EXHIBIT 4.1
CRAY INC.
AS ISSUER
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THE BANK OF NEW YORK TRUST COMPANY, N.A.
AS TRUSTEE
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3.0% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2024
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INDENTURE
DATED AS OF DECEMBER 6, 2004
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TABLE OF CONTENTS
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 Trust Indenture Act..................................... 12
Section 1.3. Rules of Construction................................................................. 13
Section 1.4. Acts of Holders....................................................................... 13
ARTICLE II THE NOTES..................................................................................................... 14
Section 2.1. Form and Dating....................................................................... 14
Section 2.2. Execution and Authentication.......................................................... 16
Section 2.3. Registrar, Paying Agent and Conversion Agent.......................................... 17
Section 2.4. Paying Agent to Hold Assets in Trust.................................................. 17
Section 2.5. Holder Lists.......................................................................... 18
Section 2.6. Transfer and Exchange................................................................. 18
Section 2.7. Replacement Notes..................................................................... 19
Section 2.8. Outstanding Notes; Determinations of Holders' Action.................................. 19
Section 2.9. Temporary Notes....................................................................... 20
Section 2.10. Cancellation.......................................................................... 20
Section 2.11. Persons Deemed Owners................................................................. 21
Section 2.12. Additional Transfer and Exchange Requirements......................................... 21
Section 2.13. CUSIP Numbers......................................................................... 26
ARTICLE III REDEMPTION OF NOTES.......................................................................................... 27
Section 3.1. The Company's Right to Redeem; Notice to Trustee...................................... 27
Section 3.2. Selection of Notes to Be Redeemed..................................................... 27
Section 3.3. Notice of Redemption.................................................................. 28
Section 3.4. Effect of Notice of Redemption........................................................ 28
Section 3.5. Deposit of Redemption Price........................................................... 29
Section 3.6. Notes Redeemed in Part................................................................ 29
Section 3.7. Repayment to the Company.............................................................. 29
Section 3.8. No Sinking Fund....................................................................... 29
Section 3.9. Provisional Redemption; Make-Whole Premium............................................ 29
Section 3.10. Availability of Shelf Registration Statement.......................................... 30
ARTICLE IV PURCHASE AT THE OPTION OF HOLDERS ON SPECIFIC DATES........................................................... 30
Section 4.1. Optional Put.......................................................................... 30
Section 4.2. Effect of Purchase Notice; Withdrawal of Purchase Notice.............................. 33
Section 4.3. Deposit of Purchase Price............................................................. 33
Section 4.4. Certificated Securities Purchased in Part............................................. 34
Section 4.5. Covenant to Comply With Securities Laws Upon Purchase of Notes........................ 34
Section 4.6. Repayment to the Company.............................................................. 34
Section 4.7. No Purchase Upon Event of Default..................................................... 34
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ARTICLE V PURCHASE AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE................................................... 35
Section 5.1. Fundamental Change Put................................................................ 35
Section 5.2. Effect of Fundamental Change Purchase Notice.......................................... 37
Section 5.3. Deposit of Fundamental Change Purchase Price.......................................... 38
Section 5.4. Certificated Securities Purchased in Part............................................. 39
Section 5.5. Covenant to Comply With Securities Laws Upon Purchase of Notes........................ 39
Section 5.6. Repayment to the Company.............................................................. 39
ARTICLE VI COVENANTS..................................................................................................... 39
Section 6.1. Payment of Notes...................................................................... 39
Section 6.2. SEC and Other Reports to the Trustee.................................................. 40
Section 6.3. Compliance Certificate................................................................ 41
Section 6.4. Further Instruments and Acts.......................................................... 41
Section 6.5. Maintenance of Office or Agency of the Trustee, Registrar, Paying
Agent and Conversion Agent............................................................ 42
Section 6.6. Delivery of Information Required Under Rule 144A...................................... 42
Section 6.7. Waiver of Stay, Extension or Usury Laws............................................... 42
Section 6.8. Statement by Officers as to Default................................................... 43
ARTICLE VII SUCCESSOR CORPORATION........................................................................................ 43
Section 7.1. When Company May Merge or Transfer Assets............................................. 43
ARTICLE VIII DEFAULTS AND REMEDIES....................................................................................... 44
Section 8.1. Events of Default..................................................................... 44
Section 8.2. Acceleration.......................................................................... 46
Section 8.3. Other Remedies........................................................................ 46
Section 8.4. Waiver of Past Defaults............................................................... 47
Section 8.5. Control by Majority................................................................... 47
Section 8.6. Limitation on Suits................................................................... 47
Section 8.7. Rights of Holders to Receive Payment or to Convert.................................... 48
Section 8.8. Collection Suit by Trustee............................................................ 48
Section 8.9. Trustee May File Proofs of Claim...................................................... 48
Section 8.10. Priorities............................................................................ 49
Section 8.11. Undertaking for Costs................................................................. 49
ARTICLE IX TRUSTEE....................................................................................................... 50
Section 9.1. Duties of Trustee..................................................................... 50
Section 9.2. Rights of Trustee..................................................................... 51
Section 9.3. Individual Rights of Trustee.......................................................... 52
Section 9.4. Trustee's Disclaimer.................................................................. 53
Section 9.5. Notice of Defaults.................................................................... 53
Section 9.6. Reports by Trustee to Holders......................................................... 53
Section 9.7. Compensation and Indemnity............................................................ 53
Section 9.8. Replacement of Trustee................................................................ 54
Section 9.9. Successor Trustee by Merger........................................................... 55
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Section 9.10. Eligibility; Disqualification......................................................... 55
Section 9.11. Preferential Collection of Claims Against Company..................................... 55
ARTICLE X DISCHARGE OF INDENTURE......................................................................................... 56
Section 10.1. Discharge of Liability on Notes....................................................... 56
Section 10.2. Deposited Monies to Be Held in Trust by Trustee....................................... 56
Section 10.3. Repayment to the Company.............................................................. 56
ARTICLE XI AMENDMENTS.................................................................................................... 57
Section 11.1. Without Consent of Holders of Notes................................................... 57
Section 11.2. With Consent of Holders of Notes...................................................... 58
Section 11.3. Compliance with Trust Indenture Act................................................... 59
Section 11.4. Revocation and Effect of Consents, Waivers and Actions................................ 59
Section 11.5. Notation on or Exchange of Notes...................................................... 60
Section 11.6. Trustee to Sign Supplemental Indentures............................................... 60
Section 11.7. Effect of Supplemental Indentures..................................................... 60
ARTICLE XII CONVERSION................................................................................................... 60
Section 12.1. Conversion Right...................................................................... 60
Section 12.2. Conversion Procedures; Conversion Rate; Fractional Shares............................. 62
Section 12.3. Adjustment of Conversion Rate......................................................... 65
Section 12.4. Consolidation or Merger of the Company................................................ 74
Section 12.5. Notice of Adjustment.................................................................. 76
Section 12.6. Notice in Certain Events.............................................................. 76
Section 12.7. Company To Reserve Stock: Registration; Listing...................................... 77
Section 12.8. Taxes on Conversion................................................................... 78
Section 12.9. Conversion After Regular Record Date.................................................. 78
Section 12.10. Company Determination Final........................................................... 78
Section 12.11. Responsibility of Trustee for Conversion Provisions................................... 79
Section 12.12. Option to Satisfy Conversion Obligation with Cash, Common Stock
or Combination Thereof................................................................ 79
Section 12.13. Conversion After a Public Acquirer Change of Control.................................. 82
ARTICLE XIII SUBORDINATION............................................................................................... 83
Section 13.1. Agreement to Subordinate.............................................................. 83
Section 13.2. Liquidation, Dissolution, Bankruptcy.................................................. 83
Section 13.3. Default on Senior Debt and/or Designated Senior Debt.................................. 83
Section 13.4. Acceleration of Notes................................................................. 84
Section 13.5. When Distribution Must Be Paid Over................................................... 84
Section 13.6. Notice by Company..................................................................... 85
Section 13.7. Subrogation........................................................................... 85
Section 13.8. Relative Rights....................................................................... 85
Section 13.9. Subordination May Not Be Impaired by Company.......................................... 86
Section 13.10. Distribution or Notice to Representative.............................................. 86
Section 13.11. Rights of Trustee and Paying Agent.................................................... 86
Section 13.12. Authorization to Effect Subordination................................................. 87
Section 13.13. Article Applicable to Paying Agents................................................... 87
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Section 13.14. Senior Debt Entitled to Rely.......................................................... 87
Section 13.15. Permitted Payments.................................................................... 87
Section 13.16. No Waiver of Subordination Provisions................................................. 87
ARTICLE XIV MISCELLANEOUS................................................................................................ 88
Section 14.1. Trust Indenture Act Controls.......................................................... 88
Section 14.2. Notices............................................................................... 88
Section 14.3. Communication by Holders with Other Holders........................................... 89
Section 14.4. Certificate and Opinion as to Conditions Precedent.................................... 89
Section 14.5. Statements Required in Certificate or Opinion......................................... 89
Section 14.6. Separability Clause................................................................... 90
Section 14.7. Rules by Trustee, Paying Agent, Conversion Agent, Registrar........................... 90
Section 14.8. Legal Holidays........................................................................ 90
Section 14.9. Governing Law; Submission to Jurisdiction; Service of Process......................... 90
Section 14.10. No Recourse Against Others............................................................ 91
Section 14.11. Successors............................................................................ 91
Section 14.12. Multiple Originals.................................................................... 91
EXHIBIT A Form of Note
EXHIBIT B Form of Certificate to be Delivered by Transferee in Connection with
Transfers to Institutional Accredited Investors
EXHIBIT C Form of Restrictive Legend for Common Stock Issues Upon Conversion
SCHEDULE I Conversion Rate Adjustment Table
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INDENTURE, dated as of December 6, 2004, between CRAY INC., a
Washington corporation (the "COMPANY"), and The Bank of New York Trust Company,
N.A., as trustee (the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 3.0%
Convertible Senior Subordinated Notes due 2024 (the "NOTES") having the terms,
tenor, amount and other provisions hereinafter set forth.
All things necessary to make the Notes, when the Notes are duly
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, in accordance with their
and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders of the Notes:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"ADDITIONAL INTEREST" has the meaning set forth in the Registration
Rights Agreement.
"ADDITIONAL SHARES" has the meaning set forth in Section 12.2.
"AFFILIATE" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AGENT MEMBERS" has the meaning set forth in Section 2.1(c).
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Note, in each case to the extent
applicable to such transaction and as in effect from time to time.
"APPLICABLE STOCK" means (a) the Common Stock and/or (b) in the
event of a transaction referred to in Section 12.4 in which the Notes become
convertible into Equity
Interests of another Person, such Equity Interests or any other Equity Interests
into which such Equity Interests shall be reclassified or changed.
"BANKRUPTCY LAW" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
United States federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any duly authorized committee of such board.
"BOARD RESOLUTION" means a resolution of the Board of Directors or
any duly appointed committee thereof.
"BUSINESS DAY" means each day of the year other than a Saturday or a
Sunday or other day on which banking institutions in the City of New York are
required or authorized by law, regulation or executive order to close.
"CASH" means such coin or currency of the United States as at any
time of payment is legal tender for the payment of public and private debts.
"CASH AMOUNT" has the meaning set forth in Section 12.12(a).
"CASH SETTLEMENT AVERAGING PERIOD" has the meaning set forth in
Section 12.12(a).
"CERTIFICATED SECURITIES" means Notes that are in substantially the
form attached hereto as Exhibit A and that do not include the information called
for by footnotes 1 and 3 thereof.
"CLOSING SALE PRICE" means with respect to a share of Applicable
Stock on any date, the closing sale price of a share of Applicable Stock (or, if
no closing sale price is reported, the average of the bid and ask prices or, if
there is more than one bid or ask price, the average of the average bid and the
average ask prices) on such date as reported on a national securities exchange
such as the New York Stock Exchange or, if the shares of Applicable Stock are
not listed on a national securities exchange, as reported by the Nasdaq National
Market system or the Nasdaq SmallCap Market system, as applicable. If the
Applicable Stock is not listed for trading on a national securities exchange and
not quoted by the Nasdaq National Market or the Nasdaq SmallCap Market on the
relevant date, the "Closing Sale Price" shall be the last quoted bid for the
Applicable Stock in the over-the-counter market on the relevant date as reported
by the National Quotation Bureau or similar organization. If the Applicable
Stock is not so quoted, the "Closing Sale Price" shall be the average of the
midpoint of the last bid and ask prices for the Applicable Stock on the relevant
date from each of at least three nationally recognized independent investment
banking firms selected by the Company for this purpose.
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"COMMON STOCK" means the common stock, $0.01 par value per share, of
the Company as that stock exists on the date of this Indenture or any other
Equity Interests of the Company into which such Common Stock shall be
reclassified or changed; provided, that after
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the consummation of any transaction referred to in Section 12.4, all references
to "Common Stock" shall, to the extent necessary to protect the interests of the
Holders of the Notes, become references to "Applicable Stock.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by any two Officers, at least one of
whom is the Chief Executive Officer or the Chief Financial Officer.
"COMPANY" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, means such successor.
The foregoing sentence shall likewise apply to any subsequent successor or
successors to such successor.
"CONVERSION AGENT" has the meaning set forth in Section 2.3.
"CONVERSION NOTICE" has the meaning set forth in Section 12.2(b).
"CONVERSION OBLIGATION" has the meaning set forth in Section
12.1(a).
"CONVERSION PERIOD" means the period from and including the
designated mid-point date in a fiscal quarter of the Company to, but not
including, the designated mid-point date (or if that day is not a Trading Day,
then the next Trading Day) in the immediately following fiscal quarter of the
Company. The "designated mid-point dates" for the Company's fiscal quarters are
February 15, May 15, August 15 and November 15 and, for purposes of determining
Conversion Periods hereunder, such designated mid-point dates shall not change
notwithstanding any change in the Company's fiscal periods.
"CONVERSION PRICE" means, at any time, $1,000 divided by the
Conversion Rate in effect at such time, rounded to two decimal places (rounded
up if the third decimal place thereof is 5 or more and otherwise rounded down).
"CONVERSION RATE" means the number of shares of Common Stock
issuable upon conversion of each $1,000 of the principal amount of the Notes,
which is initially 207.2002 shares, subject to adjustments as set forth in this
Indenture.
"CONVERSION RETRACTION PERIOD" has the meaning set forth in Section
12.12(a).
"CONVERSION SETTLEMENT STOCK PRICE" means the arithmetic average of
the Closing Sale Prices of Common Stock during the Cash Settlement Averaging
Period.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee
at which at any time its corporate trust business shall be administered, which
office at the date hereof is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as the Trustee may designate from time
to time by notice to the Holders and the Company, or the principal corporate
trust office of any successor Trustee (or such other address as a successor
Trustee may designate from time to time by notice to the Holders and the
Company).
"CURRENT MARKET PRICE" has the meaning set forth in Section 12.3(g).
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"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"DEFAULT" means, when used with respect to the Notes, any event
which is, or after notice or passage of time or both would be, an Event of
Default.
"DEPOSITARY" means, with respect to any Global Securities, a
securities clearing agency that is registered as such under the Exchange Act and
is designated by the Company to act as Depositary for such Global Securities (or
any successor securities clearing agency so registered), which shall initially
be DTC.
"DESIGNATED SENIOR DEBT" means, with respect to the Company,
indebtedness under the Senior Credit Facility and any other Senior Debt in which
the instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Debt shall be "Designated Senior Debt" for
purposes of this Indenture.
"DISTRIBUTED ASSETS" has the meaning set forth in Section 12.3(d).
"DTC" means The Depository Trust Company, a New York corporation.
"▇▇▇▇▇" has the meaning set forth in Section 6.2(b).
"EQUITY INTEREST" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person.
"EVENT OF DEFAULT" has the meaning set forth in Section 8.1.
"EXCESS CONVERSION OBLIGATION" has the meaning set forth in Section
12.12(a).
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended.
"EX-DIVIDEND TIME" means, with respect to any issuance or
distribution on Common Stock, the first Trading Day on which the Common Stock
trades regular way on the principal securities market on which the Common Stock
is then traded without the right to receive such issuance or distribution.
"EXPIRATION TIME" has the meaning set forth in Section 12.3(f).
"FAIR MARKET VALUE" has the meaning set forth in Section 12.3(g).
"FINAL NOTICE DATE" has the meaning set forth in Section 12.12(a).
"FUNDAMENTAL CHANGE" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange
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Act), is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have beneficial
ownership of all shares that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total outstanding Voting Stock of the
Company; (ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election to such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of at least
66-2/3% of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of such
Board of Directors then in office; (iii) the Company consolidates with or merges
with or into any Person, or conveys, transfers, sells or otherwise disposes of
or leases all or substantially all of its assets to any Person, or any
corporation consolidates with or merges into or with the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is changed into or exchanged for cash, securities or other property,
other than any such transaction where the outstanding Voting Stock of the
Company is not changed or exchanged at all (except to the extent necessary to
reflect a change in the jurisdiction of incorporation of the Company), or where
(A) the outstanding Voting Stock of the Company is changed into or exchanged for
cash, securities and other property (other than Equity Interests of the
surviving corporation) and (B) the shareholders of the Company immediately
before such transaction own, directly or indirectly, immediately following such
transaction, more than 50% of the total outstanding Voting Stock of the
surviving corporation; (iv) the Company is liquidated or dissolved or adopts a
plan of liquidation or dissolution other than in a transaction which complies
with the provisions described under ARTICLE VII; or (v) the Company's Common
Stock ceases to be traded on a national securities exchange or quoted on the
Nasdaq National Market or the Nasdaq SmallCap Market or traded on an established
automated over-the-counter trading market in the United States.
Notwithstanding the foregoing provisions, a "Fundamental Change"
shall not be deemed to have occurred if either:
(1) the Closing Sale Price of the Common Stock for each of at
least five Trading Days within:
(i) the period of the ten consecutive Trading Days immediately
after the later of the Fundamental Change or the public announcement
of the Fundamental Change, in the case of a Fundamental Change
resulting solely from a Fundamental Change in clause (i) of the
definition of Fundamental Change; or
(ii) the period of the ten consecutive Trading Days
immediately preceding the Fundamental Change, in the case of a
Fundamental Change resulting from a Fundamental Change in clauses
(ii), (iii) or (iv) of the definition of Fundamental Change;
is at least equal to 105% of the quotient where the numerator is the
principal amount of a Note and the denominator is the Conversion Rate in
effect on each of
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such five Trading Days, with such calculation being made for each Trading
Day (the "105% TRADING PRICE EXCEPTION"); or
(2) in the case of a merger or consolidation described in
clause (iii) of the definition of Fundamental Change, at least 90% of the
consideration, excluding cash payments for fractional shares and cash
payments pursuant to dissenters' appraisal rights, in the merger or
consolidation constituting the Fundamental Change, consists of common
stock traded on a U.S. national securities exchange or quoted on the
Nasdaq National Market or the Nasdaq SmallCap Market (or which shall be so
traded or quoted when issued or exchanged in connection with such
Fundamental Change) and as a result of such transaction or transactions
the Notes become convertible solely into such common stock, excluding cash
payments for fractional shares.
"FUNDAMENTAL CHANGE PURCHASE DATE" has the meaning set forth in
Section 5.1(a).
"FUNDAMENTAL CHANGE PURCHASE NOTICE" has the meaning set forth in
Section 5.1(c).
"FUNDAMENTAL CHANGE PURCHASE PRICE" has the meaning set forth in
Section 5.1(a).
"GLOBAL SECURITIES" means Notes that are in substantially the form
attached hereto as Exhibit A and that include the information called for by
footnotes 1 and 3 thereof and that are deposited with the Depositary or its
custodian and registered in the name of the Depositary or its nominee.
"HOLDER" means a person in whose name a Note, including any Global
Security, is registered on the Registrar's books.
"INDEBTEDNESS" means, with respect to any person,
(a) all obligations, contingent or otherwise, of such person
(i) for borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such person or only to a portion thereof), (ii)
evidenced by a note, debenture, bond or written instrument (including a
purchase money obligation), (iii) in respect of leases of such person
required, in conformity with United States generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the
balance sheet of such person; or (iv) in respect of letters of credit
(including reimbursement obligations with respect thereto), local
guarantees or bankers' acceptances;
(b) all obligations secured by a mortgage, pledge, lien,
encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such person are subject and
as are reflected as debt on the balance sheet of such person, whether or
not the obligations secured thereby shall have been assumed by or shall
otherwise be such person's legal liability;
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(c) all obligations of such person under interest rate and
currency swap agreements, cap, floor and collar agreements, spot and
forward contracts and similar agreements and arrangements; and
(d) all obligations of others of the type described in clause
(a), (b) or (c) above assumed by or guaranteed in any manner by such
person or in effect guaranteed by such person through an agreement to
purchase, contingent or otherwise (and the obligations of such person
under any such assumptions, guarantees or other such arrangements).
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the
TIA that are explicitly incorporated in this Indenture by reference to the
TIA.
"INITIAL PURCHASER" means Bear, ▇▇▇▇▇▇▇ & Co. Inc., as initial
purchaser pursuant to the Purchase Agreement.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional investor
that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST PAYMENT DATE" has the meaning set forth in Exhibit A
attached hereto.
"ISSUE DATE" means, with respect to any Note, the date on which such
Note was originally issued or deemed issued as set forth on the face of the
Note.
"LEGAL HOLIDAY" means any day other than a Business Day.
"NON-ELECTING SHARE" has the meaning set forth Section 12.4.
"NOTES" has the meaning set forth in the Recitals.
"OBLIGATIONS" means any principal, interest accruing on or after the
filing of any petition of bankruptcy or for reorganization, whether or not a
claim for post-filing interest is allowed in such proceeding, penalties, fees,
charges, expenses, indemnifications, reimbursement obligations, additional
amounts, guarantees and other liabilities or amounts payable under the
documentation governing any indebtedness or in respect thereto.
"OFFICER" means the Chief Executive Officer, the President, the
Chief Financial Officer, any Vice President, the Treasurer or the Secretary of
the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Section 14.4 and Section 14.5, signed in the name of
the Company by any two Officers, at least one of whom is the Chief Executive
Officer or the Chief Financial Officer, and delivered to the Trustee. An
Officers' Certificate given pursuant to Section 6.3 shall be signed by the Chief
Financial Officer and one other Officer.
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"OPINION OF COUNSEL" means a written opinion containing the
information specified in Section 14.4 and Section 14.5, from legal counsel
reasonably satisfactory to the Trustee. The counsel may be an employee of, or
counsel to, the Company.
"PAYING AGENT" has the meaning set forth in Section 2.3.
"PAYMENT BLOCKAGE NOTICE" has the meaning set forth in Section
13.3(b).
"PAYMENT BLOCKAGE PERIOD" has the meaning set forth in Section
13.3(b).
"PAYMENT DEFAULT" has the meaning set forth in Section 13.3(a).
"PERSON" or "PERSON" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, or government or any agency or political
subdivision thereof (and for purposes of the definition of "Fundamental Change"
shall also have the meaning set forth in such definition).
"PRINCIPAL CONVERSION SETTLEMENT ELECTION" has the meaning set forth
in Section 12.12(a).
"PUBLIC ACQUIRER CHANGE OF CONTROL" means any event constituting a
Fundamental Change (or that would otherwise constitute a Fundamental Change, but
for the application of the 105% Trading Price Exception) of the type described
in Section 12.3(e) in which the acquirer has a class of common stock traded on
any U.S. national securities exchange or quoted on the Nasdaq National Market or
the Nasdaq SmallCap Market or which will be so traded or quoted when issued or
exchanged in connection with such Fundamental Change or other event (the "PUBLIC
ACQUIRER COMMON STOCK"). If an acquirer does not itself have a class of common
stock satisfying the foregoing requirement, it will be deemed to have Public
Acquirer Common Stock if a Subsidiary of the acquirer has a class of common
stock satisfying the foregoing requirement; in such case, all references to
Public Acquirer Common Stock shall refer to such class of common stock.
"PUBLIC ACQUIRER COMMON STOCK" has the meaning assigned to it in the
definition of Public Acquirer Change of Control.
"PUBLIC NOTICE" by the Company shall mean publication of a notice in
a press release through Dow ▇▇▇▇▇ & Co., Inc., Business Wire or Bloomberg
Business News Company or, if such organizations are not in existence at the time
of issuance of such press release, such other news or press organization as is
reasonably calculated to broadly disseminate the relevant information to the
public and publication of such information on the Company's corporate website or
through such other public medium as the Company may use at that time.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated December 1,
2004, by and between the Company and the Initial Purchaser relating to the
purchase and sale of the Notes.
"PURCHASE DATE" has the meaning set forth in Section 4.1(a).
8
"PURCHASE NOTICE" has the meaning set forth in Section 4.1(c).
"PURCHASE PRICE" has the meaning set forth in Section 4.1(a).
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"RECORD DATE" has the meaning set forth in Section 12.3(g).
"REDEMPTION DATE" means, when used with respect to any Note to be
redeemed, the date fixed for redemption pursuant to this Indenture.
"REDEMPTION PRICE" means when used with respect to any Note to be
redeemed pursuant to any provision in this Indenture, the price at which it is
to be redeemed pursuant to this Indenture and the Notes.
"REFERENCE PERIOD" has the meaning set forth in Section 12.3(d).
"REGISTER" has the meaning set forth in Section 2.3.
"REGISTRAR" has the meaning set forth in Section 2.3.
"REGISTRATION DEFAULT PERIOD" has the meaning set forth in the
Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated December 6, 2004, between the Company and Bear, ▇▇▇▇▇▇▇ & Co.
Inc., as amended or supplemented from time to time.
"REGULAR RECORD DATE" has the meaning set forth in Exhibit A
attached hereto.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee,
the officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president or assistant treasurer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
"RESTRICTED CERTIFICATED SECURITY" means a Certificated Security
which is a Transfer Restricted Security.
