
representative, ratably according to the respective amounts of such Senior
Indebtedness held or represented by each, to the extent necessary to make
payment as provided herein of all such Senior Indebtedness remaining unpaid
after giving effect to all concurrent payments and distributions and all
provisions therefor to or for the holders of such Senior Indebtedness, but only
to the extent that as to any holder of such Senior Indebtedness, as promptly as
practical following notice from the Trustee to the holders of such Senior
Indebtedness that such prohibited payment has been received by the Trustee,
Holder(s) or Paying Agent (or has been segregated as provided above), such
holder (or a representative therefor) notifies the Trustee of the amounts then
due and owing
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on such Senior Indebtedness, if any, held by such holder and only the amounts
specified in such notices to the Trustee shall be paid to the holders of such
Senior Indebtedness.
SECTION 12.4 Securityholders to Be Subrogated to Rights of Holders of
Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the Company
as provided herein, the Holders of Securities shall be subrogated to the rights
of the holders of such Senior Indebtedness to receive payments or distributions
of assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full, and for the purpose of such
subrogation no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders by virtue of this
Article XII, which otherwise would have been made to the Holders shall, as
between the Company and the Holders, be deemed to be payment by the Company or
on account of such Senior Indebtedness, it being understood that the provisions
of this Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article XII shall have been
applied, pursuant to the provisions of this Article XII, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full.
SECTION 12.5 Obligations of the Company Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture or
in the Securities is intended to or shall impair as between the Company and the
Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any, interest
on, and Liquidated Damages, if any, with respect to, the Securities 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 and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII, of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy. Notwithstanding anything to the
contrary in this Article XII or elsewhere in this Indenture or in the
Securities, upon any distribution of assets of the Company referred to in this
Article XII, the Trustee, subject to the provisions of Sections 7.1 and 7.2, and
the Holders shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
the Holders for the
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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, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
XII so long as such court has been apprised of the provisions of, or the order,
decree or certificate makes reference to, the provisions of this Article XII.
Nothing in this Article XII shall apply to the claims of, or payments to, the
Trustee under or pursuant to Sections 6.6 and 7.7.
SECTION 12.6 Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment,
written notice thereof from the Company or from one or more holders of Senior
Indebtedness or from any representative therefor and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Sections 7.1
and 7.2, shall be entitled in all respects conclusively to assume that no such
fact exists.
SECTION 12.7 Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with this Indenture shall be for the sole benefit of Securityholders
and, to the extent allocated for the payment of Securities, shall not be subject
to the subordination provisions of this Article XII. Otherwise, any deposit of
assets with the Trustee or the Agent (whether or not in trust) for the payment
of principal of or interest on any Securities shall be subject to the provisions
of Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior to one Business
Day preceding the date on which by the terms of this Indenture any such assets
may become distributable for any purpose (including, without limitation, the
payment of either principal of or interest on any Security) the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 12.6, then the Trustee or such Paying Agent shall
have full power and authority to receive such assets and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date.
SECTION 12.8 Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article XII 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 of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and
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release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders.
SECTION 12.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Securities by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors of the Company),
the immediate filing of a claim for the unpaid balance of his Securities in the
form required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then the holders of the Senior Indebtedness or their
representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 12.10 Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article XII 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 this
Indenture shall be construed to deprive the Trustee of any of its rights as such
holder.
SECTION 12.11 Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if
any, interest on, or Liquidated Damages, if any, with respect to, the Securities
by reason of any provision of this Article XII shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section 6.1
or in any way prevent the Holders from exercising any right hereunder other than
the right to receive payment on the Securities.
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SECTION 12.12 No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company or any other
Person, cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article XII or otherwise. Nothing in this
Section 12.12 shall affect the obligation of any other such Person to hold such
payment for the benefit of, and to pay such payment over to, the holders of
Senior Indebtedness or their representative.
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1 Conversion Privilege.
Subject to and upon compliance with the provisions of this Article XIII,
at the option of the Holder thereof, any Security may at any time commencing on
the 90th day following the latest date of the initial issuance of the Securities
under this Indenture and ending as of the close of business on the Stated
Maturity, be converted, in whole, or in part in integral multiples of $1,000
principal amount, into fully paid and non-assessable shares of Common Stock
issuable upon conversion of the Securities, at the Conversion Price in effect at
the Date of Conversion, unless such Security or some portion thereof shall have
been called for redemption or delivered for repurchase prior to such date and no
default is made in making due provision for the payment of the redemption price
in accordance with the terms of this Indenture, in which case, with respect to
such Security or portion thereof as has been so called for redemption or
delivered for repurchase and not withdrawn, such Security or portion thereof may
be so converted until and including, but not after, the close of business on the
Business Day immediately prior to the Redemption Date or Repurchase Date, as
applicable, for such Security, unless the Company subsequently fails to pay the
applicable Redemption Price or Repurchase Price, as the case may be.
