<PAGE>
Exhibit 4.1
EXECUTION COPY
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COVAD COMMUNICATIONS GROUP, INC.
$500,000,000
6% CONVERTIBLE SENIOR NOTES DUE 2005
INDENTURE
Dated as of September 25, 2000
UNITED STATES TRUST COMPANY OF NEW YORK
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Trustee
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CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1)...................................................................8.10
(a)(2)......................................................................8.10
(a)(3)......................................................................N.A.
(a)(4)......................................................................N.A.
(a)(5)......................................................................8.10
(b).........................................................................8.10
(c).........................................................................N.A.
311(a)......................................................................8.11
(b).........................................................................8.11
(c).........................................................................N.A.
312(a)......................................................................2.05
(b)........................................................................11.03
(c)........................................................................11.03
313(a)......................................................................8.06
(b)(1).....................................................................11.03
(b)(2)......................................................................8.07
(c)........................................................................8.06;
11.02
(d).........................................................................8.06
314(a).....................................................................6.03;
11.05
(c)(1)......................................................................N.A.
(c)(2)......................................................................N.A.
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
(c)(3)......................................................................N.A.
(e)........................................................................11.05
(f).........................................................................N.A.
315(a).... .................................................................8.01
(b).........................................................................N.A.
(c).........................................................................N.A.
(d).........................................................................8.01
(e).........................................................................7.11
316(a)(last sentence).......................................................2.09
(a)(1)(A)...................................................................7.05
(A)(1)(B)...................................................................7.04
(a)(2)......................................................................N.A.
(b).........................................................................7.07
(c).........................................................................N.A.
317(a)(1)...................................................................7.08
(a)(2)......................................................................7.09
(b).........................................................................2.04
318(a)......................................................................N.A.
(b).........................................................................N.A.
(c)........................................................................11.01
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
PAGE
Article 1 DEFINITIONS AND INCORPORATION BY REFERENCE...........................7
SECTION 1.01. DEFINITIONS...........................................7
SECTION 1.02. OTHER DEFINITIONS....................................14
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT....14
SECTION 1.04. RULES OF CONSTRUCTION................................15
Article 2 THE NOTES
SECTION 2.01. FORM AND DATING......................................15
SECTION 2.02. EXECUTION AND AUTHENTICATION.........................16
SECTION 2.03. REGISTRAR AND PAYING AGENT...........................17
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST..................17
SECTION 2.05. HOLDER LISTS.........................................18
SECTION 2.06. TRANSFER AND EXCHANGE................................18
SECTION 2.07. REPLACEMENT NOTES....................................29
SECTION 2.08. OUTSTANDING NOTES....................................30
SECTION 2.09. TREASURY NOTES.......................................30
SECTION 2.10. TEMPORARY NOTES......................................30
SECTION 2.11. CANCELLATION.........................................31
SECTION 2.12. DEFAULTED INTEREST...................................31
SECTION 2.13. CUSIP NUMBERS........................................31
Article 3 REDEMPTION OF NOTES.................................................31
SECTION 3.01. OPTIONAL REDEMPTION..................................31
SECTION 3.02. NOTICE TO TRUSTEE....................................32
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TABLE OF CONTENTS
PAGE
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED....................33
SECTION 3.04. NOTICE OF REDEMPTION.................................33
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION.......................34
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE..........................35
SECTION 3.07. NOTES REDEEMED IN PART...............................36
Article 4 REPURCHASE AT THE OPTION OF A HOLDER UPON A triggering
CHANGE OF CONTROL...................................................36
SECTION 4.01. REPURCHASE RIGHT.....................................36
SECTION 4.02. NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC..36
SECTION 4.03. BENEFICIAL INTERESTS.................................38
Article 5 CONVERSION OF NOTES.................................................39
SECTION 5.01. RIGHT TO CONVERT.....................................39
SECTION 5.02. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF
COMMON STOCK ON CONVERSION; NO ADJUSTMENT
FOR INTEREST OR DIVIDENDS............................39
SECTION 5.03. CASH PAYMENTS OR ROUNDING UP IN LIEU OF FRACTIONAL
SHARES...............................................41
SECTION 5.04. CONVERSION PRICE.....................................41
SECTION 5.05. ADJUSTMENT OF CONVERSION PRICE.......................42
SECTION 5.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE..............................................49
SECTION 5.07. TAXES ON SHARES ISSUED...............................50
SECTION 5.08. RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING
OF COMMON STOCK......................................50
SECTION 5.09. RESPONSIBILITY OF TRUSTEE............................51
SECTION 5.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS...........51
Article 6 COVENANTS...........................................................52
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TABLE OF CONTENTS
PAGE
SECTION 6.01. PAYMENT OF NOTES.....................................52
SECTION 6.02. MAINTENANCE OF OFFICE OR AGENCY......................52
SECTION 6.03. REPORTS..............................................53
SECTION 6.04. COMPLIANCE CERTIFICATE...............................53
SECTION 6.05. TAXES................................................54
SECTION 6.06. STAY, EXTENSION AND USURY LAWS.......................54
SECTION 6.07. CORPORATE EXISTENCE..................................55
SECTION 6.08. USE OF PROCEEDS......................................55
Article 7 DEFAULTS AND REMEDIES...............................................55
SECTION 7.01. EVENTS OF DEFAULT....................................55
SECTION 7.02. ACCELERATION.........................................56
SECTION 7.03. OTHER REMEDIES.......................................57
SECTION 7.04. WAIVER OF DEFAULTS...................................57
SECTION 7.05. CONTROL BY MAJORITY..................................57
SECTION 7.06. LIMITATION ON SUITS..................................58
SECTION 7.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT........58
SECTION 7.08. COLLECTION SUIT BY TRUSTEE...........................58
SECTION 7.09. TRUSTEE MAY FILE PROOFS OF CLAIM.....................59
SECTION 7.10. PRIORITIES...........................................59
SECTION 7.11. UNDERTAKING FOR COSTS................................60
Article 8 TRUSTEE.............................................................60
SECTION 8.01. DUTIES OF TRUSTEE....................................60
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TABLE OF CONTENTS
PAGE
SECTION 8.02. RIGHTS OF TRUSTEE....................................61
SECTION 8.03. INDIVIDUAL RIGHTS OF TRUSTEE.........................62
SECTION 8.04. TRUSTEE'S DISCLAIMER.................................62
SECTION 8.05. NOTICE OF DEFAULTS...................................62
SECTION 8.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES...........63
SECTION 8.07. COMPENSATION AND INDEMNITY...........................64
SECTION 8.08. REPLACEMENT OF TRUSTEE...............................64
SECTION 8.09. SUCCESSOR TRUSTEE BY MERGER, ETC.....................65
SECTION 8.10. ELIGIBILITY; DISQUALIFICATION........................65
SECTION 8.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY....65
Article 9 LEGAL DEFEASANCE 67
SECTION 9.01. OPTION TO EFFECT LEGAL DEFEASANCE....................65
SECTION 9.02. LEGAL DEFEASANCE AND DISCHARGE.......................66
SECTION 9.03. CONDITIONS TO LEGAL DEFEASANCE.......................66
SECTION 9.04. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS........67
SECTION 9.05. REPAYMENT TO COMPANY.................................68
SECTION 9.06. REINSTATEMENT........................................68
SECTION 9.07. SURVIVAL.............................................68
Article 10 AMENDMENT, SUPPLEMENT AND WAIVER...................................69
SECTION 10.01. WITHOUT CONSENT OF HOLDERS OF NOTES.................69
SECTION 10.02. WITH CONSENT OF HOLDERS OF NOTES....................69
SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT.................71
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TABLE OF CONTENTS
PAGE
SECTION 10.04. REVOCATION AND EFFECT OF CONSENTS...................71
SECTION 10.05. NOTATION ON OR EXCHANGE OF NOTES....................71
SECTION 10.06. TRUSTEE TO SIGN AMENDMENTS, ETC.....................71
Article 11 MISCELLANEOUS......................................................72
SECTION 11.01. TRUST INDENTURE ACT CONTROLS........................72
SECTION 11.02. NOTICES.............................................72
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS
OF NOTES............................................73
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT..73
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.......73
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.........................74
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS..........................74
SECTION 11.08. GOVERNING LAW.......................................74
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.......74
SECTION 11.10. SUCCESSORS..........................................74
SECTION 11.11. SEVERABILITY........................................74
SECTION 11.12. COUNTERPART ORIGINALS...............................75
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC....................75
v
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
vi
<PAGE>
INDENTURE dated as of September 25, 2000 between COVAD
COMMUNICATIONS GROUP, INC., a Delaware corporation (the "Company"), and UNITED
STATES TRUST COMPANY OF NEW YORK, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 6%
Convertible Senior Notes due 2005 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note in the form of EXHIBIT
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"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 purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED that beneficial ownership of 10%
or more of the Voting Stock of a Person shall be deemed to be control. For
purposes of this definition, the terms "controlling," "controlled by" and "under
common control with" shall have correlative meanings.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ALL OR SUBSTANTIALLY ALL" has the meaning given such phrase
in the Revised Model Business Corporation Act.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law providing for the relief of debtors, as from time to time
amended and applicable to the relevant case.
"BENEFICIAL OWNER" means a beneficial owner as defined in Rules 13d-3
and 13d-5 under the Exchange Act (or any successor rules), including the
provision of such Rules that a Person shall be deemed to have beneficial
ownership of all securities that such Person has a right
7
<PAGE>
to acquire within 60 days; PROVIDED that a Person will not be deemed a
beneficial owner of, or to own beneficially, any securities if such beneficial
ownership (1) arises solely as a result of a revocable proxy delivered in
response to a proxy or consent solicitation made pursuant to, and in accordance
with, the Exchange Act and (2) is not also then reportable on Schedule 13D or
Schedule 13G (or any successor schedule) under the Exchange Act.
"BOARD OF DIRECTORS" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of (other than distributions of assets in respect of debt), the issuing
Person.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries, taken as a whole, to any Person or
group (as such term is used in Section 13(d)(3) and 14 (d)(2) of the Exchange
Act), (ii) the adoption of a plan relating to the liquidation or dissolution of
the Company, (iii) any Person or group (as defined above) is or becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total Voting
Stock or Total Common Equity of the Company, including by way of merger,
consolidation or otherwise or (iv) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors.