"RESTRICTED GLOBAL SECURITY" means a Global Security that is a
Transfer Restricted Security.
"RESTRICTED SECURITY" means a Restricted Certificated Security or a
Restricted Global Security.
9
"RULE 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.
"SEC" means the United States Securities and Exchange Commission, or
any successor thereto.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended, or any successor statute thereto and the rules and regulations
thereunder.
"SENIOR CREDIT FACILITY" means that certain Credit Agreement, dated
as of April 10, 2003, between ▇▇▇▇▇ Fargo Bank, N.A. and the Company, as
amended, modified or extended from time to time.
"SENIOR DEBT" means, with respect to the Company, the principal of,
premium, if any, and interest on (including interest accruing after, or which
would accrue but for the filing of a petition initiating any proceeding pursuant
to Bankruptcy Law at the rate specified in the applicable Senior Debt, whether
or not a claim for such interest would be allowed), all Indebtedness of the
Company, (i) arising under the Senior Credit Facility or (ii) as to which the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Indebtedness shall be "Senior Debt" for purposes of
this Indenture, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company
(including all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to the foregoing); provided, however, that Senior
Debt does not include:
(a) Indebtedness evidenced by the Notes;
(b) Indebtedness of the Company to any Subsidiary of the
Company;
(c) any liability for federal, state, foreign, local or other
taxes owed or owing by the Company; and
(d) accounts payable or other liabilities of the Company to
trade creditors arising in the ordinary course of business.
"SETTLEMENT NOTICE PERIOD" has the meaning set forth in Section
12.12(a).
"SHELF REGISTRATION STATEMENT" means any registration statement to
be filed by the Company covering resales by holders of the Notes and the Common
Stock issuable upon conversion of the Notes, as specified in the Registration
Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any existing or future, direct or
indirect, Subsidiary of the Company that would constitute a "significant
subsidiary" as such term is defined under Rule 1-02 of Regulation S-X.
"SPECIAL RECORD DATE" has the meaning set forth in Exhibit A
attached hereto.
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"SPIN-OFF" has the meaning set forth in Section 12.3(d).
"STATED MATURITY", when used with respect to any Note, means
December 1, 2024.
"STOCK PRICE" means the price paid per share of Common Stock in a
transaction to which Section 12.2(e) applies. If holders of Common Stock receive
only cash in such transaction, the Stock Price shall be the cash amount paid per
share. Otherwise, the Stock Price shall be the average of the Closing Sale
Prices of the Common Stock on the five Trading Days prior to but not including
the effective date of such transaction.
"SUBSIDIARY" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"SURRENDERED SECURITY" has the meaning set forth in Section
12.12(a).
"TIA" means the United States Trust Indenture Act of 1939 as in
effect on the date of this Indenture, provided, however, that in the event the
TIA is amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
"TRADING DAY" means a day during which trading in securities
generally occurs on the principal U.S. national or regional securities exchange
on which the Applicable Stock is then listed or, if the Applicable Stock is not
listed on a U.S. national or regional securities exchange, on the Nasdaq
National Market system or Nasdaq SmallCap Market system or, if the Applicable
Stock is not listed on a U.S. national or regional securities exchange, and not
quoted on the Nasdaq National Market system, on the principal other market on
which the Applicable Stock is then traded (provided that no day on which trading
of the Applicable Stock is suspended on such exchange or other trading market
will count as a Trading Day) (it being understood that for purposes of this
definition a market shall include obtaining quotations as provided in the last
sentence of the definition of "Closing Sale Price," if applicable).
"TRANSFER CERTIFICATE" has the meaning set forth in Section 2.12(e).
"TRANSFER RESTRICTED SECURITY" has the meaning set forth in Section
2.12(e).
"TRIGGER EVENT" has the meaning set forth in Section 12.3(d).
"TRUSTEE" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"UNDISRUPTED TRADING DAY" means a Trading Day on which the
Applicable Stock does not experience any of the following at any time during the
one-hour period ending at the conclusion of the regular Trading Day:
11
(a) any suspension of or limitation imposed on trading of the
Applicable Stock on any national or regional securities exchange or
association or over-the-counter market;
(b) any event (other than an event listed in clause (c) below)
that disrupts or impairs the ability of market participants in general to
(i) effect transactions in or obtain market values for the Applicable
Stock on any relevant national or regional securities exchange or
association or over-the-counter market or (ii) effect transactions in or
obtain market values for, futures or options contracts relating to the
Applicable Stock on any relevant national or regional securities exchange
or association or over-the-counter market; or
(c) any relevant national or regional securities exchange or
association or over-the-counter market on which the Applicable Stock
trades closes on any exchange Trading Day prior to its scheduled closing
time unless such earlier closing time is announced by the exchange at
least one hour prior to the earlier of (i) the actual closing time for the
regular trading session on such exchange and (ii) the submission deadline
for orders to be entered into the exchange for execution on such Trading
Day,
if, in the case of clauses (a) and (b) (but not clause (c)) above, the Company
determines the effect of such suspension, limitation, disruption or impairment
is material.
"UNRESTRICTED CERTIFICATED SECURITY" means a Certificated Security
that is not a Transfer Restricted Security.
"UNRESTRICTED GLOBAL SECURITY" means a Global Security that is not a
Transfer Restricted Security.
"VOTING STOCK" of a person means the Equity Interest of such person
of the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such person (irrespective of whether
or not at the time the Equity Interest of any other class or classes shall have
or might have voting power by reason of the happening of any contingency).
Section 1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Holder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "institutional trustee" means the Trustee.
12
"OBLIGOR" on the indenture securities means the Company.
All other TIA terms used but not defined in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule have the meanings assigned to them by such definitions.
Section 1.3. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with accounting principles generally accepted in
the United States as in effect from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the
plural include the singular.
Section 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company, as
described in Section 14.2. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section 1.4.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority, if it so states. The
fact and date of the execution of any such instrument or writing, or the
authority of the person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
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(c) The principal amount and serial number of any Note and the
record ownership of Notes shall be proved by the Register maintained by the
Registrar for the Notes.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
ARTICLE II
THE NOTES
Section 2.1. Form and Dating.
(a) The Notes shall be designated as the "3.0% Convertible Senior
Subordinated Notes due 2024" of the Company. The aggregate principal amount of
Notes outstanding at any time may not exceed $65,000,000 (or up to $80,000,000
if the Initial Purchaser's option to purchase additional Notes set forth in the
Purchase Agreement is exercised in full) except as provided in Section 2.7.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A attached hereto, which is incorporated in
and made a part of this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage (provided that any
such notation, legend or endorsement required by usage is in a form acceptable
to the Company). The Company shall provide any such notations, legends or
endorsements to the Trustee in writing. Each Note shall be dated the date of its
authentication.
(b) Restricted Global Securities. All of the Notes are being
initially offered and sold only to QIBs in reliance on Rule 144A and shall be
issued, initially in the form of one or more Restricted Global Securities, which
shall be deposited with the Trustee at its Corporate Trust Office, as custodian
for the Depositary and registered in the name of DTC or the nominee
14
thereof, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. If any Notes are resold to an Institutional Accredited
Investor, the Company shall duly execute and the Trustee shall duly authenticate
and deliver, in accordance with Section 2.2, one or more additional Restricted
Global Securities, which shall be deposited with the Trustee at its Corporate
Trust Office, as custodian for the Depositary and registered in the name of DTC
or the nominee thereof and in which beneficial interests may be held by
Institutional Accredited Investors in accordance with the Applicable Procedures.
Subject to Section 2.1(a), the aggregate principal amount of the Restricted
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depositary as hereinafter provided.
Without limiting the generality of the foregoing, the aggregate principal amount
of the Restricted Global Securities may be increased in order to reflect the
issuance of Notes following the exercise by the Initial Purchaser of the option
set forth in the Purchase Agreement to purchase additional Notes.
(c) Global Securities in General. Each Global Security shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall initially represent the aggregate amount of
outstanding Notes stated thereon, but that the aggregate amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions, repurchases and conversions of
such Notes.
Any adjustment of the aggregate principal amount of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee in accordance
with instructions given by the Holder thereof as required by Section 2.12 and
shall be made on the records of the Trustee and the Depositary.
Neither any members of, or participants in, the Depositary
(collectively, the "AGENT MEMBERS") nor any other persons on whose behalf Agent
Members may act may exercise any rights under this Indenture with respect to any
Global Security registered in the name of the Depositary or any nominee thereof,
or under any such Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing contained
herein shall (A) prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the case may be,
or (B) impair, as between the Depositary, its Agent Members and any other person
on whose behalf an Agent Member may act, the operation of customary practices of
such Persons governing the exercise of the rights of a holder of any Note.
(d) Certificated Securities. Certificated Securities will be issued
only under the limited circumstances provided in Section 2.12(a)(i).
15
Section 2.2. Execution and Authentication.
The Notes shall be executed on behalf of the Company by any Officer.
The signature of the Officer on the Notes may be manual or facsimile.
A Note bearing the manual or facsimile signature of an individual
who was at the time of the execution of the Note an Officer shall bind the
Company, notwithstanding that such individual has ceased to hold such office(s)
prior to the authentication and delivery of such Notes or did not hold such
office(s) at the date of authentication of such Notes.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
The Trustee shall authenticate and deliver the Notes for original
issuance in an aggregate principal amount of $65,000,000 (or up to $80,000,000
if the Initial Purchaser's option to purchase additional Notes set forth in the
Purchase Agreement is exercised) upon one or more Company Orders. The aggregate
principal amount of the Notes outstanding at any time may not exceed the amount
set forth in the foregoing sentence except as provided in Section 2.7. In
authenticating such Notes, and accepting the additional responsibilities under
this Indenture in relation to such Notes, the Trustee shall receive and shall be
fully protected in relying upon:
(a) a copy of the Board Resolution in or pursuant to which the terms
and form of the Notes were established, the issuance and sale of, and the terms
of, the Notes was authorized, this Indenture was authorized and specified
Officers were authorized to establish the form of the Notes and the form of this
Indenture, to execute the Notes and this Indenture on behalf of the Company and
to take any other necessary actions relating thereto and evidence of any actions
taken by authorized Officers pursuant to that Board Resolution, certified by the
President, Secretary, an Assistant Secretary or the General Counsel of the
Company to have been duly adopted by the Board of Directors or taken by any
authorized Officer and to be in full force and effect as of the date of such
certificate; and
(b) an Officers' Certificate delivered in accordance with to Section
14.4 and Section 14.5.
The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
The Notes shall be issued only in registered form without coupons
and only in denominations of $1,000 of principal amount and any integral
multiple thereof.
16
Section 2.3. Registrar, Paying Agent and Conversion Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR"), an office
or agency where Notes may be presented for redemption, repurchase or payment
("PAYING AGENT"), an office or agency where Notes may be presented for
conversion ("CONVERSION AGENT") and an office or agency where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. Such office shall be the Corporate Trust Office of the Trustee. Pursuant
to Section 6.5, the Company shall at all times maintain a Registrar, Paying
Agent, Conversion Agent and an office or agency where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served in the
Borough of Manhattan, The City of New York. Such office in New York shall be
initially located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The
Registrar shall keep a register of the Notes (the "REGISTER") and of their
transfer and exchange.
The Company may have one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents. The term
Paying Agent includes any additional paying agent, including any named pursuant
to Section 6.5. The term Conversion Agent includes any additional conversion
agent, including any named pursuant to Section 6.5.
The Company shall enter into an appropriate limited agency agreement
with any Registrar, Paying Agent, Conversion Agent or co-registrar (in each
case, if such Registrar, agent or co-registrar is a Person other than the
Trustee). Each such agreement shall implement the provisions of this Indenture
that relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 9.7.
The Company hereby initially appoints the Trustee as Registrar,
Paying Agent and Conversion Agent in connection with the Notes.
Section 2.4. Paying Agent to Hold Assets in Trust.
Except as otherwise provided herein, prior to 10:00 a.m., New York
City time, on each due date of payments in respect of any Note, the Company
shall deposit with the Paying Agent cash (in immediately available funds if
deposited on the due date) sufficient to make such payments when so becoming
due. The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all cash held by the Paying Agent for the making of
payments in respect of the Notes and shall notify the Trustee of any default by
the Company in making any such payment. The Company at any time may require a
Paying Agent to pay all cash held by it to the Trustee, and to account for any
funds disbursed by it, and the Trustee may at any time during the continuance of
any such default, upon the written request to the Paying Agent, require such
Paying Agent to forthwith pay to the Trustee all cash so held in trust. Upon
doing so, the Paying Agent shall have no further liability for the cash.
17
Section 2.5. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall cause to be
furnished to the Trustee on or before each semiannual 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 may reasonably require of the names and
addresses of Holders.
Section 2.6. Transfer and Exchange.
(a) Subject to compliance with any applicable additional
requirements contained in Section 2.12, when a Note is presented to the
Registrar with a request to register a transfer thereof or to exchange such Note
for an equal principal amount of Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested;
provided, however, that every Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by an assignment form
and, if applicable, a transfer certificate, each in the form included in Exhibit
A attached hereto and in form satisfactory to the Registrar and each duly
executed by the Holder thereof or its attorney duly authorized in writing. To
permit registration of transfers and exchanges, upon surrender of any Note for
registration of transfer or exchange at an office or agency maintained for such
purpose pursuant to Section 2.3, the Company shall execute, and the Trustee
shall authenticate, Notes of a like aggregate principal amount at the
Registrar's request. Any transfer or exchange shall be without charge, except
that the Company or the Registrar may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Notes from the Holder requesting
such transfer or exchange.
Neither the Company, the Registrar nor the Trustee shall be required
to exchange or register a transfer of (i) any Notes selected for redemption
(except, in the case of Notes to be redeemed in part, the portion thereof not to
be redeemed), (ii) any Notes in respect of which a Purchase Notice or a
Fundamental Change Purchase Notice has been given and not withdrawn by the
Holder thereof in accordance with the terms of this Indenture (except, in the
case of Notes to be purchased in part, the portion thereof not to be purchased)
or (iii) any Notes surrendered for conversion (except, in the case of Notes to
be converted in part, the portion thereof not to be converted).
All Notes issued upon any transfer or exchange of Notes shall be
valid obligations of the Company, evidencing the same debt and entitled to the
same benefits under this Indenture, as the Notes surrendered upon such transfer
or exchange.
(b) Any Registrar appointed pursuant to Section 2.3 shall provide to
the Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Notes upon transfer or exchange of Notes.
(c) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under
18
applicable law with respect to any transfer of any interest in any Note between
or among Agent Members or other beneficial owners of interests in any Global
Security other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.7. Replacement Notes.
If (a) any mutilated Note is surrendered to the Company, the
Registrar or the Trustee, or (b) the Company, the Registrar and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Note, and there is delivered to the Company, the Registrar and the Trustee such
security or indemnity as may be requested by them to save each of them harmless,
then, in the absence of any notice to the Company, the Registrar or the Trustee
that such Note has been acquired by a bona fide purchaser, the Company shall
execute and upon its written request the Trustee shall authenticate and deliver,
in exchange for any such mutilated Note or in lieu of any such destroyed, lost
or stolen Note, a new Note of like tenor and principal amount, bearing a
certificate number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, or is about to be redeemed by the
Company pursuant to ARTICLE III or repurchased by the Company pursuant to
ARTICLE IV or ARTICLE V, the Company in its discretion may, instead of issuing a
new Note, pay, redeem or repurchase such Note, as the case may be.
Upon the issuance of any new Notes under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee or the Registrar)
connected therewith.
Every new Note issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Notes duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.8. Outstanding Notes; Determinations of Holders' Action.
Notes outstanding at any time are all the Notes authenticated by the
Trustee, except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section 2.8 as not outstanding. If a
Note is replaced pursuant to Section 2.7, the replaced Note ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser unaware that such Note has been
replaced.
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Subject to Section 2.12(f), a Note does not cease to be outstanding
because the Company or an Affiliate thereof holds the Note; provided, however,
that in determining whether the Holders of the requisite principal amount of
Notes have given or concurred in any request, demand, authorization, direction,
notice, consent, waiver, or other Act hereunder, Notes owned by the Company or
any other obligor upon the Notes or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other Act,
only Notes which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Subject to the foregoing, only Notes outstanding
at the time of such determination shall be considered in any such determination.
If the Paying Agent holds, in accordance with the terms of this Indenture,
prior to 10:00 a.m., New York City time, on a Redemption Date, a Purchase Date,
a Fundamental Change Purchase Date or Stated Maturity, as the case may be, cash
or securities, if permitted hereunder, sufficient to pay Notes payable on that
date, then on such Redemption Date, Purchase Date, Fundamental Change Purchase
Date or Stated Maturity, as the case may be, such Notes shall cease to be
outstanding and interest (including Additional Interest, if any) on such Notes
shall cease to accrue.
If a Note is converted in accordance with ARTICLE XII, then from and
after the time of conversion on the date of conversion, such Note shall cease to
be outstanding and interest (including Additional Interest, if any) on such Note
shall cease to accrue.
Section 2.9. Temporary Notes.
Pending the preparation of definitive Notes, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
Officers executing such Notes may determine, as conclusively evidenced by their
execution of such Notes.
If temporary Notes are issued, the Company shall cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 2.3, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as definitive Notes.
Section 2.10. Cancellation.
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All Notes surrendered for payment, purchase by the Company pursuant
to ARTICLE IV or ARTICLE V, conversion, redemption or registration of transfer
or exchange shall, if surrendered to any person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it or, if
surrendered to the Trustee, shall be promptly cancelled by it. The Company shall
promptly deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. The Company may not issue new Notes to replace Notes that it has paid
or delivered to the Trustee for cancellation or that any Holder has converted
pursuant to ARTICLE XII. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be disposed of by the Trustee in accordance with the Trustee's customary
procedure.
Section 2.11. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of, Redemption Price, Purchase Price
or Fundamental Change Purchase Price, and interest (including Additional
Interest, if any) on, the Note, for the purpose of receiving cash or Applicable
Stock upon conversion and for all other purposes whatsoever, whether or not such
Note be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Section 2.12. Additional Transfer and Exchange Requirements.
(a) Transfer and Exchange of Global Securities.
(i) Certificated Securities shall be issued in exchange for
interests in the Global Securities only if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the
Global Securities or if at any time the Depositary ceases to be a
"clearing agency" registered under the Exchange Act, if so required by
applicable law or regulation, and a successor Depositary is not appointed
by the Company within 90 calendar days or (y) an Event of Default has
occurred and is continuing and the Registrar receives a request from the
Depository that the notes be issued in definitive form. In any such case,
the Company shall execute, and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate
and deliver Certificated Securities in an aggregate principal amount equal
to the principal amount of such Global Securities in exchange therefor.
Only Restricted Certificated Securities shall be issued in exchange for
beneficial interests in Restricted Global Securities, and only
Unrestricted Certificated Securities shall be issued in exchange for
beneficial interests in Unrestricted Global Securities. Certificated
Securities issued in exchange for beneficial interests in Global
Securities shall be registered in such names and shall be in such
authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver or cause to be delivered such
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Certificated Securities to the Persons in whose name such Notes are so
registered. Such exchange shall be effected in accordance with the
Applicable Procedures.
(ii) Notwithstanding any other provisions of this Indenture other
than the provisions set forth in Section 2.12(a)(i), a Global 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.
(b) Transfer and Exchange of Certificated Securities. In the event
that Certificated Securities are issued in exchange for beneficial interests in
Global Securities in accordance with Section 2.12(a)(i), and, on or after such
event, Certificated Securities are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the Certificated Securities to a
person who will take delivery thereof in the form of Certificated Securities
only; or
(y) to exchange such Certificated Securities for an equal principal
amount of Certificated Securities of other authorized denominations,
such Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Certificated Securities presented or surrendered for
register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in accordance with the proviso in the first paragraph of Section
2.6(a); and
(ii) in the case of a Restricted Certificated Security, such request
shall be accompanied by the following additional information and
documents, as applicable:
(A) if such Restricted Certificated Security is being
delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, or such Restricted Certificated
Security is being transferred to the Company or a Subsidiary of the
Company, a certification to that effect from such Holder (in
substantially the form set forth in the Transfer Certificate);
(B) if such Restricted Certificated Security is being
transferred to a person the Holder reasonably believes is a QIB in
compliance with Rule 144A, pursuant to the exemption from the
registration requirements of the Securities Act provided by Rule 144
(if available) or pursuant to an effective registration statement
under the Securities Act, a certification to that effect from such
Holder (in substantially the form set forth in the Transfer
Certificate); or
(C) if such Restricted Certificated Security is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act to an Institutional Accredited
Investor (other than to a QIB in accordance with Rule 144A), that,
prior to such transfer, furnishes to the Trustee a certificate
containing certain representations and warranties by such
Institutional Accredited
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Investor (in substantially the form set forth in Exhibit B), an
Opinion of Counsel if required by the Company or the Trustee and a
certification to that effect from the Holder (in substantially the
form set forth in the Transfer Certificate).
(c) Transfer of a Beneficial Interest in a Restricted Global
Security for a Beneficial Interest in an Unrestricted Global Security. Any
person having a beneficial interest in a Restricted Global Security may upon
request, subject to the Applicable Procedures, transfer such beneficial interest
to a person who is required or permitted to take delivery thereof in the form of
an Unrestricted Global Security. 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 Restricted Global Security and the following additional
information and documents in such form as is customary for the Depositary from
the Depositary or its nominee on behalf of the person having such beneficial
interest in the Restricted Global Security (all of which may be submitted by
facsimile or electronically):
(i) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certification
to that effect from the Holder (in substantially the form set forth in the
Transfer Certificate); or
(ii) if such beneficial interest is being transferred pursuant to
the exemption from the registration requirements of the Securities Act
provided by Rule 144, a certification to that effect from the Holder (in
substantially the form set forth in the Transfer Certificate),
the Trustee, as the Registrar, shall reduce or cause to be reduced the aggregate
principal amount of the Restricted Global Security by the appropriate principal
amount and shall increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Security by a like principal amount. Such
transfer shall otherwise be effected in accordance with the Applicable
Procedures. If no Unrestricted Global Security is then outstanding, the Company
shall execute and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly), authenticate and deliver an Unrestricted
Global Security.
(d) Transfers of Certificated Securities for Beneficial Interests in
Global Securities. In the event that Certificated Securities are issued in
exchange for beneficial interests in Global Securities and, thereafter, the
events or conditions specified in Section 2.12(a)(i) which required such
exchange shall cease to exist, the Company shall mail notice to the Trustee and
to the Holders stating that Holders may exchange Certificated Securities for
interests in Global Securities by complying with the procedures set forth in
this Indenture and briefly describing such procedures and the events or
circumstances requiring that such notice be given. Thereafter, if Certificated
Securities are presented by a Holder to a Registrar with a request:
(x) to register the transfer of such Certificated Securities to a
person who will take delivery thereof in the form of a beneficial interest
in a Global Security, which request shall specify whether such Global
Security will be a Restricted Global Security or an Unrestricted Global
Security, or
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(y) to exchange such Certificated Securities for an equal principal
amount of beneficial interests in a Global Security, which beneficial
interests shall be owned by the Holder transferring such Certificated
Securities (provided that in the case of such an exchange, Restricted
Certificated Securities may be exchanged only for Restricted Global
Securities and Unrestricted Certificated Securities may be exchanged only
for Unrestricted Global Securities), the Registrar shall register the
transfer or make the exchange as requested by canceling such Certificated
Security and causing, or directing the Registrar to cause, the aggregate
principal amount of the applicable Global Security to be increased
accordingly and, if no such Global Security is then outstanding, the
Company shall issue and the Trustee shall, upon receipt of a Company Order
(which the Company agrees to deliver promptly) authenticate and deliver a
new Global Security;
provided, however, that the Certificated Securities presented or surrendered for
registration of transfer or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in accordance with the proviso in the
first paragraph of Section 2.6(a);
(2) in the case of a Restricted Certificated Security to
be transferred for a beneficial interest in an Unrestricted
Global Security, such request shall be accompanied by the
following additional information and documents, as applicable:
(i) if such Restricted Certificated Security is being
transferred pursuant to an effective registration statement
under the Securities Act, a certification to that effect from
such Holder (in substantially the form set forth in the
Transfer Certificate); or
(ii) if such Restricted Certificated Security is being
transferred pursuant to the exemption from the registration
requirements of the Securities Act provided by Rule 144, a
certification to that effect from such Holder (in
substantially the form set forth in the Transfer Certificate);
(3) in the case of a Restricted Certificated Security to
be transferred or exchanged for a beneficial interest in a
Restricted Global Security, such request shall be accompanied
by a certification from such Holder (in substantially the form
set forth in the Transfer Certificate) to the effect that such
Restricted Certificated Security is being transferred to a
person the Holder reasonably believes is a QIB (which, in the
case of an exchange, shall be such Holder) in compliance with
Rule 144A or, in the case of a transfer to an Institutional
Accredited Investor (other than to a QIB in accordance with
Rule 144A), by a certificate containing certain
representations and warranties by such Institutional
Accredited Investor (in substantially the form set forth in
Exhibit B), an Opinion of Counsel if required by the Company
or the Trustee and a certification to that effect
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from the Holder (in substantially the form set forth in the
Transfer Certificate); and
(4) in the case of an Unrestricted Certificated Security
to be transferred or exchanged for a beneficial interest in an
Unrestricted Global Security, such request need not be
accompanied by any additional information or documents.
(e) Legends.
(1) Except as permitted by the following paragraphs (2),
(3) and (4), each Global Security and Certificated Security
(and all Notes issued in exchange therefor or upon
registration of transfer or replacement thereof) shall bear a
legend in substantially the form called for by footnote 2 to
Exhibit A and footnote 1 to Exhibit C attached hereto (each a
"TRANSFER RESTRICTED SECURITY"), for so long as it is required
by this Indenture to bear such legend. Each Transfer
Restricted Security shall have attached thereto a certificate
(a "TRANSFER CERTIFICATE") in substantially the form called
for by footnote 4 to Exhibit A attached hereto.