SECTION 13.2 Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security to the Company at any
time during usual business hours at its office or agency maintained for the
purpose as provided in this Indenture, accompanied by a fully executed written
notice, in substantially the form set forth on the reverse of the Security, that
the Holder elects to convert such Security or a stated portion thereof
constituting a multiple of $1,000 principal amount, and, if such Security is
surrendered for conversion during the period between the close of business on
any Record Date and the opening of business on the next following Interest
Payment Date and has not been called for
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redemption on a Redemption Date which occurs within such period, accompanied
also by payment to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of the Security being
surrendered for conversion, notwithstanding such conversion; provided that no
such payment shall be required with respect to interest payable on September 15,
2000. Such notice of conversion shall also state the name or names (with
address) in which the certificate or certificates for shares of Common Stock
shall be issued. Securities surrendered for conversion shall (if reasonably
required by the Company or the Trustee) be duly endorsed by, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Company duly executed by, the Holder or his attorney duly authorized in writing.
As promptly as practicable after the receipt of such notice and the surrender of
such Security as aforesaid, the Company shall, subject to the provisions of
Section 13.8 hereof, issue and deliver at such office or agency to such Holder,
or on his written order, a certificate or certificates for the number of full
shares of Common Stock issuable on such conversion of Securities in accordance
with the provisions of this Article XIII and Cash, as provided in Section 13.3
hereof, in respect of any fraction of a share of Common Stock otherwise issuable
upon such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date (herein called the "Date
of Conversion") on which such Security shall have been surrendered as aforesaid,
and the person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become on the Date of Conversion the holder or holders 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
cause the person or persons in whose name or names the certificate or
certificates for such shares are to be issued to be deemed to have become the
record holder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open but such
conversion shall nevertheless be at the conversion price in effect at the close
of business on the date when such Security shall have been so surrendered with
the conversion notice. In the case of conversion of a portion, but less than
all, of a Security, the Company shall as promptly as practicable execute, and
the Trustee shall authenticate and deliver to the Holder thereof, at the expense
of the Company, a Security or Securities in the aggregate principal amount of
the unconverted portion of the Security surrendered. Except as otherwise
expressly provided in this Indenture, no payment or adjustment shall be made for
interest accrued on any Security (or portion thereof) converted or for dividends
or distributions on any Common Stock issued upon conversion of any Security.
SECTION 13.3 Fractional Interests.
No fractions of shares or scrip representing fractions of shares shall
be issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities so surrendered. If any
fraction of a share of Common Stock would, except for the foregoing provisions
of this Section 13.3, be issuable on the conversion of any Security or
Securities, the Company shall make payment in lieu thereof in an amount of Cash
equal to the
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value of such fraction computed on the basis of the last sale price of the
Common Stock as reported on the New York Stock Exchange (or if not listed for
trading thereon, then on the principal national securities exchange or on the
principal automated quotation system on which the Common Stock is listed or
admitted to trading) at the close of business on the Date of Conversion or if no
such sale takes place on such day, the last sale price for such day shall be the
average of the closing bid and asked prices regular way on the New York Stock
Exchange (or if not listed for trading thereon, on the principal national
securities exchange or on the principal automated quotation system on which the
Common Stock is listed or admitted to trading) for such day (any such last sale
price being hereinafter referred to as the "Last Sale Price"). If on such
Trading Day the Common Stock is not quoted by any such organization, the fair
value of such Common Stock on such day, as reasonably determined in good faith
by the Board of Directors of the Company, shall be used.
SECTION 13.4 Conversion Price.
The conversion price per share of Common Stock issuable upon conversion
of the Securities (herein called the "Conversion Price") shall initially be
$26.25 (equivalent to a conversion rate of 38.0952 shares per $1,000 principal
amount of Securities).
SECTION 13.5 Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustment from time to time as
follows:
(a) In case the Company shall make or pay a dividend or make a
distribution in shares of Common Stock on any class of Capital Stock of the
Company, the Conversion Price in effect immediately following the record date
fixed for the determination of stockholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on such date and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution. An adjustment made pursuant to this
subsection (a) shall become effective immediately, except as provided in
subsections (i) and (j) below, after such record date.
(b) In case the Company shall (1) subdivide its outstanding shares
of Common Stock into a greater number of shares or (2) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately following the effectiveness of such
action shall be adjusted by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
immediately prior to such subdivision or combination and the denominator shall
be the number of shares outstanding immediately after giving effect to such
subdivision or combination. An adjustment made pursuant to this subsection (b)
shall become effective immediately, except as provided in subsections (i) and
(j) below, after the effective date of a subdivision or combination.
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(c) In case the Company shall issue rights, options or warrants to
all or substantially all holders of Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the then
current market price per share of the Common Stock (as determined pursuant to
subsection (g) below) on the record date fixed for determination of the
stockholders entitled to receive such rights, option or warrants, the Conversion
Price in effect immediately following such record date shall be adjusted to a
price, computed to the nearest cent, so that the same shall equal the price
determined by multiplying:
(i) such Conversion Price by a fraction, of which
(ii) the numerator shall be (A) the number of shares
of Common Stock outstanding on such record date plus (B) the number of
shares which the aggregate offering price of the total number of shares
so offered for subscription or purchase would purchase at such current
market price (determined by multiplying such total number of shares by
the exercise price of such rights, options or warrants and dividing the
product so obtained by such current market price), and of which
(iii) the denominator shall be (A) the number of
shares of Common Stock outstanding on such record date plus (B) the
number of additional shares of Common Stock which are so offered for
subscription or purchase.
