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eToys Inc.,
ISSUER
TO
U.S. Bank Trust National Association,
a national banking association
TRUSTEE
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INDENTURE
Dated as of December 6, 1999
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Up to U.S. $200,000,000
6.25% CONVERTIBLE SUBORDINATED NOTES DUE DECEMBER 1, 2004
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INDENTURE, dated as of December 6, 1999, between eToys
Inc., a corporation duly organized and existing under the laws of the State
of Delaware, having its principal office at 3100 Ocean Park Boulevard, Suite
300, Santa Monica, California 90405 (herein called the "Company"), and U.S.
Bank Trust National Association, a national banking association, as Trustee
hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 6.25% Convertible Subordinated Notes due December 1, 2004 (herein called
the "Securities"), of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture.
All things necessary to make the Securities, when the
Securities are executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their
and its terms, have been done. Further, all things necessary to duly
authorize the issuance of the Common Stock of the Company issuable upon
the conversion of the Securities, and to duly reserve for issuance the
number of shares of Common Stock issuable upon such conversion, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase
of the Securities by the Holders thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly; and
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has
the meaning specified in SECTION 1.4.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the
Depositary.
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"Applicable Procedures" means, with respect to any transfer
or transaction involving a Global Security or beneficial interest therein,
the rules and procedures of the Depositary for such Security, to the extent
applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized pursuant
to SECTION 6.12 to act on behalf of the Trustee to authenticate Securities.
"Average Sales Price Per Share" means, with respect to the
Common Stock of the Company, for any day, (i) the average of the high and low
sales price per share regular way on a national securities exchange or, (ii)
if the Common Stock is not listed on a national securities exchange, the
average of the high and low sales price per share regular way on The Nasdaq
National Market, or (iii) if the Common Stock is not quoted on The Nasdaq
National Market or listed or admitted to trading on any national securities
exchange, the average of the high and low sales prices in the
over-the-counter market as furnished by any New York Stock Exchange member
firm selected from time to time by the Company for that purpose.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a resolution duly adopted by the
Board of Directors, a copy of which, certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such
certification, shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, Place of Conversion or any other place, as the case may be, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in such Place of Payment, Place of Conversion or
other place, as the case may be, are authorized or obligated by law or
executive order to close; PROVIDED, HOWEVER, that a day on which banking
institutions in New York, New York are authorized or obligated by law or
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executive order to close shall not be a Business Day for purposes of SECTION
10.6 or SECTION 11.5.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the
date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $500 million and a Thompson Bank
Watch Rating of "B" or better, (iii) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any financial institution meeting the
qualifications specified in clause (ii) above, (iv) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Ratings Services and in each case maturing within six months after
the date of acquisition and (v) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i)-(iv)
of this definition.
"Change in Control" has the meaning specified in
SECTION 13.4(b).
"Code" has the meaning specified in SECTION 2.1.
"Commission" means the United States Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Stock" means the shares of the class designated as
common stock of the Company at the date of
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this Indenture or as such stock may be reconstituted from time to time.
Subject to the provisions of SECTION 11.11, shares issuable on conversion or
repurchase of Securities shall include only shares of Common Stock or shares
of any class or classes of common stock resulting from any reclassification
or reclassifications thereof; PROVIDED, HOWEVER, that if at any time there
shall be more than one such resulting class, the shares so issuable on
conversion of Securities shall include shares of all such classes, and the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Notice" has the meaning specified in SECTION 13.3(a).
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by its Chairman or Uncle
of the Board, its Vice Chairman of the Board, its Chief Executive Officer,
its President or a Vice President, and by its principal financial officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Constituent Person" has the meaning specified in
SECTION 11.11.
"Conversion Agent" means any Person authorized by the
Company to convert Securities in accordance with ARTICLE ELEVEN. The Company
has initially appointed the Trustee as its Conversion Agent.
"Conversion Price" has the meaning specified in SECTION
13.4(c).
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"Conversion Rate" has the meaning specified in SECTION 11.1.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be
principally administered (which at the date of this Indenture is located at
180 East Fifth Street, Suite 200, St. Paul, Minnesota 55101, Attn: Corporate
Trust).
"Corporation" means a corporation, company, association,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in
SECTION 3.7.
"Depositary" means, with respect to any Registered
Securities, a clearing agency that is registered as such under the Exchange
Act and is designated by the Company to act as Depositary for such Registered
Securities (or any successor securities clearing agency so registered).
"Designated Senior Debt" means any particular Senior Debt
in which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is
a party) expressly provides that such indebtedness shall be "Designated
Senior Debt" for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the right
of such Senior Debt to exercise the rights of Designated Senior Debt).