(2) Upon any sale or transfer of a Transfer Restricted
Security (x) pursuant to Rule 144 or (y) pursuant to an
effective registration statement under the Securities Act:
(i) in the case of any Restricted Certificated Security,
any Registrar shall permit the Holder thereof to exchange such
Restricted Certificated Security for an Unrestricted
Certificated Security, or (under the circumstances described
in Section 2.12(d)) to transfer such Restricted Certificated
Security to a transferee who shall take such Note in the form
of a beneficial interest in an Unrestricted Global Security,
and in each case shall rescind any restriction on the transfer
of such Note; and
(ii) in the case of any beneficial interest in a
Restricted Global Security, the Trustee shall permit the
beneficial owner thereof to transfer such beneficial interest
to a transferee who shall take such interest in the form of a
beneficial interest in an Unrestricted Global Security and
shall rescind any restriction on transfer of such beneficial
interest; provided, that such Unrestricted Global Security
shall continue to be subject to the provisions of Section
2.12(a)(ii).
(3) Upon the expiration of the holding period pursuant
to Rule 144(k) of the Securities Act, the Company shall remove
any restriction of transfer on such Note, and the Company
shall execute, and the Trustee shall authenticate and deliver
Notes that do not bear such legend and that do not have a
Transfer Certificate attached thereto.
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(4) Until the expiration of the holding period
applicable to sales of the Notes under Rule 144(k) of the
Securities Act or a transfer of the Notes pursuant to Rule 144
or pursuant to an effective registration statement under the
Securities Act, the Applicable Stock issued upon conversion of
the Notes shall bear the legend in substantially the form
called for by Exhibit C attached hereto.
(f) Transfers to the Company. Nothing contained in this Indenture or
in the Notes shall prohibit the sale or other transfer of any Notes (including
beneficial interests in Global Securities) to the Company or any of its
Subsidiaries. The Company shall ensure that if any such Notes shall be reissued,
such reissuance shall comply with applicable law and any Notes reissued as
Transfer Restricted Securities shall be assigned a different "CUSIP" number than
any other Notes.
(g) Amendments to Rule 144(k). Notwithstanding any other provision
in this Indenture, if Rule 144(k) as promulgated under the Securities Act is
amended to shorten the two-year period under Rule 144(k), then the references to
"two years" in the restrictive legend of each Transfer Restricted Security shall
be deemed to refer to such shorter period from and after receipt by the Trustee
of the documents described in Section 2.12(d)(2) from the Company or from a
Holder of a Transfer Restricted Security; provided that a Transfer Restricted
Security shall not be deemed to refer to such shorter period if to do so would
be prohibited by, or would otherwise cause a violation of, the U.S. federal
securities laws applicable at the time. As soon as practicable after a
Responsible Officer of the Company receives notice of the effectiveness of any
such amendment to shorten the two-year period under Rule 144(k), unless causing
the Transfer Restricted Securities to refer to such shorter period would
otherwise be prohibited by, or would otherwise cause a violation of, the U.S.
federal securities laws applicable at the time, the Company shall provide to the
Trustee the documents described in Section 2.12(d)(2) respecting the
effectiveness of such amendment.
Section 2.13. CUSIP Numbers.
The Company may issue the Notes with one or more "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption or repurchase as a convenience to Holders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of
a redemption or repurchase and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption or
repurchase shall not be affected by any defect in or omission of such numbers.
The Company shall promptly notify the Trustee of any change in the CUSIP
numbers.
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ARTICLE III
REDEMPTION OF NOTES
Section 3.1. The Company's Right to Redeem; Notice to Trustee.
Subject to the terms and conditions of this ARTICLE III, the Company
may, at its option, redeem for cash all or a portion of the Notes at any time on
or after December 1, 2009 at a Redemption Price equal to 100% of the principal
amount of the Notes to be redeemed plus accrued and unpaid interest (including
Additional Interest, if any) to, but not including, the Redemption Date.
In the event that the Company elects to redeem Notes on a date that
is after any Regular Record Date but on or before the corresponding Interest
Payment Date, the Company shall be required to pay any accrued and unpaid
interest (including Additional Interest, if any) to the holder of the redeemed
Note and not the Holder on the corresponding Regular Record Date.
If the Company elects to redeem Notes, it shall notify the Trustee
in writing of the Redemption Date, the principal amount of Notes to be redeemed
and the Redemption Price. The Company shall give this notice to the Trustee by a
Company Order at least 40 calendar days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee).
Section 3.2. Selection of Notes to Be Redeemed.
If fewer than all of the outstanding Notes are to be redeemed,
unless the procedures of the Depositary provide otherwise, the Trustee shall
select the Notes to be redeemed by lot or on a pro rata basis or by another
method the Trustee considers fair and appropriate. The Trustee shall make the
selection within five Business Days after it receives the notice provided for in
Section 3.1 from outstanding Notes not previously called for redemption.
Notes and portions of Notes that the Trustee selects shall be in
principal amounts of $1,000 or an integral multiple thereof. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of the Notes to be redeemed.
Notes and portions of Notes that are to be redeemed are convertible
by the Holder until 5:00 p.m., New York City time, on the second Business Day
immediately preceding the Redemption Date. If any Note selected for partial
redemption is converted in part before termination of the conversion right with
respect to the portion of the Note so selected, the converted portion of such
Note shall be deemed (so far as may be) to be the portion selected for
redemption. Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for purposes of such
selection.
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Section 3.3. Notice of Redemption.
At least 30 calendar days but not more than 60 calendar days before
a Redemption Date, the Company shall mail a notice of redemption by first-class
mail, postage prepaid, to each Holder of Notes to be redeemed.
The notice of redemption shall identify the Notes to be redeemed and
shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Rate and any adjustment thereto;
(d) the name and address of the Paying Agent and Conversion Agent;
(e) that Notes called for redemption may be converted at any time
prior to 5:00 p.m., New York City time, on the second Business Day immediately
preceding the Redemption Date;
(f) that Holders who want to convert their Notes must satisfy the
requirements set forth in ARTICLE XII;
(g) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(h) if fewer than all of the outstanding Notes are to be redeemed,
the serial numbers, if any, and principal amounts of the particular Notes to be
redeemed;
(i) that, unless the Company defaults in making payment of such
Redemption Price, interest (including Additional Interest, if any) on Notes
called for redemption shall cease to accrue on and after the Redemption Date;
(j) the CUSIP number(s) of the Notes; and
(k) any other information the Company wants to present.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company makes such request at least ten Business Days (unless
a shorter period shall be satisfactory to the Trustee) prior to the date by
which such notice of redemption must be given to Holders in accordance with this
Section 3.3; provided, further, that the text of the notice of redemption shall
be prepared by the Company.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is given, Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price,
except for Notes which are
28
converted in accordance with the terms of this Indenture. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price.
Section 3.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the applicable
Redemption Date, the Company shall irrevocably deposit with the Paying Agent an
amount of cash (in immediately available funds if deposited on the Redemption
Date) sufficient to pay the aggregate Redemption Price of all Notes or portions
thereof which are to be redeemed as of such Redemption Date other than Notes or
portions of Notes called for redemption which on or prior thereto have been
delivered by the Company to the Trustee for cancellation or have been converted.
If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the applicable Redemption Date, cash
sufficient to pay the Redemption Price of any Notes for which notice of
redemption is given, then, on such Redemption Date, such Notes shall cease to be
outstanding and interest (including Additional Interest, if any) on such Notes
shall cease to accrue, whether or not such Notes are delivered to the Paying
Agent, and the rights of the Holders in respect thereof shall terminate (other
than the right to receive the Redemption Price upon delivery of such Notes).
Section 3.6. Notes Redeemed in Part.
Any Certificated Security which is to be redeemed only in part shall
be surrendered at the office of the Paying Agent and the Company shall execute
and the Trustee shall authenticate and deliver to the Holder of such Note,
without charge, a new Note or Notes, of any authorized denomination as requested
by such Holder in aggregate principal amount equal to the unredeemed portion of
the Note surrendered.
Section 3.7. Repayment to the Company.
To the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 3.5 exceeds the aggregate Redemption Price of the
Notes or portions thereof which the Company is redeeming as of the Redemption
Date, then, promptly after the Redemption Date, the Paying Agent shall return
any such excess to the Company.
Section 3.8. No Sinking Fund.
The Notes shall not have a sinking fund.
Section 3.9. Provisional Redemption; Make-Whole Premium.
Subject to the foregoing terms and conditions of this ARTICLE III,
the Company may, at its option, redeem for cash all or a portion of the Notes at
any time on or after December 1, 2007 and prior to December 1, 2009 at a
Redemption Price equal to 100% of the principal amount of the Notes to be
redeemed plus accrued and unpaid interest (including Additional Interest, if
any) to, but not including, the Redemption Date, plus the Make-Whole Premium
described below, if the Closing Sale Price of the Common Stock exceeds 150% of
the Conversion Price for at least twenty (20) Trading Days in any consecutive
thirty (30) Trading
29
Day period ending on the Trading Day prior to the mailing of the notice of
redemption. The Company shall mail a notice of redemption at least 30 calendar
days but not more than 60 calendar days before a Redemption Date in the manner
set forth in Section 3.3.
In the event that the Company elects to redeem Notes on a date that
is after any Regular Record Date but on or before the corresponding Interest
Payment Date, the Company shall be required to pay any accrued and unpaid
interest (including Additional Interest, if any) to the holder of the redeemed
Note and not the Holder on the corresponding Regular Record Date.
If the Company elects to redeem Notes, it shall notify the Trustee
in writing of the Redemption Date, the principal amount of Notes to be redeemed
and the Redemption Price. The Company shall give this notice to the Trustee by a
Company Order at least 45 calendar days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee).
The Make-Whole Premium with respect to any redemption pursuant to
this Section 3.9 shall equal the sum of (a) $150.00 per $1,000 principal amount
of the Notes to be redeemed, minus (b) the amount of any interest actually paid
or accrued and unpaid to, but not including, the Redemption Date. The provisions
of Sections 3.2 through 3.7 of this ARTICLE III shall apply to any redemption
under this Section 3.9; provided, however, that the Make-Whole Premium shall be
deposited and paid, as provided in Section 3.5, in addition to the other amounts
to be deposited and paid as set forth therein. The Make-Whole Premium shall be
paid in cash.
Section 3.10. Availability of Shelf Registration Statement.
Notwithstanding any other provision of this Article III, the Company shall not
be entitled to redeem any Notes pursuant to this Article III unless the Shelf
Registration Statement is effective and available for use and is expected to
remain effective and available for use during the 30 days following the
redemption date, unless registration is no longer required.
ARTICLE IV
PURCHASE AT THE OPTION OF HOLDERS ON SPECIFIC DATES
Section 4.1. Optional Put.
(a) Subject to the provisions of this Article IV, each Holder shall
have the right, at the Holder's option, to require the Company to purchase, and
upon the exercise of such right, the Company shall purchase, all of such
Holder's Notes not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or an integral multiple
thereof, as directed by such Holder pursuant to this Section 4.1, on each of
December 1, 2009, December 1, 2014 and December 1, 2019 (each a "PURCHASE
DATE"). The Company shall be required to purchase such Notes at a purchase price
in cash equal to 100% of the principal amount of such Notes plus accrued and
unpaid interest (including Additional Interest, if any) to, but not including,
the Purchase Date (the "PURCHASE PRICE").
(b) No later than 22 Business Days prior to each Purchase Date, the
Company shall mail a written notice of the purchase right by first class mail to
the Trustee (and the Paying
30
Agent if the Trustee is not then acting as a Paying Agent) and to each Holder at
its address shown in the Register of the Registrar, and to beneficial owners as
required by applicable law. The notice shall include a form of Purchase Notice
to be completed by the Holder and shall briefly state, as applicable:
(i) the date by which the Purchase Notice must be delivered to the
Paying Agent in order for a Holder to exercise the purchase right pursuant
to this Section 4.1;
(ii) the Purchase Date;
(iii) the Purchase Price;
(iv) the name and address of the Paying Agent and the Conversion
Agent;
(v) briefly, the conversion rights of the Notes, if any, and that
the Holder must satisfy the requirements set forth in Article XII in order
to convert the Notes;
(vi) the Conversion Rate and any adjustments thereto;
(vii) that the Notes as to which a Purchase Notice has been given
may be converted into Common Stock if they are otherwise convertible
pursuant to ARTICLE XII of this Indenture only if the Purchase Notice has
been withdrawn in accordance with the terms of this Indenture;
(viii) that the Notes must be surrendered to the Paying Agent to
collect the Purchase Price;
(ix) that the Purchase Price for any Notes as to which a Purchase
Notice has been duly given and not withdrawn shall be paid promptly
following the later of the Purchase Date and the time of surrender of such
Notes as described in Section 4.1(b)(viii);
(x) the procedures the Holder must follow to exercise its rights
under this Section 4.1 and a brief description of such rights;
(xi) the procedures for withdrawing a Purchase Notice, including a
form of notice of withdrawal;
(xii) that, unless the Company defaults in making payment of such
Purchase Price, interest (including any Additional Interest, if any) on
Notes surrendered for purchase by the Company shall cease to accrue on and
after the Purchase Date; and
(xiii) the CUSIP number(s) of the Notes.
At the Company's request, the Trustee shall give the notice of
purchase right in the Company's name and at the Company's expense; provided,
however, that the Company makes such request at least five Business Days (unless
a shorter period shall be satisfactory to the Trustee) prior to the date by
which such notice of purchase right must be given to the Holders
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in accordance with this Section 4.1(b); provided, further, that the text of the
notice of purchase right shall be prepared by the Company.
If any of the Notes is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to comply with the
Applicable Procedures.
Simultaneously with delivering the written notice pursuant to this
Section 4.1(b), the Company shall make a Public Notice containing all
information specified in such written notice.
(c) A Holder may exercise its rights specified in clause (a) of this
Section 4.1 upon delivery of a written notice (which shall be in substantially
the form included on the reverse side of the Notes entitled "Option of Holder to
Elect Purchase" hereto and which may be delivered by letter, overnight courier,
hand delivery, facsimile transmission or in any other written form and, in the
case of Global Securities, may be delivered by other means in accordance with
the Depositary's customary procedures) of the exercise of such rights (a
"PURCHASE NOTICE") to the Paying Agent at any time from the opening of business
on the date that is 22 Business Days prior to the relevant Purchase Date until
the close of business on the second Business Day prior to such Purchase Date.
The Purchase Notice delivered by a Holder shall state (i) the
relevant Purchase Date, (ii) if certificated Notes, the certificate number or
numbers of the Note or Notes which the Holder shall deliver to be purchased (if
not certificated, the notice must comply with Applicable Procedures), (iii) the
portion of the principal amount of the Note which the Holder shall deliver to be
purchased, which portion must be $1,000 or an integral multiple thereof, and
(iv) that such Note shall be purchased pursuant to the terms and conditions
specified in the Notes and this Section 4.1.
Delivery of a Note to the Paying Agent by book-entry transfer or
physical delivery prior to, on or after the applicable Purchase Date (together
with all necessary endorsements) at the offices of the Paying Agent is a
condition to receipt by the Holder of the Purchase Price therefor; provided,
however, that such Purchase Price shall be so paid pursuant to this Section 4.1
only if the Note so delivered to the Paying Agent shall conform in all respects
to the description thereof in the related Purchase Notice, as determined by the
Company.
The Company shall purchase from the Holder thereof, pursuant to this
Section 4.1, a portion of a Note if the principal amount of such portion is
$1,000 or an integral multiple thereof. Provisions of this Indenture that apply
to the purchase of all of a Note pursuant to Section 4.1 through Section 4.7
also apply to the purchase of such portion of such Note.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written withdrawal thereof.
Anything herein to the contrary notwithstanding, in the case of
Global Securities, any Purchase Notice may be delivered or withdrawn and such
Notes may be surrendered or delivered for purchase in accordance with the
Applicable Procedures as in effect from time to time.
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Section 4.2. Effect of Purchase Notice; Withdrawal of Purchase Notice.
(a) Upon receipt by the Paying Agent of the Purchase Notice
specified in Section 4.1(c), the Holder of the Note in respect of which such
Purchase Notice was given shall (unless such Purchase Notice is withdrawn as
specified in the following paragraph) thereafter be entitled to receive solely
the Purchase Price with respect to such Note. Such Purchase Price shall be paid
to such Holder, subject to receipt of cash by the Paying Agent, promptly
following the later of (a) the Purchase Date with respect to such Note (provided
the conditions in Section 4.1(c) have been satisfied) and (b) the time of
book-entry transfer or delivery of such Note to the Paying Agent by the Holder
thereof in the manner required by Section 4.1(c). Notes in respect of which a
Purchase Notice has been given by the Holder thereof may not be converted
pursuant to ARTICLE XII on or after the date of the delivery of such Purchase
Notice unless such Purchase Notice has first been validly withdrawn as specified
in the following paragraph.
(b) A Purchase Notice may be withdrawn by means of a written notice
(which may be delivered by letter, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global Securities,
may be delivered by other means in accordance with Applicable Procedures) of
withdrawal delivered by the Holder to the Paying Agent at any time prior to the
close of business on the Business Day immediately preceding the Purchase Date,
specifying (a) the principal amount of the Note or portion thereof (which must
be a principal amount of $1,000 or an integral multiple thereof) with respect to
which such notice of withdrawal is being submitted, (b) if certificated Notes
have been issued, the certificate numbers of the withdrawn Notes, or if not
certificated, such notice must comply with Applicable Procedures, and (c) the
principal amount, if any, which remains subject to the Purchase Notice. If a
Purchase Notice has been properly withdrawn pursuant to this Section 4.2(b)
prior to the Purchase Date, the Company shall not be obligated to purchase those
Notes so identified in such notice of withdrawal.
Section 4.3. Deposit of Purchase Price.
Prior to 10:00 a.m., New York City time, on the applicable Purchase
Date, the Company shall irrevocably deposit with the Paying Agent an amount of
cash (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Purchase Price of all the Notes or portions
thereof which are to be purchased as of such Purchase Date.
If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the applicable Purchase Date, cash sufficient
to pay the Purchase Price of any Notes for which a Purchase Notice has been
tendered and not withdrawn pursuant to Section 4.2(b), then, on such Purchase
Date, such Notes shall cease to be outstanding and interest (including
Additional Interest, if any) on such Notes shall cease to accrue, whether or not
book-entry transfer of such Notes is made and whether or not such Notes are
delivered to the Paying Agent, and the rights of the Holders in respect thereof
shall terminate (other than the right to receive the Purchase Price upon
delivery of such Notes).
The Company shall make a Public Notice of the aggregate principal
amount of Notes purchased on the applicable Purchase Date on such date or as
soon as practicable thereafter.
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Section 4.4. Certificated Securities Purchased in Part.
Any Certificated Security which is to be purchased only in part
shall be surrendered at the office of the Paying Agent (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and promptly after
the applicable Purchase Date the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note, without charge, a new Note
or Notes, of any authorized denomination or denominations as may be requested by
such Holder, in aggregate principal amount equal to, and in exchange for, the
portion of the Principal Amount of the Note so surrendered that is not
purchased.
Section 4.5. Covenant to Comply With Securities Laws Upon Purchase of
Notes.
When complying with the provisions of Article IV, and subject to any
exemptions available under applicable law, the Company shall:
(a) if such offer or purchase constitutes an "issuer tender offer"
for purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or purchase,
(i) if applicable, comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act and (ii) file the related Schedule TO (or any
successor schedule, form or report) if required under the Exchange Act; and
(b) otherwise comply with all applicable federal and state
securities laws so as to permit the rights and obligations under this ARTICLE IV
to be exercised in the time and in the manner specified therein.
Section 4.6. Repayment to the Company.
To the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 4.3 exceeds the aggregate Purchase Price of the
Notes or portions thereof which the Company is obligated to purchase as of the
applicable Purchase Date, then, promptly after such Purchase Date, the Paying
Agent shall return any such excess to the Company, together with interest, if
any, thereon.
Section 4.7. No Purchase Upon Event of Default. There shall be no purchase
of any Notes pursuant to this ARTICLE IV if there has occurred (prior to, on or
after, as the case may be, the giving by each of the Holders of such Notes of
the required Purchase Notice but, in any event, prior to the applicable Purchase
Date) and is continuing, as of such Purchase Date, an Event of Default (other
than a default in the payment of the Purchase Price with respect to such Notes).
The Paying Agent shall promptly return to the respective Holders thereof any
Notes (a) with respect to which a Purchase Notice has been delivered in
compliance with this Indenture, or (b) held by it during the continuance of an
Event of Default (other than a default in the payment of the Purchase Price with
respect to such Notes), in which case, upon such return, the Purchase Notice
with respect thereto shall be deemed to have been withdrawn.
34
ARTICLE V
PURCHASE AT THE OPTION OF HOLDERS
UPON A FUNDAMENTAL CHANGE
Section 5.1. Fundamental Change Put.
(a) In the event that a Fundamental Change shall occur at any time
prior to the Stated Maturity, each Holder shall have the right, at the Holder's
option, but subject to the provisions of this Section 5.1, to require the
Company to purchase, and upon the exercise of such right, the Company shall
purchase, all of such Holder's Notes not theretofore called for redemption, or
any portion of the principal amount thereof that is equal to $1,000 or an
integral multiple thereof, as directed by such Holder pursuant to this Section
5.1, on the date designated by the Company (the "FUNDAMENTAL CHANGE PURCHASE
DATE") that is a Business Day no later than 35 Business Days after the date of
notice pursuant to Section 5.1(b) of the occurrence of a Fundamental Change
(subject to extension to comply with applicable law). The Company shall be
required to purchase such Notes at a purchase price in cash equal to 100% of the
principal amount plus any accrued and unpaid interest (including Additional
Interest, if any) to, but excluding, the Fundamental Change Purchase Date (the
"FUNDAMENTAL CHANGE PURCHASE PRICE"). In the event that a Fundamental Change
Purchase Date is a date that is after any Regular Record Date but on or before
the corresponding Interest Payment Date, the Company shall be required to pay
accrued and unpaid interest (including Additional Interest, if any) to the
holder of the repurchased Note and not the Holder on the Regular Record Date.
(b) No later than 10 Business Days after the occurrence of a
Fundamental Change, the Company shall mail a written notice of the Fundamental
Change by first class mail to the Trustee (and the Paying Agent if the Trustee
is not then acting as Paying Agent) and to each Holder at its address shown in
the Register of the Registrar, and to beneficial owners as required by
applicable law. The notice shall include a form of Fundamental Change Purchase
Notice to be completed by the Holder and shall briefly state, as applicable:
(i) the date of such Fundamental Change and, briefly, the events
causing such Fundamental Change;
(ii) the date by which the Fundamental Change Purchase Notice must
be delivered to the Paying Agent in order for a Holder to exercise the
purchase right pursuant to this Section 5.1;
(iii) the Fundamental Change Purchase Date;
(iv) the Fundamental Change Purchase Price;
(v) the name and address of the Paying Agent and Conversion Agent;
(vi) briefly, the conversion rights of the Notes, and that the
Holder must satisfy the requirements set forth in Article XII in order to
convert the Notes;
(vii) the Conversion Rate and any adjustments thereto;
35
(viii) that the Notes as to which a Fundamental Change Purchase
Notice has been given may be converted into Common Stock pursuant to
ARTICLE XII of this Indenture only if the Fundamental Change Purchase
Notice has been withdrawn in accordance with the terms of this Indenture;
(ix) that the Notes must be surrendered to the Paying Agent to
collect payment;
(x) that the Fundamental Change Purchase Price for any Note as to
which a Fundamental Change Purchase Notice has been duly given and not
withdrawn shall be paid promptly following the later of the Fundamental
Change Purchase Date and the time of surrender of such Note as described
in Section 5.1(b)(ix);
(xi) the procedures the Holder must follow to exercise rights under
this Section 5.1 and a brief description of such rights;
(xii) the procedures for withdrawing a Fundamental Change Purchase
Notice, including a form of notice of withdrawal;
(xiii) that, unless the Company defaults in making payment of such
Fundamental Change Purchase Price, interest (including Additional
Interest, if any) on Notes surrendered for purchase by the Company shall
cease to accrue on and after the Fundamental Change Purchase Date; and
(xiv) the CUSIP number(s) of the Notes.
At the Company's request, the Trustee shall give the notice of
purchase right in the Company's name and at the Company's expense; provided,
however, that the Company makes such request at least five Business Days (unless
a shorter period shall be satisfactory to the Trustee) prior to the date by
which such notice of purchase right must be given to the Holders in accordance
with this Section 5.1(b); provided, further, that the text of the notice of
purchase right shall be prepared by the Company.
If any of the Notes is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with
Applicable Procedures.
Simultaneously with delivering the written notice pursuant to this
Section 5.1(b), the Company shall make a Public Notice containing all
information specified in such written notice.
(c) A Holder may exercise its rights specified in clause (a) of this
Section 5.1 upon delivery of a written notice (which shall be in substantially
the form included on the reverse side of the Notes entitled "Option of Holder to
Elect Purchase" hereto and which may be delivered by letter, overnight courier,
hand delivery, facsimile transmission or in any other written form and, in the
case of Global Securities, may be delivered by other means in accordance with
the Depositary's customary procedures) of the exercise of such rights (a
"FUNDAMENTAL CHANGE PURCHASE NOTICE") to the Paying Agent at any time on or
before the
36
20th Business Day after the date of the Company's notice of the Fundamental
Change (subject to extension to comply with applicable law).
The Fundamental Change Purchase Notice delivered by a Holder shall
state (i) the Fundamental Change Purchase Date, (ii) if Certificated Securities,
the certificate number or numbers of the Note or Notes which the Holder shall
deliver to be purchased (if not certificated, the notice must comply with
Applicable Procedures), (iii) the portion of the principal amount of the Note
which the Holder shall deliver to be purchased, which portion must be $1,000 or
an integral multiple thereof, and (iv) that such Note shall be purchased
pursuant to the terms and conditions specified in the Notes and this Article V.