Such adjustment shall become effective immediately, except as provided
in subsections (i) and (j) below, after the record date for the determination of
holders entitled to receive such rights, options or warrants; provided, however,
that if any such rights, options or warrants issued by the Company as described
in this subsection (c) are only exercisable upon the occurrence of certain
triggering events, then the Conversion Price will not be adjusted as provided in
this subsection (c) until such triggering events occur.
(d) In case the Company or any Subsidiary of the Company shall
distribute to all or substantially all holders of Common Stock, any of its
assets, evidences of indebtedness, cash or securities (other than (x) dividends
or distributions exclusively in cash, (y) any dividend or distribution for which
an adjustment is required to be made in accordance with subsection (a) or (c)
above, or (z) any distribution of rights or warrants subject to subsection (l)
below) then in each such case the Conversion Price in effect immediately
following the record date fixed for the determination of the stockholders
entitled to such distribution shall be adjusted so that the same shall equal the
price determined by multiplying such Conversion Price by a fraction of which the
numerator shall be the then current market price per share of the Common Stock
(determined as provided in subsection (g) below) on such record date less the
then fair market value (as reasonably determined in good faith by the Board of
Directors of the Company) of the portion of the assets so distributed applicable
to one share of Common Stock, and of which the denominator shall be such current
market price per share of the Common Stock. Such adjustment shall become
effective immediately, except as provided in subsections (i) and (j) below,
after the record date for the determination of stockholders entitled to receive
such distribution.
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(e) In case the Company or any Subsidiary of the Company shall make
any distribution consisting exclusively of cash (excluding any cash portion of
distributions for which an adjustment is required to be made in accordance with
subsection (d) above, or cash distributed upon a merger or consolidation to
which Section 13.6 applies) to all or substantially all holders of Common Stock
in an aggregate amount that, combined together with (i) all other such all-cash
distributions made within the then preceding 12 months in respect of which no
adjustment pursuant to this subsection (e) has been made and (ii) any cash and
the fair market value of other consideration paid or payable in respect of any
tender or exchange offer by the Company or any of its Subsidiaries for Common
Stock concluded within the preceding 12 months in respect of which no adjustment
has been made, exceeds 15% of the Company's market capitalization (defined as
being the product of the then current market price of the Common Stock
(determined as provided in subsection (g) below) times the number of shares of
Common Stock then outstanding) on the record date fixed for the determination of
the stockholders entitled to such distribution, in each such case the Conversion
Price immediately following such record date shall be adjusted so that the same
shall equal the price determined by multiplying such Conversion Price by a
fraction of which the numerator shall be the then current market price per share
of the Common Stock on such record date less the amount of the cash and/or fair
market value (as reasonably determined in good faith by the Board of Directors
of the Company) of other consideration so distributed applicable to one share of
Common Stock, and of which the denominator shall be such current market price
per share of the Common Stock. Such adjustment shall become effective
immediately, except as provided in subsections (i) and (j) below, after the
record date for the determination of stockholders entitled to receive such
distribution.
(f) In case the Company or any Subsidiary of the Company shall
complete a tender or exchange offer for all or any portion of the Common Stock
(any such tender or exchange offer being referred to as an "Offer") that
involves an aggregate consideration having a fair market value as of the
expiration of such Offer (the "Expiration Time") that, together with (i) any
cash and the fair market value of any other consideration payable in respect of
any other tender or exchange offer, as of the expiration of such other tender or
exchange offer, expiring within the 12 months preceding the expiration of such
Offer and in respect of which no Conversion Price adjustment pursuant to this
subsection (f) has been made and (ii) the aggregate amount of any all-cash
distributions referred to in subsection (e) of this Section 13.5 to all holders
of Common Stock within the 12 months preceding the expiration of such Offer for
which no conversion price adjustment pursuant to such subsection (e) has been
made, exceeds 15% of the product of the then current market price per share
(determined as provided in subsection (g) below) of the Common Stock on the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, the Conversion Price
in effect immediately following such Expiration Time shall be reduced by
multiplying such Conversion Price by a fraction of which the numerator shall be
(i) the product of the then current market price per share (determined as
provided in subsection (g) below) of the Common Stock on the Expiration Time
times the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time minus (ii) the fair market value of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms
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of the Offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted being referred to as the
"Purchased Shares") and the denominator shall be the product of (i) such current
market price per share on the Expiration Time times (ii) such number of
outstanding shares on the Expiration Time less the number of Purchased Shares,
such reduction to become effective immediately prior to the opening of business
on the day following the Expiration Time.
For purposes of this subsection (f), the fair market value of any
consideration with respect to an Offer shall be reasonably determined in good
faith by the Board of Directors of the Company and described in a Board
Resolution.
(g) For the purpose of any computation under subsections (c), (d),
(e) and (f) above, the current market price per share of Common Stock on any
date shall be deemed to be the average of the Last Sale Prices of a share of
Common Stock for the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later than, the
earlier of the date in question and the date before the "'ex' date," with
respect to the issuance, distribution or Offer requiring such computation. If on
any such Trading Day the Common Stock is not quoted by any organization referred
to in the definition of Last Sale Price in Section 13.3, the fair value of the
Common Stock on such day, as reasonably determined in good faith by the Board of
Directors of the Company, shall be used. For purposes of this paragraph, the
term "'ex' date," when used with respect to any issuance, distribution or
payments with respect to an Offer, means the first date on which the Common
Stock trades regular way on the New York Stock Exchange (or if not listed or
admitted to trading thereon, then on the principal national securities exchange
or the Nasdaq Stock Market's National Market if the Common Stock is listed or
admitted to trading thereon) without the right to receive such issuance,
distribution or Offer.