"Dollar" or "U.S.$" means a dollar or other equivalent unit
in such coin or currency of the United States as at the time shall be legal
tender for the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York
corporation.
"Event of Default" has the meaning specified in SECTION 5.1.
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"Exchange Act" means the United States Securities Exchange
Act of 1934 (or any successor statute), as amended from time to time.
"Global Security" means a Registered Security that is
registered in the Security Register in the name of a Depositary or a nominee
thereof.
"Holder" means the Person in whose name the Security is
registered in the Security Register.
"Indenture" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any
such supplemental indenture, the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively.
"Initial Purchasers" means Goldman, Sachs & Co., Merrill
Lynch Pierce, Fenner & Smith Incorporated, BancBoston Robertson Stephens,
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Liquidated Damages" has the meaning specified in the
Registration Rights Agreement.
"Maturity", when used with respect to any Security, means
the date on which the principal of such Security becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption, exercise of the repurchase right set
forth in ARTICLE THIRTEEN or otherwise.
"Non-electing Share" has the meaning specified in
SECTION 11.11.
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"Notice of Default" has the meaning specified in SECTION 5.1.
"Officers' Certificate" means a certificate signed by the
Chairman or Uncle of the Board, a Vice Chairman of the Board, the Chief
Executive Officer, the President or a Vice President and by the principal
financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel,
who may be counsel for or employed by the Company and who shall be acceptable
to the Trustee.
"Outstanding", when used with respect to Securities, means,
as of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which
money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company)
in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the
Holders of such Securities, PROVIDED that if such Securities
are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to SECTION
3.6 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof
satisfactory to it that such Securities are
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held by a bona fide purchaser in whose hands such Securities
are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of
Holders of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities
owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such determination as to the presence
of a quorum or upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not
the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor.
"Paying Agent" means any Person authorized by the Company
to pay the principal of or interest on any Securities on behalf of the
Company and, except as otherwise specifically set forth herein, such term
shall include the Company if it shall act as its own Paying Agent. The
Company has initially appointed the Trustee as its Paying Agent.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, trust, estate, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in
SECTION 3.1.
"Place of Payment" has the meaning specified in SECTION 3.1.
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"Predecessor Security" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under SECTION 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated as
of December 1, 1999, between the Company and the Initial Purchasers, as such
agreement may be amended from time to time.
"Record Date" means any Regular Record Date or Special
Record Date.
"Record Date Period" means the period from the close of
business of any Regular Record Date next preceding any Interest Payment Date
to the opening of business on such Interest Payment Date.
"Redemption Date" when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security
to be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Registered Securities" has the meaning specified in
SECTION 2.1.
"Registrable Securities" has the meaning specified in the
Registration Rights Agreement.
"Registration Default" has the meaning specified in the
Registration Rights Agreement.
"Registration Rights Agreement" has the meaning specified
in SECTION 2.2.
"Regular Record Date" for interest payable in respect of
any Registered Security on any Interest Payment
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Date means the fifteenth day of May or the fifteenth day of November (whether
or not a Business Day), as the case may be, next preceding such Interest
Payment Date.
"Representative" means (a) the indenture trustee or other
trustee, agent or representative for any Designated Senior Debt, or (b) with
respect to Designated Senior Debt that does not have any such trustee, agent
or other representative, (i) in the case of such Designated Senior Debt
issued pursuant to an agreement providing for voting arrangements as among
the holders or owners of such Designated Senior Debt, any holder or owner of
such Designated Senior Debt acting with the consent of the required Persons
necessary to bind such holders or owners of such Designated Senior Debt and
(ii) in the case of all other such Designated Senior Debt, the holder or
owner of such Designated Senior Debt.
"Repurchase Date" has the meaning specified in SECTION 13.1.
"Repurchase Price" has the meaning specified in SECTION 13.1.
"Responsible Officer", when used with respect to the
Trustee, means any officer within the Corporate Trust Office of the Trustee,
including, without limitation, any vice president, assistant vice president,
assistant treasurer, corporate trust officer or other employee 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 and familiarity with the particular subject.
"Restricted Global Security" has the meaning specified in
SECTION 2.1.
"Restricted Securities Legend" means, collectively, the
legends substantially in the forms of the legends required in the form of
Security set forth in SECTION 2.2 to be placed upon each Security.
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"Rule 144A" means Rule 144A under the Securities Act (or
any successor provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in
SECTION 9.9.
"Securities" has the meaning ascribed to it in the first
paragraph under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of
1933 (or any successor statute), as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend.