"CLOSING DATE" shall mean the first date on which Notes are issued
by the Company.
"COMMON STOCK" means the common stock, par value $0.001 per share,
of the Company.
"COMPANY" means Covad Communications Group, Inc., and any and all
successors thereto.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election to such Board of Directors with the affirmative vote of a majority of
the Continuing Directors who were members of such Board at the time of such
nomination or election or who was elected or appointed in the ordinary course by
Continuing Directors or other directors so elected or appointed.
8
<PAGE>
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the
address of the Trustee specified in Section 11.02 hereof or such other address
as to which the Trustee may give written notice to the Company.
"CUSTODIAN" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of EXHIBIT A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations thereunder.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"GLOBAL NOTES" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
EXHIBIT A hereto, issued in accordance with Section 2.01, 2.06(b)(iv) or
2.06(d)(ii).
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"HOLDER" means a Person in whose name a Note is registered.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
9
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"INITIAL NOTES" means the first $500,000,000 aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"INITIAL PURCHASERS" means Bear, Stearns & Co. Inc.,
Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation,
Deutsche Bank Securities, Inc. and Goldman, Sachs & Co., as initial purchasers
in the Offering.
"ISSUE DATE" means September 25, 2000.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"LIQUIDATED DAMAGES" means, on any date of determination, all
Liquidated Damages then owing pursuant to the Registration Rights Agreement, if
any. All references in this Indenture to interest which is or may become payable
on the Notes shall be deemed to include Liquidated Damages, if applicable.
"MAKE-WHOLE AMOUNT" means, respect of any redemption pursuant
to Section 3.01(a), the sum of:
(a) the present value of the aggregate amount of the interest that
would otherwise have accrued on the Notes to be redeemed pursuant to such
redemption from the Redemption Date to but not including September 18, 2003 (the
"interest make-whole period"); and
(b) Liquidated Damages, if any, to the Redemption Date.
Present value shall be calculated by using the bond equivalent yield on U.S.
Treasury notes or bills having a term nearest in length to that of the interest
make-whole period, as of the date the notice of the redemption is mailed
pursuant to this Indenture.
"NASDAQ NATIONAL MARKET" means the National Association of
Securities Dealers Automated Quotation National Market or any successor national
securities exchange or automated over-the-counter trading market in the United
States.
"1998 INDENTURE" means the indenture dated March 11, 1998
between the Company and The Bank of New York, pursuant to which the Company
issued its 13 1/2% Senior Discount Notes due 2008.
"1999 INDENTURE" means the indenture dated February 18, 1999
between the Company and The Bank of New York, pursuant to which the Company
issued its 12 1/2% Senior Notes due 2009.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect
to the Notes in global form, or any other successor entity thereto.
10
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"NOTES" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.
"OFFERING" means the offering of the Notes by the Company.
"OFFICER" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel that
meets the requirements of Section 11.05 hereof. The counsel may be an employee
of (provided such employee is a duly admitted attorney) or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"PARTICIPANT" means a Person who has an account with the
Depositary.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"PREDECESSOR NOTE" of any particular Note means every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.07 or 2.10 hereof in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Note shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Note.
"PROVISIONAL REDEMPTION PRICE" means, in respect of any
redemption pursuant to Section 3.01(a), 103% of the principal amount of the
Notes to be redeemed pursuant to such redemption.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
11
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"REDEMPTION PRICE" means either the Provisional Redemption
Price or the Optional Redemption Price applicable to any Notes being redeemed
pursuant to Section 3.01(a) or 3.01(b), as applicable.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of September 25, 2000, by and among the Company and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time, as such agreement may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to register the Notes under the Securities Act.
"RESPONSIBLE OFFICER" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary. If no referent
Person is identified, the term "Restricted Subsidiaries" shall be deemed to
refer to Restricted Subsidiaries of the Company.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A " means Rule 144A promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means and Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1.02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such regulation is in effect on
the date of this Indenture.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly,
12
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by such Person or one or more of the other Subsidiaries of that Person or a
combination thereof and (ii) any partnership, limited liability company or
similar pass-through entity, (a) the sole general partner or the managing
general partner or managing member of which is such Person or a Subsidiary of
such Person or (b) the only general partners, managing members, or Persons,
however designated in corresponding roles, of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TOTAL COMMON EQUITY" of any Person means, as of any date of
determination the product of (i) the aggregate number of outstanding primary
shares of Common Stock of such Person on such day (which shall not include any
options or warrants on, or securities convertible or exchangeable into, shares
of Common Stock of such Person) and (ii) the average Closing Price of such
Common Stock over the 20 consecutive Trading Days immediately preceding such
day. If no such Closing Price exists with respect to shares of any such class,
the value of such shares for purposes of clause (ii) of the preceding sentence
shall be determined by the Board of Directors of the Company in good faith and
evidenced by a resolution of the Board of Directors filed with the Trustee.
"TRADING DAY", with respect to a securities exchange or automated
quotation system, means a day on which such exchange or system is open
for a full day of trading.
"TRIGGERING CHANGE OF CONTROL" means any Change of Control, unless
the closing sale price per share of the Company's Capital Stock equals or
exceeds 110% of the Conversion Price applicable on any five Trading Days within
a period of 10 consecutive Trading Days ending immediately:
(a) in the case of any "Change of Control", as defined in
clause (iii) of the definition thereof, after the later of such Change of
Control or the public announcement of such Change of Control, or
(b) in the case of any "Change of Control", as defined in any of
clauses (i), (ii), and (iv) of the definition thereof, before the Change of
Control.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"2000 INDENTURE" means the indenture dated January 28, 2000 between
the Company and United States Trust Company of New York, pursuant to which the
Company issued its 12% Senior Notes due 2010.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note in the form
of EXHIBIT A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on
13
<PAGE>
behalf of and registered in the name of the Depositary, representing a series of
Notes that do not bear the Private Placement Legend.
"UNRESTRICTED DEFINITIVE NOTE" means a Definitive Note that does not
bear and is not required to bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary under any of the 1998
Indenture, 1999 Indenture and 2000 Indenture.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
"VOTING STOCK" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
TERM SECTION
---- ------------
<S> <C>
"Additional Notes"................................................................2.02
"Authentication Order"............................................................2.02
"Closing Price"...................................................................5.05
"Company Notice"..................................................................4.02
"Conversion Price"................................................................5.04
"Current Market Value"............................................................3.01
"DTC".............................................................................2.03
"Event of Default"................................................................6.01
"Legal Defeasance"................................................................7.02
"Offer Expiration Time"...........................................................5.05
"Optional Redemption Price".......................................................3.01
"Paying Agent"....................................................................2.03
"Pre-Offer Redemption"............................................................5.05
"Purchased Shares"................................................................5.05
"Registrar".......................................................................2.03
"Repurchase Date".................................................................4.01
"Repurchase Right"................................................................4.01
"Repurchase Price"................................................................4.01
"Trigger Event"...................................................................5.05
</TABLE>
SECTION 1.03. 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.
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The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined
has the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the
plural, and in the plural include the singular;
(5) provisions apply to successive events
and transactions; and
(6) references to sections of or rules
under the Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the SEC from
time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of EXHIBIT A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date
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of its authentication. The Notes shall be in denominations of $1,000 and
integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be substantially
in the form of EXHIBIT A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
EXHIBIT A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate Notes for original
issue up to $500,000,000 aggregate principal amount on the Issue Date. Such
Authentication Order shall specify the amount of the Notes to be authenticated
and the date on which the original issue of Notes are to be authenticated and
any other information necessary for such authentication. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in the following paragraph or in Section 2.07 hereof.
The Trustee shall, upon execution and delivery of a corporate
Authentication Order, authenticate up to approximately $75,000,000 of additional
Notes ("Additional Notes")
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for issuance under this Indenture. The Company agrees to comply with all
applicable SEC rules and regulations that relate to the issuance and sale of any
such Additional Notes.
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. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC') to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium, if any, or interest on the Notes, and will notify
the Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
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SECTION 2.05. 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
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary. All Global Notes will be exchanged by the
Company for Definitive Notes if (i) the Company delivers to the Trustee notice
from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a); however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Sections 2.06(b) or (c) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend. Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery
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<PAGE>
thereof in the form of a beneficial interest in an Unrestricted Global Note. No
written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor of
such beneficial interest must deliver to the Registrar either (A)(1) a written
order from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase
or (B)(1) a written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given by
the Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii)TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Restricted Global Note if the transfer complies with the
requirements of Section 2.06(b)(ii) above and the Registrar receives a
certificate in the form of EXHIBIT B hereto, including the certifications in
item (1) thereof.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE.
A beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the exchange or transfer complies
with the requirements of Section 2.06(b)(ii) above and:
(A) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(B) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of EXHIBIT C hereto,
including the certifications in item (1)(a) thereof; or
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<PAGE>
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of EXHIBIT B hereto, including the
certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial interests
transferred.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of EXHIBIT C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in EXHIBIT B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
EXHIBIT B hereto, including the certifications in item (2)(a)
thereof;
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(D) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the
effect set forth in EXHIBIT B hereto, including the
certifications in item (2)(b) thereof; or
(E) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
EXHIBIT B hereto, including the certifications in item (2)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions
a Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a Restricted
Global Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note only if:
(A) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(B) the Registrar receives the following:
(1) if the holder of such beneficial interest in a I
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the
Private Placement Legend, a certificate from such holder in
the form of EXHIBIT C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of EXHIBIT B hereto, including the certifications in item
(3) thereof,
and, in each such case set forth in this subparagraph (B), if the
Company so requests or the Applicable Procedures so require, an
Opinion of Counsel in form reasonably
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acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in an
Unrestricted Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note, then,
upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the
Trustee shall cause the aggregate principal amount of the applicable Global Note
to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company
shall execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions an Unrestricted Definitive Note in the
appropriate principal amount. Any Unrestricted Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall
be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement
Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of EXHIBIT C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in EXHIBIT B
hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
EXHIBIT B hereto, including the certifications in item (2)(a)
thereof;
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<PAGE>
(D) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in EXHIBIT B hereto, including the
certifications in item (2)(b) thereof; or
(E) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
EXHIBIT B hereto, including the certifications in item (2)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note and, in
the case of clause (B) above, the 144A Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(B) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in an Unrestricted
Global Note, a certificate from such Holder in the form of
EXHIBIT C hereto, including the certifications in item (l)(c)
thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of EXHIBIT B hereto,
including the certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (B), if the
Company so requests or the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
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<PAGE>
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii) or (iii) above at
a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) RESTRICTED DEFINITIVE TO RESTRICTED DEFINITIVE NOTES. Any
Restricted Definitive Note may be transferred to and registered in the name of
Persons who take delivery thereof in the form of a Restricted Definitive Note if
the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must deliver a
certificate in the form of EXHIBIT B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the
form of EXHIBIT B hereto, including the certifications,
certificates and Opinion of Counsel required by item (2)
thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the
Registration Rights Agreement;
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<PAGE>
(B) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note,
a certificate from such Holder in the form of EXHIBIT C hereto,
including the certifications in item (1)(d) thereof, or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such Holder in the form of EXHIBIT B hereto, including the
certifications in item (3) thereof;
and, in each such case set forth in this subparagraph (D),
an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) COMMON STOCK LEGENDS. Until the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), any stock certificate representing Common Stock issued
upon conversion of any Note shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or such Common Stock has
been issued upon conversion of Notes that have been transferred pursuant to a
registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company in writing with written notice
thereof to the transfer agent:
"THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF WHICH
THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED.