(h) In addition to the foregoing adjustments in subsections (a),
(b), (c), (d), (e) and (f) above, the Company from time to time and to the
extent permitted by applicable Law, shall be permitted to reduce the Conversion
Price by any amount for any period of at least 20 Business Days, in which case
the Company shall give at least 15 days notice of such reduction, if the Board
of Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive. The Company,
at its option, shall be permitted to make such other reductions in the
Conversion Price, in addition to those set forth above in subsections (a), (b),
(c), (d), (e), (f) and the first sentence of this subsection (h), as the Board
of Directors deems advisable to avoid or diminish any income tax to holders of
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such a dividend or distribution for
United States federal income tax purposes.
(i) In any case in which this Section 13.5 shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Security converted after such record
date and on and before such adjustment shall have
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become effective (i) defer paying any Cash payment pursuant to Section 13.3
hereof or issuing to the Holder of such Security the number of shares of Common
Stock and other capital stock of the Company (or other assets or securities)
issuable upon such conversion in excess of the number of shares of Common Stock
and other Capital Stock of the Company issuable thereupon only on the basis of
the Conversion Price prior to adjustment, and (ii) not later than five Business
Days after such adjustment shall have become effective, pay to such Holder the
appropriate Cash payment pursuant to Section 13.3 hereof and issue to such
Holder the additional shares of Common Stock and other Capital Stock of the
Company issuable on such conversion.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1.0% of the
Conversion Price; provided, that any adjustments which by reason of this
subsection (j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XIII shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(k) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly (i) file with the Trustee and each conversion agent
an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness of
such adjustment, and (ii) mail or cause to be mailed a notice of such adjustment
to each holder of Securities at his address as the same appears on the registry
books of the Company.
(l) In the event that the Company distributes rights or warrants
(other than those referred to in subsection (c) above) pro rata to holders of
Common Stock, so long as any such rights or warrants have not expired or been
redeemed by the Company, the Company shall make proper provision so that the
Holder of any Note surrendered for conversion will be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable upon such
conversion (the "Conversion Shares"), a number of rights or warrants to be
determined as follows: (i) if such conversion occurs on or prior to the date for
the distribution to the holders of rights or warrants of separate certificates
evidencing such rights or warrants (the "Distribution Date"), the same number of
rights or warrants to which a holder of a number of shares of Common Stock equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the rights or
warrants, and (ii) if such conversion occurs after such Distribution Date, the
same number of rights or warrants to which a holder of the number of shares of
Common Stock into which the principal amount of such Note so converted was
convertible immediately prior to such Distribution Date would have been entitled
on such Distribution Date in accordance with the terms and provisions of and
applicable to the rights or warrants.
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SECTION 13.6 Continuation of Conversion Privilege in Case of
Reclassification, Change, Merger, Consolidation or Sale of Assets.
If any of the following shall occur, namely: (a) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of the
Securities (other than a change in par value, or from par value to no par value,
or from no par value, to par value, or as a result of a subdivision or
combination), (b) any consolidation or merger of the Company with or into any
other Person, or the merger of any other Person with or into the Company (other
than a merger which does not result in any reclassification, change, conversion,
exchange or cancellation of outstanding shares of Common Stock) or (c) any sale,
transfer or conveyance of all or substantially all of the assets of the Company,
then the Company, or such successor or purchasing entity, as the case may be,
shall, as a condition precedent to such reclassification, change, consolidation,
merger, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right to convert such Security only into the kind and amount of shares of
stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance by
a holder of the number of shares of Common Stock issuable upon conversion of
such Security immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance assuming such holder of Common Stock of the
Company failed to exercise his rights of an election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, sale, transfer or conveyance
(provided that if the kind or amount of securities, cash, and other property
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance is not the same for each share of Common Stock of the
Company held immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section 13.6 the kind and amount of securities, cash and other property
receivable upon such reclassification, change, consolidation, merger, sale,
transfer or conveyance by 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 XIII. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and property (including cash) of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 13.6 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
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Notice of the execution of each such supplemental indenture shall be
mailed to each Holder of Securities at his address as the same appears on the
registry books of the Company.
Neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders of
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article VIII hereof, 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 13.7 Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock (other than cash dividends);
(b) the Company shall authorize the granting to the holders of
Common Stock of rights, warrants or options to subscribe for or purchase any
shares of stock of any class or of any other rights;
(c) the Company shall authorize any reclassification or change of
the Common Stock (including a subdivision or combination of its outstanding
shares of Common Stock), or any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is required,
or the sale or conveyance of all or substantially all the property or business
of the Company;
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
(e) the Company or any of its Subsidiaries shall complete an Offer;
then, the Company shall cause to be filed at the office or agency maintained for
the purpose of conversion of the Securities as provided in Section 13.2 hereof,
and shall cause to be mailed to each Holder of Securities, at his address as it
shall appear on the registry books of the Company, at least 20 days before the
date hereinafter specified (or the earlier of the dates hereinafter specified,
in the event that more than one date is specified), a notice stating the date on
which (1) a record is expected to be taken for the purpose of such dividend,
distribution, rights, warrants or options or Offer, 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, rights, warrants or options or to participate in
such Offer are to be determined, or (2) such
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reclassification, change, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding-up is expected to become effective and the date, if any
is to be fixed, as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reclassification, change, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding-up.