"Security Register" and "Security Registrar" have the
respective meanings specified in SECTION 3.5.
"Senior Debt" means the principal of (and premium, if any)
and interest (including all interest accruing subsequent to the commencement
of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such proceeding) on,
and all fees and other amounts payable in connection with, the following,
whether absolute or contingent, secured or unsecured, due or to become due,
outstanding on the date of this Indenture or thereafter created, incurred or
assumed: (a) all indebtedness of the Company evidenced by credit or loan
agreements, notes, bonds, debentures, or other similar instruments, (b) all
obligations of the Company for money borrowed, (c) all obligations of the
Company as lessee under leases required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, (d) all
obligations of the Company under interest rate and currency swaps, caps,
floors, collars, hedge agreements, forward contracts, or similar agreements
or arrangements including, without limitation, agreements and arrangements
intended to protect the Company against fluctuations in interest or currency
exchange rates or commodity prices, (e) all obligations of the Company with
respect to letters of
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credit, bank guarantees, bankers' acceptances and similar facilities issued
for the account of the Company and all reimbursement obligations of the
Company with respect to the foregoing, (f) all obligations of the Company
issued or assumed as the deferred purchase price of any business, property,
assets (including intangibles) or services (but excluding trade accounts
payable and accrued liabilities that constitute liabilities arising in the
ordinary course of business), (g) all obligations of the Company of the type
referred to in clauses (a) through (f) above of another Person and all
dividends of another Person, the payment of which, in either case, the
Company has assumed or guaranteed, or for which the Company is responsible or
liable, directly or indirectly, jointly or severally, as obligor, guarantor
or otherwise, or which is secured by a lien on property of the Company, and
(h) renewals, extensions, modifications, replacements, restatements and
refundings of, or any indebtedness or obligation issued in exchange for, any
such indebtedness or obligation described in clauses (a) through (g) of this
paragraph; PROVIDED, HOWEVER, that Senior Debt shall not include the
Securities or any such indebtedness or obligation if the terms of such
indebtedness or obligation (or the terms of the instrument under which, or
pursuant to which it is issued) expressly provides that such indebtedness or
obligation is not superior in right of payment to the Securities; PROVIDED,
FURTHER, that Senior Debt shall not include trade payables and any
indebtedness or obligation owed by the Company to any direct or indirect
Subsidiary.
"Shelf Registration Statement" has the meaning specified in
SECTION 2.2.
"Significant Subsidiary" means any Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such regulation is in
effect on the date hereof.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Company pursuant to SECTION 3.7.
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"Stated Maturity", when used with respect to any Security
or any installment of interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock or other similar interests in the corporation which ordinarily
has or have voting power for the election of directors, or Persons performing
similar functions, whether at all times or only so long as no senior class of
stock or other interests has or have such voting power by reason of any
contingency.
"Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt as
that evidenced by, such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under SECTION 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security.
"Trading Days" means (i) if the Common Stock is listed or
admitted for trading on any national securities exchange, days on which such
national securities exchange is open for business; (ii) if the Common Stock
is quoted on The Nasdaq National Market or any other system of automated
dissemination of quotations of securities prices, days on which trades may be
effected through such system; or (iii) if the Common Stock is not listed or
admitted for trading on any national securities exchange or quoted on The
Nasdaq National Market or any other system of automated dissemination of
quotation of securities prices, days on which the Common Stock is traded
regular way in the over-the-counter market and for which a closing bid and a
closing asked price for the Common Stock are available.
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"Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction (its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands).
"Vice President", when used with respect to the Company,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and, if required by the Trust
Indenture Act, an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (including
certificates provided for in SECTION 9.8) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO THE TRUSTEE.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the
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matters upon which such certificate or opinion is based are erroneous. Any
such certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company or any other Person stating that the
information with respect to such factual matters is in the possession of the
Company or such other Person, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 1.4 ACTS OF HOLDERS OF SECURITIES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders of Securities may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent or proxy duly appointed in writing by such Holders.
Such action shall become effective when such instrument or instruments record
is delivered to the Trustee and, where it is hereby expressly required, to
the Company. The Trustee shall promptly deliver to the Company copies of all
such instruments delivered to the Trustee. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders of Securities signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject
to SECTION 6.1) conclusive in favor of the Trustee and the Company if made in
the manner provided in this SECTION 1.4.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by
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the affidavit of a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The principal amount and serial number of any
Registered Security held by any Person, and the date of his holding the same,
shall be proved by the Security Register.