Delivery of a Note (together with all necessary endorsements) to the
Paying Agent by book-entry transfer or physical delivery prior to, on or after
the Fundamental Change Purchase Date at the offices of the Paying Agent is a
condition to receipt by the Holder of the Fundamental Change Purchase Price
therefor; provided, however, that such Fundamental Change Purchase Price shall
be so paid pursuant to this Section 5.1 only if the Note so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Fundamental Change Purchase Notice, as determined by the Company.
The Company shall purchase from the Holder thereof, pursuant to this
Section 5.1, a portion of a Note if the principal amount of such portion is
$1,000 or an integral multiple thereof. Provisions of the Indenture that apply
to the purchase of all of a Note also apply to the purchase of such portion of
such Note.
A Paying Agent shall promptly notify the Company of the receipt by
it of any Fundamental Change Purchase Notice or written withdrawal thereof.
Anything herein to the contrary notwithstanding, in the case of
Global Securities, any Fundamental Change Purchase Notice may be delivered or
withdrawn and such Notes may be surrendered or delivered for purchase in
accordance with the Applicable Procedures as in effect from time to time.
(d) Notwithstanding the foregoing provisions of this Section 5.1,
the Company shall not be required to issue a Fundamental Change Purchase Notice
upon a Fundamental Change (i) if a third party issues a Fundamental Change
Purchase Notice in the manner, at the times and otherwise in compliance with the
requirements set forth in Section 5.1(b) applicable to a Fundamental Change
Purchase Notice made by the Company and otherwise complies with the provisions
of this Article V as if it were the Company and purchases, and pays for, all
Notes validly tendered and not withdrawn pursuant to such Fundamental Change
Purchase Notice and (ii) provided that if such third party fails to comply with
any of the provisions of this Article V, the Company shall as promptly as
reasonably practicable deliver the Fundamental Change Purchase Notice in
accordance with, and otherwise comply with, all provisions of this Article V.
Section 5.2. Effect of Fundamental Change Purchase Notice.
(a) Upon receipt by the Paying Agent of the Fundamental Change
Purchase Notice specified in Section 5.1(c), the Holder of the Note in respect
of which such Fundamental
37
Change Purchase Notice was given shall (unless such Fundamental Change Purchase
Notice is withdrawn as specified in the following paragraph) thereafter be
entitled to receive the Fundamental Change Purchase Price with respect to such
Note. Such Fundamental Change Purchase Price shall be paid to such Holder,
subject to receipt of cash by the Paying Agent, promptly following the later of
(i) the Fundamental Change Purchase Date with respect to such Note (provided
that the Paying Agent has received an Opinion of Counsel and Officers'
Certificate stating that all of the conditions in Section 5.1(c) have been
satisfied) and (ii) the time of book-entry transfer or delivery of such Note to
the Paying Agent by the Holder thereof in the manner required by Section 5.1(c).
Notes in respect of which a Fundamental Change Purchase Notice has been given by
the Holder thereof may not be converted pursuant to ARTICLE XII on or after the
date of the delivery of such Fundamental Change Purchase Notice unless such
Fundamental Change Purchase Notice has first been validly withdrawn as specified
in the following paragraph.
(b) A Fundamental Change Purchase Notice may be withdrawn by means
of a written notice (which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered by other means in accordance with the
Depositary's customary procedures) of withdrawal delivered by the Holder to the
Paying Agent at any time prior to the close of business on the Business Day
immediately preceding the Fundamental Change Purchase Date (or such later time
as may be required by applicable law), specifying (i) the principal amount of
the Note or portion thereof (which must be a principal amount of $1,000 or an
integral multiple thereof) with respect to which such notice of withdrawal is
being submitted, (ii) if certificated Notes have been issued, the certificate
numbers of the withdrawn Notes, or if not certificated, such notice must comply
with Applicable Procedures, and (iii) the principal amount, if any, which
remains subject to the Fundamental Change Purchase Notice. If a Fundamental
Change Purchase Notice has been properly withdrawn pursuant to this Section
5.2(b) prior to the Fundamental Change Purchase Date, the Company shall not be
obligated to purchase those Notes so identified in such notice of withdrawal.
Section 5.3. Deposit of Fundamental Change Purchase Price.
Prior to 10:00 a.m., New York City time, on the applicable
Fundamental Change Purchase Date, the Company shall irrevocably deposit with the
Paying Agent an amount of cash (in immediately available funds if deposited on
such Business Day) sufficient to pay the aggregate Fundamental Change Purchase
Price of all the Notes or portions thereof which are to be purchased as of such
Fundamental Change Purchase Date.
If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the applicable Fundamental Change Purchase
Date, cash sufficient to pay the Fundamental Change Purchase Price of any Notes
for which a Fundamental Change Purchase Notice has been tendered and not
withdrawn pursuant to Section 5.2(b), then, on such Fundamental Change Purchase
Date, such Notes shall cease to be outstanding and interest and Additional
Interest, if any, on such Notes shall cease to accrue, whether or not book-entry
transfer of such Notes is made and whether or not such Notes are delivered to
the Paying Agent, and the rights of the Holders in respect thereof shall
terminate (other than the right to receive the Fundamental Change Purchase Price
upon delivery of such Notes).
38
The Company shall make a Public Notice of the aggregate principal
amount of Notes purchased as a result of such Fundamental Change on or as soon
as practicable after the Fundamental Change Purchase Date.
Section 5.4. Certificated Securities Purchased in Part.
Any Certificated Security that is to be purchased only in part shall
be surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and promptly after
the Fundamental Change Purchase Date the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Note, without charge, a new
Note or Notes, of any authorized denomination or denominations as may be
requested by such Holder, in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Note so surrendered
that is not purchased.
Section 5.5. Covenant to Comply With Securities Laws Upon Purchase of
Notes.
When complying with the provisions of Article V, and subject to any
exemptions available under applicable law, the Company shall:
(a) if such offer or purchase constitutes an "issuer tender offer"
for purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or purchase,
(i) if applicable, comply with Rule 13e- 4 and Rule 14e-1 (or any successor
provision) under the Exchange Act and (ii) file the related Schedule TO (or any
successor schedule, form or report) if required under the Exchange Act; and
(b) otherwise comply with all applicable federal and state
securities laws so as to permit the rights and obligations under this ARTICLE V
to be exercised in the time and in the manner specified therein.
Section 5.6. Repayment to the Company.
To the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 5.3 exceeds the aggregate Fundamental Change
Purchase Price of the Notes or portions thereof which the Company is obligated
to purchase as of the Fundamental Change Purchase Date then, promptly after the
Fundamental Change Purchase Date, the Paying Agent shall return any such excess
to the Company.
ARTICLE VI
COVENANTS
Section 6.1. Payment of Notes.
The Company shall pay interest on the Notes as provided in the
Notes. The Company shall promptly make all payments in respect of the Notes on
the dates and in the manner provided in the Notes or pursuant to this Indenture.
Principal, Redemption Price,
39
Purchase Price and Fundamental Change Purchase Price and accrued and unpaid
interest (including Additional Interest, if any) shall be considered paid on the
applicable date due if by 10:00 a.m., New York City time, on such date the
Paying Agent holds, in accordance with this Indenture, cash or securities, if
permitted hereunder, sufficient to pay all such amounts then due. The Company
shall, to the fullest extent permitted by law, pay interest on overdue principal
and overdue installments of interest (including Additional Interest, if any) at
the rate borne by the Notes per annum. All references in this Indenture or the
Notes to interest shall, without duplication, be deemed to include Additional
Interest, if any, payable pursuant to the Registration Rights Agreement.
Payment of the principal of and interest (including Additional
Interest, if any) on the Notes shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
Subject to Section 3.1, Section 4.1 and Section 5.1, the Company
shall pay interest (including Additional Interest, if any) on the Notes to the
Person in whose name the Notes are registered at the close of business on the
Regular Record Date next preceding the corresponding Interest Payment Date. Any
such interest (including Additional Interest, if any) not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may be paid (a) to the Person in whose name the Notes
are registered at the close of business on a Special Record Date for the payment
of such defaulted interest (including Additional Interest, if any) to be fixed
by the Company, notice whereof shall be given to the Holders not less than 10
calendar days prior to such Special Record Date or (b) at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange.
The Holder must surrender the Notes to the Paying Agent to collect
payment of principal. Payment of interest (including Additional Interest, if
any) on Certificated Securities in the aggregate principal amount of $5,000,000
or less shall be made by check mailed to the address of the Person entitled
thereto as such address appears in the Register, and payment of cash interest
(including Additional Interest) if any, on Certificated Securities in aggregate
principal amount in excess of $5,000,000 shall be made by wire transfer in
immediately available funds if requested in writing by the Holder, otherwise by
check mailed to the address of the Holder. Notwithstanding the foregoing, so
long as the Notes are registered in the name of a Depositary or its nominee, all
payments with respect to the Notes shall be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee. At the Stated
Maturity, interest (including Additional Interest, if any) on Certificated
Securities will be payable at the office or agency of the Trustee, Registrar,
Paying Agent and Conversion Agent as described in Section 6.5 herein.
Section 6.2. SEC and Other Reports to the Trustee.
(a) The Company shall ensure delivery to the Trustee within 15
calendar days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe)
40
which the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act in accordance with TIA Section 314(a). In the event
the Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would have
been required to be filed with the SEC had the Company continued to have been
subject to such reporting requirements. In such event, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements. The
Company also shall comply with the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely conclusively on Officers' Certificates). The Trustee shall have
no duty or responsibility to review such reports, information or documents. In
the event that the Company shall provide the Trustee with any such report and
shall not have filed such report on ▇▇▇▇▇, the Trustee, at the request of the
Company, shall promptly mail copies of such reports to each Holder (other than
reports provided solely pursuant to TIA Section 314(a)).
(b) The Company intends to file the reports referred to in paragraph
(a) above in this Section 6.2 hereof with the SEC in electronic form pursuant to
Regulation S-T of the SEC using the SEC's Electronic Data Gathering, Analysis
and Retrieval ("▇▇▇▇▇") system. The Company shall notify the Trustee in the
manner prescribed herein of each such filing. The Trustee is hereby authorized,
but not obligated to access the ▇▇▇▇▇ system for purposes of retrieving the
reports so filed. Compliance with the foregoing shall constitute delivery by the
Company of such reports to the Trustee in compliance with the provisions of
Section 6.2(a) and TIA Section 314(a). The Trustee shall have no duty to search
for or obtain any electronic or other filings that the Company makes with the
SEC, regardless of whether such filings are periodic, supplemental or otherwise.
Delivery of the reports, information and documents to the Trustee pursuant to
this Section 6.2(b) shall be solely for the purposes of compliance with this
Section 6.2(b) and with TIA Section 314(a). The Trustee's receipt of such
reports, information and documents shall not constitute notice to it of the
consent thereof or of any matter determinable from the content thereof,
including the Company's compliance with any of its covenants hereunder, as to
which the Trustee is entitled to rely upon Officers' Certificates.
Section 6.3. Compliance Certificate.
The Company shall deliver to the Trustee within 120 calendar days
after the end of each fiscal year of the Company an Officers' Certificate,
stating whether or not to the knowledge of the signers thereof, the Company is
in compliance with all conditions and covenants under this Indenture.
Section 6.4. Further Instruments and Acts.
Upon request of the Trustee, or as otherwise necessary, the Company
shall execute and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purposes
of this Indenture.
41
Section 6.5. Maintenance of Office or Agency of the Trustee, Registrar,
Paying Agent and Conversion Agent.
The Company shall maintain in the Borough of Manhattan, New York,
New York, an office where Notes may be presented or surrendered for payment,
where Notes may be surrendered for registration of transfer, exchange,
redemption, repurchase or conversion and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The office
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ shall initially be such
office or agency for all of the aforesaid purposes. The Company shall give
prompt written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee). If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 14.2.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; 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, New York, New York, for such purposes.
Section 6.6. Delivery of Information Required Under Rule 144A.
Prior to the expiration of the holding period applicable to sales of
the Notes under Rule 144(k) of the Securities Act (or any successor provision),
upon the request of a Holder or any beneficial owner of Notes or holder or
beneficial owner of Common Stock issued upon conversion thereof, the Company
shall, during any period in which the Company is not subject to Section 13 or
15(d) of the Exchange Act, promptly furnish or cause to be furnished the
information required pursuant to Rule 144A(d)(4) under the Securities Act to
such Holder or any beneficial owner of Notes or holder or beneficial owner of
Common Stock, or to a prospective purchaser of any such security designated by
any such holder, as the case may be, to the extent required to permit compliance
by such Holder or holder with Rule 144A under the Securities Act in connection
with the resale of any such security. Whether a person is a beneficial owner
shall be determined by the Company to the Company's reasonable satisfaction. It
is understood that any request from anyone other than a Holder shall be made
solely to, by and through the Company, and not to, by or through the Trustee.
Section 6.7. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company from paying all or any portion of
the principal amount, Redemption Price, Purchase Price or Fundamental Change
Purchase Price in respect of Notes, or any interest (including Additional
Interest, if any) on such amounts, as contemplated herein, or which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives
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all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
Section 6.8. Statement by Officers as to Default.
The Company shall deliver to the Trustee, as soon as practicable and
in any event within five Business Days after the Company becomes aware of the
occurrence of any Default or Event of Default, an Officers' Certificate setting
forth the details of such Default or Event of Default and the action which the
Company proposes to take with respect thereto.
ARTICLE VII
SUCCESSOR CORPORATION
Section 7.1. When Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into any
other person or convey, transfer, sell, lease or otherwise dispose of all or
substantially all of its properties and assets to any person, unless:
(a) either (i) the Company shall be the continuing corporation or
(ii) the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance,
transfer, sale, lease or other disposition all or substantially all of the
properties and assets of the Company substantially as an entirety (1) shall be
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia and (2) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the Company
under the Notes, this Indenture and the Registration Rights Agreement and, to
the extent applicable, otherwise comply with the provisions of Section 12.4;
(b) immediately before and after giving effect to such transaction,
no Default shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer, sale, lease or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture, comply with this ARTICLE VII and that all conditions
precedent herein provided for relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of the properties and assets of one or more Subsidiaries,
which, if such assets were owned by the Company, together with the assets of all
of the other Subsidiaries of the Company, would constitute all or substantially
all of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the Company
unless such transfer is to the Company or another Subsidiary.
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The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer,
sale, lease or other disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor had been named as the Company herein;
and thereafter, except in the case of a conveyance, transfer, sale, lease or
other disposition and any obligations the Company may have under a supplemental
indenture, the Company shall be discharged from all obligations and covenants
under this Indenture and the Notes. Subject to Section 11.6, the Company, the
Trustee and the successor Person shall enter into a supplemental indenture to
evidence the succession and substitution of such successor Person and such
discharge and release of the Company.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Events of Default.
So long as any Notes are outstanding, each of the following shall be
an "EVENT OF DEFAULT":
(a) the failure by the Company to pay the principal of (or premium,
if any, on) any Note when the same becomes due and payable as therein provided
or as provided in this Indenture;
(b) the failure by the Company to pay any accrued and unpaid
interest (including Additional Interest, if any) on any Note, in each case, when
due and payable, and such default shall continue for a period of 30 days;
(c) the failure by the Company to convert any portion of any Note
following the exercise by the Holder of the right to convert such Note into
Common Stock (or cash or a combination of cash and Common Stock, if the Company
elects) pursuant to and in accordance with ARTICLE XII;
(d) the failure by the Company to redeem any Note, or any portion
thereof, called for redemption by the Company pursuant to and in accordance with
ARTICLE III;
(e) the failure by the Company to provide notice in the event of a
Fundamental Change in accordance with Section 5.1(b);
(f) the failure by the Company to purchase any Note, or any portion
thereof, in accordance with ARTICLE IV or ARTICLE V, upon the exercise by the
Holder of such Holder's right to require the Company to purchase such Notes
pursuant thereto;
(g) the failure by the Company to perform or observe any other term,
covenant or agreement contained in the Notes or this Indenture (other than a
term, covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section 8.1 specifically dealt with) for a period of 60 days
after written notice of such failure has been given (1) to the Company by the
Trustee or (2) to the
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Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding;
(h) there shall have occurred a default under any credit agreement,
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness of the Company or any of its
Subsidiaries whether such Indebtedness now exists, or is created after the date
of this Indenture, which default (i) involves the failure to pay principal of or
any premium or interest on such Indebtedness when such Indebtedness becomes due
and payable at the stated maturity thereof, and such default shall continue
after any applicable grace period or (ii) results in the acceleration of such
Indebtedness prior to the stated maturity thereof (without such acceleration
being rescinded or annulled), and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness so unpaid at its stated maturity or the stated maturity of which
has been so accelerated, aggregates $1,000,000 or more;
(i) there shall be a failure by the Company or any of its
Subsidiaries to pay final judgments not covered by insurance aggregating in
excess of $2,500,000, which judgments are not paid, discharged or stayed for a
period of 60 calendar days;
(j) the Company or any Significant Subsidiary, or any group of two
or more Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of any order for relief against it in an
involuntary case or proceeding or the commencement of any case against it;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(iv) makes a general assignment for the benefit of its creditors;
(v) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(vi) consents to the filing of such petition or the appointment of
or taking possession by a Custodian; and
(k) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Significant Subsidiary
in an involuntary case or proceeding, or adjudicates the Company or any
Significant Subsidiary insolvent or bankrupt;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of the property of either; or
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(iii) orders the winding up or liquidation of the Company or any
Significant Subsidiary,
(l) and the order of decree remains unstayed and in effect for 60
days.
Section 8.2. Acceleration.
If an Event of Default (other than an Event of Default specified in
Section 8.1(j) or Section 8.1(k) with respect to the Company) occurs and is
continuing (including an Event of Default specified in Section 8.1(j) or Section
8.1(k) with respect to one or more Significant Subsidiaries), the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding by notice to the Company and the
Trustee, may declare the principal of, and accrued and unpaid interest
(including Additional Interest, if any) on, all the Notes to be immediately due
and payable. Upon such a declaration, such accelerated amount shall be due and
payable immediately.
If an Event of Default specified in Section 8.1(j) or Section 8.1(k)
occurs with respect to the Company and is continuing, the principal of, and
accrued and unpaid interest (including Additional Interest, if any) on, all the
Notes shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders.
The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding, by notice to the Trustee (and without notice to any
other Holder) may rescind an acceleration and its consequences if (a) the
rescission would not conflict with any judgment or decree (b) all existing
Events of Default have been cured or waived, except nonpayment of the principal
of, premium, if any, or any accrued and unpaid interest (including Additional
Interest, if any) that have become due solely as a result of acceleration and
(c) all amounts due to the Trustee under Section 9.7 have been paid. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
Section 8.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may,
but shall not be obligated to, pursue any available remedy to collect the
payment of the principal plus accrued and unpaid interest (including Additional
Interest, if any) on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Notes or does not produce any of the Notes in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of, or acquiescence in, the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
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Section 8.4. Waiver of Past Defaults.
Subject to Section 8.7 and Section 11.2, the Holders of a majority
in aggregate principal amount of the Notes at the time outstanding, by notice to
the Trustee (and without notice to any other Holder), may waive an existing
Default and its consequences except:
(a) a Default described in Section 8.1(a), Section 8.1(b), Section
8.1(d) or Section 8.1(f);
(b) a Default which constitutes a failure to convert any Note in
accordance with the terms of ARTICLE XII; or
(c) a Default in respect of any provision of this Indenture or the
Notes, which, under Section 11.2, cannot be amended or modified without the
consent of each Holder affected thereby.
When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
This Section 8.4 shall be in lieu of Section 316(a)1(B) of the TIA and such
Section 316(a)1(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 8.5. Control by Majority.
The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines in good faith is prejudicial to the rights of other Holders or would
involve the Trustee in personal liability.
Section 8.6. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(b) the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding make a written request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offered to the Trustee security or
indemnity reasonably satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of such notice, request and offer of security or indemnity; and
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(e) the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of any
other Holder or to obtain a preference or priority over any other Holder.
Section 8.7. Rights of Holders to Receive Payment or to Convert.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of the principal, Redemption Price, Purchase
Price, Fundamental Change Purchase Price, and interest (including Additional
Interest, if any) in respect of the Notes held by such Holder, on or after the
respective due dates expressed in the Notes and in this Indenture, and to
convert such Notes in accordance with ARTICLE XII, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, is absolute and unconditional and shall not be impaired or affected
adversely without the consent of such Holder.
Section 8.8. Collection Suit by Trustee.
If an Event of Default described in Section 8.1(a), Section 8.1(b),
Section 8.1(d) or Section 8.1(f) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or another obligor on the Notes for the whole amount owing with respect
to the Notes and the amounts provided for in Section 9.7.
Section 8.9. 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
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal, Redemption Price,
Purchase Price, Fundamental Change Purchase Price and interest (including
Additional Interest, if any) in respect of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal,
Redemption Price, Purchase Price, Fundamental Change Purchase Price and interest
(including Additional Interest, if any) 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 agents and counsel or any other
amounts due the Trustee under Section 9.7) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
48
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
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 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 9.7.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 8.10. Priorities.
If the Trustee collects any money pursuant to this ARTICLE VIII, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 9.7;
SECOND: to Holders for amounts due and unpaid on the Notes for the
principal, Redemption Price, Purchase Price, Fundamental Change Purchase Price
and interest (including Additional Interest, if any) as the case may be,
ratably, without preference or priority of any kind, according to such amounts
due and payable on the Notes; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 8.10. At least 10 calendar days prior to
such record date, the Trustee shall mail to each Holder and the Company a notice
that states the record date, the payment date and the amount to be paid.
Section 8.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant (other than the Trustee) in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 8.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 8.7 or a suit by Holders
of more than 10% in aggregate principal amount of the Notes at the time
outstanding. This Section 8.11 shall be in lieu of Section 315(e) of the TIA and
such Section 315(e) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
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ARTICLE IX
TRUSTEE
Section 9.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise of those rights and powers
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
(ii) 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, but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture, but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein.
This Section 9.1(b) shall be in lieu of Section 315(a) of the TIA
and such Section 315(a) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b) of this
Section 9.1;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 8.5.
(iv) 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 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.
(d) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder)
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shall be under no liability for interest on any money received by it hereunder
unless otherwise agreed in writing with the Company.
(e) The Trustee shall comply with the reporting requirements set
forth in Section 313 of the TIA.
(f) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 9.2. Rights of Trustee.
Subject to its duties and responsibilities under the TIA and this
Indenture,
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(whether in its original or facsimile form) believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(d) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith which it reasonably believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in reliance on such advice or Opinion of Counsel;
(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 security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
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(h) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, including that of Conversion Agent, and to each
agent, custodian and other person employed to act hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
(l) to the extent permitted by the TIA, in no event shall the
Trustee be responsible or liable for special, indirect, or consequential loss or
damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(m) in no event shall the Trustee be responsible or liable for any
failure or delay in the performance of its obligations hereunder arising out of
or caused by, directly or indirectly, forces beyond its control, including,
without limitation strikes, work stoppages, accidents, acts of war or terrorism,
civil or military disturbances, nuclear or natural catastrophes or acts of God,
and interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.
Section 9.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee; provided
that the Trustee must comply with Section 9.10 and Section 9.11. Any Paying
Agent, Registrar, Conversion Agent or co-registrar may do the same with like
rights.
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Section 9.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, it shall not be accountable for the Company's
use or application of the proceeds from the Notes, it shall not be responsible
for any statement in any registration statement for the Notes under the
Securities Act or in any offering document for the Notes, this Indenture or the
Notes (other than its certificate of authentication), or the determination as to
which beneficial owners are entitled to receive any notices or reports
hereunder.
Section 9.5. Notice of Defaults.
If a Default occurs and if it is known to the Trustee, the Trustee
shall give to each Holder notice of the Default within 90 calendar days after it
occurs or, if later, within 15 calendar days after it is known to the Trustee,
unless such Default shall have been cured or waived before the giving of such
notice. Notwithstanding the preceding sentence, except in the case of a Default
described in Section 8.1(a), Section 8.1(b), Section 8.1(d) or Section 8.1(f),
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interest of the Holders. The preceding sentence shall be in lieu of the
proviso to Section 315(b) of the TIA and such proviso is hereby expressly
excluded from this Indenture, as permitted by the TIA.
Section 9.6. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Holder a brief report
dated as of such May 15 that complies with TIA Section 313(a), if required by
such Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange, if any, on which the Notes are
listed. The Company agrees to notify the Trustee promptly whenever the Notes
become listed on any securities exchange and of any delisting thereof.
Section 9.7. Compensation and Indemnity.
The Company agrees to:
(a) pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) reimburse the Trustee upon its request for all expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the compensation and the reasonable
expenses, advances and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its own negligence or
willful misconduct; and
53
(c) fully indemnify the Trustee or any predecessor Trustee and their
agents for, and to hold them harmless against, any and all loss, damage, claim,
liability, cost or expense (including attorney's fees and expenses, and taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee)) incurred without the Trustee's negligent action, negligent failure to
act or willful misconduct, arising out of or in connection with the acceptance
or administration of this trust, including the costs and expenses of defending
itself against any claim (whether asserted by the Company or any Holder or any
other person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, or in connection with enforcing the
provisions of this Section 9.7.
With regard to its indemnification rights under this Section 9.7(c)
where the Company has assumed the defense in any action or proceeding, the
Trustee shall have the right to employ separate counsel in any such action or
proceeding and participate in the investigation and defense thereof, and the
Company shall pay the reasonable fees and expenses of such separate counsel;
provided, however, that the Trustee may only employ separate counsel at the
expense of the Company if in the judgment of the Trustee (i) a conflict of
interest exists by reason of common representation or (ii) there are legal
defenses available to the Trustee that are different from or are in addition to
those available to the Company or if all parties commonly represented do not
agree as to the action (or inaction) of counsel.