SECTION 13.8 Taxes on Conversion.
The Company will pay any and all documentary, stamp or similar taxes
payable to the United States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant thereto; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common
Stock in a name other than that of the Holder of the Securities to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company the amount of any such
tax or has established, to the satisfaction of the Company, that such tax has
been paid. The Company extends no protection with respect to any other taxes
imposed in connection with conversion of Securities.
SECTION 13.9 Company to Provide Stock.
The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Securities from time to time as such Securities are presented for
conversion, provided, that nothing contained herein shall be construed to
preclude the Company from satisfying its obligations in respect of the
conversion of Securities by delivery of repurchased shares of Common Stock which
are held in the treasury of the Company.
If any shares of Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such shares may be
validly issued or delivered upon conversion, then the Company covenants that it
will in good faith and as expeditiously as possible use its best efforts to
secure such registration or approval, as the case may be, provided, however,
that nothing in this Section 13.9 shall be deemed to limit in any way the
obligations of the Company provided in this Article XIII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.
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The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
non-assessable by the Company and free of preemptive rights.
SECTION 13.10 Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any agent of the Trustee shall at any time be
under any duty or responsibility to any Holder of Securities to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the Officers' Certificate referred to in Section 13.5,
or with respect to the nature or extent 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. Neither the Trustee nor any agent
of the Trustee shall 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 (including cash), which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any agent
of the Trustee shall be responsible for any failure of the Company to issue,
register the transfer of or deliver any shares of Common Stock or stock
certificates or other securities or property (including cash) upon the
surrender of any Security for the purpose of conversion or, subject to Article
VIII hereof, to comply with any of the covenants of the Company contained in
this Article XIII.
SECTION 13.11 Return of Funds Deposited for Redemption of Converted
Securities.
Any funds which at any time shall have been deposited by the Company or
on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as provided in this Article XIII, shall after such conversion be repaid to the
Company by the Trustee or such other Paying Agent.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of the TIA, the imposed duties, whether or not
this Indenture has been qualified under the TIA, shall control.
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SECTION 14.2 Notices.
Any notices or other communications to the Company or the Trustee
required or permitted hereunder shall be in writing, and shall be sufficiently
given if made by hand delivery, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company:
SmarTalk TeleServices, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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SECTION 14.3 Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
SECTION 14.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) An Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; or
(2) an Opinion of Counsel (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 14.5 Statements Required in Certificate or Opinion.
Each certificate or opinion 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 statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of each such Person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
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SECTION 14.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 14.7 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 14.8 Governing, Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK.
SECTION 14.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.10 No Recourse Against Others.
No direct or indirect partner, employee, stockholder, director or
officer, as such, past, present or future of the Company or any successor
corporation, shall have any personal liability in respect of the obligations of
the Company under the Securities or this Indenture by reason of his, her or its
status as such partner, stockholder, employee, director or officer. Each
Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 14.11 Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 14.12 Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
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SECTION 14.13 Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 14.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 14.15 Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of the Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 14.16 Registration Rights.
Certain Holders of the Securities are entitled to certain registration
rights with respect to such Securities pursuant to, and subject to the terms of,
the Registration Rights Agreement.
***
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this indenture to be
duly executed as of the date first written above.
SMARTALK TELESERVICES, INC., a
California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
84
EXHIBIT A
[FORM OF FACE OF SECURITY]
SMARTALK TELESERVICES, INC.
5-3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole 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. Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.(1)
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.(2)
THE HOLDER OF THE SECURITIES EVIDENCED HEREBY BY ITS ACCEPTANCE HEREOF
AGREES THAT SUCH SECURITIES ARE "RESTRICTED SECURITIES" WITHIN THE
MEANING OF RULE 144 UNDER THE SECURITIES ACT AND THAT IT AND ANY
SUBSEQUENT HOLDER WILL NOT OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
----------
(1) This paragraph should only be added if the Security is issued in global
form.
(2) This paragraph should be included only for the Transfer Restricted
Securities.
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REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) PURSUANT TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR," WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING
CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.(3)
----------
(3) This paragraph should be included only for the Transfer Restricted
Securities.
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SMARTALK TELESERVICES, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
No. CUSIP No. ___________
$ _______
SmarTalk TeleServices, Inc., a California corporation (hereinafter
called the "Company," which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________, or registered assigns, the principal sum of _______ Dollars, on
September 15, 2004.
Interest Payment Dates: March 15 and September 15; commencing March 15,
1998.
Record Dates: February 28 and August 31.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
SMARTALK TELESERVICES, INC., a California
corporation
[seal]
By:__________________________________
Name:
Title:
Attest:___________________________
[Title]
Dated:________________
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned Indenture.