(d) The fact and date of execution of any such instrument
or writing and the authority of the Person executing the same may also be
proved in any other manner which the Trustee deems sufficient; and the
Trustee may in any instance require further proof with respect to any of the
matters referred to in this SECTION 1.4.
(e) The Company may set any day as the record date for the
purpose of determining the Holders entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action, or
to vote on any action, authorized or permitted by this Indenture to be given
or taken by Holders. Promptly and in any case not later than ten days after
setting a record date, the Company shall notify the Trustee and the Holders
of such record date. If not set by the Company prior to the first solicitation
of a Holder made by any Person in respect of any such action, or, in the case
of any such vote, prior to such vote, the record date for any such action or
vote shall be the thirtieth day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to SECTION 14.1) prior to such
first solicitation or vote, as the case may be. With regard to any record date,
the Holders on such date (or their duly appointed agents or proxies), and only
such Persons, shall be entitled to give or take, or vote on, the relevant
action, whether or not such Holders remain Holders after such record date.
Notwithstanding the foregoing, the Company shall not set a record date for, and
the provisions of this
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paragraph shall not apply with respect to, any notice, declaration or
direction referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of (i) any
notice of default or breach referred to in SECTION 5.1(4), if such default or
breach has occurred and is continuing and the Trustee shall not have given
such a notice to the Company, (ii) any declaration of acceleration referred
to in SECTION 5.2, if an Event of Default has occurred and is continuing and
the Trustee shall not have given such a declaration to the Company, or (iii)
any direction referred to in SECTION 5.12, if the Trustee shall not have
taken the action specified in such direction, then, with respect to clauses
(ii) and (iii), a record date shall automatically and without any action by
the Company or the Trustee be set for determining the Holders entitled to
join in such declaration or direction, which record date shall be the close
of business on the tenth day (or, if such day is not a Business Day, the
first Business Day thereafter) following the day on which the Trustee receives
such declaration or direction, and, with respect to clause (i), the Trustee
may set any day as a record date for the purpose of determining the Holders
entitled to join in such notice of default. Promptly after such receipt by the
Trustee of any such declaration or direction referred to in clause (ii) or
(iii), and promptly after setting any record date with respect to clause (i),
and as soon as practicable thereafter, the Trustee shall notify the Company
and the Holders of any such record date so fixed. The Holders on such record
date (or their duly appointed agents or proxies), and only such Persons, shall
be entitled to join in such notice, declaration or direction, whether or not
such Holders remain Holders after such record date; PROVIDED that, unless such
notice, declaration or direction shall have become effective by virtue of
Holders of the requisite principal amount of Securities on such record date
(or their duly appointed agents or proxies) having joined therein on or prior
to the ninetieth day after such record date, such notice, declaration or
direction shall automatically and without any action by any Person be
cancelled and of no further effect. Nothing in this paragraph shall be
construed to prevent a Holder (or a duly appointed agent or proxy thereof)
from giving, before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the
expiration of such period, identical to, the notice, declaration or direction
to which such record date relates, in which event a new record date in respect
thereof shall be set pursuant to this paragraph. In addition, nothing in this
paragraph shall be construed to render ineffective any notice,
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declaration or direction contrary to or different from, or, after the
expiration of such period, identical to, the notice, declaration or direction
to which such record date relates, in which event a new record date in respect
thereof shall be set pursuant to this paragraph. In addition, nothing in this
paragraph shall be construed to render ineffective any notice, declaration or
direction of the type referred to in this paragraph given at any time to the
Trustee and the Company by Holders (or their duly appointed agents or proxies)
of the requisite principal amount of Securities on the date such notice,
declaration or direction is so given.
(f) Except as provided in SECTIONS 5.12 and 5.13, any
request, demand, authorization, direction, notice, consent, election, waiver
or other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of Holders of Securities or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder of Securities or by the Company
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee and received at
its Corporate Trust Office, Attention: Corporate Trust Department, and
shall be deemed given when received.
(2) the Company by the Trustee or by any Holder of Securities
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing, mailed, first-class postage
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prepaid, or telecopied and confirmed by mail, first-class postage
prepaid, or delivered by hand or overnight courier, addressed to the
Company at 3100 Ocean Park Blvd., Suite 300, Santa Monica, California
90405, Attention: Chief Financial Officer (telecopy no.: (310)
664-8101), or at any other address previously furnished in writing to
the Trustee by the Company, and shall be deemed given when received.
Any request, demand, authorization, direction, notice,
consent, election or waiver required or permitted under this Indenture shall
be in the English language, except that any published notice may be in an
official language of the country of publication.