(1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF
25
<PAGE>
AVAILABLE) OR (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER.
(2) PRIOR TO ANY SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(C) ABOVE), IT WILL FURNISH TO SUCH TRANSFER
AGENT, (OR ANY SUCCESSOR TRANSFER AGENT, AS APPLICABLE) SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT;
AND
(3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON
STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 1(C) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(C) ABOVE OR THE EXPIRATION OF
TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY UPON THE CONVERSION OF
WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED."
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate for a like number of shares of Common
Stock, which shall not bear the restrictive legend by this Section 2.06(f).
(g) LEGENDS. The following legends shall appear on all Global Notes
and Definitive Notes issued under this Indenture unless specifically stated
otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form.
"THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
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OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISTION
HEREOF, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURTIES ACT;
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEROF, (B) TO A QUALIFIED
INSTUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (D)PURUSANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE SECURITY EVIDENCED HEREBY IS TRANFERRED (OTHER THAN A TRANFER PURSUANT TO
CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE (OR THE SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF
THE SECURITY EVIDENCED HEREBY."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii),
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(e)(ii) or (e)(iii) to this Section 2.06 (and all Notes issued in
exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED
IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
(iii) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased,
converted or cancelled in whole and not in part, each such Global Note shall be
returned to or retained and cancelled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in a Global Note is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note or
for Definitive Notes or will convert to Common Stock, the principal amount of
Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Note, such other Global Note shall be increased accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such increase.
(h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.07, 5.01 and 10.05 hereof).
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(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.03 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding interest payment
date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by facsimile, to
be followed promptly by originals.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
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SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding or, if applicable, interest on
it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a Redemption Date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange, conversion or
payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, conversion, payment, replacement or
cancellation and shall return such cancelled Notes to the Company upon written
request. Certification of the destruction of all cancelled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, PROVIDED that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption as a convenience to 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 and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or the
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3
REDEMPTION OF NOTES
SECTION 3.01. OPTIONAL REDEMPTION.
(a)(i) At any time prior to September 18, 2003, the Company
may, at its option, redeem the Notes in whole at any time or in part from time
to time, upon notice as set forth in Section 3.04, at the Provisional Redemption
Price, if:
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(A) the Shelf Registration Statement covering resales of
the Notes and the Common Stock issuable upon conversion of the Notes
is effective and available for use and is expected to remain
effective and available for use for the 30 days following the
Redemption Date; and
(B) the Current Market Value of the Common Stock equals or
exceeds 150% of the Conversion Price then in effect for at least 20
Trading Days in any consecutive 30-day trading period ending on the
Trading Day prior to the date the notice of the redemption pursuant
to this Section 3.01(a) is mailed pursuant to Section 3.04. The
"CURRENT MARKET VALUE" means the average of the high and low sale
prices of our common stock, as reported on the Nasdaq National Market
or any national securities exchange on which the Common Stock is then
listed, on such Trading Day.
(ii) On the Redemption Date, the Company shall also pay the
Make-Whole Amount on all Notes called for redemption pursuant to this Section
3.01(a), including those Notes which are converted into Common Stock after the
date the notice of the provisional redemption is mailed and prior to the
Redemption Date.
(b) On or after September 18, 2003, the Company may, at its option,
redeem the Notes in whole at any time or in part from time to time, on any date
prior to maturity, upon notice as set forth in Section 3.04, at the redemption
price (expressed as percentages of the principal amount of the Notes being
redeemed) (such price, the "Optional Redemption Price") set forth below if
redeemed during the corresponding period set forth below:
Redemption Price
----------------
September 18, 2003 to September 14, 2003...................... 101.50%
On or after September 15, 2004................................ 100.00%
(c) The Company shall pay any interest on the Notes called for
redemption pursuant to this Section 3.01 (including those Notes which are
converted into Common Stock after the date the notice of the redemption is
mailed and prior to the Redemption Date) accrued but not paid to the Redemption
Date. Such interest shall be paid to the Holder entitled to the Provisional
Redemption Price or Optional Redemption Price, as applicable; PROVIDED that if
the Redemption Date is an interest payment date, the Company shall pay the
interest to the Holder of the Note at the close of business on the corresponding
record date.
SECTION 3.02. NOTICE TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the
redemption provisions of Section 3.01(a) or (b) hereof (such election to be
evidenced by a resolution of the Company's board of directors), it shall notify
the Trustee at least 30 days prior to the Redemption Date
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(unless a shorter notice shall be satisfactory to the Trustee) of such intended
Redemption Date, the principal amount of Notes to be redeemed and the CUSIP
numbers of the Notes to be redeemed.
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all the Notes are to be redeemed, the Trustee
shall select the particular Notes to be redeemed from the Notes then outstanding
by a method that complies with the requirements of any exchange on which the
Notes are listed, or, if the Notes are not listed on an exchange, on a pro rata
basis or by lot or in accordance with any other method the Trustee considers
fair and appropriate. Notes and portions thereof that the Trustee selects shall
be in amounts equal to the minimum authorized denominations for Notes to be
redeemed or any integral multiple thereof.
If any Note selected for partial redemption is converted in
part before termination of the conversion right with respect to the portion of
the Notes so selected, the converted portion of such Note shall be deemed to be
the portion selected for redemption (PROVIDED, HOWEVER, that the Holder of such
Note so converted and deemed redeemed shall not be entitled to any additional
interest payment as a result of such deemed redemption than such Holder would
have otherwise been entitled to receive upon conversion of such Note). Notes
that have been converted during a selection of Notes to be redeemed may be
treated by the Trustee as outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Notes selected for redemption and, in the case of
any Notes selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Notes shall
relate, in the case of any Notes redeemed or to be redeemed only in part, to the
portion of the principal amount of such Notes which has been or is to be
redeemed.
SECTION 3.04. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 11.02 hereof to the Holders of Notes to be redeemed. Such notice shall
be given not less than 30 nor more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of interest accrued and
unpaid to the Redemption Date, if any;
(3) the Make-Whole Amount, if any;
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(4) if fewer than all the Notes then outstanding are to be
redeemed, the aggregate principal amount of Notes to be redeemed
and the aggregate principal amount of Notes which will be outstanding
after such partial redemption;
(5) that on the Redemption Date the Redemption Price and, as
provided in Section 3.01(c), interest accrued and unpaid to the
Redemption Date, and Liquidated Damages, if any, will become due
and payable upon each such Note to be redeemed, and that interest
thereon shall cease to accrue on and after such date;
(6) the Conversion Price, the date on which the right to convert
the principal of the Notes to be redeemed will terminate and the
places where such Notes may be surrendered for conversion;
(7) that Global Notes called for redemption must be surrendered
to the Trustee and all Definitive Notes called for redemption
must be surrendered to the Trustee to collect the Redemption
Price, the amount of accrued interest, if any, and the Make-Whole
Amount, if any; and
(8) the CUSIP numbers of the Notes.
The notice given shall specify the last date on which exchanges
or transfers of Notes may be made pursuant to Section 2.06 hereof, and shall
specify the serial numbers of the Notes and the portions thereof called for
redemption.
Notice of redemption of Notes to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name of and at the expense of the Company.
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION.
Notice of redemption having been given as provided in Section
3.04 hereof, the Notes so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price and the Make-Whole Amount, if any,
therein specified (and, as provided in Section 3.01(c), accrued interest and
Liquidated Damages, if any, to the Redemption Date) and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued and unpaid interest) such Notes shall cease to bear interest; PROVIDED
that the Company may specify in such notice conditions to the redemption of the
Notes that must be met on or prior to the Redemption Date, including the receipt
of proceeds from concurrent equity or other financings, in which case the
Redemption Date shall not occur, and the Notes to be redeemed shall not be due
and payable at the Redemption Price, until such conditions are satisfied. Upon
surrender of any such Note for redemption in accordance with such notice
(including the satisfaction of all applicable conditions), such Note shall be
paid by the Company at the Redemption Price and the Make-Whole Amount, if any.
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If any Note called for redemption shall not be so paid when
due upon surrender thereof for redemption, the principal and premium, if any,
shall, until paid, bear interest from the Redemption Date at the then applicable
interest rate on the Notes.
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE.
Prior to or on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust) an amount of money sufficient to pay
(x) the Redemption Price of, and accrued and unpaid interest, if any, on (and
the Make-Whole Amount, if any, in respect of), all the Notes to be redeemed on
that Redemption Date other than any Notes called for redemption on that date
which have been converted prior to the date of such deposit and (y) the
Make-Whole Amount, if any, payable on Notes called for redemption on that date
which have been converted prior to the date of such deposit.
If any Note called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Note shall (subject to any right of the Holder
of such Note or any Predecessor Note to receive interest as provided in such
Predecessor Note and to receive the Make-Whole Amount as set forth in Section
3.01(a)(ii)) be paid to the Company on Company request or, if then held by the
Company, shall be discharged from such trust.