Wilmington Trust Company, as Trustee
By
--------------------------------------
Authorized Signatory
Dated:
--------------------
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[FORM OF REVERSE SIDE OF SECURITY]
SMARTALK TELESERVICES, INC.
5 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2004
1. Interest.
SmarTalk TeleServices, Inc., a California corporation
(hereinafter called the "Company," which term includes any successors under the
Indenture hereinafter referred to), promises to pay interest on the principal
amount of this Security at the rate of 5 3/4% per annum. To the extent it is
lawful, the Company promises to pay interest on any interest payment due but
unpaid on such principal amount at a rate of 5 3/4% per annum compounded
semi-annually.
The Company will pay interest semi-annually on March 15 and
September 15 of each year (each, an "Interest Payment Date"), commencing March
15, 1998. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid on the Securities,
from September 17, 1997. Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Securities (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. Any such interest not so punctually paid, and defaulted interest
relating thereto, may be paid to the Persons who are registered Holders at the
close of business on a Special Record Date for the payment of such defaulted
interest, as more fully provided in the Indenture referred to below. Except as
provided below, the Company shall pay principal and interest in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("U.S. Legal Tender"). The
Securities will be payable as to principal, premium, interest and Liquidated
Damages, if any, at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or at the option of
the Company, payment of principal, premium, interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set forth in
the registry of Holders, and provided that payment by wire transfer of
immediately available funds will be required with respect to principal of,
premium and interest on and Liquidated Damages, if any, with respect to Global
Securities and all other Securities the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent.
3. Paying Agent and Registrar.
Initially, Wilmington Trust Company (the "Trustee") will
act as Paying Agent, Registrar and conversion agent. The Company may change any
Paying Agent, Registrar or
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co-Registrar or conversion agent without notice to the Holders. The Company or
any of its Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated
as of September 17, 1997 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are general
unsecured obligations of the Company limited in aggregate principal amount to
$150,000,000.
5. Redemption.
The Securities may be redeemed in whole or from time to time
in part at any time on and after September 15, 2000, at the option of the
Company, at the Redemption Price (expressed as a percentage of principal amount)
set forth below with respect to the indicated Redemption Date, in each case,
plus any accrued but unpaid interest and Liquidated Damages, if any, to, but
excluding, the Redemption Date. The Securities may not be so redeemed prior to
September 15, 2000.
If redeemed during
the 12-month period
beginning September 15, Redemption Price
----------------
2000 ............................... 103.286%
2001 ............................... 102.464%
2002 ............................... 101.643%
2003 ............................... 100.821%
2004 ............................... 100.000%
Any such redemption will comply with Article III of the
Indenture.
6. Notice of Redemption.
Notice of redemption will be sent by first class mail,
postage prepaid, at least 30 days and not more than 60 days prior to the
Redemption Date to the Holder of each Security to be redeemed at such Holder's
last address as then shown upon the registry books of the Registrar. Securities
may be redeemed in part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Securities called for
redemption shall have been deposited with the Paying Agent on such Redemption
Date and payment of the Securities called for redemption
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is not prohibited under Article XII of the Indenture, the Securities called for
redemption will cease to bear interest and the only right of the Holders of such
Securities will be to receive payment of the Redemption Price, plus any accrued
and unpaid interest and Liquidated Damages, if any, to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the
owner of it for all purposes, subject to the provisions of the Indenture with
respect to record dates for the payment of interest.
9. Unclaimed Money.
If money for the payment of principal, interest or Liquidated
Damages, if any, remains unclaimed for two years, the Trustee and the Paying
Agent(s) will pay the money back to the Company at its written request. After
that, all liability of the Trustee and such Paying Agent(s) with respect to such
money shall cease.
10. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the
Securities may be amended or supplemented, and any existing Default or Event of
Default or compliance with any provision may be waived, with the written consent
of the Holders of a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency, or make any other change
that does not adversely affect the rights of any Holder of a Security.
11. Conversion Rights.
Subject to the provisions of the Indenture, the Holders have
the right to convert the principal amount of the Securities into fully paid and
nonassessable shares of Common Stock of the Company at the initial conversion
price per share of Common Stock of $26.25 (equivalent to a conversion rate of
38.0952 shares per $1,000 principal amount of Securities), or at the adjusted
conversion price then in effect, if adjustment has been made as provided in the
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Indenture, upon surrender of the Security to the Company, together with a fully
executed notice in substantially the form attached hereto.
12. Ranking.
Payment of principal, premium, if any, interest on and
Liquidated Damages, if any, with respect to the Securities is subordinated, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior Indebtedness.
13. Repurchase at Option of Holder Upon a Change of Control.
If there is a Change of Control, the Company shall be
required to offer to purchase on the Repurchase Date all outstanding Securities
at a purchase price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, to, but excluding, the
Repurchase Date. Holders of Securities will receive a Repurchase Offer from the
Company prior to any related Repurchase Date and may elect to have such
Securities purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
14. Successors.
When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing (other than
as Event of Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of the
securities shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of
Securities notice of any continuing Default or Event of Default (except a
Default in payment of principal, interest or Liquidated Damages, if any), if it
determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates as if it were not the Trustee.
▇-▇
▇▇
▇▇. No Recourse Against Others.