To secure the Company's payment obligations in this Section 9.7, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay the principal amount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or interest
(including Additional Interest, if any) as the case may be, on particular Notes.
The Company's payment obligations pursuant to this Section 9.7 shall
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 8.1(j) or Section 8.1(k), the expenses including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any Bankruptcy Law.
Section 9.8. Replacement of Trustee.
The Trustee may resign by so notifying the Company; provided,
however, that no such resignation shall be effective until a successor Trustee
has accepted its appointment pursuant to this Section 9.8. The Holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
remove the Trustee by so notifying the Trustee and the Company. The Company
shall remove the Trustee if:
(a) the Trustee fails to comply with Section 9.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the Trustee or its
property; or
(d) the Trustee otherwise becomes incapable of acting.
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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, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, upon payment of all the retiring Trustee's
fees and expenses then due and payable and subject to the lien provided for in
Section 9.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may petition at the expense of the Company any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 9.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Section 9.9. Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation, the resulting, surviving or transferee corporation without
any further act shall be the successor Trustee.
Section 9.10. Eligibility; Disqualification.
The Trustee and any successor Trustee shall at all times satisfy the
requirements of TIA Sections 310(a)(1) and 310(b). The Trustee (or its parent
holding company) 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. Nothing contained herein shall prevent the Trustee from filing with
the SEC the application referred to in the penultimate paragraph of TIA Section
310(b). If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 9.10, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 9.11. 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
therein.
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ARTICLE X
DISCHARGE OF INDENTURE
Section 10.1. Discharge of Liability on Notes.
When (i) the Company delivers to the Trustee all outstanding Notes
(other than Notes replaced or repaid pursuant to Section 2.7) for cancellation
or (ii) all Notes not theretofore delivered to the Trustee for cancellation (a)
have become due and payable, (b) shall become due and payable at their stated
maturity within one year whether on a Purchase Date, Fundamental Change Purchase
Date or upon conversion, or (c) are to be called for redemption within one year
under arrangements reasonably satisfactory to the Trustee, and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of, and
premium, if any, and interest (including Additional Interest, if any) on the
Notes to the date of deposit together with irrevocable instructions from the
Company directing the Trustee to apply such funds to the payment thereof at
maturity or redemption, as the case may be; and if in either case the Company
pays all other sums payable hereunder by the Company, and the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent under this Indenture relating to the
satisfaction and discharge of this Indenture have been complied with, then this
Indenture shall, subject to Section 9.7 and subject to the satisfaction of any
obligations of the Company under Article XII to effect settlement upon
conversion of the Notes, cease to be of further effect. The Trustee shall join
in the execution of a document prepared by the Company acknowledging
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and Opinion of Counsel, each stating
that all conditions precedent under this Indenture relating to the satisfaction
and discharge of the Indenture have been complied with and at the cost and
expense of the Company. Notwithstanding the foregoing, the obligations of the
Company under Section 9.7 shall survive the discharge of the Indenture and the
Notes.
Section 10.2. Deposited Monies to Be Held in Trust by Trustee.
Subject to Section 10.3, all monies deposited with the Trustee
pursuant to Section 10.1 shall be held in trust for the sole benefit of the
Holders and not to be subject to the subordination provisions of ARTICLE XIII;
provided, that such monies were not deposited in violation of ARTICLE XIII. Such
deposited monies shall be applied by the Trustee to the payment, either directly
or through any paying agent, to the holders of the particular Notes for the
payment of which such monies have been deposited with the Trustee, of all sums
due and to become due thereon for principal and interest and Additional
Interest, if any.
Section 10.3. Repayment to the Company.
The Trustee shall return to the Company upon written request any
cash or securities held by them for the payment of any amount with respect to
the Notes that remains unclaimed for two years, subject to applicable unclaimed
property law. After return to the Company, Holders entitled to the cash or
securities must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and the
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Trustee shall have no further liability to the Holders with respect to such cash
or securities for that period commencing after the return thereof.
ARTICLE XI
AMENDMENTS
Section 11.1. Without Consent of Holders of Notes.
The Company and the Trustee may amend this Indenture or the Notes
without the consent of any Holder to:
(a) add to the covenants of the Company for the benefit of the
Holders of Notes;
(b) surrender any right or power herein conferred upon the Company;
(c) provide for conversion rights of Holders of Notes if any
reclassification or change of the Common Stock or any consolidation, merger or
sale of all or substantially all of the Company's assets occurs;
(d) provide for the assumption of the Company's obligations to the
Holders of Notes in the case of a merger, consolidation, conveyance, transfer,
sale, lease or other disposition pursuant to ARTICLE VII;
(e) increase the Conversion Rate; provided, however, that such
increase in the Conversion Rate shall not adversely affect the interests of the
Holders of Notes (after taking into account tax and other consequences of such
increase);
(f) require the Company to settle its Conversion Obligation in cash
with respect to the principal amount of Notes surrendered for conversion if a
Principal Conversion Settlement Election has been made;
(g) comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(h) make any changes or modifications necessary in connection with
the registration of the Notes under the Securities Act as contemplated in the
Registration Rights Agreement; provided, however, that such action pursuant to
this clause (h) does not, in the good faith opinion of the Board of Directors
(as evidenced by a Board Resolution on which the Trustee may conclusively rely),
adversely affect the interests of the Holders of Notes in any material respect;
(i) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder;
(j) add guarantees with respect to the Notes or secure the Notes;
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(k) cure any ambiguity or correct or supplement any provision herein
which may be inconsistent with any other provision herein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under this Indenture which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of this Indenture;
provided, however, that such action pursuant to this clause (k) does not, in the
good faith opinion of the Board of Directors (as evidenced by a Board Resolution
on which the Trustee may conclusively rely), adversely affect the interests of
the Holders of Notes in any material respect;
(l) evidence the succession of another Person to the Company or any
other obligor upon the Notes, and the assumption by any such successor of the
covenants of the Company or such obligor herein and in the Notes, in each case
in compliance with the provisions of this Indenture; or
(m) add or modify any other provisions herein with respect to
matters or questions arising hereunder which the Company and the Trustee may
deem necessary or desirable and which in the good faith opinion of the Board of
Directors (as evidenced by a Board Resolution on which the Trustee may
conclusively rely) shall not adversely affect the interests of the Holders of
Notes.
Section 11.2. With Consent of Holders of Notes.
Except as provided below in this Section 11.2, this Indenture or the
Notes may be amended, modified or supplemented, and noncompliance in any
particular instance with any provision of this Indenture or the Notes may be
waived, in each case with the written consent or affirmative vote of the Holders
of at least a majority of the principal amount of the Notes at the time
outstanding.
Without the written consent or the affirmative vote of each Holder
of Notes affected thereby (in addition to the written consent or the affirmative
vote of the holders of at least a majority of the principal amount of the Notes
at the time outstanding), an amendment or waiver under this Section 11.2 may
not:
(a) change the maturity of the principal amount of, or the payment
date of any installment of interest (including Additional Interest, if any) on,
any Note;
(b) reduce the principal amount, Redemption Price, Purchase Price or
Fundamental Change Purchase Price of, or interest (including Additional
Interest, if any) on, any Note;
(c) change the currency of payment of the principal amount,
Redemption Price, Purchase Price or Fundamental Change Purchase Price of, or
interest (including Additional Interest, if any) on, any Note from U.S. Dollars;
(d) impair or adversely affect the rate of accrual of interest
(including Additional Interest, if any) on any Note, or the manner of
calculation thereof;
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(e) impair the right of any Holder to institute suit for the
enforcement of any payment or with respect to, or conversion of, any Note;
(f) modify the Company's obligation to maintain a Registrar, Paying
Agent, Conversion Agent and an office or agency where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served in the
Borough of Manhattan, New York City;
(g) modify the optional redemption provisions of ARTICLE III in a
manner adverse to the Holders of Notes;
(h) impair or adversely affect the purchase rights of the Holders of
the Notes as provided in ARTICLE IV or ARTICLE V;
(i) impair or adversely affect the conversion rights of the Holders
of the Notes as provided in ARTICLE XII;
(j) modify the subordination provisions of ARTICLE XIII in a manner
adverse to the Holders of Notes;
(k) reduce the percentage of the principal amount of the outstanding
Notes the written consent or affirmative vote of whose Holders is required for
any such amendment, modification or supplement;
(l) reduce the percentage of the principal amount of the outstanding
Notes the written consent or affirmative vote of whose Holders is required to
rescind an acceleration and its consequences or for any waiver of any past
Default provided for in this Indenture; or
(m) waive any matter set forth in Section 8.4(a), Section 8.4(b), or
Section 8.4(c).
It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 11.2 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
Section 11.3. Compliance with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
comply with the TIA.
Section 11.4. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action by Holders becomes
effective, a consent thereto by a Holder of a Note hereunder is a continuing
consent by the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same obligation as the consenting Holder's Note, even if
notation of the consent, waiver or action is not made on the
59
Note. However, any such Holder or subsequent Holder may revoke the consent,
waiver or action as to such Holder's Note or portion of the Note if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Holder.
Section 11.5. Notation on or Exchange of Notes.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this ARTICLE XI may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Notes.
Section 11.6. Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental indenture authorized
pursuant to this ARTICLE XI if the amendment contained therein does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign such supplemental indenture. In
signing any supplemental indenture the Trustee shall receive, and (subject to
the provisions of Section 9.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture, and that all conditions precedent to
the execution of the Supplement have been complied with.
Section 11.7. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
ARTICLE XII
CONVERSION
Section 12.1. Conversion Right.
(a) Subject to and upon compliance with the provisions of this
ARTICLE XII, a Holder of a Note shall have the right, at such Holder's option,
to convert all or any portion (if the portion to be converted is $1,000 of the
principal amount or an integral multiple thereof) of such Note into, subject to
Section 12.12 and the provisions of this Section 12.1, a number of fully paid
and nonassessable shares of Common Stock equal to the product of (x) the
Conversion Rate in effect on the date of conversion times (y) the quotient of
the principal amount of the Note or portion thereof surrendered for conversion
divided by $1,000:
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(i) during any Conversion Period if, on each of at least 20 Trading
Days in the period of 30 consecutive Trading Days ending on the first
Trading Day of the Conversion Period, the Closing Sale Price of the Common
Stock exceeds 120% of the Conversion Price in effect on the 30th Trading
Day of such period of 30 consecutive Trading Days;
(ii) at any time prior to 5:00 p.m., New York City time, on the
second Business Day preceding the Redemption Date, if such Note has been
called for redemption pursuant to ARTICLE III; or
(iii) as provided in clause (b) of this Section 12.1.
The Company's obligations in respect of conversion of the Notes as
provided above are referred to as the "CONVERSION OBLIGATION."
The Company shall determine on the first day of each Conversion
Period whether the Notes shall be convertible as a result of the occurrence of
an event specified in clause (a)(i) above and, if the Notes shall be so
convertible, shall promptly deliver to the Trustee notice thereof and make
Public Notice to the Holders thereof on the first day of such Conversion Period.
Any notice so given shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice.
Notes called for redemption may be converted at any time on and
after the date that the Company mails the notice to the Holders required in
Section 3.3 until 5:00 p.m., New York City time, on the second Business Day
preceding the corresponding Redemption Date.
With respect to any conversion of a Note during a Registration
Default Period following satisfaction of any of the conditions to conversion
described in the Indenture (and during the prescribed time periods in respect
thereof), a Holder shall be entitled, subject to Section 12.12, to 103% of the
number of shares of Common Stock that the Holder would have otherwise been
entitled to upon conversion.
(b) (i) In the event that:
(A) the Company distributes to all or substantially all
holders of the Common Stock rights or warrants entitling them (for a
period expiring within 60 days of the Record Date for such
distribution) to subscribe for or purchase Common Stock, or
securities convertible into or exchangeable for Common Stock, at a
price per share of Common Stock less than the Closing Sale Price of
the Common Stock on the Business Day immediately preceding the
announcement of such distribution;
(B) the Company distributes to all or substantially all
holders of its Common Stock cash or other assets, debt securities or
rights or warrants to subscribe for or purchase its securities,
including the declaration of any cash dividends, payable quarterly
or otherwise, where the Fair Market Value (as determined by the
Board of Directors) of such distribution per share of Common
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Stock exceeds 10% of the Closing Sale Price of the Common Stock on
the Business Day immediately preceding the date of declaration of
such distribution; or
(C) a Fundamental Change occurs,
then, in each case, the Notes may be surrendered for conversion at any time on
and after the date that the Company gives notice (including by making a Public
Notice) to the Holders of such right, which shall be, in the case of (A) or (B),
not less than 20 Business Days prior to the Ex-Dividend Time for such
distribution, or, in the case of (C), within 20 Business Days after the
occurrence of the Fundamental Change, until 5:00 p.m., New York City time, on
the earlier of the Business Day immediately preceding the Ex-Dividend Time and
the date the Company announces that such distribution shall not take place in
the case of (A) or (B), or within 20 Business Days of the notice of the
Fundamental Change in the case of (C); provided, however, that in the case of
(A) or (B), a Holder of Notes may not surrender Notes for conversion if the
Holder is otherwise entitled to participate in such distribution in its capacity
as a Holder to the same extent as would have been the case had such Holder's
Notes been converted into Common Stock prior to such distribution.
(ii) In addition, in the event that the Company consolidates or
merges with or into another Person, or is a party to a binding share
exchange pursuant to which the Common Stock would be converted into cash,
securities or other property as set forth in Section 12.4 (except when the
shareholders of the Company immediately before such transaction own,
directly or indirectly, immediately following such transaction more than
fifty percent (50%) of the total outstanding Voting Stock), then the Notes
may be surrendered for conversion at any time from and after the date
which is 15 calendar days prior to the date the Company announces by
Public Notice as the anticipated effective time of such transaction until
15 calendar days after the effective date of such transaction,
irrespective of whether such transaction constitutes a Fundamental Change.
(c) Notwithstanding the foregoing, a Note in respect of which a
Holder has delivered a Purchase Notice or a Fundamental Change Purchase Notice,
as the case may be, exercising such Holder's right to require the Company to
repurchase such Note may be converted only if such Purchase Notice or
Fundamental Change Purchase Notice is withdrawn in accordance with Section
4.2(b) or Section 5.2(b).
(d) A Holder of Notes shall not be entitled to any rights of a
holder of Common Stock until such Holder has converted its Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock as provided in Section 12.2(c).
Section 12.2. Conversion Procedures; Conversion Rate; Fractional Shares.
(a) Subject to Section 12.12, each Note shall be convertible at the
office of the Conversion Agent into fully paid and nonassessable shares of
Common Stock (calculated to the nearest 1/10,000th of a share).
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The Conversion Agent shall notify the Company when it receives a
Conversion Notice. Pursuant to Section 12.12, the Company shall determine the
number of shares of Common Stock and/or the amount of cash, if any, that the
Holder that submitted the Conversion Notice is entitled to receive upon
surrender of the Notes covered by that Conversion Notice. If the Company elects
to settle in Common Stock only, a certificate for the full number of shares of
Common Stock into which the Notes are converted (and cash in lieu of fractional
shares) shall be delivered by the Company to such Holder, assuming all of the
other requirements have been satisfied by such Holder, as soon as practicable,
but in any event not more than 5 Business Days, after the Company issues its
notification of its chosen method of settlement in accordance with Section
12.12. If the Company elects to settle in cash or a combination of cash and
Common Stock (including, without limitation, pursuant to a Principal Conversion
Settlement Election), the cash and, if applicable, a certificate for the full
number of shares of Common Stock into which the Notes are converted (and cash in
lieu of fractional shares) shall be paid and delivered to such Holder, assuming
all of the other requirements have been satisfied by such Holder, in accordance
with Section 12.12. Notwithstanding the foregoing, the Company shall not be
required to deliver certificates for Common Stock while the stock transfer books
for such stock or the security register are duly closed for any purpose, but
certificates for Common Stock shall be issued and delivered as soon as
practicable after the opening of such books or security register.
The Company shall not issue fractional shares of its Common Stock
upon conversion of the Notes. In lieu thereof, the Company shall pay in cash the
value of such fractional shares based upon the Closing Sale Price of its Common
Stock on the Trading Day immediately prior to the date of conversion.
Except as described in Section 12.9, the Company will not make any
payment or other adjustment for accrued and unpaid interest (including
Additional Interest, if any) on any Notes when they are converted. The Company's
delivery to the Holder of the full number of shares of Common Stock into which
the Note is convertible (or, at the Company's option, cash, or a combination of
cash and Common Stock, in lieu thereof as provided in Section 12.12), together
with any cash payment for such Holder's fractional shares, shall be deemed to
satisfy the Company's obligation to pay the principal of the Note and to satisfy
its obligation to pay accrued and unpaid interest (including Additional
Interest, if any) through the conversion date. As a result, accrued interest
(including Additional Interest, if any) is deemed paid in full rather than
cancelled, extinguished or forfeited. Notwithstanding the foregoing, accrued
interest (including Additional Interest, if any) will be payable upon any
conversion of Notes made concurrently with or after acceleration of the Notes
following an Event of Default.
If a Holder has exercised its right to require the Company to
repurchase its Notes pursuant to ARTICLE IV or ARTICLE V, such Holder's
conversion rights on the Notes so subject to repurchase shall expire at 5:00
p.m., New York City time, on the Business Day immediately preceding the Purchase
Date or Fundamental Change Purchase Date, as the case may be. Notwithstanding
the foregoing, a Note in respect of which a Holder has delivered a Purchase
Notice or a Fundamental Change Purchase Notice, as the case may be, exercising
such Holder's right to require the Company to repurchase such Note may be
converted only if such Purchase Notice or Fundamental Change Purchase Notice is
withdrawn in accordance with Section 4.2(b) or Section 5.2(b).
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(b) Before any Holder shall be entitled to convert any Notes into
Common Stock, such Holder shall, in the case of Global Securities, comply with
the Applicable Procedures of the Depositary in effect at that time, and in the
case of Certificated Securities, surrender such Notes, duly endorsed to the
Company or in blank, at the office of the Conversion Agent, and shall give
written notice to the Company at said office or place in the form of the
Conversion Notice attached to the Note (the "CONVERSION NOTICE") that such
Holder elects to convert the same and shall state in writing therein the
principal amount of Notes to be converted (in whole or in part so long as the
principal amount to be converted is in multiples of $1,000) and the name or
names (with addresses) in which such Holder wishes the certificate or
certificates for Common Stock to be issued.
Before any such conversion, a Holder also shall pay all funds
required from such Holder, if any, relating to interest (including Additional
Interest, if any) on the Notes, as provided in Section 12.9, and all taxes or
duties, if any, as provided in Section 12.8.
If more than one Note shall be surrendered for conversion at one
time by the same Holder, the number of shares of Common Stock that shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted thereby) so surrendered.
If shares of Common Stock to be issued upon conversion of a
Restricted Security are to be issued in the name of a Person other than the
Holder of such Restricted Security, such Holder shall deliver to the Conversion
Agent a certification in substantially the form set forth in a Transfer
Certificate dated the date of surrender of such Restricted Security and signed
by such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Security. The Company shall not be required to issue Common
Stock upon conversion of any such Restricted Security to a Person other than the
Holder if such Restricted Security is not so accompanied by a properly completed
certification, and the Registrar shall not be required to register Common Stock
upon conversion of any such Restricted Security in the name of a Person other
than the Holder if such Restricted Security is not so accompanied by a properly
completed certification.
(c) A Note shall be deemed to have been converted immediately prior
to 5:00 p.m., New York City time, on the date on which all of the conversion
requirements set forth in Section 12.2(b) have been satisfied, and the person or
persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record Holder or Holders of such Common Stock
as of 5:00 p.m., New York City time, on such date.
(d) In case any Certificated Security shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate
and deliver to or upon the written order of the Holder of the Note so
surrendered, without charge to such Holder (subject to the provisions of Section
12.8), a new Note or Notes in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Certificated
Securities.
(e) If and only to the extent a Holder elects to convert Notes in
connection with a Fundamental Change described in clause (i) or (iii) of the
definition thereof (or in connection with a transaction that would have been a
Fundamental Change under such clause (i) or (iii) but
64
for the application of the 105% Trading Price Exception (as defined in the
definition of a Fundamental Change)) that occurs on or prior to December 1, 2009
pursuant to which 10% or more of the consideration for the Common Stock (other
than cash payments for fractional shares and cash payments made in respect of
dissenters' appraisal rights) in such transaction consists of cash or securities
(or other property) that are not traded or scheduled to be traded immediately
following such transaction on a U.S. national securities exchange, the Nasdaq
National Market or the Nasdaq SmallCap Market, such holder will be entitled to
receive, in addition to a number of shares of Common Stock equal to the
Conversion Rate per $1,000 principal amount of Notes, an additional number of
shares of Common Stock (the "ADDITIONAL SHARES") as described below, subject to
the Company's Principal Conversion Settlement Election as described in Section
12.12 and subject to the Company's rights in respect of a Public Acquirer Change
of Control as described in Section 12.13; provided, however, that if the Stock
Price paid in connection with such transaction is greater than $10.50 or less
than $3.51 (subject in each case to adjustment as described below), no
Additional Shares shall be issued. No Additional Shares shall be issuable under
this Section 12.2(e) unless the Holder elects to convert the Notes in connection
with such transaction.
The number of Additional Shares issuable in connection with the
conversion of Notes as described in the immediately preceding paragraph will be
determined by reference to the table attached as Schedule I hereto, based on the
effective date of such transaction and the Stock Price paid in connection with
such transaction; provided that if the Stock Price is between two Stock Price
amounts in the table or such effective date is between two effective dates in
the table, the number of Additional Shares will be determined by the Company by
a straight-line interpolation between the number of Additional Shares set forth
for the higher and lower Stock Price amounts and the two effective dates, as
applicable, based on a 365-day year. The "EFFECTIVE DATE" with respect to a
Fundamental Change transaction means the date on which such Fundamental Change
becomes effective.
The Stock Prices set forth in the first row of the table in Schedule
I hereto will be adjusted as of any date on which the Conversion Rate of the
Notes is adjusted pursuant to Section 12.3. The adjusted Stock Prices will equal
the Stock Prices applicable immediately prior to such adjustment, multiplied by
a fraction, the numerator of which is the Conversion Rate immediately prior to
the adjustment giving rise to the Conversion Rate adjustment and the denominator
of which is the Conversion Rate as so adjusted. The number of Additional Shares
will be adjusted in the same manner as the Conversion Rate as set forth in
Section 12.3.
Notwithstanding the foregoing, in no event will the total number of
shares of Common Stock issuable upon conversion exceed 284.9003 per $1,000
principal amount of Notes, subject to adjustments in the same manner as the
Conversion Rate as set forth in Section 12.3.
Section 12.3. Adjustment of Conversion Rate.
The Conversion Rate shall be adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time
after the initial Issue Date while any of the Notes are outstanding, pay a
dividend or make a distribution in
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Common Stock to all or substantially all holders of its outstanding Common
Stock, then the Conversion Rate in effect immediately prior to the close of
business on the Record Date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be increased by multiplying
such Conversion Rate by a fraction:
(i) the numerator of which shall be the sum of the total number of
shares of Common Stock outstanding on such Record Date and the total
number of shares of Common Stock constituting such dividend or other
distribution; and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on such Record Date.
Such increase shall become effective immediately prior to the
opening of business on the day following the Record Date fixed for such
determination. If any dividend or distribution of the type described in this
Section 12.3(a) is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared.
(b) In case the Company shall, at any time or from time to time
after the initial Issue Date while any of the Notes are outstanding, subdivide
or split its outstanding shares of Common Stock into a greater number of shares
of Common Stock, the Conversion Rate in effect immediately prior to the opening
of business on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and, conversely, in case
the Company shall, at any time or from time to time after the initial Issue Date
while any of the Notes are outstanding, combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, the Conversion Rate in
effect immediately prior to the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately reduced,
such increase or reduction, as the case may be, to become effective immediately
prior to the opening of business on the day following the day upon which such
subdivision, split or combination becomes effective, so that the Holder of any
Note thereafter surrendered for conversion shall be entitled to receive that
number of shares of Common Stock which it would have received had such Note been
converted immediately prior to the happening of such event adjusted as a result
of such event.
(c) In case the Company shall, at any time or from time to time
after the initial Issue Date while any of the Notes are outstanding, issue
rights or warrants for a period expiring within 60 days (other than any rights
or warrants referred to in Section 12.3(d)) to all or substantially all holders
of its outstanding Common Stock entitling them to subscribe for or purchase
Common Stock (or securities convertible into or exchangeable or exercisable for
Common Stock), at a price per share of Common Stock (or having a conversion,
exchange or exercise price per share of Common Stock) less than the Closing Sale
Price of the Common Stock on the Business Day immediately preceding the date of
announcement of such issuance (treating the conversion, exchange or exercise
price per share of Common Stock of the securities convertible, exchangeable or
exercisable into Common Stock as equal to (x) the sum of (i) the price for a
unit of the security convertible into or exchangeable or exercisable for Common
Stock and (ii) any additional consideration initially payable upon the
conversion of or exchange or exercise for such security into Common Stock
divided by (y) the number of shares of Common
66
Stock initially underlying such convertible, exchangeable or exercisable
security), then the Conversion Rate shall be increased by multiplying the
Conversion Rate in effect at the opening of business on the date after such date
of announcement by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date of
announcement, plus the total number of additional shares of Common
Stock so offered for subscription or purchase (or into which the
convertible, exchangeable or exercisable securities so offered are
convertible, exchangeable or exercisable); and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the date of
announcement, plus the number of shares of Common Stock (or
convertible, exchangeable or exercisable securities) which the
aggregate offering price of the total number of shares of Common
Stock (or convertible, exchangeable or exercisable securities) so
offered for subscription or purchase (or the aggregate conversion,
exchange or exercise price of the convertible, exchangeable or
exercisable securities so offered) would purchase at such Closing
Sale Price of the Common Stock.