If the Company complies with the provisions of the two
preceding paragraphs, on and after the Redemption Date, interest shall cease to
accrue on the Notes or the portions of the Notes called for redemption. If a
Note is redeemed or converted on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close
of business on such record date. If any failure of the Company to comply with
the foregoing paragraphs, interest shall be paid on unpaid principal, from the
Redemption Date until such principal is paid, and, to the extent lawful, on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 6.01 hereof.
SECTION 3.07. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 2.03 (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 the Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Note without
service charge, a new Note or Notes of any authorized denomination as requested
by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Note so surrendered.
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ARTICLE 4
REPURCHASE AT THE OPTION OF A HOLDER UPON A triggering CHANGE OF CONTROL
SECTION 4.01. REPURCHASE RIGHT.
In the event that a Triggering Change of Control shall occur,
each Holder shall have the right (the "Repurchase Right"), at the Holder's
option, but subject to the provisions of Section 4.02 hereof, to require the
Company to repurchase, and upon the exercise of such right the Company shall
repurchase, 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 (provided that no single Note may be repurchased in
part unless the portion of the principal amount of such Note to be outstanding
after such repurchase is equal to $1,000 or an integral multiple thereof), on
the date (the "Repurchase Date") that is a Business Day no earlier than 30 days
nor later than 60 days after the date of the Company Notice at a purchase price
equal to 100% of the principal amount of the Notes to be repurchased (the
"Repurchase Price"), plus interest accrued and unpaid to, but excluding, the
Repurchase Date.
SECTION 4.02. NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for redemption
all of the Notes then outstanding, prior to or on the 30th day after the
occurrence of a Triggering Change of Control, the Company, or, at the written
request and expense of the Company prior to or on the 30th day after such
occurrence, the Trustee, shall give to all Holders of Notes notice, in the
manner provided in Section 11.02 hereof, of the occurrence of the Triggering
Change of Control and of the Repurchase Right set forth herein arising as a
result thereof (the "Company Notice"). The Company shall also deliver a copy of
such notice of a Repurchase Right to the Trustee. Each notice of a Repurchase
Right shall state:
(1) the Repurchase Date;
(2) the date by which the Repurchase Right must be exercised;
(3) the Repurchase Price and the amount of accrued and unpaid
interest, if any;
(4) that on the Repurchase Date the Repurchase Price, accrued and
unpaid interest and Liquidated Damages, if any, will become due and
payable upon each such Note designated by the Holder to be repurchased,
and that interest thereon shall cease to accrue on and after said date;
(5) that any Holder electing to have any Note or portion thereof
purchased pursuant to its Repurchase Right will be required to
surrender such Note, together with the form entitled "Notice of
Exercise of Repurchase Right" on the reverse side of such Note
completed, to, in the case of Book-Entry Interests in a Global Note,
the Trustee and,
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in the case, of Definitive Notes, the Trustee, in each case, at the address
specified in the notice prior to the close of business on the Business Day
immediately preceding the Repurchase Date;
(6) the Conversion Price then in effect, the date on which the right
to convert the principal amount of the Notes to be repurchased will
terminate and the place where such Notes may be surrendered for
conversion; and
(7) the place or places where such Notes, together with the Option
to Elect Repayment Upon a Triggering Change of Control certificate
annexed to the each Note are to be delivered for payment of the
Repurchase Price and accrued and unpaid interest, if any.
No failure of the Company to give the foregoing notices or
defect therein shall limit any Holder's right to exercise a Repurchase Right or
affect the validity of the proceedings for the repurchase of Notes.
If any of the foregoing provisions or other provisions of this
Article 4 are inconsistent with applicable law, such law shall govern.
(b) To exercise a Repurchase Right, a Holder shall deliver to the
Trustee prior to the close of business on the third Business Day immediately
preceding the Repurchase Date:
(1) written notice of the Holder's exercise of such
Repurchase Right, which notice shall set forth the name of the
Holder, the principal amount of the Notes to be repurchased (and, if
any Note is to be repurchased in part, the serial number thereof, the
portion of the principal amount thereof to be repurchased) and a
statement that an election to exercise the Repurchase Right is being
made thereby, and
(2) the Notes with respect to which the Repurchase
Right is being exercised.
Such written notice shall be irrevocable if not withdrawn prior to
the close of business on the third Business Day prior to the Repurchase Date by
delivery to the Trustee of a notice of withdrawal, except that the right of the
Holder to convert the Notes with respect to which the Repurchase Right is being
exercised shall continue until the close of business on the Business Day
immediately preceding the Repurchase Date. The Company shall not pay accrued and
unpaid interest on any such Notes so converted.
(c) In the event a Repurchase Right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
the Repurchase Price in cash for payment to the Holder on the Repurchase Date,
together with Liquidated Damages, if any, and accrued and unpaid interest to the
Repurchase Date payable in cash with respect to the Notes as to which the
Repurchase Right has been exercised; PROVIDED, HOWEVER, that installments of
interest that mature prior to or on the Repurchase Date shall be payable in cash
to the Holders
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of such Notes, or one or more Predecessor Notes, registered as such at the close
of business on the relevant record date.
(d) If any Note (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Note (or
portion thereof, as the case may be) shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the then
applicable interest rate on the Notes, and each Note shall remain convertible
into Common Stock until the principal of such Note (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(e) Any Note which is to be repurchased only in part shall be
surrendered to the Trustee (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 his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Note without
service charge, a new Note or Notes, containing identical terms and conditions,
each in an authorized denomination in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Note so
surrendered.
(f) All Notes delivered for repurchase shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.11 hereof.
SECTION 4.03. BENEFICIAL INTERESTS.
The holder of any beneficial interest in a Global Note shall
notify the Trustee in writing (or by such other method as shall be permitted
under the Applicable Procedures of the Depositary) of its election of its
Repurchase Right at least 10 days prior to the applicable Repurchase Date, which
notice shall include the information required by Section 4.02. In connection
with any repurchase of Global Notes pursuant to the Repurchase Right, the
Trustee shall complete and deliver the Notice of Exercise of Repurchase Right
attached to each Global Note surrendered for repurchase to reflect the decrease
in principal amount of such Global Note resulting from such repurchase. The
exercise of any Repurchase Right with respect to any beneficial interest in a
Global Note shall be subject to, and comply with, the Applicable Procedures of
the Depositary.
ARTICLE 5
CONVERSION OF NOTES
SECTION 5.01. RIGHT TO CONVERT.
Subject to and upon compliance with the provisions of this
Indenture, the Holder of any Note shall have the right, at its option, at any
time after the original issuance of the Notes hereunder through the close of
business on the Business Day prior to the date of repurchase, redemption or
final maturity of the Notes (except that, with respect to any Note or portion of
a
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Note that shall be called for redemption or tendered for repurchase pursuant
to Section 3.01 or 4.02, such right shall not terminate, if the Company shall
default in payment due upon redemption or purchase thereof) to convert the
principal amount of any such Note, or any portion of such principal amount which
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Note or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Note so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 5.02. A Note in respect
of which a Holder is exercising its option to require repurchase upon a
Triggering Change of Control pursuant to Section 4.02 may be converted only if
such Holder withdraws its election by delivering written notice to the Company
three Business Days prior to the related Repurchase Date. A Holder of Notes is
not entitled to any rights of a holder of Common Stock until such Holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 5.
SECTION 5.02. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
In order to exercise the conversion privilege with respect to
any Note in certificated form, the Holder of any such Note to be converted in
whole or in part shall surrender such Note, duly endorsed, at an office or
agency maintained by the Company pursuant to Section 2.03, accompanied by the
funds, if any, required by this Section 5.02, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the office or agency that the Holder elects to
convert such Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 5.07. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the Holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to
any beneficial interest in a Note in global form, the holder of such beneficial
interest must complete the appropriate instruction form for conversion pursuant
to the Depository's book-entry conversion program, deliver by book-entry
delivery a beneficial interest in such Note in global form, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 5.02 and
any transfer taxes if required pursuant to Section 5.07.
As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Holder (as if such transfer were a transfer of the
Note or Notes (or portion thereof) so converted), the Company shall issue and
shall deliver to such Holder at the office or agency maintained by the Company
for such purpose
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pursuant to Section 2.03, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and, if applicable, a
check or cash in respect of any fractional interest in respect of a share of
Common Stock arising upon such conversion, as provided in Section 5.03.
Each conversion shall be deemed to have been effected as to
any such Note (or portion thereof) on the date on which the requirements set
forth above in this Section 5.02 have been satisfied as to such Note (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the Holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered in accordance with the applicable terms of the
Indenture.
Any Note or portion thereof surrendered for conversion during
the period from the close of business on the record date for any interest
payment date to the close of business on the Business Day next preceding the
following interest payment date must (unless such Note or portion thereof being
converted shall have been called for redemption on a Redemption Date, or
tendered for repurchase on a repurchase date, that occurs during the period from
the close of business on such record date to the close of business on the
Business Day next preceding the following interest payment date), be accompanied
by payment, in same day funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; provided, however, that no such payment
need be made if there shall exist at the time of conversion a default in the
payment of interest on the Notes. Except as provided above in this Section 5.02,
no payment or other adjustment shall be made for interest accrued on any Note
converted or for dividends on any shares issued upon the conversion of such Note
as provided in this Article.
Upon the conversion of an interest in a Note in global form,
the Trustee (or other conversion agent appointed by the Company), or the
Custodian at the direction of the Trustee (or other conversion agent appointed
by the Company), shall make a notation on such Note in global form as to the
reduction in the principal amount represented thereby. Upon the conversion of an
interest in a Note in definitive form, the Trustee (or other conversion agent
appointed by the Company), or the Custodian at the direction of the Trustee (or
the conversion agent appointed by the Company), shall authenticate and deliver
to the Holder of the Note so surrendered, without charge to him, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note. The Company shall notify the
Trustee in writing of any conversions of Notes effected through any conversion
agent other than the Trustee.
If shares of Common Stock to be issued upon conversion of a
Restricted Global Note or a Restricted Definitive Note, or Notes to be issued
upon conversion of a Restricted
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Global Note or a Restricted Definitive Note in part only, are to be registered
in a name other than that of the Holder of such Restricted Global Note or a
Restricted Definitive Note, such Holder must deliver to the Trustee a
certificate in substantially the form set forth in the form of Exhibit B, dated
the date of surrender of such Note and signed by such Holder, as to compliance
with the restrictions on transfer applicable to such Note. The Trustee shall not
be required to register in a name other than that of the Holder shares of Common
Stock or Note issued upon conversion of any such Restricted Global Note or a
Restricted Definitive Note not so accompanied by a properly completed
certificate.