No stockholder, director, officer or employee, as such,
past, present or future, of the Company or any successor corporation shall have
any personal liability in respect of the obligations of the Company under the
Securities or the Indenture by reason of his, her or its status as such
stockholder, director, officer or employee. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
18. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on the other side
of this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder
of a Security or an assignee, such as: TEN COM (= tenants in common), TENANT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (=Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company will cause CUSIP
numbers to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
21. Additional Rights of Holders of Transfer Restricted Securities.
In addition to the rights provided to Holders of Securities
under the Indenture, Holders of Securities shall have all the rights set forth
in the Registration Rights Agreement.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Request may be made to:
SmarTalk TeleServices, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
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FORM OF ASSIGNMENT
I or we assign this Security to
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
(Print or type name, address and zip code of assignee)
----------------------------
Please insert Social Security or other identifying number of assignee
And irrevocably appoint ______________________________________ agent to transfer
this Security on the books of the Company. The agent may substitute another to
act for him.
Dated:_______________________ Signed:_______________________________
(Sign exactly as your name
appears on the other side of this
Security)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Article XI of the Indenture, check the box: [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Article XI of the Indenture, state the amount you want to be
purchased: $__________
Dated:_______________________ Signed:_______________________________
(Sign exactly as your name
appears on the other side of this
Security)
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES(4)
The following exchanges of a part of this Global Security
for Definitive Securities have been made:
Amount of decrease Amount of increase Principal Amount of
in Principal Amount in Principal Amount this Global Security Signature of authorized
of this Global of this Global following such officer of Trustee or
Date of Exchange Security Security decrease (or increase) Securities Custodian
---------------- -------- -------- ---------------------- --------------------
----------
(4) This schedule should only be added if the Security is issued in
global form.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 5 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004 OF SMARTALK
TELESERVICES, INC.
This Certificate relates to $__________ principal amount of Securities held in
book-entry or *_________ definitive form by __________ (the "Transferor").
1. The Transferor:*
[ ](a) has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depositary
a Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its
beneficial interest in such Global Security (or the portion thereof
indicated above); or
[ ](b) has requested the Trustee by written order to exchange or register
the transfer of a Security or Securities.
2. In connection with any such request and in respect of each such
Security, the Transfer or does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act because:*
[ ](a) Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
[ ](b) Such Security is being transferred to a person who the Transferor
reasonably believes is a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) purchasing for its own account
or for the account of a qualified institutional buyer over which it
exercises sole investment discretion that is aware that the transfer
is being made in reliance on Rule 144A (in satisfaction of Section
2.6(a)(ii)(B), Section 2.6(b)(i)(x) or Section 2.6(d)(i)(B) of the
Indenture).
[ ](c) Such Security is being transferred in accordance with Regulation S
under the Securities Act (in satisfaction of Section 2.6(a)(ii)(C),
Section 2.6(b)(i)(y) or Section 2.6(d)(i)(C) of the Indenture). An
Opinion of Counsel, if so requested by the Company or the Trustee, to
the effect that such transfer is in compliance with the Securities
Act accompanies this Certificate (in satisfaction of Section
2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
[ ](d) Such Security is being transferred to an institutional investor that
is an "accredited investor" within the meaning of Rule
501(a)(1),(2),(3) or (7) under the Securities Act
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97
which delivers a certificate in the form of Exhibit B to the
Indenture to the Trustee (in satisfaction of Section 2.6(a)(ii)(D) or
Section 2.6(d)(i)(D) of the Indenture). An Opinion of Counsel, if so
requested by the Company or the Trustee, to the effect that such
transfer is in compliance with the Securities Act accompanies this
Certificate (in satisfaction of Section 2.6(a)(ii)(D) or Section
2.6(d)(i)(D) of the Indenture).
[ ](e) Such Security is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the
Securities Act. An Opinion of Counsel, if so requested by the Company
or the Trustee, to the effect that such transfer is in compliance
with the Securities Act accompanies this Certificate (in satisfaction
of Section 2.6(a)(ii)(E) or Section 2.6(d)(i)(E) of the Indenture).
----------
* Check applicable box.
[INSERT NAME OF TRANSFEROR]
Date:_________________________ Name:________________________________
3. Affiliation with the Company [check if applicable]
[ ](a) The undersigned represents and warrants that it is, or at some time
during which it held this Security was, an Affiliate of the Company.
(b) If 3(a) above is checked and if the undersigned was not an Affiliate
of the Company at all times during which it held this Security,
indicate the periods during which the undersigned was an Affiliate of
the Company:
(c) If 3(a) above is checked and if the Transferee will not pay t he full
purchase price for the transfer of this Security on or prior to the
date of transfer indicate when such purchase price will be paid:
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TO BE COMPLETED BY TRANSFEREE IF 2(b) ABOVE IS CHECKED AND THE
TRANSFEROR IS NOT A QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information.
Dated:____________________________ _________________________________
NOTICE: To be executed by an
officer.
TO BE COMPLETED BY TRANSFEREE IF 2(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S.
Person" (as defined in Regulation S under the Securities Act of 1933, as
amended).
Dated:____________________________ _________________________________
NOTICE: To be executed by an
officer.