SECTION 1.6 NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this
Indenture provides for notice to Holders of Securities of any event, such
notice shall be sufficiently given to Holders if in writing and mailed,
first-class postage prepaid, to each Holder of a Security affected by such
event, at the address of such Holder as it appears in the Security Register,
not earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.
Neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder of a Registered Security shall
affect the sufficiency of such notice with respect to other Holders of
Registered Securities. In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification to Holders of Registered Securities
as shall be made with the approval of the Trustee, which approval shall not be
unreasonably withheld or delayed, shall constitute a sufficient notification to
such Holders for every purpose hereunder.
Such notice shall be deemed to have been given when such
notice is mailed.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person
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entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
of Securities shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In addition, all notices or communications addressed to
Holders of Securities shall be given by release made to Reuters Economic
Services and Bloomberg Business News. The foregoing notwithstanding, such
notices and communications given to Holders of Securities pursuant to the
Registration Rights Agreement do not have to be released to Reuters Economics
Services or Bloomberg Business News.
SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 1.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the
Company and by the Trustee shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.9 SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1.10 BENEFITS OF INDENTURE.
Except as provided in the next sentence, nothing in this
Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors and assigns hereunder and
the Holders of Securities, any benefit or legal or equitable right, remedy or
claim under this Indenture. The provisions of ARTICLE
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TWELVE are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt.
SECTION 1.11 GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 1.12 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption
Date, Repurchase Date or Stated Maturity of any Security or the last day on
which a Holder of a Security has a right to convert his Security shall not be
a Business Day at a Place of Payment or Place of Conversion, as the case may
be, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of principal of, premium, if any, or interest on, or the
payment of the Repurchase Price (whether the same is payable in cash or in
shares of Common Stock) with respect to, or delivery for conversion of, such
Security need not be made at such Place of Payment or Place of Conversion, as
the case may be, on or by such day, but may be made on or by the next
succeeding Business Day at such Place of Payment or Place of Conversion, as
the case may be, with the same force and effect as if made on the Interest
Payment Date, Redemption Date or Repurchase Date, or at the Stated Maturity
or by such last day for conversion; PROVIDED, HOWEVER, that in the case that
payment is made on such succeeding Business Day, no interest shall accrue on
the amount so payable for the period from and after such Interest Payment
Date, Redemption Date, Repurchase Date, Stated Maturity or last day for
conversion, as the case may be.
SECTION 1.13 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with
a provision of the Trust Indenture Act that is required under such act to be
a part of and govern this Indenture, the latter provision shall control. If
any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act that may be so
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<PAGE>
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be. Until such
time as this Indenture shall be qualified under the Trust Indenture Act, this
Indenture, the Company and the Trustee shall be deemed for all purposes hereof
to be subject to and governed by the Trust Indenture Act to the same extent as
would be the case if this Indenture were so qualified on the date
hereof.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1 FORM GENERALLY.
The Securities shall be in substantially the form set forth
in this Article, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may be required to comply with the rules of
any securities exchange or the Internal Revenue Code of 1986, as amended, and
regulations thereunder (the "Code"), or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. All Securities shall be issued in registered form, as
opposed to bearer form, and shall sometimes be referred to as "Registered
Securities".
The Trustee's certificates of authentication shall be in
substantially the form set forth in SECTION 2.3.
Conversion notices shall be in substantially the form set
forth in SECTION 2.4.
Repurchase notices shall be substantially in the form set
forth in SECTION 2.2.
The Securities shall be printed, lithographed, typewritten
or engraved or produced by any combination of
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these methods on steel engraved borders if so required by any securities
exchange upon which the Securities may be listed, or may be produced in any
other manner permitted by the rules of any such securities exchange, or, if
the Securities are not listed on a securities exchange, in any other manner
approved by the Company, all as determined by the officers executing such
Securities, as evidenced by their execution thereof.
Upon their original issuance, Securities shall be issued in
the form of one or more Global Securities without interest coupons and shall
be registered in the name of DTC, as Depositary, or its nominee and deposited
with the Trustee, as custodian for DTC, for credit by DTC to the respective
accounts of beneficial owners of the Securities represented thereby (or such
other accounts as they may direct). Such Global Security, together with its
Successor Securities which are Global Securities, are collectively herein
called the "Restricted Global Security".
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<PAGE>
SECTION 2.2 FORM OF SECURITY.