SECTION 5.03. CASH PAYMENTS OR ROUNDING UP IN LIEU OF FRACTIONAL SHARES.
No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of Notes. If more than one
Note shall be surrendered for conversion at one time by the same Holder, the
number of full shares that shall be issuable upon conversion shall be computed
on the basis of the aggregate principal amount of the Notes (or specified
portions thereof to the extent permitted thereby) so surrendered. If any
fractional share of stock would be issuable upon the conversion of any Note or
Notes, the Company shall, at its option, make an adjustment and payment therefor
in cash at the Closing Price thereof on the last Business Day immediately
preceding the day on which the Notes (or specified portions thereof) are deemed
to have been converted to the Holder or round up the number of shares to be
received to the nearest whole share.
SECTION 5.04. CONVERSION PRICE.
The conversion price shall be as specified in the form of Note
(herein called the "Conversion Price") attached as Exhibit A hereto, subject to
adjustment as provided in this Article 5.
SECTION 5.05. ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be adjusted from time to time by
the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction (i) the numerator of which shall be the number of
shares of the Common Stock outstanding at the close of business on the date
fixed for such determination and (ii) the denominator of which shall be the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution, such reduction, subject to the Company's rights
under Section 5.05(l), to become effective immediately after the opening of
business on the day following the date fixed for such determination. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company. If any dividend or distribution of the type
described in this Section 5.05(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the
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Conversion Price that would then be in effect if such dividend or distribution
had not been declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within 45 days after the date fixed for determination of stockholders entitled
to receive such rights or warrants) to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price (as defined
below) on the date fixed for determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date fixed for determination of stockholders entitled
to receive such rights or warrants by a fraction (i) the numerator of which
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders entitled to receive
such rights and warrants plus the number of shares that the aggregate offering
price of the total number of shares so offered would purchase at such Current
Market Price, and (ii) the denominator of which shall be the number of shares of
Common Stock outstanding on the date fixed for determination of stockholders
entitled to receive such rights and warrants plus the total number of additional
shares of Common Stock offered for subscription or purchase. Such adjustment
shall be successively made whenever any such rights and warrants are issued, and
shall, subject to the Company's rights under Section 5.05(l), become effective
immediately after the opening of business on the day following the date fixed
for determination of stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock are not delivered after the expiration
of such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
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(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 5.05(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 5.05(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 5.05(a) (any of the foregoing hereinafter in this Section 5.05(d) called
the "Securities")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Holders upon the conversion of
the Notes so that any such Holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such Holder is
entitled, the amount and kind of such Securities which such Holder would have
received if such Holder had converted its Notes into Common Stock immediately
prior to the record date fixed for determination, the Conversion Price shall be
reduced so that the same shall be equal to the price determined by multiplying
the Conversion Price in effect on the record date with respect to such
distribution by a fraction (i) the numerator of which shall be the Current
Market Price per share of the Common Stock on such record date less the fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive, and described in a resolution of the Board of Directors) on the
record date of the portion of the Securities so distributed applicable to one
share of Common Stock and (ii) the denominator of which shall be the Current
Market Price per share of the Common Stock on such record date, such reduction,
subject to the Company's rights under Section 5.05(l), to become effective
immediately prior to the opening of business on the day following such record
date; provided, however, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on such record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right to
receive upon conversion the amount of Securities such Holder would have received
had such Holder converted each Note on such record date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 5.05(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock, unless
the Board of Directors determines in good faith that such determination would
not be in the best interests of the Holders.
Rights or warrants distributed by the Company to all holders
of Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"): (i) are deemed to be transferred with such
shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 5.05 (and no adjustment to the
Conversion Price under this Section 5.05 will be required) until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be made under this Section 5.05(d). If
any such right or warrant are subject to events, upon
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the occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 5.05
was made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
For purposes of this Section 5.05(d) and Sections 5.05(a) and
(b), any dividend or distribution to which this Section 5.05(d) is applicable
that also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock (or both), shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, assets or
shares of capital stock other than such shares of Common Stock or rights or
warrants (and any Conversion Price reduction required by this Section 5.05(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 5.05(a) and (b) with respect to such dividend or distribution shall
then be made), except (A) the record date of such dividend or distribution shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 5.05(a) and (b), and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 5.05(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per share
of Common Stock in any fiscal quarter does not exceed the greater of (A) the
amount per share of Common Stock of the next preceding quarterly cash dividend
on the Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 5.05(e)
(as adjusted to reflect subdivisions, or combinations of the Common Stock), and
(B) 2.5% of the arithmetic average of the Closing Price (determined as set forth
in Section 5.05(h)) during the ten Trading Days immediately prior to the date of
declaration of such dividend, and (y) any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Company,
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whether voluntary or involuntary), then, in such case, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such record date by a fraction (i) the numerator of which shall be
the Current Market Price of the Common Stock on the record date less the amount
of cash so distributed (and not excluded as provided above) applicable to one
share of Common Stock and (ii) the denominator of which shall be such Current
Market Price of the Common Stock on such date, such reduction, subject to the
Company's rights under Section 5.05(l), to be effective immediately prior to the
opening of business on the day following the record date; provided, however,
that in the event the portion of the cash so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market Price of the
Common Stock on the record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each Note on the record date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared. If any adjustment is required to
be made as set forth in this Section 5.05(e) as a result of a distribution that
is a quarterly dividend, such adjustment shall be based upon the amount by which
such distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded pursuant hereto. If an adjustment is required to be made as set
forth in this Section 5.05(e) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock (other than any tender
offer or exchange offer that is made and consummated for any and all shares of
the Common Stock) shall expire and such tender or exchange offer (as in effect
upon the expiration thereof) shall require the payment to stockholders of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors) that as of the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended) exceeds the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the Expiration Time by a fraction (i) the numerator of which shall be the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) on the Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time and (ii) the
denominator of which shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not withdrawn as
of the Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the number
of shares of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the second Trading Day following
the
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Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price that would then be in effect if such tender or exchange
offer had not been made.
(g) In the case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary (a) for an amount that increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding (provided that in the case of any offeror whose ownership percentage
of the Common Stock is 15% or more prior to the commencement of the tender offer
or exchange offer, this requirement would not be met unless the tender offer or
exchange offer would increase the offeror's ownership of Common Stock by more
than 10% of the total shares of Common Stock outstanding), (b) that involves the
payment by such Person of consideration per share of Common Stock having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive, and described in a resolution of the Board of Directors) at the
last time (the "Offer Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended) that
exceeds the Current Market Price of the Common Stock on the Trading Day next
succeeding the Offer Expiration Time, (c) in which, as of the Offer Expiration
Time, the Board of Directors is not recommending rejection of the offer and (d)
in which the average of the daily Closing Price per share of the Common Stock
for the ten consecutive Trading Days ending ten Trading Days prior to the public
announcement of the tender offer or exchange offer (the "Pre-Offer Reference
Price") exceeds 110% of the average of the daily Closing Price per share of the
Common Stock for the ten Trading Days commencing ten Trading Days following the
Offer Expiration Time (the "Post-Offer Reference Price") the Conversion Price
shall be reduced so that the same shall equal the price determined by
subtracting from the Conversion Price in effect immediately prior to the Offer
Expiration Time an amount determined by multiplying the Conversion Price in
effect immediately prior to the Offer Expiration Time by a fraction (i) the
numerator of which shall be (x) the difference between the Pre-Offer Reference
Price and the Post-Offer Reference Price multiplied by (y) the number of shares
of Common Stock outstanding immediately prior to the Offer Expiration Time (less
all shares validly tendered or exchanged and not withdrawn as of the Offer
Expiration Time) and (ii) the denominator of which shall be the product of the
Pre-Offer Reference Price and the number of shares of Common Stock outstanding
immediately prior to the Offer Expiration Time (including any tendered or
exchanged shares). Any reduction in the Conversion Price provided for in this
Section 5.05(g) shall become effective retroactive to immediately prior to the
opening of business on the day following the Offer Expiration Time. In the event
that such Person is obligated to purchase shares pursuant to any such tender or
exchange offer, but such Person is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 5.05(g) shall not be made
if, as of the Offer Expiration Time, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Section 5.06.
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(h) For purposes of this Section 5.05, the following terms shall have the
meaning indicated:
(1) "Closing Price" with respect to any securities on any day means
the closing sale price, regular way, on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case as quoted on the Nasdaq National Market
or, if such security is not quoted or listed or admitted to trading on such
Nasdaq National Market, on the principal national security exchange or
quotation system on which such security is quoted or listed or admitted to
trading or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors or, to the extent
permitted by applicable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" means the average of the daily Closing
Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question. The Current Market Price shall
be appropriately adjusted to take into account the occurrence during the
period commencing on the first of such Trading Days during such ten-
Trading Day period and ending on the date in question of any other events
that would require an adjustment of the Conversion Price pursuant to
Section 5.05 of this Indenture.
(3) "fair market value" means the amount which a willing buyer would
pay a willing seller in an arm's-length transaction.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 5.05(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during the period and
the Board of Directors shall have made a determination that such reduction would
be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to Holder of record of the Notes a notice of
the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period during which it will be in effect.
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(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments that by reason of this Section 5.05(j)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. No adjustments shall be made to the Conversion Price
for any change in the par value of the Common Stock (including the designation
thereof as "no par value" stock). All calculations under this Article 5 shall be
made by the Company and shall be made to the nearest tenth of one cent or to the
nearest one-hundredth (1/100) of a share, as the case may be. No adjustment need
be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. To the extent the Notes become
convertible into cash, assets, property or securities (other than capital stock
of the Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to the Holder of each Note at his last address appearing on the Note register
provided for in Section 2.03 of this Indenture, within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(l) In any case in which this Section 5.05 provides that an adjustment
shall become effective immediately after a record date for an event or any other
date specified herein, occurring prior to the event, that is the basis for such
adjustment, the Company may defer until the occurrence of such event (i) issuing
to the Holder of any Note converted after such record or other specified date or
other date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (ii) paying to such Holder any
amount in cash or additional shares in lieu of any fraction pursuant to Section
5.03.