Such increase shall become effective immediately prior to the
opening of business on the day following the Record Date for such determination.
To the extent that shares of Common Stock (or securities convertible,
exchangeable or exercisable into shares of Common Stock) are not delivered
pursuant to such rights or warrants, upon the expiration or termination of such
rights or warrants, the Conversion Rate shall be readjusted to the Conversion
Rate which would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made on the basis of the delivery of only the
number of shares of Common Stock (or securities convertible, exchangeable or
exercisable into shares of Common Stock) actually delivered. In the event that
such rights or warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if the Record
Date fixed for the determination of stockholders entitled to receive such rights
or warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Closing Sale Price, and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, the value of such consideration if other
than cash, to be determined by the Board of Directors.
(d)
(A) In case the Company shall, at any time or from time to time
after the initial Issue Date while any of the Notes are outstanding, by dividend
or otherwise, distribute to all or substantially all holders of its outstanding
shares of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the continuing corporation and
the shares of Common Stock are not changed or exchanged), shares of its capital
stock, evidences of its Indebtedness or other assets, including securities
(including shares of capital stock of one or more of the Company's
Subsidiaries), but excluding (i) dividends or distributions of Common Stock
referred to in Section 12.3(a), (ii) any rights or warrants referred to in
Section 12.3(c), (iii) dividends and distributions paid exclusively in cash
67
referred to in Section 12.3(c) and (iv) dividends and distributions of stock,
securities or other property or assets (including cash) in connection with the
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 12.4 applies (such capital
stock, evidence of its indebtedness, other assets or securities being
distributed hereinafter in this Section 12.3(d) called the "DISTRIBUTED
ASSETS"), then, in each such case, subject to paragraphs (D) and (E) of this
Section 12.3(d), the Conversion Rate shall be increased by multiplying the
Conversion Rate in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction:
(i) the numerator of which shall be the Current Market Price;
and
(ii) the denominator of which shall be such Current Market
Price of the Common Stock, less the Fair Market Value on such date
of the portion of the distributed assets so distributed applicable
to one share of Common Stock (determined on the basis of the number
of shares of Common Stock outstanding on the Record Date) on such
date.
Such increase shall become effective immediately prior to the
opening of business on the day following the Record Date for such distribution.
In the event that such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be in effect if such dividend or distribution had not been declared.
(B) If the Board of Directors determines the Fair Market Value of
any distribution for purposes of this Section 12.3(d) by reference to the actual
or when issued trading market for any distributed assets comprising all or part
of such distribution, it must in doing so consider the prices in such market
over the same period (the "REFERENCE PERIOD") used in computing the Current
Market Price pursuant to Section 12.3(g) below to the extent possible, unless
the Board of Directors determines in good faith that determining the Fair Market
Value during the Reference Period would not be in the best interest of the
Holders.
(C) In the event any such distribution consists of shares of capital
stock of, or similar equity interests in, one or more of the Company's
Subsidiaries (a "SPIN-OFF"), the Fair Market Value of the securities to be
distributed shall equal the average of the Closing Sale Prices of such
securities on the principal securities market on which such securities are
traded for the five consecutive Trading Days commencing on and including the
sixth Trading Day of those securities after the effectiveness of the Spin-Off,
and the Current Market Price shall be measured for the same period. In the
event, however, that an underwritten initial public offering of the securities
in the Spin-Off occurs simultaneously with the Spin-Off, Fair Market Value of
the securities distributed in the Spin-Off shall mean the initial public
offering price of such securities and the Current Market Price shall mean the
Closing Sale Price for the Common Stock on the same Trading Day.
(D) Rights or warrants distributed by the Company to all holders of
the outstanding shares of Common Stock entitling them to subscribe for or
purchase Equity Interests of the Company (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("TRIGGER EVENT"), (x) are deemed to be transferred with such
shares of Common Stock, (y) are not exercisable and (z) are also issued in
respect of
68
future issuances of shares of Common Stock shall be deemed not to have been
distributed for purposes of this Section 12.3(d) (and no adjustment to the
Conversion Rate under this Section 12.3(d) shall be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different distributed assets, evidences of
indebtedness or other assets, or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be deemed
to be the date of issuance and Record Date with respect to a new right or
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Rate under
this Section 12.3(d):
(i) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder of shares Common Stock
with respect to such rights or warrants (assuming such holder had retained
such rights or warrants), made to all holders of Common Stock as of the
date of such redemption or repurchase; and
(ii) in the case of such rights or warrants which shall have expired
or been terminated without exercise, the Conversion Rate shall be
readjusted as if such rights and warrants had never been issued.
To the extent that the Company has a rights plan in effect upon the
conversion of the Notes into Common Stock only or a combination of cash and
Common Stock, with respect to the conversion consideration payable in Common
Stock, a Holder will receive in addition to the Common Stock, the rights under
the rights plan, unless the rights have separated from the Common Stock prior to
the time of conversion, in which case the Conversion Rate will be adjusted at
the time of separation as if the Company made a distribution referred to in this
Section 12.3(d). To the extent that the Company has a rights plan in effect upon
conversion of the Notes into cash, with respect to the conversion consideration
payable in cash, a Holder will not receive any rights under the Rights Plan or
other consideration in respect thereof.
(E) For purposes of this Section 12.3(d) and Section 12.3(a),
Section 12.3(b) and Section 12.3(c), any dividend or distribution to which this
Section 12.3(d) is applicable that also includes (x) shares of Common Stock, (y)
a subdivision, split or combination of shares of Common Stock to which Section
12.3(b) applies or (z) rights or warrants to subscribe for or purchase shares of
Common Stock to which Section 12.3(c) applies (or any combination thereof),
shall be deemed instead to be:
(i) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants, other than such
shares of Common Stock, such subdivision, split or combination or such
rights or warrants to which Section 12.3(a),
69
Section 12.3(b) and Section 12.3(c) apply, respectively (and any
Conversion Rate adjustment required by this Section 12.3(d) with respect
to such dividend or distribution shall then be made), immediately followed
by
(ii) a dividend or distribution of such shares of Common Stock, such
subdivision, split or combination or such rights or warrants (and any
further Conversion Rate increase required by Section 12.3(a), Section
12.3(b) and Section 12.3(c) with respect to such dividend or distribution
shall then be made), except:
(1) the Record Date of such dividend or distribution
shall be substituted as (i) "the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution," "Record Date fixed for such
determinations" and "Record Date" within the meaning of
Section 12.3(a), (ii) "the day upon which such subdivision or
split becomes effective" or "the day upon which such
combination becomes effective" (as applicable) within the
meaning of Section 12.3(b), and (iii) as "the Record Date
fixed for the determination of the stockholders entitled to
receive such rights or warrants" and such "Record Date" within
the meaning of Section 12.3(c); and
(2) any reduction or increase in the number of shares of
Common Stock resulting from such subdivision, split or
combination (as applicable) shall be disregarded in connection
with such dividend or distribution.
(e) In case the Company shall, at any time or from time to time
after the initial Issue Date while any of the Notes are outstanding, by dividend
or otherwise, distribute to all or substantially all holders of its outstanding
shares of Common Stock, cash (including any quarterly cash dividends) then, and
in each case, immediately after the close of business on such date, the
Conversion Rate shall be increased by multiplying the Conversion Rate in effect
immediately prior to the close of business on such Record Date by a fraction:
(A) the numerator of which shall be equal to the Current
Market Price on such date; and
(B) the denominator of which shall be equal to the Current
Market Price on the Record Date, less an amount equal to the
quotient of (x) the aggregate amount of such cash distribution and
(y) the number of shares of Common Stock outstanding on the Record
Date.
Such increase shall become effective immediately prior to the
opening of business on the day following the Record Date for such distribution.
In the event that such distribution is not so made, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would then be in effect if
such distribution had not been declared.
(f) In case a tender offer or exchange offer (other than as part of
a stock option exchange offer) made by the Company or any of its Subsidiaries
for all or any portion of the Common Stock shall expire, then and in each such
case, immediately prior to the opening of
70
business on the day after the date of the last time (the "EXPIRATION TIME")
tenders or exchanges could have been made pursuant to such tender offer or
exchange offer, the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the date of the Expiration Time by
a fraction:
(A) the numerator of which shall be the sum of (x) the product
of (i) the number of shares of Common Stock outstanding (excluding
any tendered or exchanged shares) at the Expiration Time and (ii)
the Current Market Price of the Common Stock at the Expiration Time,
and (y) the Fair Market Value of the aggregate consideration payable
to stockholders based on acceptance (up to any maximum specified in
the terms of the tender offer or exchange offer) of all shares
validly tendered and not withdrawn as of the Expiration Time; and
(B) the denominator of which shall be the product of the
number of shares of Common Stock outstanding (including any tendered
or exchanged shares) at the Expiration Time and the Current Market
Price of the Common Stock at the Expiration Time.
Such increase (if any) shall become effective immediately prior to
the opening of business on the day following the Expiration Time. In the event
that the Company is obligated to purchase shares pursuant to any such tender
offer or exchange offer, but the Company is permanently prevented by applicable
law from effecting any such purchases or all or a portion of such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate
which would then be in effect if such (or such portion of the) tender offer or
exchange offer had not been made. If the application of this Section 12.3(e) to
any tender offer or exchange offer would result in a decrease in the Conversion
Rate, no adjustment shall be made for such tender offer or exchange offer under
this Section 12.3(e).
(g) For purposes of this ARTICLE XII, the following terms shall have
the meanings indicated:
"CURRENT MARKET PRICE" on any date means the average of the daily
Closing Sale Prices per share of Common Stock for the ten consecutive Trading
Days immediately prior to such date; provided, however, that if:
(i) the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires an
adjustment to the Conversion Rate pursuant to Section 12.3(a), Section
12.3(b), Section 12.3(c), Section 12.3(d), Section 12.3(e) or Section
12.3(f) occurs during such ten consecutive Trading Days, the Closing Sale
Price for each Trading Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing Sale Price by the same
fraction by which the Conversion Rate is so required to be adjusted as a
result of such other event;
(ii) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to
the Conversion Rate pursuant to Section 12.3(a), Section 12.3(b), Section
12.3(c), Section 12.3(d), Section 12.3(e) or
71
Section 12.3(f) occurs on or after the "ex" date for the issuance or
distribution requiring such computation and prior to the day in question,
the Closing Sale Price for each Trading Day on and after the "ex" date for
such other event shall be adjusted by multiplying such Closing Sale Price
by the reciprocal of the fraction by which the Conversion Rate is so
required to be adjusted as a result of such other event; and
(iii) the "ex" date for the issuance or distribution requiring such
computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (i) or (ii) of this proviso, the
Closing Sale Price for each Trading Day on or after such "ex" date shall
be adjusted by adding thereto the amount of any cash and the Fair Market
Value (as determined by the Board of Directors in a manner consistent with
any determination of such value for purposes of Section 12.3(d), Section
12.3(e) or Section 12.3(f)) of the evidences of Indebtedness, shares of
capital stock or assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such "ex" date.
For purposes of any computation under Section 12.3(e), if the "ex" date for any
event (other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Rate pursuant to Section 12.3(a), Section 12.3(b),
Section 12.3(c), Section 12.3(d), Section 12.3(e) or Section 12.3(f) occurs on
or after the Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Sale Price for each
Trading Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Sale Price by the reciprocal of the fraction by which
the Conversion Rate is so required to be adjusted as a result of such other
event. For purposes of this paragraph, the term "ex" date, when used:
(i) with respect to any issuance or distribution, means the first
date on which the Common Stock trade regular way on the relevant exchange
or in the relevant market from which the Closing Sale Price was obtained
without the right to receive such issuance or distribution;
(ii) with respect to any subdivision, split or combination of Common
Stock, means the first date on which the Common Stock trade regular way on
such exchange or in such market after the time at which such subdivision,
split or combination becomes effective; and
(iii) with respect to any tender offer or exchange offer, means the
first date on which the Common Stock trade regular way on such exchange or
in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Rate are called for pursuant to this Section 12.3, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 12.3 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
"FAIR MARKET VALUE" means the amount which a willing buyer would pay
a willing seller in an arm's length transaction (as determined by the Board of
Directors, whose
72
determination shall be made in good faith and, absent manifest error, shall be
final and binding on Holders of the Notes).
"RECORD DATE" means, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the right
to receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(h) The Company shall be entitled to make such additional increases
in the Conversion Rate, in addition to those required by Section 12.3(a),
Section 12.3(b), Section 12.3(c), Section 12.3(d), Section 12.3(e) or Section
12.3(f), if the Board of Directors determines that it is advisable, subject to
compliance with Nasdaq Marketplace Rule 4350(i), in order that any dividend or
distribution of Common Stock, any subdivision, reclassification or combination
of Common Stock or any issuance of rights or warrants referred to above, or any
event treated as such for United States federal income tax purposes, shall not
be taxable to the holders of Common Stock for United States federal income tax
purposes or to diminish any such tax.
(i) To the extent permitted by law and applicable Nasdaq rules, the
Company may, from time to time, increase the Conversion Rate by any amount for
any period of time if such period is at least 20 calendar days, the increase is
irrevocable during the period and the Board of Directors, in good faith and
absent manifest error, determines that such increase would be in the best
interest of the Company, subject to compliance with Nasdaq Marketplace Rule
4350(i). Any such determination by the Company's Board of Directors shall be
conclusive. Whenever the Conversion Rate is increased pursuant to the preceding
sentence or clause (h) above, the Company shall mail to the Trustee and each
Holder at the address of such Holder as it appears in the register of the Notes
maintained by the Registrar (and make a Public Notice), at least 15 Business
Days prior to the date the increased Conversion Rate takes effect, a notice of
the increase stating the increased Conversion Rate and the period during which
it shall be in effect.
(j) In any case in which this Section 12.3 shall require that any
adjustment be made effective as of or retroactively immediately following a
Record Date, the Company may elect to defer (but only for five Trading Days
following the filing of the notice referred to in Section 12.5) issuing to the
Holder of any Notes converted after such Record Date the Common Stock issuable
upon such conversion over and above the Common Stock issuable upon such
conversion on the basis of the Conversion Rate prior to adjustment; provided,
however, that the Company shall deliver to such Holder a due ▇▇▇▇ or other
appropriate instrument evidencing such Holder's right to receive such additional
Common Stock upon the occurrence of the event requiring such adjustment.
(k) All calculations under this Section 12.3 shall be made to the
nearest cent or one-hundredth of a share, with one-half cent and 0.005 of a
share, respectively, being rounded upward. Notwithstanding any other provision
of this Section 12.3, the Company shall not be required to make any adjustment
of the Conversion Rate unless such adjustment would require an increase or
decrease of at least 1% in the Conversion Rate as last adjusted. Any lesser
73
adjustment shall be carried forward and shall be made at the earlier of (i) the
time of and together with the next subsequent adjustment which, together with
any adjustment or adjustments so carried forward, shall amount to an increase or
decrease of at least 1% in the Conversion Rate as last adjusted or (ii) in
connection with any conversion of the Notes following a call for redemption or
at Stated Maturity, as applicable. Any adjustments under this Section 12.3 shall
be made successively whenever an event requiring such an adjustment occurs.
(l) In the event that at any time, as a result of an adjustment made
pursuant to this Section 12.3, the Holder of any Notes thereafter surrendered
for conversion shall become entitled to receive any shares of Applicable Stock
of the Company other than Common Stock into which the Notes originally were
convertible, the Conversion Rate of such other shares so receivable upon
conversion of any such Note shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in subparagraphs (a) through (k) of this
Section 12.3, and the provision of Section 12.1, Section 12.2 and Section 12.4
through Section 12.9 with respect to the Common Stock shall apply on like or
similar terms to any such other shares (including, without limitation, the
determination of whether the conditions to conversion provided in Section 12.1
have been satisfied). In the event that the Conversion Rate is required to be
adjusted pursuant to this Section 12.3 during any period referred to in Section
12.1(a)(i) or any Cash Settlement Averaging Period, the Closing Sale Price for
each Trading Day during such period shall, to the extent necessary, be adjusted
to reflect the effects of such adjustment to this Section 12.3.
(m) No adjustment shall be made pursuant to this Section 12.3 if the
effect thereof would be to reduce the Conversion Price below the par value (if
any) of the Common Stock.
Section 12.4. Consolidation or Merger of the Company.
If any of the following events occurs, namely:
(a) any reclassification or change of the outstanding shares of
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination);
(b) any merger, consolidation, statutory share exchange or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock; or
(c) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock;
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture, if such supplemental indenture is then required to so comply)
providing that such Notes shall be convertible into the kind and amount
74
of shares of stock and other securities or property or assets (including cash)
which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Notes been converted into Common Stock
immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided, that if
the kind or amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance is not the
same for each share of Common Stock in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purposes of
this Section 12.4, the kind and amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this ARTICLE
XII and, to the extent applicable, reflect the other types of adjustments
provided for in Section 12.3(l). If, in the case of any such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of Common Stock includes shares of stock or other securities and assets
of a Person other than the successor or purchasing Person, as the case may be,
in such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, then such supplemental indenture
shall also be executed by such other Person and shall contain such additional
provisions to protect the interests of the Holders of the Notes as the Board of
Directors shall reasonably consider necessary by reason of the foregoing
including the provisions providing for the repurchase rights set forth in
ARTICLE IV and ARTICLE V.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the register of the Notes maintained by the Registrar, within 20 days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The above provisions of this Section 12.4 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 12.4 applies to any event or occurrence, Section
12.3 shall not apply. Notwithstanding this Section 12.4, if a Public Acquirer
Change of Control occurs and the Company elects to adjust the Conversion Rate
and its conversion obligation pursuant to Section 12.13, the provisions of
Section 12.13 shall apply to the conversion instead of this Section 12.4.
Any Additional Shares which a Holder is entitled to receive upon
conversion pursuant to Section 12.2(e), if applicable, shall not be payable in
shares of Common Stock, but will represent a right to receive the aggregate
amount of cash, securities or other property into which the Additional Shares
would convert as a result of such recapitalization, consolidation, merger, share
transfer, acquisition or share exchange.
75
Section 12.5. Notice of Adjustment.
Whenever an adjustment in the Conversion Rate with respect to the
Notes is required:
(a) the Company shall forthwith place on file with the Trustee and
any Conversion Agent for such securities a certificate of the Chief Financial
Officer of the Company, stating the adjusted Conversion Rate determined as
provided herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such adjustment;
and
(b) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company, to each Holder in the manner provided in Section 14.2.
Any notice so given shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice.
Section 12.6. Notice in Certain Events.
In case of:
(a) a consolidation or merger to which the Company is a party and
for which approval of any holders of Common Stock of the Company is required, or
of the sale or conveyance to another Person or entity or group of Persons or
entities acting in concert as a partnership, limited partnership, syndicate or
other group (within the meaning of Rule 13d-3 under the Exchange Act) of all or
substantially all of the property and assets of the Company; or
(b) the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(c) any action triggering an adjustment of the Conversion Rate
referred to in clauses (x) or (y) below;
then, in each case, the Company shall cause to be filed with the
Trustee and the Conversion Agent, and shall cause to be given, to the Holders of
the Notes in the manner provided in Section 14.2, at least 15 days prior to the
applicable date hereinafter specified, a notice stating:
(x) the date on which a record is to be taken for the purpose of any
distribution or grant of rights or warrants triggering an adjustment to
the Conversion Rate pursuant to this ARTICLE XII, or, if a record is not
to be taken, the date as of which the holders of record of Common Stock
entitled to such distribution, rights or warrants are to be determined; or
(y) the date on which any reclassification, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Rate pursuant to this ARTICLE XII is expected
to become effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled
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to exchange their shares of Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect
the legality or validity of the proceedings described in Section 12.6(a),
Section 12.6(b) or Section 12.6(c).
Section 12.7. Company To Reserve Stock: Registration; Listing.
(a) The Company shall, prior to issuance of any Notes hereunder, and
from time to time as may be necessary, reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of the Notes, such number of its duly
authorized Common Stock as shall from time to time be sufficient to effect the
conversion of all Notes then outstanding into such Common Stock at any time
(assuming that, at the time of the computation of such number of Common Stock,
all such Notes would be held by a single Holder). The Company covenants that all
Common Stock which may be issued upon conversion of Notes shall upon issue be
fully paid and nonassessable and free from all liens and charges and, except as
provided in Section 12.8, taxes with respect to the issue thereof.
(b) Except with respect to shares issued upon conversion of a
Transfer Restricted Security prior to the second anniversary of the initial
Issue Date, if any shares of Applicable Stock which would be issuable upon
conversion of Notes hereunder (including, without limitation, in connection with
any transaction referred to in Section 12.4) require registration with or
approval of any governmental authority before such shares may be issued upon
such conversion, the Company shall use its reasonable best efforts to cause such
shares to be duly registered or approved, as the case may be, or to cause such
shares not to be Transfer Restricted Securities. In addition, in connection with
any transaction referred to in Section 12.4, the Company and any parent company
of the Company required to issue Applicable Stock upon conversion of a Note
shall take such actions as are required to entitle the Company or such parent
company, as the case may be, to rely on Section 3(a)(9) of the Securities Act in
connection with conversion of the Notes without extending any holding periods
under Rule 144 or otherwise permit such Applicable Stock issued upon conversion
of the Notes to be resold without requiring registration thereof under the
Securities Act.
(c) The Company further covenants that, if at any time the Common
Stock shall be listed on the New York Stock Exchange or any other national
securities exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap
Market or any other automated quotation system, the Company will, if permitted
by the rules of such exchange or automated quotation system, list and keep
listed or quoted, so long as the Common Stock shall be so listed or quoted on
such exchange or automated quotation system, all Common Stock issuable upon
conversion of the Notes; provided that so long as no delay in listing or
quotation will occur upon conversion of the Notes into Common Stock, if the
rules of such exchange or automated quotation system permit the Company to defer
the listing or quotation of such Common Stock until the first conversion of the
Notes into Common Stock in accordance with the provisions of this Indenture, the
Company covenants to obtain the listing or quotation of such Common Stock
issuable upon
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conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.
Section 12.8. Taxes on Conversion.
The issue of stock certificates on conversion of Notes shall be made
without charge to the converting Holder for any documentary, stamp or similar
issue or transfer taxes in respect of the issue thereof, and the Company shall
pay any and all documentary, stamp or similar issue or transfer taxes that may
be payable in respect of the issue or delivery of Common Stock on conversion of
Notes pursuant hereto. The Company shall not, however, be required to pay any
such tax which may be payable in respect of any transfer involved in the issue
or delivery of Common Stock or the portion, if any, of the Notes which are not
so converted in a name other than that in which the Notes so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.
Section 12.9. Conversion After Regular Record Date.
Except as provided in the succeeding paragraph, upon conversion, the
Holder of Notes shall not be entitled to receive any accrued and unpaid interest
(including Additional Interest, if any) other than overdue interest, if any.
If any Notes are surrendered for conversion subsequent to the close
of business on any Regular Record Date but prior to the opening of business on
the corresponding Interest Payment Date, the Holder of such Notes at the close
of business on such Regular Record Date shall receive the interest and
Additional Interest, if any, payable on such Notes on such Interest Payment Date
notwithstanding the conversion thereof. Notes surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the corresponding Interest Payment Date shall (except in the case
of Notes which have been called for redemption on a Redemption Date within such
period or Notes surrendered for conversion after acceleration of the Notes) be
accompanied by payment by the Holder, for the account of the Company, in New
York Clearing House funds or other funds acceptable to the Company of an amount
equal to the accrued and unpaid interest and Additional Interest (other than
overdue interest), if any, payable on such Interest Payment Date on the Notes
being surrendered for conversion.
Except as described in Section 12.2(a) and this Section 12.9, the
Company will not make any payment in cash or Common Stock or other adjustment
for accrued and unpaid interest or Additional interest on any Notes when they
are converted.
Section 12.10. Company Determination Final.
Excepts as otherwise provided herein or the Note, the Company or its
agents shall be responsible for making all calculations required under the terms
of this ARTICLE XII. Any determination that the Company or the Board of
Directors must make pursuant to this ARTICLE XII shall be set forth in a Board
Resolution, shall be made in good faith and, absent manifest
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error, shall be final and binding on holders of the Notes. The Company or its
agents shall be required to deliver to the Trustee a schedule of its
calculations and the Trustee shall be entitled to conclusively rely upon the
accuracy of such calculations without independent verification.
Section 12.11. Responsibility of Trustee for Conversion Provisions.
The Trustee has no duty to determine when an adjustment under this
ARTICLE XII should be made, how it should be made or what it should be. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Notes. The Trustee shall not be responsible for
any failure of the Company to comply with this ARTICLE XII. Each Conversion
Agent other than the Company shall have the same protection under this Section
12.11 as the Trustee.
The rights, privileges, protections, immunities and benefits given
to the Trustee under this Indenture including, without limitation, its rights to
be indemnified, are extended to, and shall be enforceable by, other than the
Company, the Trustee in each of its capacities hereunder, and each Paying Agent
or Conversion Agent, other than the Company, acting hereunder.
Section 12.12. Option to Satisfy Conversion Obligation with Cash, Common
Stock or Combination Thereof.
(a) At any time after the Issue Date, the Company may make an
election at its sole and absolute discretion (the "PRINCIPAL CONVERSION
SETTLEMENT ELECTION") (in which case it will notify the Holders in writing and
make a Public Notice) that the Company will satisfy the Conversion Obligation
applicable to the principal amount of all Notes thereafter converted by paying
100% of the principal amount of such Notes in cash. Once the Company has
notified the Holders thereof, the Principal Conversion Settlement Election is
irrevocable. Unless the Company makes a Principal Conversion Settlement
Election, the Company shall not be required to notify Holders of its method for
settling its Conversion Obligation until the Company receives a Conversion
Notice and is required to do so as a result of such receipt as provided in this
Section 12.12(a).