If none of the boxes under Section 2 of this certificate is checked or if any of
the above representations required to be made by the Transferee is not made, the
Registrar shall not be obligated to register this Security in the name of any
person other than the Holder hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 3(a) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT NOR
HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS SECURITY AN AFFILIATE, AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE
COMPANY.
Dated:____________________________ _________________________________
NOTICE: The signature of the
Holder to this assignment must
correspond with the name as
written upon the face of this
Security particular, without
alteration or enlargement or any
change whatsoever.
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EXHIBIT B
[FORM OF] INVESTOR LETTER OF REPRESENTATION
SmarTalk TeleServices, Inc.
c/o the Trustee
Ladies and Gentlemen:
This letter is delivered by the undersigned to request a transfer of
$_________ principal amount of the 5 3/4% Convertible Subordinated Notes due
2004 (the "Notes") of SmarTalk TeleServices, Inc. (the "Company"): The Notes are
described in that certain Offering Memorandum (the "Offering Memorandum") dated
September 12, 1997 relating to the offering of the Notes. We acknowledge receipt
of the Offering Memorandum and acknowledge that we have read the Offering
Memorandum, have had access to such financial and other information and have
been afforded the opportunity to ask such questions of representatives of the
Company and receive answers thereto, as we deem necessary in connection with our
decision to purchase the Notes.
Upon transfer the Notes would be registered in the name of
the undersigned:
Name:___________________________________
Address:________________________________
________________________________
Taxpayer ID Number:_____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as
defined in Rule 50l(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the "Securities Act")),
purchasing for our own account or for the account of such
an institutional "accredited investor," and we are
acquiring the Notes for investment purposes and not with a
view to, or for offer or sale in connection with any
distribution in violation of the Securities Act and we have
such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risk
of our investment in the Notes and invest in or purchase
securities similar to the Notes in the normal course of our
business, and we, and any accounts for which we are acting,
are each able to bear the economic risk of our or its
investment. We confirm that neither the Company nor any
person acting on its behalf has offered to sell the Notes
by, and that we have not been made aware of the offering
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100
of the Notes by, any form of general solicitation or
general advertising, including, but not limited to, any
advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or
broadcast over television or radio.
2. We understand that the Notes and the Common
Stock issuable upon conversion of the Notes (the Notes and
such Common Stock are collectively referred to herein as
"Restricted Securities") have not been registered under
the Securities Act and, unless so registered, may not be
sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes are "restricted
securities" within the meaning of Rule 144 under the
Securities Act and to offer, sell or otherwise transfer
such Notes prior to the date which is two years after the
later of the date of original issue (or any predecessor
thereto) (the "Resale Restriction Termination Date") only
(a) to the Company, (b) pursuant to a registration
statement that has been declared effective under the
Securities Act, (c) pursuant to Rule 144A under the
Securities Act, for so long as it is available, to a
person we reasonably believe is a qualified institutional
buyer under Rule 144A under the Securities Act (a "QIB")
that purchases for its own account or for the account of a
QIB and to whom notice is given that the transfer is being
made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to
an institutional "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities
Act that is purchasing for its own account or for the
account of an institutional "accredited investor," in each
case, with respect to the Notes, or (f) pursuant to any
other available exemption from the registration
requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the
disposition of our property or the property of such
investor account or accounts be at all times within our or
their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will
not apply subsequent to the Resale Restriction Termination
Date. If any resale or other transfer of the Notes is
proposed to be made pursuant to clause (e) above prior to
the Resale Restriction Termination Date, the transferor
shall deliver a letter from the transferee substantially
in the form of this letter to the Company and the trustee
(the "Trustee") under the Indenture, dated as of September
17, 1997, between the Company and the Trustee relating to
the Notes, which shall provide, among other things, that
the transferee is an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act and that it is acquiring such
Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser
acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer, prior to
the Resale Restriction Termination Date of the Restricted
Securities pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to
the Company and the Trustee.
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101
3. We understand that the Notes will be in the form of
definitive physical certificates bearing the legend set
forth in clause (4) in the "Notice to Investors" section of
the Offering Memorandum.
We acknowledge that you, the Initial Purchasers and others will
rely upon our confirmations, acknowledgments and agreements set forth herein,
and we agree to notify you promptly in writing if any of our representations and
warranties herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
____________________________________
By:_________________________________
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EXHIBIT C
[FORM OF] CONVERSION NOTICE
To: SmarTalk TeleServices, Inc.
The undersigned owner of this Security hereby: (i) irrevocably
exercises the option to convert this Security, or the portion hereof below
designated, for shares of Common Stock of SmarTalk TeleServices, Inc. in
accordance with the terms of this Indenture referred to in this Security and
(ii) directs that such shares of Common Stock deliverable upon the conversion,
together with any check in payment for fractional shares and any Security(ies)
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 are to be delivered registered in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:____________________ ______________________________
Signature
Fill in for registration of shares if to be delivered, and of
Securities if to be issued, otherwise than to and in the name of the registered
holder.
________________________________________
Social Security or other
Taxpayer Identifying Number
___________________________________
(Name)
___________________________________
(Street Address)
___________________________________
(City, State and Zip Code)
(Please print name and address)
Principal amount to be
converted: (if less than all)
$_______________________________
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