[FORM OF FACE]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY
OTHER THAN ANY RESTRICTED GLOBAL SECURITY:
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION
OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A) (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT THAT PRIOR TO SUCH TRANSFER PROVIDES TO
THE TRUSTEE FOR THE NOTES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTES (THE
FORM OF THE LETTER CAN BE OBTAINED FROM THE TRUSTEE OF THE NOTES) AND, IF
SUCH TRANSFER IS FOR LESS THAN AN AGGREGATE PRINCIPAL AMOUNT OF $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO ETOYS INC. (THE "COMPANY"), IF REQUESTED BY
THE COMPANY, THAT THE TRANSFER IS EXEMPT FROM REGISTRATION, (4) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, (IF AVAILABLE) (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (5) PURSUANT
TO AN
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EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS.
THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS
CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF
THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
NOTE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY
SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED GLOBAL
SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY AND ANY
COMMON STOCK ISSUABLE UPON THE CONVERSION OF THE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
BENEFICIAL INTEREST IN THE SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF
SUCH BENEFICIAL INTEREST IN THE SECURITIES MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE
SECURITIES EVIDENCED BY THIS GLOBAL SECURITY (INCLUDING ANY PARTICIPANT IN
THE DEPOSITARY HOLDING THE GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN
INTEREST ON THE RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT
HOLDS THROUGH ANY SUCH PARTICIPANT) AGREES FOR THE BENEFIT OF ETOYS INC. (THE
"COMPANY") THAT (A) ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY SHARES
OF COMMON STOCK ISSUABLE UPON THEIR CONVERSION MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
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INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (III) TO AN INSTITUTIONAL
INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT THAT PRIOR TO SUCH
TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE NOTES (THE FORM OF THE LETTER CAN BE OBTAINED FROM THE
TRUSTEE OF THE NOTES) AND, IF SUCH TRANSFER IS FOR LESS THAN AN AGGREGATE
PRINCIPAL AMOUNT OF $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO ETOYS INC.
(THE "COMPANY"), IF REQUESTED BY THE COMPANY, THAT THE TRANSFER IS EXEMPT
FROM REGISTRATION, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT, (IF AVAILABLE) (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS
OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS AND THAT (B) THE
BENEFICIAL OWNER WILL, AND EACH SUBSEQUENT BENEFICIAL OWNER OF AN INTEREST IN
ANY OF THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY OR ANY COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF IS REQUIRED TO, NOTIFY ANY PURCHASER OF ANY
BENEFICIAL INTEREST IN THE SECURITIES OR SUCH COMMON STOCK ISSUABLE UPON ITS
CONVERSION FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS
CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS
SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER AND BENEFICIAL
OWNERS OF AN INTEREST IN THIS SECURITY AND ANY SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND THE
BENEFICIAL INTERESTS THEREIN AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.]
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[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE
COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS
SECURITY FOR ALL PURPOSES.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY FOR
WHICH THE DEPOSITORY TRUST COMPANY IS TO BE THE DEPOSITARY:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
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<PAGE>
eToys Inc.
6.25% CONVERTIBLE SUBORDINATED NOTES
DUE DECEMBER 1, 2004
No. _____________ U.S.$_____
CUSIP No._______
eToys Inc., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _____________ United States Dollars
(U.S.$ _____) [IF THIS SECURITY IS A GLOBAL SECURITY, THEN INSERT -- (which
principal amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all
other Outstanding Securities, shall not exceed $150,000,000 in the aggregate
at any time, unless the Initial Purchasers exercise their over-allotment
rights, in which case the principal amount of the Outstanding Securities shall
not exceed U.S. $200,000,000) by adjustments made on the records of the Trustee
hereinafter referred to in accordance with the Indenture)] on December 1, 2004,
and to pay interest thereon, from December 6, 1999, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or
duly provided for, semi-annually in arrears on June 1 and December 1 in each
year (each, an "Interest Payment Date"), commencing June 1, 2000, at the rate
of 6.25% per annum, until the principal hereof is due, and at the rate then in
effect on any overdue principal and premium, if any, and, to the extent
permitted by law, on any overdue interest. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the May 15 and
November 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Except as otherwise provided in the
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Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall be given to Holders of Registered Securities
not less than ten days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. Payments of principal shall be made upon the surrender of this
Security at the option of the Holder at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company as may be designated
by it for such purpose in the Borough of Manhattan, The City of New York, in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, or at such
other offices or agencies as the Company may designate, by United States Dollar
check drawn on, or wire transfer to, a United States Dollar account (such a
wire transfer to be made only to a Holder of an aggregate principal amount of
Registered Securities in excess of U.S.$2,000,000, and only if such Holder
shall have furnished wire instructions in writing to the Trustee no later than
fifteen days prior to the relevant payment date) maintained by the payee with
a bank in the Borough of Manhattan, The City of New York. Payment of interest
on this Security may be made by United States Dollar check drawn on a bank in
the Borough of Manhattan, The City of New York mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register,
or, upon written application by the Holder to the Security Registrar setting
forth wire instructions not later than the relevant Record Date, by wire
transfer to a United States Dollar account (such a wire transfer to be made
only to a Holder of an aggregate principal amount of Registered Securities in
excess of U.S.$2,000,000 and only if such Holder shall have furnished wire
instructions in writing to the Trustee no later than 15 days prior to the
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relevant payment date) maintained by the payee with a bank in the Borough of
Manhattan, The City of New York.