(b) If the Company receives any Holder's Conversion Notice on or
prior to the day that is 31 Trading Days prior to the Stated Maturity (the
"FINAL NOTICE DATE"), then the Company shall notify the Holder through the
Trustee, at any time on or before the date that is three Trading Days following
receipt of the Conversion Notice (such period, the "SETTLEMENT NOTICE PERIOD")
of the method the Company chooses to settle (x) the Conversion Obligation
relating to the principal amount of the Notes surrendered for conversion (each
such Note a "SURRENDERED SECURITY"), if the Company has not made a Principal
Conversion Settlement Election prior to such time, and (y) the value, if any, of
the Conversion Obligation applicable to the Surrendered Security in excess of
the principal amount of the Surrendered Security (the "EXCESS CONVERSION
OBLIGATION"). If the Company elects to settle its Conversion Obligation in a
combination of cash and Common Stock, the Company shall specify the percentage
of the principal amount of the Notes surrendered for conversion and the Excess
Conversion Obligation, if any, relating to the Surrendered Security that it will
pay in cash, provided that if a Principal Conversion Settlement Election has
been made, such amount shall not be less than the principal
79
amount of the Surrendered Security. The remainder of its Conversion Obligation
will be settled in shares of Common Stock (except that cash will be paid in lieu
of issuing any fractional shares). If the Company fails to give notice during
the Settlement Notice Period as provided in this Section 12.12(a), then the
Company shall be obligated to settle the entire Conversion Obligation (or if the
Company has delivered a Principal Conversion Settlement Election, the entire
Excess Conversion Obligation) by delivering shares of Common Stock (plus cash
paid in lieu of issuing any fractional shares). The Company shall treat all
Holders converting on the same Trading Day in the same manner and the Company
shall not have any obligation, except to the extent the Company has made a
Principal Conversion Settlement Election, to settle Conversion Obligations
arising on different Trading Days in the same manner.
If the Company timely elects to pay cash for any portion of the
Conversion Obligation, the Holder may retract the Conversion Notice at any time
during the two Trading Day period beginning on the Trading Day after the final
day of the Settlement Notice Period (the "CONVERSION RETRACTION PERIOD");
provided, that no such retraction can be made (and a Conversion Notice shall be
irrevocable) if the Company does not elect to deliver cash, or a combination of
cash and shares, in lieu of shares (other than cash in lieu of fractional
shares) or is not required to deliver cash as a result of having made a
Principal Conversion Settlement Election. Settlement in Common Stock only will
be made in accordance with Section 12.2(a). If the Conversion Notice has not
been retracted or a Principal Conversion Settlement Election has been made, then
settlement of any portion of the Company's Conversion Obligation to be made in
cash or in a combination of cash and Common Stock will, subject to Section
12.12(c), be made on the third Trading Day following the final Trading Day of
the 20 Trading Day period, which period shall begin on the Trading Day following
the final Trading Day of the Conversion Retraction Period or, if no Conversion
Retraction Period is applicable, the Trading Day following the final Trading Day
of the Settlement Notice Period (the "CASH SETTLEMENT AVERAGING PERIOD"),
assuming all of the other requirements have been satisfied by such Holder.
Settlement amounts will be computed as follows (subject to the
provisions of the fifth paragraph of Section 12.1(a) in connection with
conversions during a Registration Default Period):
(i) if the entire Conversion Obligation (including the principal
amount of the Surrendered Security and the Excess Conversion Obligation)
is to be settled in Common Stock (other than with respect to fractional
shares), the Company shall deliver to such Holder, for each $1,000
principal amount of Notes, a number of shares of Common Stock equal to the
Conversion Rate (plus any cash paid for fractional shares);
(ii) if the entire Conversion Obligation (including principal amount
of the Surrendered Security and Excess Conversion Obligation) is to be
settled in cash, the Company shall deliver to such Holder, for each $1,000
principal amount of Notes, cash in an amount equal to the product of:
(1) the Conversion Rate, multiplied by
(2) the arithmetic average of the Closing Sale Prices of
Common Stock during the Cash Settlement Averaging Period; and
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(iii) if a portion of the Conversion Obligation is to be settled in
cash (the "CASH AMOUNT") (excluding any cash paid for fractional shares)
and a portion of the Conversion Obligation is to be settled in Common
Stock, the Company shall deliver to such Holder, for each $1,000 principal
amount of Notes:
(1) a Cash Amount equal to the sum of:
- the product of (x) $1,000 multiplied by (y) the
percentage of the principal amount of the Surrendered
Security to be satisfied in cash; plus
- if greater than zero, the product of (x) the amount of
cash that would be paid pursuant to clause (ii) above
minus $1,000, multiplied by (y) the percentage of the
Excess Conversion Obligation to be satisfied in cash;
and
(2) a number of shares of Common Stock equal to the difference
between:
- the number of shares that would be issued pursuant to
clause (i) above; minus
- the number of shares of Common Stock equal to the
quotient of (A) the Cash Amount divided by (B) the
arithmetic average of the Closing Sale Prices of the
Common Stock during the Cash Settlement Averaging
Period.
(c) If the Company receives any Holder's Conversion Notice after the
Final Notice Date, the Company shall notify the Holder through the Trustee, at
any time during the Settlement Notice Period, of the method the Company chooses
to settle (x) the Conversion Obligation relating to the principal amount of the
Notes surrendered for conversion if the Company has not made a Principal
Conversion Settlement Election prior to such time, and (y) the Excess Conversion
Obligation. If the Company elects to settle any Conversion Obligations arising
after the Final Notice Date in a combination of cash (including pursuant to a
Principal Conversion Settlement Election) and Common Stock, the Company shall
specify the percentage of the principal amount of the Notes surrendered for
conversion and the Excess Conversion Obligation relating to the Notes
surrendered for conversion that it will pay in cash. The remainder of any
Conversion Obligation arising after the Final Notice Date shall be settled in
shares of Common Stock (except that cash will be paid in lieu of issuing any
fractional shares). If the Company fails to give notice during the Settlement
Notice Period as provided in this Section 12.12(b), then the Company shall be
obligated to settle the entire Conversion Obligation (or if the Company has
delivered a Principal Conversion Settlement Election, the entire Excess
Conversion Obligation) by delivering shares of Common Stock (plus cash paid in
lieu of issuing any fractional shares). The Company shall settle all of its
Conversion Obligations arising after
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the Final Notice Date in the same manner. All Conversion Notices received after
the Final Notice Date shall be irrevocable.
Settlement of Conversion Obligations arising after the Final Notice
Date in Common Stock only shall be made in accordance with Section 12.2(a).
Settlement of Conversion Obligations arising after the Final Notice Date to be
made in cash or in a combination of cash and Common Stock shall be made on the
third Trading Day following the final Trading Day of the Cash Settlement
Averaging Period described in the following sentence. The settlement amount of
Common Stock, cash or combination of cash and Common Stock in satisfaction of
Conversion Obligations arising after the Final Notice Date shall be computed in
the same manner as set forth in Section 12.12(a), except that the "Cash
Settlement Averaging Period" shall be the 20 Trading Day period beginning on the
date that is the 23rd Trading Day prior to the Stated Maturity.
(d) If any Trading Day during a Cash Settlement Averaging Period is
not an Undisrupted Trading Day, then determination of the price for that day
will be delayed until the next Undisrupted Trading Day on which a pricing is not
otherwise observed and such day will not count as one of the 20 Trading Days
that constitute the Cash Settlement Averaging Period. If this results in a price
being observed later than the eighth Trading Day after the last of the original
20 Trading Days in the Cash Settlement Averaging Period, then the Company's
Board of Directors will determine all prices for all delayed and undetermined
prices on that eighth Trading Day based on its good faith estimate of the value
of the Common Stock on that date. In the event that any Trading Day during the
Cash Settlement Averaging Period beginning on the date that is the 23rd Trading
Day prior to the Stated Maturity is not an Undisrupted Trading Day, settlement
will occur after the Stated Maturity.
Section 12.13. Conversion After a Public Acquirer Change of Control.
(a) In the event of a Public Acquirer Change of Control, the Company
may, in lieu of issuing the Additional Shares pursuant to Section 12.2(e), elect
to adjust the Conversion Rate and the related Conversion Obligation such that
from and after the Effective Date of such Public Acquirer Change of Control,
Holders of the Notes will be entitled to convert their Notes, in accordance with
Section 12.2 hereof, into a number of shares of Public Acquirer Common Stock by
adjusting the Conversion Rate in effect immediately before the Public Acquirer
Change of Control by multiplying it by a fraction:
(1) the numerator of which will be (A) in the case of a share
exchange, consolidation, merger or binding share exchange, pursuant to
which the Common Stock is converted into cash, securities or other
property, the value of all cash and any other consideration (as determined
by the Board of Directors) paid or payable per share of Common Stock or
(B) in the case of any other Public Acquirer Change of Control, the
average of the Closing Sale Price of the Common Stock for the five
consecutive Trading Days prior to but excluding the Effective Date of such
Public Acquirer Change of Control, and
(2) the denominator of which will be the average of the Closing Sale
Prices of the Public Acquirer Common Stock for the five consecutive
Trading Days commencing
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on the Trading Day next succeeding the effective date of such Public
Acquirer Change of Control.
(b) (b) The Company will notify Holders of its election by providing
notice as set forth in Section 12.5(b).
ARTICLE XIII
SUBORDINATION
Section 13.1. Agreement to Subordinate.
The Company agrees, and each holder of Notes by accepting a Note
agrees, that the Indebtedness evidenced by the Note is subordinated in right of
payment, to the extent and in the manner provided in this ARTICLE XIII, to the
prior payment in full in cash or other consideration satisfactory to holders of
all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
Section 13.2. Liquidation, Dissolution, Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(i) holders of Senior Debt shall be entitled to receive payment in
full of all obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt, whether or not a claim for such
interest would be allowed) in cash or other consideration satisfactory to
the holders of the Senior Debt before holders of Notes shall be entitled
to receive any payment with respect to the Notes; and
(ii) until all Senior Debt is paid in full in cash or other
consideration satisfactory to the holders of the Senior Debt, any
distribution to which holders of Notes would be entitled but for this
ARTICLE XIII shall be made to holders of Senior Debt, as their interests
may appear.
Section 13.3. Default on Senior Debt and/or Designated Senior Debt.
(a) In the event of any default in payment of the principal of or
premium, if any, or interest on, or any other payment obligation under any
Senior Debt beyond any applicable grace period with respect thereto (a "PAYMENT
DEFAULT"), then, until all such payments due in respect of such Senior Debt have
been paid in full in cash or other consideration satisfactory to holders of
Senior Debt or such default shall have been cured or waived, no payment shall be
made by the Company with respect to the principal of, or interest (including
Additional Interest,
83
if any) on the Notes or to acquire any of the Notes (including any purchase
pursuant to the purchase right of a Holder upon a Fundamental Change).
(b) In addition, if the Trustee shall receive written notice from
one or more holders of Designated Senior Debt or one or more representatives of
such holder or holders that there has occurred and is continuing under such
Designated Senior Debt, or any agreement pursuant to which such Designated
Senior Debt is issued, any default (other than a Payment Default), which default
shall not have been cured or waived, giving the holders of such Designated
Senior Debt the right to declare such Designated Senior Debt immediately due and
payable (a "PAYMENT BLOCKAGE NOTICE"), then, anything contained in this
Indenture to the contrary notwithstanding, no payment on account of the
principal of or interest (including Additional Interest, if any) on the Notes,
and no repurchase or other acquisition of the Notes, shall be made by or on
behalf of the Company during the period (the "PAYMENT BLOCKAGE PERIOD")
commencing on the date of receipt of the Payment Blockage Notice and ending on
the earlier of 179 calendar days thereafter or the date on which such
non-Payment Default is cured or waived.
Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in Section 13.1 and
the first sentence of this Section 13.3), unless the holder(s) of such
Designated Senior Debt or the representative(s) of such holder(s) shall have
accelerated the maturity of such Designated Senior Debt, the Company may resume
payments on the Notes after the end of such Payment Blockage Period. No new
Payment Blockage Period may be commenced unless 360 calendar days have elapsed
since the effectiveness of the prior Payment Blockage Notice. No default under
Designated Senior Debt that is not a Payment Default that existed or was
continuing on the date of delivery of any Payment Blockage Notice delivered to
the Trustee shall be, or be made, the basis of a subsequent Payment Blockage
Notice unless such default has been cured or waived and a period of at least 90
days has elapsed since such cure or waiver.
Section 13.4. Acceleration of Notes.
If payment of the Notes is to be accelerated because of an Event of
Default (other than an Event of Default with respect to the Company specified in
Section 8.1(j) or (k)), the Company shall promptly notify holders of Designated
Senior Debt or trustee(s) of such Designated Senior Debt before the
acceleration. In the event of the acceleration of the Notes because of an Event
of Default, the Company may not make any payment or distribution to the Trustee
or any Holder of Notes in respect of obligations with respect to the Notes until
10 days after holders of Designated Senior Debt or trustee(s) of such Designated
Senior Debt receive notice of such acceleration pursuant to the immediately
preceding sentence and thereafter only to the extent such payment or
distribution is not otherwise prohibited by the terms of this Article XIII.
Section 13.5. When Distribution Must Be Paid Over.
In the event that the Trustee, any holder of Notes or any other
person receives any payment or distribution of assets of the Company of any kind
with respect to the Notes in contravention of any terms contained in this
Indenture, whether in cash, property or securities,
84
including, without limitation, by way of set-off or otherwise, then such payment
or distribution shall be held by the recipient in trust for the benefit of
holders of Senior Debt, and shall be immediately paid over and delivered to the
holders of Senior Debt or their representative(s), to the extent necessary to
make payment in full in cash or other consideration satisfactory to such holders
of all Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution or provision therefor, to or for the holders of Senior
Debt; provided, that the foregoing shall apply to the Trustee only if a
Responsible Officer of the Trustee has actual knowledge (as determined in
accordance with Section 13.11) that such payment or distribution is prohibited
by this Indenture.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this ARTICLE XIII, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of holders of Notes or the
Company or any other person money or assets to which any holders of Senior Debt
shall be entitled by virtue of this ARTICLE XIII, except if such payment or
distribution is made as a result of the willful misconduct or negligence of the
Trustee.
Section 13.6. Notice by Company.
The Company shall promptly notify the Trustee of any facts known to
the Company that would cause a payment of any obligations with respect to the
Notes or the purchase of any Notes by the Company to violate this ARTICLE XIII,
but failure to give such notice shall not affect the subordination of the Notes
to the Senior Debt as provided in this ARTICLE XIII.
Section 13.7. Subrogation.
After all Senior Debt is paid in full and until the Notes are paid
in full, holders of Notes shall be subrogated (equally and ratably with all
other indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this ARTICLE XIII to holders
of Senior Debt that otherwise would have been made to holders of Notes is not,
as between the Company and holders of Notes, a payment by the Company on the
Notes.
Section 13.8. Relative Rights.
This ARTICLE XIII defines the relative rights of holders of Notes
and holders of Senior Debt. Nothing contained in this Indenture shall otherwise:
(1) impair, as between the Company and holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of or premium, if any, and interest (including Additional Interest, if any) on
the Notes in accordance with their terms;
85
(2) affect the relative rights of holders of Notes and creditors
(other than with respect to Senior Debt) of the Company, other than their rights
in relation to holders of Senior Debt; or
(3) prevent the Trustee or any holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the notice
requirements of Section 8.2 and to the rights of holders and owners of Senior
Debt to receive distributions and payments otherwise payable to holders of
Notes.
If the Company fails because of this ARTICLE XIII to pay principal
of, premium, if any, or interest (including Additional Interest, if any) on a
Note on the due date, the failure is still a Default or Event of Default.
Section 13.9. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination
of the indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or any holder of Notes or by the failure of the
Company or any such holder to comply with this Indenture.
Section 13.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
representative(s).
Upon any payment or distribution of assets of the Company referred
to in this ARTICLE XIII, the Trustee and the holders of Notes shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other person making any distribution to the Trustee or to the holders
of Notes for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this ARTICLE
XIII.
Section 13.11. Rights of Trustee and Paying Agent.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company that would prohibit the making of any payment to or by
the Trustee in respect of the Notes. Notwithstanding the provisions of this
ARTICLE XIII or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment or distribution by the Trustee (other than pursuant to
Section 13.4), and the Trustee may continue to make payments on the Notes,
unless a Responsible Officer shall have received at least two Business Days
prior to the date of such payment or distribution written notice of facts that
would cause such payment or distribution with respect to the Notes to violate
this ARTICLE XIII. Only the Company or the holder or representative of any class
of Senior Debt may give such notice.
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Notwithstanding anything to the contrary contained in this Article
XIII, nothing contained in this ARTICLE XIII shall apply to or impair the claims
of, or payments to, the Trustee under or pursuant to Section 9.7.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 13.12. Authorization to Effect Subordination.
Each Holder of a Note by such Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
ARTICLE XIII, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 8.9 at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Debt or their representatives are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
Section 13.13. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee.
Section 13.14. Senior Debt Entitled to Rely.
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of Senior Debt, whether such Senior Debt was
created or acquired before or after the issuance of the Notes, to acquire and
continue to hold, or to continue to hold, such Senior Debt and such holder of
Senior Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt.
Section 13.15. Permitted Payments.
Notwithstanding anything to the contrary contained in this ARTICLE
XIII, the Holders of Notes may receive and retain at any time on or prior to the
Stated Maturity (i) securities that are subordinated to at least the same extent
as the Notes to (a) Senior Debt and (b) any securities issued in exchange for
Senior Debt and (ii) payments and other distributions made from any trust
created pursuant to Section 10.2.
Section 13.16. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any
87
act or failure to act on the part of the Company, or by any non-compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the holders of the Notes,
without incurring responsibility to the holders of the Notes and without
impairing or releasing the subordination provided in this ARTICLE XIII or the
obligations hereunder of the holders of the Notes to the holders of Senior Debt,
do any one or more of the following, subject to any rights of the Company in
respect thereof: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any person liable in any manner for the
collection of Senior Debt; and (iv) exercise or refrain from exercising any
rights against the Company and any other person.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with the duties imposed by Section
318(c) of the TIA, such section of the TIA shall control. If any provision of
this Indenture expressly modifies or excludes any provision of the TIA that may
be so modified or excluded under the TIA, the Indenture provision so modifying
or excluding such provision of the TIA shall be deemed to apply.
Section 14.2. Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person (including
by commercial courier services) or mailed by first-class mail, postage prepaid,
addressed as follows or transmitted by facsimile transmission (confirmed by
guaranteed overnight courier) to the following facsimile numbers:
if to the Company:
Cray Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Stoel Rives LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
88
Attention: L. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Jr.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
The Bank of New York Trust Company, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice given to the other in the
manner provided above may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the
Holder, by first-class mail, postage prepaid, at the Holder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent, or co-registrar.
Notice to the Trustee shall be effective only upon receipt.
Section 14.3. Communication by Holders with Other Holders.
Holders may communicate pursuant to Section 312(b) of the TIA with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent
and anyone else 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:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel 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.
89
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(a) a statement that each person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement that, in the opinion of such person, such covenant
or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
Section 14.6. Separability Clause.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 14.7. Rules by Trustee, Paying Agent, Conversion Agent, Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, the Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
Section 14.8. Legal Holidays.
If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Notes, no interest, if any, shall accrue for the intervening
period.
Section 14.9. Governing Law; Submission to Jurisdiction; Service of
Process.
This Indenture shall be governed by, and construed in accordance
with, the laws of the State of New York.
The Company submits to the non-exclusive jurisdiction of the courts
of the State of New York and the courts of the United States of America, in each
case located in the Borough of Manhattan, New York, New York over any suit,
action or proceeding arising under or in connection with this Indenture or the
transactions contemplated hereby or the Notes. The
90
Company waives any objection that it may have to the venue of any suit, action
or proceeding arising under or in connection with this Indenture or the
transactions contemplated hereby or the Notes in the courts of the State of New
York or the courts of the United States of America, in each case located in the
Borough of Manhattan, New York, New York, or that such suit, action or
proceeding brought in the courts of the State of New York or the courts of the
United States of America, in each case located in the Borough of Manhattan, New
York, New York, was brought in an inconvenient court and agrees not to plead or
claim the same.
The Company agrees to irrevocably appoint CT Corporation System or
another similar Person in New York, New York as its authorized agent for service
of process in accordance with the provisions of this paragraph.
Section 14.10. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Note, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such, or against
any past, present or future stockholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Notes by the Holders and as part of the consideration for the
issue of the Notes.
Section 14.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 14.12. Multiple Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
(Signature page follows)
91
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
CRAY INC., as Issuer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel, Chief Financial Officer and
Corporate Secretary
THE BANK OF NEW YORK TRUST COMPANY,
N.A., as Trustee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
SIGNATUTRE PAGE TO INDENTURE
EXHIBIT A
[FORM OF FACE OF NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE AND, 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.](1)
[THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933") OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933 OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3)
or (7) UNDER THE SECURITIES ACT OF 1933 (AN "INSTITUTIONAL ACCREDITED
INVESTOR") THAT IS PURCHASING AT LEAST $100,000 IN AGGREGATE PRINCIPAL
AMOUNT OF THE SECURITY EVIDENCED HEREBY;
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY OR THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE
------------------------
(1) This legend should be included only if the Note is a Global Security.
A-1
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
AS DEFINED IN, AND IN COMPLIANCE WITH, RULE 144A UNDER THE SECURITIES ACT
OF 1933, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO The Bank of New York Trust Company, N.A., AS TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS AND OPINION OF
COUNSEL REQUIRED BY THE COMPANY OR THE TRUSTEE OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
2(C) OR 2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.](2)
[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED
TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)
------------------------
(2) This legend should be included only if the Note is a Transfer Restricted
Security.
A-2
CRAY INC.
3.0% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2024
$__________
No. ___ CUSIP: 225223 AA 4
CRAY INC., a Washington corporation (the "COMPANY" ), which term shall
include any successor Person under the Indenture referred to on the reverse
hereof), for value received, promises to pay to _____________________, or
registered assigns, on December 1, 2024, the principal amount of
________________ Dollars[, or such lesser or greater principal amount at Stated
Maturity as is indicated in the records of the Trustee and the Depositary in
accordance with the Indenture].(3)
In addition, for value received, the Company hereby promises to pay to the
Holder of this Note, or registered assigns, from December 6, 2004, or from the
most recent Interest Payment Date to which interest has been paid or provided
for, to, but not including, December 1, 2024, interest at an annual rate of 3.0%
of the principal amount of this Note. Interest on this Note is payable
semi-annually in arrears on June 1 and December 1 in each year (each, an
"INTEREST PAYMENT DATE"), with the first Interest Payment Date being June 1,
2005. Each payment of cash interest on this Note will include interest accrued
through the day before the applicable Interest Payment Date.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date shall, except as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the regular record date for such interest, which
shall be the May 15 or November 15 (whether or not a Business Day), as the case
may be, next preceding the corresponding Interest Payment Date (a "REGULAR
RECORD DATE"). Any such interest (including Additional Interest, if any) not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may be paid (a) to the Person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on a special record date for the payment of such defaulted interest to
be fixed by the Trustee (a "SPECIAL RECORD DATE"), notice whereof shall be given
to Holders not less than 10 calendar days prior to such Special Record Date, or
(b) at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture.
Reference is hereby made to the further provisions of this Note set forth
on the reverse side of this Note, which further provisions shall for all
purposes have the same effect as if set forth at this place.
------------------------
(3) This phrase should be included only if the Note is a Global Security.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: CRAY INC.
By: _________________________________
Name: ________________________________
Title: _______________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK TRUST COMPANY,
N.A.,
as Trustee
By: __________________________________
A-4
[FORM OF REVERSE OF NOTE]
3.0% Convertible Senior Subordinated Notes due 2024
This Note is one of a duly authorized issue of 3.0% Convertible
Senior Subordinated Notes due 2024 (the "NOTES") of CRAY INC., a Washington
corporation (including any successor corporation under the Indenture hereinafter
referred to, the "COMPANY"), issued under an Indenture, dated as of December 6,
2004 (the "INDENTURE"), between the Company and The Bank of New York Trust
Company, N.A., as Trustee (the "TRUSTEE"). The terms of the Note include those
stated in the Indenture, those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended ("TIA"), and those set forth in this
Note. This Note is subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of all such terms. To the extent permitted
by applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture shall control.
Capitalized terms used but not defined herein have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
If this Note is redeemed pursuant to Section 5 of this Note or the
Holder elects to require the Company to purchase this Note pursuant to Section 6
of this Note, on a date that is after the Regular Record Date and on or before
the corresponding Interest Payment Date, interest (including Additional
Interest, if any) accrued and unpaid hereon to, but excluding, the applicable
Redemption Date, Purchase Date or Fundamental Change Purchase Date shall be paid
to the same Holder to whom the Company pays the principal of this Note. Interest
(including Additional Interest, if any) accrued and unpaid hereon at the Stated
Maturity also shall be paid to the same Holder to whom the Company pays the
principal of this Note.
Interest (including Additional Interest, if any) on Notes converted
after the close of business on a Regular Record Date but prior to the opening of
business on the corresponding Interest Payment Date shall be paid to the Holder
of the Notes on the Regular Record Date but, upon conversion, the Holder must
pay the Company an amount equal to the interest (including Additional Interest,
if any) which has accrued and shall be paid on such Interest Payment Date. No
such payment need be made with respect to Notes converted after a Regular Record
Date and prior to the corresponding Interest Payment Date after being called for
redemption or upon acceleration.
All references herein to interest accrued or payable as of any date
shall, without duplication, be deemed to include Additional Interest, if any,
payable pursuant to the Registration Rights Agreement.