(m) For purposes of this Section 5.05, the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(n) If the distribution date for the rights provided in the Company's
rights agreement occurs prior to the date on which a Note is converted, any
Holder of a Note who converts such Note after the distribution date shall not be
entitled to receive the rights that would otherwise have attached (but for the
date of conversion) to the shares of Common Stock received upon such conversion,
provided that an adjustment shall be made to the Conversion Price
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pursuant to this Section 5.05 as if the rights were being distributed to the
holders of Common Stock immediately prior to such conversion. If such an
adjustment is made and the rights are later redeemed, invalidated or terminated,
then a corresponding reversing adjustment shall be made to the Conversion Price,
on an equitable basis, to take account of such event.
SECTION 5.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification
or change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 5.05(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of each supplemental indenture) providing that the Notes shall be convertible
into the kind and amount of shares of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
provided that, if the kind or amount of stock, other securities or other
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purposes of this
Section 5.06 the kind and amount of securities, cash or other property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares. Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Notes, at its address appearing on the
Note register provided for in Section 2.03 of this Indenture, within 20 days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
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The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 5.06 applies to any event or occurrence, Section 5.05
shall not apply.
SECTION 5.07. TAXES ON SHARES ISSUED.
The issue of stock certificates on conversions of Notes shall be made
without charge to the converting Holder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the Holder of any Note converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the Person or Persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 5.08. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH
GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK.
The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares of
Common Stock to provide for the conversion of the Notes from time to time as
such Notes are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that, subject to the terms of this Indenture,
the Registration Rights Agreement and the compliance by the Holders of the Notes
to be converted with applicable law, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible endeavor to secure such registration
or approval, as the case may be.
The Company further covenants that, subject to the terms of this
Indenture, the Registration Rights Agreement and compliance by the Holders of
the Notes with applicable law, if at any time the Common Stock shall be listed
on the Nasdaq National Market or any other national securities exchange or
automated quotation system, the Company will, if permitted by
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the rules of such exchange or automated quotation system, list and keep listed,
so long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.
SECTION 5.09. RESPONSIBILITY OF TRUSTEE.
The Trustee and any other conversion agent shall not at any time be
under any duty or responsibility to any Holder of Notes to determine the
Conversion Price or whether any facts exist which may require any adjustment of
the Conversion Price, or with respect to the nature or extent or calculation of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
The Trustee and any other conversion agent shall not be accountable with respect
to the validity or value (or the kind or amount) of any shares of Common Stock,
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Note; and the Trustee and any other conversion agent
make no representations with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Note for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 5.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Holders upon the conversion of their Notes after any event
referred to in such Section 5.06 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 8.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
SECTION 5.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution) on its
Common Stock that would require an adjustment in the Conversion Price pursuant
to Section 5.05; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a
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change in par value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company or any
Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company or any Significant Subsidiary; the Company shall cause to be
filed with the Trustee and to be mailed to each holder of Notes at his address
appearing on the Note register provided for in Section 2.03 of this Indenture,
as promptly as possible but in any event at least ten days prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
or rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective or occur, and the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
ARTICLE 6
COVENANTS
SECTION 6.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal amount of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal amount, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal amount, premium, if any, and interest then
due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 6.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of
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the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
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, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 6.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes and file with the SEC (unless the SEC will not accept such a filing) (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in Management's Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Company and its Subsidiaries and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the SEC on Form 8-K if the Company were required to
file such reports, in each case within the time periods specified in the SEC's
rules and regulations. The Company shall at all times comply with TIA ss.
314(a).
(b) For so long as any Notes remain outstanding, the Company shall furnish
to the Holders, securities analysts, prospective investors and beneficial owners
of the Notes, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 6.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 105 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
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signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or requirement of notice provided under the Indenture.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 6.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 6 hereof or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
SECTION 6.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 6.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that 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 all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, 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 has
been enacted.
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SECTION 6.07. CORPORATE EXISTENCE.
The Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its corporate existence, and the
corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
SECTION 6.08. USE OF PROCEEDS.
For so long as any note thereunder is outstanding, the Company shall
use the proceeds of the Offering in accordance with the 1998 Indenture, the 1999
Indenture and the 2000 Indenture.
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 7.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on the Notes
(including any Liquidated Damages) and such default continues for a period of 30
days;
(b) the Company defaults in the payment when due of the principal of or
premium, if any, on the Notes when the same becomes due and payable at maturity,
upon any date fixed for redemption or repurchase (including in connection with
any redemption or repurchase) or otherwise;
(c) the Company fails to comply with any of the provisions of Section 5.06
hereof;
(d) the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
60 days after notice to the Company by the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes (including Additional Notes, if
any) then outstanding voting as a single class;
(e) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Significant Subsidiaries and such judgment or judgments remain
undismissed and are not stayed for a period
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(during which execution shall not be effectively stayed) of 60 days, PROVIDED
that the aggregate of all such undischarged judgments exceeds $5 million;
(f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case,
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is not paying its debts as they become due; or
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary; or
(iii) orders the liquidation of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days.
SECTION 7.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 7.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, all principal of and accrued and unpaid interest, if
any, on the Notes shall be due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in clause (f) or (g) of Section 7.01
hereof occurs with respect to the Company, any of its Significant
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Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, all outstanding Notes shall be due and
payable immediately without further action or notice.
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.01 or 3.02
hereof (assuming for purposes of this Section 7.02 that the conditions for
redemption under Section 3.01 have been satisfied), then, upon acceleration of
the Notes, an equivalent premium shall also become and be immediately due and
payable, to the extent permitted by law, anything in this Indenture or in the
Notes to the contrary notwithstanding.
SECTION 7.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 7.04. WAIVER OF DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes (including in connection
with an offer to purchase) (PROVIDED, HOWEVER, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 7.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, or that the Trustee
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determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in personal liability.
SECTION 7.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to a Responsible Officer of the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c)such Holder of a Note or Holders of Notes offer and provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 7.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 7.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 7.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust on behalf of the Holders against the Company for
the whole amount of principal amount of, premium, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
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SECTION 7.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
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 8.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 8.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 7.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 8.07 hereof, including payment of all reasonable compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
reasonable costs and expenses of collection;
SECOND: TO Holders of Notes for amounts due and unpaid on the
Notes for principal amount, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 7.10.
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SECTION 7.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 7.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 8
TRUSTEE
SECTION 8.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; 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. However, 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).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(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
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(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 7.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds except
to the extent required by law.
(g) The rights, privilege, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
SECTION 8.02. RIGHTS OF TRUSTEE.
(a) The Trustee as Trustee and acting in each of its capacities
hereunder may conclusively rely upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee
may consult with counsel of its selection and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
written demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(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 or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
SECTION 8.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgees of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 8.10 and 8.11 hereof.
SECTION 8.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for, nor shall it be liable for,
and makes no representation as to the validity or adequacy of this Indenture or
the Notes; it shall not be accountable for the Company's use of the proceeds
from the Notes or any money paid to the Company or upon the Company's direction
under any provision of this Indenture; it shall not be responsible for, nor
shall it be liable for, the use or application of any money received by any
Paying Agent other than the Trustee; and it shall not be responsible for, nor
shall it be liable for, any statement or recital herein or any statement in the
Notes or any other document in connection with the sale of the Notes or pursuant
to this Indenture other than its certificate of authentication.
SECTION 8.05. NOTICE OF DEFAULTS.
(a) 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 a Responsible Officer of the Trustee at the
Corporate Trust Officer of the Trustee, and such notice references the
Notes and this Indenture.
(b) If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal
of, premium, if any, or interest on any Note, the Trustee may withhold the
notice if and
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so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the
Notes.
SECTION 8.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA ss. 313(a) (but if no event described in
TIA ss. 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 8.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as
Trustee and acting in each of its capacities hereunder as the parties shall
agree in writing from time to time. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture as Trustee and
acting in each of its capacities hereunder, including the costs and expenses of
enforcing this Indenture against the Company (including this Section 8.07) and
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, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 8.07 shall survive
the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section, 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 principal and
interest on particular Notes. Such lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.01(f) or (g) hereof occurs, the expenses and the
compensation for the services (including the reasonable fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
SECTION 8.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 8.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
8.10, such Holder of a Note
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may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes and the Company. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
PROVIDED all sums owing to the Trustee hereunder have been paid and subject to
the lien provided for in Section 8.07 hereof. Notwithstanding replacement of the
Trustee pursuant to this Section 8.08, the Company's obligations under Section
8.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 8.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 8.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 8.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 9
LEGAL DEFEASANCE
SECTION 9.01. OPTION TO EFFECT LEGAL DEFEASANCE .
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
Section 9.02 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 9.
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SECTION 9.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 9.01 hereof of the option
applicable to this Section 9.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 9.03 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire debt represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 9.04 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same upon receipt of an Officer's Certificate and an Opinion
of Counsel in form and substance satisfactory to the Trustee), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 9.03 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Section 6.02 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith and (d) this Article 9.
SECTION 9.03. CONDITIONS TO LEGAL DEFEASANCE.
The following shall be the conditions to the application of Section
9.02 hereof to the outstanding Notes:
In order to exercise Legal Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
on the outstanding Notes on the stated date for payment thereof or on the
applicable Redemption Date, as the case may be;
(b) in the case of an election under Section 9.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date
of this Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
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(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 7.01(f) or
7.01(g) hereof is concerned, at any time in the period ending on the 91st
day after the date of deposit;
(d) such Legal Defeasance shall not result in a breach or violation
of, or constitute a default under, any material agreement or instrument
(other than this Indenture) to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound;
(e) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be subject to reasonable customary exceptions) to the
effect that (assuming that no Holder of any Notes would be considered an
insider of the Company under applicable bankruptcy or insolvency law) after
the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others; and
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance have been
complied with.
SECTION 9.04. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 9.05 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 9.04, the
"Trustee") pursuant to Section 9.03 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal amount, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 9.03 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or
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non-callable Government Securities held by it as provided in Section 9.03 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 9.03(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance.
SECTION 9.05. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal amount of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal amount and premium, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may, but is not required to, at the expense
of the Company cause to be published once, in the New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 9.06. REINSTATEMENT.
If Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 9.02
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 9.02 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 9.02 hereof, as the case may
be; PROVIDED, HOWEVER, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
SECTION 9.07. SURVIVAL.
The Trustee's rights under this Article 9 shall survive termination of
this Indenture.
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ARTICLE 10
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 10.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 10.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes by a successor to the Company pursuant to Section 5.06
hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any such Holder;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(f) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Sections 11.04 and 11.05 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 10.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 10.02, the Company and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes (including the Additional Notes, if any) then outstanding
voting as a single class (including, without limitation, consents obtained in
connection with a redemption or purchase of, or a tender offer or exchange offer
for, Notes), and, subject to Sections 7.04 and 7.07 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the payment of
the principal of, premium, if
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any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including
the Additional Notes, if any) voting as a single class (including, without
limitation, consents obtained in connection with a redemption or purchase of, or
tender offer or exchange offer for, the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Sections 11.04 and 11.05 hereof, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 10.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 7.04 and 7.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes (including the Additional
Notes, if any) then outstanding voting as a single class may waive compliance in
a particular instance by the Company with any provision of this Indenture or the
Notes. However, without the consent of each Holder affected, an amendment or
waiver under this Section 10.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including the
Additional Notes, if any) and a waiver of the payment default that resulted
from such acceleration);
70
<PAGE>
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes;
(g) waive a redemption payment with respect to any Note;
(h) make any change in Section 7.04 or 7.07 hereof or in the foregoing
amendment and waiver provisions.
SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
SECTION 10.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 10.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee, at the direction of the Company, may place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Notes that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 10 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental Indenture,
the Trustee shall be entitled to receive (whether or not such amendment or
supplemental Indenture does or does not affect the rights, duties, liabilities
or immunities of the Trustee) and (subject to Section 8.01 hereof) may rely
conclusively on and shall be fully protected in relying upon an Officer's
Certificate and an Opinion of Counsel stating that the
71
<PAGE>
execution of such amended or supplemental Indenture is authorized or permitted
by this indenture (and otherwise in a form and substance reasonably satisfactory
to the Trustee).
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the others' address
below:
If to the Company:
Covad Communications Group, Inc.
4250 Burton Drive
Santa Clara, California 95054
Telecopier No.: (408) 844-7501
Attention: Chief Financial Officer
With a copy to:
Irell & Manella LLP
Suite 900
1800 Avenue of the Stars
Los Angeles, California 90067-4276
Telecopier No.: (310) 203-7199
Attention: Meredith S. Jackson
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, NY 10036
Telecopier No.: (212) 852-1626
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
72
<PAGE>
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given upon receipt.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in T1A ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 11.04. 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 in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion 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
certificate or opinion are based;
73
<PAGE>
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
SECTION 11.08. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.11. SEVERABILITY.
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.
74
<PAGE>
SECTION 11.12. COUNTERPART 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.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
75
<PAGE>
SIGNATURES
Dated as of September 25, 2000
COVAD COMMUNICATIONS GROUP, INC.
BY: /s/ Dhruv Khanna
----------------------------
Name: Dhruv Khanna
Title: Executive Vice President/
Secretary
Attest:
/s/ Terence Murphy
-------------------------
Name: Terence Murphy
Title: Vice President of Finance/Treasurer
UNITED STATES TRUST COMPANY OF NEW YORK
BY: /s/ Patricia Gallagher
------------------------------
Name: Patricia Gallagher
Title: Assistant Vice President
<PAGE>
EXHIBIT A
(Face of Note)
================================================================================
CUSIP/CINS 222814AN5
6% Convertible Senior Notes due 2005
No. $
---- -----------
COVAD COMMUNICATIONS GROUP, INC.
promises to pay to
--------------------------------------------------------------
or registered assigns,
the principal sum of
---------------------------------------------------
Dollars on September 15, 2005.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
A1-1
<PAGE>
EXHIBIT A
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
COVAD COMMUNICATIONS GROUP, INC.
BY:
------------------------------
Name:
Title:
BY:
------------------------------
Name:
Title:
Dated: September 25, 2000
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
United States Trust Company of New York,
as Trustee
By:
----------------------------
Authorized Signatory
A1-2
<PAGE>
EXHIBIT A
(Back of Note)
6% Convertible Senior Notes due 2005
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ACQUISTION HEREOF, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURTIES ACT;
A1-3
<PAGE>
EXHIBIT A
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEROF, (B) TO A
QUALIFIED INSTUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (D) PURUSANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANFERRED (OTHER THAN A TRANFER PURSUANT TO CLAUSE
2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE (OR THE SUCCESSOR TRUSTEE, AS APPLICABLE). IF
THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF
THE SECURITY EVIDENCED HEREBY.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST; CONVERSION. Covad Communications Group, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 6% per annum. The Company shall pay interest and
Liquidated Damages, if any, semi-annually on March 15 and September 15,
commencing on March 15, 2001, or if any such day is not a Business Day, on
the next succeeding Business Day (each an "Interest Payment Date").
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no
A1-4
<PAGE>
EXHIBIT A
interest has been paid, from the Closing Date; PROVIDED that if there is no
existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED, FURTHER, that the first
Interest Payment Date shall be March 15, 2001. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time
on demand at a rate that is 1% per annum in excess of the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. All references in this
Note and in the Indenture to "interest" shall be deemed to include any
Liquidated Damages that may become payable thereon according to the
provisions of the Indenture.
In accordance with the terms of the Resale Registration Rights
Agreement, dated September 25, 2000, between the Company, Bear Stearns &
Co. Inc., Morgan Stanley & Co. Incorporated, Credit Suisse First Boston
Corporation, Deutsche Bank Securities, Inc. and Goldman, Sachs & Co. (the
"Initial Purchasers"), during the first 90 days following a Registration
Default (as defined in the Resale Registration Rights Agreement), the
Interest Rate borne by the Notes shall be increased by 0.50% on:
(a) March 24, 2001 (the "Effectiveness Target Date"), if the Shelf
Registration Statement is not declared effective by the Notes and Exchange
Commission prior to or on such date;
(b) subject to the exceptions in the Resale Registration Rights
Agreement, the day after the fifth Business Day after the Shelf
Registration Statement, previously declared effective, ceases to be
effective or fails to be usable after the Effectiveness Target Date and
during the period required by the Resale Registration Rights Agreement for
the Shelf Registration Statement to be effective, if a post-effective
amendment (or report filed pursuant to the Exchange Act) that cures the
Shelf Registration Statement is not filed with the Notes and Exchange
Commission during such five Business Day period; or
(c) the day following the 60th or 90th day, as the case may be, of any
period that the prospectus contained in the Shelf Registration Statement
has been suspended, if such suspension has not been terminated.
After the first such 90-day period, the Interest Rate borne by the Notes shall
be increased by 0.25% each 90-day period during the existence and continuance of
such a Registration Default. In no event shall the Interest Rate borne by the
Notes be increased by more than 2.00%.
Any amount of such Liquidated Damages will be payable in cash
semiannually, in arrears, on each Interest Payment Date and will cease to accrue
on the date the Registration
A1-5
<PAGE>
EXHIBIT A
Default is cured. The Holder of this Note is entitled to the benefits of the
Resale Registration Rights Agreement.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on March 1 or September 1 preceding the
Interest Payment Date, even if such Notes are cancelled or converted after
such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted
interest. However, any such Holder which surrenders any such Note for
conversion during the period between the close of business on such record
date and ending with the opening of business on the corresponding Interest
Payment Date shall be required to pay the Company an amount equal to the
interest on the principal amount of such Note so converted, which is
payable by the Company to such Holder on such Interest Payment Date, at the
time such Holder surrenders such Note for conversion. Notwithstanding the
foregoing, any such Holder which surrenders for conversion any Note which
has been called for redemption by the Company in a notice of redemption
given by the Company pursuant to Section 3.04 of the Indenture shall be
entitled to receive (and retain) such interest and need not pay the Company
an amount equal to the interest on the principal amount of such Note so
converted at the time such Holder surrenders such Note for conversion. The
Notes will be payable as to principal, premium and interest at the office
or agency of the Company maintained for such purpose within or without the
City and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set
forth in the register of Holders, and provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, premium on, all Global Notes and all other Notes
the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment 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.
3. PAYING AGENT AND REGISTRAR. Initially, United States Trust Company
of New York, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of September 25, 2000 (the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act
for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are obligations of
the Company limited to $500,000,000 in aggregate principal amount (or
$575,000,000 if the Additional Notes are issued pursuant to Section 2.02 of
the Indenture).
5. CONVERSION RIGHTS. Subject to the provisions of the Indenture, the
holder
A1-6
<PAGE>
EXHIBIT A
hereof has the right, at its option, at any time after the original
issuance of any Notes through the close of business on the Business Day
prior to the date of repurchase, redemption or final maturity date of the
Notes (unless the Company shall default in payment due upon redemption or
repurchase thereof) to convert the principal hereof or any portion of such
principal which is $1,000 or an integral multiple thereof into that number
of shares of the Company's Common Stock, as said shares shall be
constituted at the date of conversion, obtained by dividing the principal
amount of this Note or portion thereof to be converted by the Conversion
Price of $17.775 (the "Conversion Price") (as such Conversion Price may be
adjusted from time to time as provided in the Indenture), upon surrender of
this Note, together with a conversion notice as provided in the Indenture,
to the Company at the office or agency of the Company maintained for that
purpose in accordance with the terms of the Indenture, or at the option of
such holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed
by, or accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder or by his duly authorized attorney. In
order to exercise the conversion privilege with respect to any beneficial
interest in a Note in global form, the holder of such beneficial interest
must complete the appropriate instruction form for conversion pursuant to
the Depository's book-entry conversion program, deliver by book-entry
delivery a beneficial interest in such Note in global form, furnish
appropriate endorsements and transfer documents if required by the Company
or the Trustee or conversion agent, and otherwise comply with the
requirements set forth in the Indenture. No adjustment in respect of
interest or dividends will be made upon any conversion; provided, however,
that if this Note shall be surrendered for conversion during the period
from the close of business on any record date for the payment of interest
to the close of business on the Business Day preceding the interest payment
date, this Note (unless it or the portion being converted shall have been
called for redemption or repurchase during the period from the close of
business on any record date for the payment of interest to the close of
business on the Business Day preceding the interest payment date) must be
accompanied by an amount, in same day funds or other funds acceptable to
the Company, equal to the interest payable on such interest payment date on
the principal amount being converted. No fractional shares will be issued
upon any conversion, but either an adjustment in cash will be made, as
provided in the Indenture, in respect of any fraction of a share which
would otherwise be issuable upon the surrender of any Note or Notes for
conversion or the number of shares shall be rounded up to full shares. A
Note in respect of which a holder is exercising its right to require
repurchase upon a Triggering Change of Control may be converted only if
such holder withdraws its election to exercise such right in accordance
with the terms of the Indenture.