Except as specifically provided herein and in the Indenture,
the Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof or an
Authenticating Agent by the manual signature
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of one of their respective authorized signatories, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this Security to
be duly executed under its corporate seal.
eToys Inc.
[Corporate Seal]
By:
-----------------------------------
Name:
Title:
Attest:
-----------------------------------
Name:
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[FORM OF REVERSE]
This Security is one of a duly authorized issue of
securities of the Company designated as its "6.25% Convertible Subordinated
Notes due December 1, 2004" (herein called the "Securities"), limited in
aggregate principal amount to U.S.$150,000,000(U.S.$200,000,000 if the
over-allotment is fully exercised), issued and to be issued under an
Indenture, dated as of December 6, 1999 (herein called the "Indenture"),
between the Company and U.S. Bank Trust National Association, a national
banking association, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, the holders of Senior Debt and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. As provided in the Indenture and
subject to certain limitations therein set forth, Registered Securities are
exchangeable for a like aggregate principal amount of Registered Securities
of any authorized denominations as requested by the Holder surrendering the
same upon surrender of the Registered Security or Registered Securities to be
exchanged, at the Corporate Trust Office of the Trustee. The Trustee upon
such surrender by the Holder will issue the new Registered Securities in the
requested denominations.
No sinking fund is provided for the Securities.
The Securities are subject to redemption at the option of
the Company at any time on or after December 1, 2002, in whole or in part,
upon not less than 30 nor more than 60 days' notice to the Holders prior to
the Redemption Date at the following Redemption Prices (expressed as
percentages of the principal amount) for the twelve-month period beginning on
December 1 of the following years:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2002 ................ 102.500%
2003 ................ 101.250%
</TABLE>
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and, if applicable, at a Redemption Price equal to 100% of the principal amount
on and after December 1, 2004, together, in each case, with accrued interest to
the Redemption Date; PROVIDED, HOWEVER, that interest installments on
Securities whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
In the event of a redemption of the Securities, the Company
will not be required (a) to register the transfer or exchange of Registered
Securities for a period of 15 days immediately preceding the date notice is
given identifying the serial numbers of the Securities called for such
redemption (it being understood that the Company will not be required to
identify the serial numbers of Outstanding Securities if all such Securities
are called for redemption) or (b) to register the transfer or exchange of any
Registered Security, or portion thereof, called for redemption.
Notice to the Holders will be given not less than 30 nor
more than 60 days prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the
principal of, premium, if any, Liquidated Damages, if any, or interest on any
Security or the last day on which a Holder of a Security has a right to convert
his Security shall be, at any Place of Payment or Place of Conversion, as the
case may be, a day on which banking institutions at such Place of Payment or
Place of Conversion are authorized or obligated by law or executive order to
close, then payment of principal, premium, if any, Liquidated Damages, if any,
or interest or delivery for conversion of such Security need not be made on or
by such date at such place but may be made on or by the next succeeding day at
such place which is not a day on which banking institutions are authorized or
obligated by law or executive order to close, with the same force and effect as
if made on the date for such payment or the date fixed for redemption or
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repurchase, or by such last day for conversion, and no interest shall accrue
on the amount so payable for the period from and after such due date.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled, at his option, at any
time following the original issue date of the Securities and on or before the
close of business on December 1, 2004, or in case this Security or a portion
hereof is called for redemption or the Holder hereof has exercised his right
to require the Company to repurchase this Security or such portion hereof,
then in respect of this Security until and including, but (unless the Company
defaults in making the payment due upon redemption or repurchase, as the case
may be) not after, the close of business on the Business Day immediately
preceding the Redemption Date or the Repurchase Date, as the case may be, to
convert this Security (or any portion of the principal amount hereof that is
an integral multiple of U.S.$1,000, PROVIDED that the unconverted portion of
such principal amount is U.S.$1,000 or any integral multiple of U.S.$1,000 in
excess thereof) into fully paid and nonassessable shares of Common Stock of
the Company at an initial Conversion Rate of 13.5323 (or at the current
adjusted Conversion Rate if an adjustment has been made as provided in the
Indenture) by surrender of this Security, duly endorsed or assigned to the
Company or in blank and, in case such surrender shall be made during the
period from the close of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date (except if this Security has been called for redemption on a Redemption
Date or is repurchasable on a Repurchase Date, with the consequence that the