2. Method of Payment.
A-5
Payment of the principal of and interest on the Notes shall be in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. The Holder must
surrender the Notes to the Paying Agent to collect payment of principal. Payment
of interest (including Additional Interest, if any) on Certificated Securities
in the aggregate principal amount of $5,000,000 or less shall be made by check
mailed to the address of the Person entitled thereto as such address appears in
the Register, and payment of interest (including Additional Interest, if any) on
Certificated Securities in aggregate principal amount in excess of $5,000,000
shall be made by wire transfer in immediately available funds if requested in
writing by the Holder, otherwise by check mailed to the address of the Holder.
Notwithstanding the foregoing, so long as the Notes are registered in the name
of a Depositary or its nominee, all payments with respect to the Notes shall be
made by wire transfer of immediately available funds to the account of the
Depositary or its nominee. At the Stated Maturity, interest (including
Additional Interest, if any) on Certificated Securities will be payable at the
office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent
described in the Indenture.
3. Paying Agent, Registrar, Conversion Agent.
Initially, The Bank of New York Trust Company, N.A., shall act as
Paying Agent, Registrar and Conversion Agent. The Company may appoint and change
any Paying Agent, Registrar and Conversion Agent without notice, other than
notice to the Trustee; provided that the Company shall at all times maintain a
Registrar, Paying Agent, Conversion Agent and an office or agency where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served in the Borough of Manhattan, New York City, which shall initially
be an office or agency of the Trustee.
4. Indenture.
The Notes are unsecured senior subordinated obligations of the
Company limited to up to $65,000,000 (or up to $80,000,000 if the Initial
Purchaser's option to purchase additional Notes set forth in the Purchase
Agreement is exercised in full) aggregate principal amount. The Indenture does
not limit other indebtedness of the Company, secured or unsecured.
5. Redemption of the Notes by the Company.
Subject to the terms and conditions of the Indenture, the Company
may, at its option, redeem for cash all or a portion of the Notes at any time on
or after December 1, 2009 at a Redemption Price equal to 100% of the principal
amount of the Notes to be redeemed plus accrued and unpaid interest (including
Additional Interest, if any) to, but not including, the Redemption Date.
Additionally, in circumstances described in the Indenture, the Company may, at
its option, redeem for cash all or a portion of the Notes at any time on or
after December 1, 2007 and before December 1, 2009 at a redemption price equal
to 100% of the principal amount of the Notes to be redeemed, plus accrued and
unpaid interest (including Additional Interest, if any) to, but not including,
the Redemption Date, plus a make whole premium as described in the Indenture.
A-6
At least 30 calendar days but not more than 60 calendar days before
a Redemption Date, the Company shall mail a notice of redemption by first-class
mail, postage prepaid, to each Holder of Notes to be redeemed. Once notice of
redemption is given, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price, except for Notes which are
converted in accordance with the terms of this Indenture. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price. If the Paying
Agent holds, in accordance with the terms hereof, at 10:00 a.m., New York City
time, on the applicable Redemption Date, cash sufficient to pay the Redemption
Price of any Notes for which notice of redemption is given, then, on such
Redemption Date, such Notes shall cease to be outstanding and interest
(including Additional Interest, if any) on such Notes shall cease to accrue,
whether or not such Notes are delivered to the Paying Agent, and the rights of
the Holders in respect thereof shall terminate (other than the right to receive
the Redemption Price upon delivery of such Notes).
6. Purchase by the Company at the Option of the Holder on Specific Dates;
Purchase at the Option of the Holder Upon a Fundamental Change.
Each Holder shall have the right, at the Holder's option, but
subject to the provisions of the Indenture, to require the Company to purchase
all of such Holder's Notes not theretofore called for redemption, or any portion
of the principal amount thereof that is equal to $1,000 or an integral multiple
thereof, on each of December 1, 2009, December 1, 2014 and December 1, 2019. The
Company shall be required to purchase such Notes at a purchase price in cash
equal to 100% of the principal amount of the Notes plus accrued and unpaid
interest (including Additional Interest, if any) to, but not including, the
Purchase Date. To exercise such right, a Holder shall deliver a Purchase Notice
to the Paying Agent at any time from the opening of business on the date that is
22 Business Days prior to the relevant Purchase Date until the close of business
on the second Business Day prior to such Purchase Date.
In the event that a Fundamental Change shall occur at any time prior
to the Stated Maturity, each Holder shall have the right, at the Holder's
option, but subject to the provisions of the Indenture, to require the Company
to purchase all of such Holder's Notes not theretofore called for redemption, or
any portion of the principal amount thereof that is equal to $1,000 or an
integral multiple thereof. The Company shall be required to purchase such Notes
at a purchase price in cash equal to 100% of the principal amount plus any
accrued and unpaid interest (including Additional Interest, if any) to, but
excluding, the Fundamental Change Purchase Date. To exercise such right, a
Holder shall deliver a Fundamental Change Purchase Notice to the Paying Agent at
any time on or before the 20th Business Day after the date of the Company's
notice of the Fundamental Change (subject to extension to comply with applicable
law).
Holders have the right to withdraw any Purchase Notice or
Fundamental Change Purchase Notice by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture.
If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time, on the applicable Purchase Date or Fundamental
Change Purchase Date, cash sufficient to irrevocably pay the Purchase Price or
Fundamental Change Purchase Price, as the case may be, of any Notes for which a
Purchase Price or Fundamental Change Purchase
A-7
Notice, as the case may be, has been tendered and not withdrawn pursuant to the
Indenture, then, on such Purchase Date or Fundamental Change Purchase Date, as
the case may be, such Notes shall cease to be outstanding and interest
(including Additional Interest, if any) on such Notes shall cease to accrue,
whether or not such Notes are delivered to the Paying Agent, and the rights of
the Holders in respect thereof shall terminate (other than the right to receive
the Purchase Price or Fundamental Change Purchase Price, as the case may be,
upon delivery of such Notes).
7. Conversion.
Subject to and in compliance with the provisions of the Indenture
(including, without limitation, the conditions to conversion of this Note set
forth in Section 12.1 thereof), a Holder is entitled, at such Holder's option,
to convert the Holder's Note (or any portion of the principal amount thereof
that is $1,000 or an integral multiple thereof), into fully paid and
non-assessable shares of Common Stock at the Conversion Rate in effect on the
date of conversion. The number of shares of Common Stock issuable upon
conversion of each $1,000 of principal amount of Notes is initially 207.2002
shares of Common Stock, and is subject to adjustment in certain events as set
forth in the Indenture.
Upon conversion, the Company shall have the right to deliver, in
lieu of shares of Common Stock, cash or a combination of cash and shares of
Common Stock as provided in the Indenture. The Company, or the Conversion Agent
on the Company's behalf, shall notify Holders of any event triggering the right
to convert the Notes as specified in the Indenture in accordance with the
Indenture.
With respect to any conversion of a Note during a Registration
Default Period following satisfaction of any of the conditions to conversion
described in the Indenture (and during the prescribed time periods in respect
thereof), a Holder shall be entitled, subject to the Indenture, to 103% of the
number of shares of Common Stock, if any, that the Holder would have otherwise
been entitled to upon conversion.
A Note in respect of which a Holder has delivered a Purchase Notice
or Fundamental Change Purchase Notice, as the case may be, exercising the right
of such Holder to require the Company to repurchase such Note may be converted
only if such Purchase Notice or Fundamental Change Purchase Notice is withdrawn
in accordance with the terms of the Indenture.
Except as described in the Indenture, the Company will not make any
payment in cash or Common Stock or other adjustment for accrued and unpaid
interest (including Additional Interest, if any) on any Notes when they are
converted. The Company's delivery to the Holder of the full number of shares of
Common Stock into which the Note is convertible (or, at the Company's option,
cash, or a combination of cash and Common Stock, in lieu thereof as provided in
the Indenture), together with any cash payment for such Holder's fractional
shares, shall be deemed to satisfy the Company's obligation to pay the principal
amount of the Note and to satisfy its obligation to pay accrued and unpaid
interest (including Additional Interest, if any) through the conversion date. As
a result, accrued interest (including Additional Interest, if any) are deemed
paid in full rather than cancelled, extinguished or forfeited. Notwithstanding
the foregoing, accrued interest (including Additional Interest, if any) will be
payable upon any
A-8
conversion of Notes made concurrently with or after acceleration of the Notes
following an Event of Default.
Before any Holder shall be entitled to convert any Notes into Common
Stock, such Holder shall, in the case of Global Securities, comply with the
Applicable Procedures of the Depositary in effect at that time, and in the case
of Certificated Securities, surrender such Notes, duly endorsed to the Company
or in blank, at the office of the Conversion Agent, and shall give written
notice to the Company at said office or place in the form of the Conversion
Notice attached to the Note that such Holder elects to convert the same and
shall state in writing therein the principal amount of Notes to be converted (in
whole or in part so long as the principal amount to be converted is in multiples
of $1,000) and the name or names (with addresses) in which such Holder wishes
the certificate or certificates for Common Stock to be issued. Before any such
conversion, a Holder also shall pay all funds required, if any, relating to
interest (including Additional Interest, if any) on the Notes, as provided in
the Indenture, and all taxes or duties, if any, as provided in the Indenture.
If the Company (i) reclassifies the Common Stock, (ii) is a party to
a consolidation, merger or binding share exchange or (iii) conveys, transfers or
leases all or substantially all of its properties and assets to any Person, the
right to convert a Note into shares of Common Stock may be changed into a right
to convert it into securities, cash or other assets of the Company or such other
Person, in each case in accordance with the Indenture.
If and only to the extent a holder elects to convert Notes in
connection with a Fundamental Change to the extent set forth in the Indenture
that occurs on or prior to December 1, 2009 pursuant to which 10% or more of the
consideration for the Common Stock (other than cash payments for fractional
shares and cash payments made in respect of dissenters' appraisal rights) in
such Fundamental Change transaction consists of cash or securities (or other
property) that are not traded or scheduled to be traded immediately following
such transaction on a U.S. national securities exchange or the Nasdaq National
Market or the Nasdaq SmallCap Market, such holder will be entitled to receive,
in addition to a number of shares of Common Stock equal to the Conversion Rate
per $1,000 principal amount of Notes, an additional number of shares of Common
Stock as described in the Indenture.
8. Denominations; Transfer; Exchange.
The Notes shall be issued in fully registered form, without coupons,
in denominations of $1,000 of the principal amount and integral multiples
thereof. A Holder may transfer or exchange Notes 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. Neither the Company, the
Registrar nor the Trustee shall be required to exchange or register a transfer
of (i) any Notes selected for redemption (except, in the case of Notes to be
redeemed in part, the portion thereof not to be redeemed), or (ii) any Notes in
respect of which a Purchase Notice or a Fundamental Change Purchase Notice has
been given and not withdrawn by the Holder thereof in accordance with the terms
of this Indenture (except, in the case of Notes to be repurchased in part, the
portion thereof not to be repurchased), or (iii) any Notes surrendered for
conversion (except, in the case of Notes to be converted in part, the portion
thereof not to be converted).
A-9
9. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of
this Note for all purposes.
10. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any cash or securities held by them for the payment of any
amount with respect to the Notes that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person.
11. Subordination.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, as
defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each Holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent or affirmative
vote of the Holders of at least a majority in aggregate principal amount of the
outstanding Notes and (ii) certain Defaults may be waived with the written
consent or affirmative vote of the Holders of a majority in aggregate principal
amount of the outstanding Notes.
The Company and the Trustee may amend the Indenture or the Notes
without the consent of any Holder to (a) add to the covenants of the Company for
the benefit of the Holders of Notes; (b) surrender any right or power herein
conferred upon the Company; (c) provide for conversion rights of Holders of
Notes if any reclassification or change of the Common Stock or any
consolidation, merger or sale of all or substantially all of the Company's
assets occurs; (d) provide for the assumption of the Company's obligations to
the Holders of Notes in the case of a merger, consolidation, conveyance,
transfer, sale, lease or other disposition pursuant to Article VII of the
Indenture; (e) increase the Conversion Rate; provided, however, that such
increase in the Conversion Rate shall not adversely affect the interests of the
Holders of Notes (after taking into account tax and other consequences of such
increase); (f) require the Company to settle its Conversion Obligation in cash
with respect to the principal amount of Notes surrendered for conversion if a
Principal Conversion Settlement Election has been made; (g) comply with the
requirements of the SEC in order to effect or maintain the qualification of this
Indenture under the TIA; (h) make any changes or modifications necessary in
connection with the registration of the Notes under the Securities Act as
contemplated in the Registration Rights Agreement;
A-10
provided, however, that such action pursuant to this clause (h) does not, in the
good faith opinion of the Board of Directors (as evidenced by a Board
Resolution), adversely affect the interests of the Holders of Notes in any
material respect; (i) to evidence and provide the acceptance of the appointment
of a successor trustee hereunder; (j) add guarantees with respect to the Notes
or secure the Notes; (k) cure any ambiguity, correct or supplement any provision
in the Indenture which may be inconsistent with any other provision therein or
which is otherwise defective, or to make any other provisions with respect to
matters or questions arising under the Indenture which the Company may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Indenture; provided, however, that such action pursuant to this clause
(k) does not, in the good faith opinion of the Board of Directors (as evidenced
by a Board Resolution), adversely affect the interests of the Holders of Notes
in any material respect; (l) to evidence the succession of another Person to the
Company or any other obligor upon the Notes, and the assumption by any such
successor of the covenants of the Company or such obligor herein and in the
Notes, in each case in compliance with the provisions of this Indenture; or (m)
add or modify any other provisions herein with respect to matters or questions
arising hereunder which the Company and the Trustee may deem necessary or
desirable and which shall not adversely affect the interests of the Holders of
Notes.
13. Defaults and Remedies.
If any Event of Default, other than as a result of certain events of
bankruptcy, insolvency or reorganization of the Company as specified in the
Indenture, occurs and is continuing, the principal amount of all the Notes may
be declared due and payable in the manner and with the effect provided in the
Indenture. If an Event of Default occurs as a result of certain events of
bankruptcy, insolvency or reorganization of the Company as provided in the
Indenture, the principal amount of all the Notes shall become due and payable
immediately without any declaration or other act on the part of the Trustee or
any Holder, all as and to the extent provided in the Indenture.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
15. Calculations in Respect of Notes.
The Company or its agents shall be responsible for making all
calculations called for under ARTICLE XII of the Indenture, including, but not
limited to, determination of the Closing Sale Price of Applicable Stock, the
Note Price, the number of shares of Common Stock or other Applicable Stock
and/or the amount of cash issuable or payable upon conversion and the amounts of
interest (including Additional Interest, if any) on the Notes. Any calculations
made in good faith and without manifest error shall be final and binding on
Holders of the Notes. The Company or its agents shall be required to deliver to
the Trustee a schedule of its calculations
A-11
and the Trustee shall be entitled to conclusively rely upon the accuracy of such
calculations without independent verification.
16. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Note, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such, or against
any past, present or future stockholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Notes by the Holders and as part of the consideration for the
issue of the Notes.
17. Authentication.
This Note shall not be valid or obligatory for any purpose until an
authorized signatory of the Trustee (or a duly authorized authentication agent)
signs, manually or by facsimile, the Trustee's Certificate of Authentication on
the other side of this Note.
18. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. INDENTURE TO CONTROL; GOVERNING LAW.
IN THE CASE OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS NOTE AND
THE INDENTURE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PROVISIONS OF THE
INDENTURE SHALL CONTROL. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture which has in it the text of this Note in
larger type. Requests may be made to:
CRAY INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
20. Registration Rights.
A-12
The Holders of the Notes may be entitled to the benefits of a
Registration Rights Agreement, dated as of December 6, 2004, between the Company
and Bear, ▇▇▇▇▇▇▇ & Co. Inc., as amended, modified or supplemented in accordance
therewith, including the receipt of Additional Interest upon a Registration
Default (as defined in such agreement).
A-13
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature(s):
Date: _______________________ __________________________________________
(Sign exactly as your name(s) appears on the
other side of this Note)
Signature Guaranteed
______________________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
By: ________________________________
Authorized Signatory
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to ARTICLE IV
(Purchase at the Option of Holders on Specific Dates) or ARTICLE V (Purchase at
the Option of Holders Upon a Fundamental Change) of the Indenture, check the
box: ARTICLE IV [ ] ARTICLE V [ ].
If this Note is to be purchased by the Company pursuant to ARTICLE IV of the
Indenture, check the box for the applicable Purchase Date: December 1, 2009 [ ]
December 1, 2014 [ ] December 1, 2019 [ ].
If you wish to have a portion of this Note purchased by the Company pursuant to
ARTICLE IV or ARTICLE V of the Indenture, as applicable, state the amount (in
principal amount): $ ______________.
If certificated, the certificate numbers of the Notes to be delivered for
purchase are:
__________________.
Any purchase of Notes pursuant hereto shall be pursuant to the terms and
conditions specified in the Indenture.
Your Signature(s):
Date: _______________________ ____________________________________________
(Sign exactly as your name(s) appears on the
other side of this Note)
Signature Guaranteed
__________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
By: _________________________
Authorized Signatory
A-15
CONVERSION NOTICE
To convert this Note into Common Stock of the Company (or cash or a combination
of Common Stock and cash, if the Company so elects), check the box .
To convert only part of this Note, state the principal amount to be converted
(which must be $1,000 or an integral multiple thereof):_______________________.
If you want the stock certificate made out in another person's name fill in the
form below:
________________________________________________________________________________
(Insert the other person's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type the other person's name, address and zip code)
Your Signature(s):
Date: _______________________ __________________________________________
(Sign exactly as your name(s) appears on the
other side of this Note)
Signature Guaranteed
_________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
By: ____________________________________
Authorized Signatory
A-16
TRANSFER CERTIFICATE(4)
Re: 3.0% Convertible Senior Subordinated Notes due 2024
(the "NOTES") of Cray Inc. (the "COMPANY")
This certificate relates to $_______ principal amount of Notes owned
in (check applicable box)
[ ] book-entry [ ] definitive form by ______________ (the
"TRANSFEROR").
The Transferor has requested a Registrar or the Trustee to exchange
or register the transfer of such Notes.
In connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Notes as provided in Section 2.6 and Section 2.12
of the Indenture dated as of December 6, 2004 between the Company and The Bank
of New York Trust Company, N.A., as Trustee (the "INDENTURE"), and the transfer
of such Note is being made pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the "SECURITIES ACT") (check applicable
box) or the transfer or exchange, as the case may be, of such Note does not
require registration under the Securities Act because (check applicable box):
[ ] Such Note is being acquired for the Transferor's own account,
without transfer; or
[ ] Such Note is being transferred to the Company or a Subsidiary;
or
[ ] Such Note is being transferred to a person that the Transferor
reasonably believes is a "qualified institutional buyer," as
defined in, and in compliance with, Rule 144A under the
Securities Act; or
[ ] Such Note is being transferred pursuant to the exemption from
the registration requirements of the Securities Act under Rule
144 (or any successor thereto) ("RULE 144") under the
Securities Act; or
[ ] Such Note is being transferred pursuant to an effective
registration statement under the Securities Act; or
[ ] Such Note is being transferred pursuant to an exemption from
the registration requirements of the Securities Act to an
institutional investor that is an "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) that, prior to the transfer,
----------
(4) This certificate should only be included if this Security is a Transfer
Restricted Security.
A-17
furnishes to the Trustee such certifications and opinion of
counsel required by the Company or the Trustee.
The Transferor acknowledges and agrees that, if the transferee will
hold any such Notes in the form of beneficial interests in a global Note that is
a "restricted security" within the meaning of Rule 144 under the Securities Act,
then such transfer can be made only pursuant to Rule 144A under the Securities
Act and such transferee must be a "qualified institutional buyer," as defined in
Rule 144A, or an institutional investor that is an "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act).
_______________________________________________
Date: Signature(s) of Transferor
(If the registered owner is a corporation, partnership or fiduciary, the title
of the person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
_____________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
By: _______________________________
Authorized Signatory
A-18
EXHIBIT B
[FORM OF CERTIFICATE TO BE DELIVERED BY
TRANSFEREE IN CONNECTION WITH TRANSFERS
TO INSTITUTIONAL ACCREDITED INVESTORS]
[Date]
The Bank of New York Trust Company, N.A., as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Re: Cray Inc.
Ladies and Gentlemen:
In connection with the undersigned's proposed purchase of
$____________ aggregate principal amount of 3.0% Convertible Senior Subordinated
Notes due 2024 (the "NOTES") of Cray Inc. (the "COMPANY") or _____________
shares of Common Stock of the Company issued upon conversion of the Notes (the
"COMMON STOCK," and together with the Notes, the "SECURITIES"), the undersigned
confirms, represents and warrants that:
(1) The undersigned is an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the "SECURITIES ACT") (an
"INSTITUTIONAL ACCREDITED INVESTOR").
(2) (A) Any purchase of the Securities by the undersigned will
be for the undersigned's own account or for the account of one or
more other Institutional Accredited Investors or as fiduciary for
the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities
Act and for each of which the undersigned exercises sole investment
discretion or (B) the undersigned is a "bank" within the meaning of
Section 3(a)(2) of the Securities Act or a "savings and loan
association" or other institution described in Section 3(a)(5)(A) of
the Securities Act that is acquiring the Securities as fiduciary for
the account of one or more institutions for which the undersigned
exercises sole investment discretion.
(3) The undersigned has such knowledge and experience in
financial and business matters that the undersigned is capable of
evaluating the merits and risks of its investment in the Securities,
and the undersigned and any accounts for which it is acting is each
able to bear the economic risk of its or their investment.
(4) The undersigned has been given an opportunity to ask
questions and receive answers concerning the terms and conditions of
the Securities and to obtain any additional information which the
Company possesses or can acquire without reasonable effort or
expense that is necessary to verify the accuracy of the information
furnished.
B-1
(5) The undersigned is not acquiring the Securities with a
view to distribution thereof or with any present intention of
offering or selling any Securities, except as permitted below;
provided that the disposition of the undersigned's property and the
property of any accounts for which the undersigned is acting as
fiduciary will remain at all times within the undersigned's control.
(6) The undersigned understands that the Securities have not
been registered under the Securities Act or any applicable state
securities laws.
(7) The undersigned agrees, on its own behalf and on behalf of
each account for which the undersigned acquires any Securities, that
if in the future the undersigned decides to resell or otherwise
transfer such Securities within two years after the original
issuance of the Notes, such Securities may be resold or otherwise
transferred only:
(A) to the Company or any subsidiary thereof;
(B) with respect to Notes only, to a person which is a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) and otherwise in compliance with Rule 144A under the
Securities Act;
(C) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available);
(D) pursuant to an exemption from the registration
requirements under the Securities Act to a person whom the purchaser
reasonably believes is an Institutional Accredited Investor that
prior to such transfer, furnishes to you (and the Trustee or the
Transfer Agent, as the case may be) a signed letter substantially in
the form of this letter, a transfer certificate substantially in the
form provided in the Indenture and an opinion of counsel; or
(E) pursuant to a registration statement which has been
declared effective under the Securities Act and continues to be
effective at the time of such transfer.
The undersigned further agrees to provide to any person purchasing any of the
Securities from us a written notice advising such purchaser that resales of the
Securities are restricted as stated herein.
(8) The undersigned understands that, on any proposed resale
of any Securities, the undersigned shall be required to furnish to
the Trustee or the Transfer Agent, as the case may be, and the
Company such certifications, legal opinions and other information as
you and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. The
undersigned further understands that the Securities purchased by the
undersigned will bear a legend to the foregoing effect.
B-2
Each of the Company, the Trustee or the Transfer Agent, as the case
may be, and the initial purchaser of the Securities is entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By: __________________________________________
Name:
Title:
Address:
B-3
EXHIBIT C
[FORM OF RESTRICTIVE LEGEND FOR
COMMON STOCK ISSUED UPON CONVERSION](5)
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933 OR (B) IT
IS AN INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" AS DEFINED
IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR");
(2) AGREES THAT IT SHALL NOT, WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF WHICH THE SHARES
OF COMMON STOCK EVIDENCED HEREBY WERE ISSUED, RESELL OR OTHERWISE TRANSFER
THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO CRAY INC. OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OF 1933 PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), (C) TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO A
QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN, AND IN COMPLIANCE WITH, RULE
144A UNDER THE SECURITIES ACT OF 1933, (D) PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 (IF AVAILABLE)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT PRIOR TO SUCH TRANSFER,
FURNISHES TO MELLON INVESTOR SERVICES LLC, AS TRANSFER AGENT (OR ANY
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), CERTIFICATIONS AND OPINION OF
COUNSEL REQUIRED BY THE COMPANY OR TRANSFER AGENT OR (E) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT OF 1933 AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER; AND
(3) AGREES THAT IT SHALL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 2(A), 2(B) OR 2(E) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND.
----------
(1) This legend should be included only if the Security is a Transfer
Restricted Security for purposes of Rule 144A.
C-1
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION
RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
C-2
SCHEDULE I
The following table sets forth the Stock Prices and number of Additional
Shares to be issuable per $1,000 principal amount of Notes:
STOCK PRICE
EFFECTIVE ----------------------------------------------------------------------------------------------------------
DATE $3.51 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 $7.50 $8.00 $8.50 $9.00 $9.50 $10.00 $10.50
---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- -------
December 1, 2004 77.700 62.261 50.752 42.113 35.465 30.241 26.061 22.665 19.868 17.537 15.572 13.902 12.468 11.228 10.148
December 1, 2005 77.700 62.660 50.296 41.140 34.195 28.820 24.585 21.198 18.451 16.196 14.324 12.755 11.426 10.291 9.314
December 1, 2006 77.700 61.822 48.355 38.548 31.261 25.753 21.527 18.242 15.655 13.595 11.936 10.585 9.475 8.550 7.774
December 1, 2007 77.700 60.072 45.005 34.174 26.089 19.897 15.229 11.717 9.128 7.709 7.075 6.663 6.310 5.994 5.708
December 1, 2008 77.700 55.575 39.126 27.774 19.804 14.114 9.975 6.951 4.879 3.931 3.536 3.329 3.153 2.995 2.852
December 1, 2009 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000