6. OPTIONAL REDEMPTION.
(a) (i) The Company may redeem this Note at any time prior to
September 18, 2003 in whole at any time or in part from time to time at the
Provisional Redemption Price, if:
(A) the Shelf Registration Statement covering resales of
this Note and the Common Stock issuable upon conversion of this
Note is effective and
A1-7
<PAGE>
EXHIBIT A
available for use and is expected to remain effective and
available for use for the 30 days following the Redemption Date;
and
(B) the Current Market Value of the Common Stock equals or
exceeds 150% of the Conversion Price then in effect for at least
20 Trading Days in any consecutive 30-day trading period ending
on the Trading Day prior to the date the notice of the redemption
is mailed.
(ii) On the Redemption Date, the Company shall also pay the
Make-Whole Amount on this Note if called for redemption pursuant to
Section 3.01(a) of the Indenture, whether or not converted into Common
Stock after the date the notice of the provisional redemption is
mailed and prior to the Redemption Date.
(b) This Note may be redeemed in whole or in part, upon not less than
20 nor more than 60 days' notice, at any time on or after September 18,
2003, at the option of the Company, at the redemption price (expressed as
percentages of the principal amount of the Notes being redeemed) (such
price, the "Optional Redemption Price") set forth below if redeemed during
the corresponding period set forth below:
<TABLE>
<CAPTION>
Redemption Price
------------------
<S> <C>
September 18, 2003 to September 14, 2004...................... 101.50%
On or after September 15, 2004................................ 100.00%
</TABLE>
(c) The Company shall pay any interest on the Notes called for
redemption accrued but not paid to the Redemption Date, pursuant to the
terms of the Indenture.
Notes in original denominations larger than $1,000 may be redeemed in
part. 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 to be the portion
selected for redemption (provided, however, that the Holder of such Note so
converted and deemed redeemed shall not be entitled to any additional interest
payment as a result of such deemed redemption than such Holder would have
otherwise been entitled to receive upon conversion of such Note). Notes which
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
On and after the Redemption Date, interest ceases to accrue on Notes
or portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
Notice of redemption will be given by the Company to the Holders as
provided in the Indenture.
A1-8
<PAGE>
EXHIBIT A
7. REPURCHASE RIGHT UPON A TRIGGERING CHANGE OF CONTROL.
If a Triggering Change in Control occurs, the Holder of Notes, at the
Holder's option, shall have the right, subject to the conditions and in
accordance with the provisions of the Indenture, to require the Company to
repurchase the Notes (or any portion of the principal amount hereof that is at
least $1,000 or an integral multiple thereof, PROVIDED that the portion of the
principal amount of this Note to be outstanding after such repurchase is at
least equal to $1,000) at the Repurchase Price in cash, plus any interest
accrued and unpaid to the Repurchase Date.
A Company Notice will be given by the Company to the Holders as
provided in the Indenture.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by law or permitted by the Indenture. The Company need
not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note will be
treated as its owner for all purposes.
10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the then
outstanding Notes (and Additional Notes, if any) voting as a single class,
and any existing default or compliance with any provision of the Indenture
or the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (and Additional Notes, if
any) voting as a single class. Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of the Notes in case of
a merger or consolidation or sale of all or substantially all of the
Company's assets, to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely
affect the legal rights under the Indenture of any such Holder, to comply
with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to provide
for the Issuance of Additional Notes in accordance with the limitations set
forth in the Indenture.
11. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in
A1-9
<PAGE>
EXHIBIT A
the payment when due of interest on the Notes (including, for the avoidance
of doubt, any Liquidated Damages); (ii) default in payment when due of
principal of or premium, if any, on the Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an offer
to purchase) or otherwise; (iii) failure by the Company to comply with
Section 5.06 of the Indenture; (iv) failure by the Company for 30 days
after notice to the Company by the Trustee or the Holders of at least 25%
in principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class to comply with certain other
agreements in the Indenture or the Notes; (v) certain final judgments for
the payment of money that remain undischarged for a period of 60 days; or
(vi) certain events of bankruptcy or insolvency with respect to the Company
or any of its Significant Subsidiaries. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be due
and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes will become due and payable without further action or
notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default
and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the
Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver
to the Trustee a statement specifying such Default or Event of Default.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
13. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
14. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
15. 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
A1-10
<PAGE>
EXHIBIT A
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
16. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of September 25, 2000, between the
Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
18. GOVERNING LAW. This Note shall be governed by, and construed in
accordance with, the law of the State of New York.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Covad Communications Group, Inc.
4250 Burton Drive
Santa Clara, California 95054
Attention: Chief Financial Officer
A1-11
<PAGE>
EXHIBIT A
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 I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:
----------------
Your Signature:
---------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
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.
A1-12
<PAGE>
EXHIBIT A
CONVERSION NOTICE
TO: COVAD COMMUNICATIONS GROUP, INC.
4250 Burton Drive
Santa Clara, California 95054
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any
Notes representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto. To the extent provided in
the Indenture, any amount required to be paid to the undersigned on account of
interest (including, for the avoidance of doubt, Liquidated Damages, if any),
accompanies this Note.
Dated: Your Name:
--------------- -------------------------------------------
(Print your name exactly as it appears on the face of
this Note)
Your Signature:
--------------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee*:
--------------------------------
Social Note or other Taxpayer Identification
Number:
----------------------------------
Principal amount to be converted (if less than all):$
-------------------
---------------------
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-13
<PAGE>
EXHIBIT A
Fill in for registration of shares (if to be issued) and Notes (if to be
delivered) other than to and in the name of the registered holder:
------------------------------------------------------
(Name)
------------------------------------------------------
(Street Address)
------------------------------------------------------
(City, State and Zip Code)
A1-14
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE OF REPURCHASE RIGHT
TO: COVAD COMMUNICATIONS GROUP, INC.
4250 Burton Drive
Santa Clara, California 95054
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Covad Communications Group, Inc. (the
"Company") as to the occurrence of a Triggering Change of Control with respect
to the Company and requests and instructs the Company to repay the entire
principal amount of this Note, or the portion thereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, in accordance with the
terms of the Indenture referred to in this Note, together with interest and
Liquidated Damages, if any, accrued and unpaid to, but excluding, such date, to
the registered holder hereof.
Dated: Your Name:
--------------- -------------------------------------------
(Print your name exactly as it appears on the face of
this Note)
Your Signature:
--------------------------------------
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee*:
--------------------------------
Social Note or other Taxpayer
Identification Number:
-------------------------------
Principal amount to be converted (if less than all): $
---------------------
*Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-15
<PAGE>
EXHIBIT A
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
---------- ---------------- ---------------- --------------- -------------
Principal Signature of
Amount of Amount of Amount of this authorized
decrease in increase in Global Note officer of
Principal Principal Amount following such Trustee or
Date of Amount of of this Global decrease (or Note
Exchange this Global Note Note increase) Custodian
---------- ---------------- ---------------- --------------- -------------
A1-16
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Covad Communications Group, Inc.
4250 Burton Drive
Santa Clara, California 95054
Attention: General Counsel
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 6% Convertible Senior Notes due 2005 of
COVAD COMMUNICATIONS GROUP, INC.
Reference is hereby made to the Indenture, dated as of September 25,
2000 (the "INDENTURE"), between Covad Communications Group, Inc., as issuer (the
"COMPANY"), and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
, (the "TRANSFEROR") owns and proposes to transfer the
--------------
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $ in such Note[s] or interests (the "TRANSFER"), to
--------
(the "TRANSFEREE"), as further specified in Annex A hereto. In
----------
connection with the Transfer, the Transferor hereby certifies that:
1. DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE
NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the beneficial interest or Definitive Note is being transferred
to a Person that the Transferor reasonably believed and believes is purchasing
the beneficial interest or Definitive Note for its own account, or for one or
more accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
B-17
<PAGE>
2. //CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A DEFINITIVE NOTE
PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) //such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) //such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) //such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus
delivery requirements of the Securities Act;
3. RULE 144. (i) The Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
-----------------------------------
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
Dated:
-------------------
B-18
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
CHECK ONE OF (a) OR (b)
(a) //a beneficial interest in the 144A Global Note (CUSIP 222814AN5), or
(b) //a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
(c) //a beneficial interest in the (i) ?144A Global Note (CUSIP 222814AN5),
or
(ii) //Unrestricted Global Note (CUSIP 222814AN5); or
(d) //a Restricted Definitive Note; or
(e) //an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
CHECK ONE
B-19
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Covad Communications Group, Inc.
4250 Burton Drive
Santa Clara, California 95054
Attention: General Counsel
United States Trust Company of New York
114 West 47th Street
25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 6% Convertible Senior Notes due 2005 of
COVAD COMMUNICATIONS GROUP, INC.
(CUSIP 222814AN5))
Reference is hereby made to the Indenture, dated as of September 25,
2000 (the "INDENTURE"), between Covad Communications Group, Inc., as issuer (the
"COMPANY"), and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
(the "OWNER") owns and proposes to exchange the
---------------
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$ in such Note[s] or interests (the "EXCHANGE"). In connection with the
---------
Exchange, the Owner hereby certifies that:
3. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(f) //CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note for
a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "SECURITIES Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
C-1
<PAGE>
(g) //CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(h) //CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(i) //CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED
DEFINITIVE NOTE. In connection with the Owner's Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
4. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES
(j) //CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL
NOTE TO RESTRICTED DEFINITIVE Note. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(k) //CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL
INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the
Owner's
C-2
<PAGE>
Restricted Definitive Note for a beneficial interest in the 144A Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
C-3
<PAGE>
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
-----------------------------------
[Insert Name of Owner]
By:
--------------------------------
Name:
Title:
Dated:
-------------------
C-4