conversion right of such Security would terminate between such Regular Record
Date and the close of business on such Interest Payment Date), also accompanied
by payment in New York Clearing House or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Security then being converted, and also the conversion
notice hereon duly executed, to the Company at the Corporate Trust Office of
the Trustee, or at such other office or agency of the Company, subject to any
laws or regulations applicable thereto and subject to the
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right of the Company to terminate the appointment of any Conversion Agent (as
defined below) as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, or at such other offices or agencies as the
Company may designate (each a "Conversion Agent"), PROVIDED, FURTHER, that in
case surrender of this Security for conversion shall be made during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
and if this Security or portion hereof has been called for redemption on a
Redemption Date or is repurchasable on a Repurchase Date, with the consequence
that the conversion right of such Security would terminate between such Regular
Record Date and the close of business on such Interest Payment Date, then the
Holder of this Security will be entitled to receive the interest accruing
hereon from the Interest Payment Date next preceding the date of such
conversion to such succeeding Interest Payment Date and shall not be required
to pay such interest upon surrender of this Security for conversion. Subject to
the provisions of the preceding sentence and, in the case of a conversion after
the close of business on the Regular Record Date next preceding any Interest
Payment Date and on or before the close of business on such Interest Payment
Date, to the right of the Holder of this Security (or any Predecessor Security
of record as of such Regular Record Date) to receive the related installment of
interest to the extent and under the circumstances provided in the Indenture,
no cash payment or adjustment is to be made on conversion for interest accrued
hereon from the Interest Payment Date next preceding the day of conversion, or
for dividends on the Common Stock issued on conversion hereof. The Company
shall thereafter deliver to the Holder the fixed number of shares of Common
Stock (together with any cash adjustment, as provided in the Indenture) into
which this Security is convertible and such delivery will be deemed to satisfy
the Company's obligation to pay the principal amount of this Security. No
fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest (calculated to the
nearest 1/100th of a share) the Company shall pay a cash adjustment as provided
in the Indenture. The Conversion Rate is subject to adjustment as provided in
the Indenture. In addition, the
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Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the conveyance, transfer, sale or lease of all or
substantially all of the property and assets of the Company, the Indenture
shall be amended, without the consent of any Holders of Securities, so that
this Security, if then Outstanding, will be convertible thereafter, during
the period this Security shall be convertible as specified above, only into
the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, transfer, sale or lease by a holder
of the number of shares of Common Stock of the Company into which this Security
could have been converted immediately prior to such consolidation, merger,
conveyance, transfer, sale or lease (assuming such holder of Common Stock is
not a Constituent Person, failed to exercise any rights of election and
received per share the kind and amount received per share by a plurality of
Non-electing Shares). No adjustment in the Conversion Rate will be made until
such adjustment would require an increase or decrease of at least one percent
of such rate, PROVIDED that any adjustment that would otherwise be made will
be carried forward and taken into account in the computation of any subsequent
adjustment.
Subject to certain limitations in the Indenture, at any time
when the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Security or the holder of shares of Common Stock issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder of Securities or such holder of
shares of Common Stock issued upon conversion of Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by
such Holder or holder with Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).
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The Holder of this Security [if this Security is a Global
Security, then insert--(including any Person that has a beneficial interest
in this Security)] and the Common Stock issuable upon conversion hereof is
entitled to the benefits of a Registration Rights Agreement, dated as of
December 6, 1999 (the "Registration Rights Agreement"), executed by the
Company. Pursuant to the Registration Rights Agreement, the Company has agreed
for the benefit of the Holders from time to time of Registered Securities and
the Common Stock issuable upon conversion thereof, in each case, that are
Registrable Securities, at the Company's expense, (a) to file on or before 90
days after the first date of original issuance of the Securities, a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Registrable Securities, (b) thereafter to use
its reasonable efforts to cause such Shelf Registration Statement to be
declared effective by the Commission on or before 180 days after the first date
of original issuance of the Securities, and (c) to use its reasonable efforts
to maintain such Shelf Registration Statement continuously effective under the
Securities Act until a period of the two years from the date of the
effectiveness of the Shelf Registration Statement or, if earlier, until there
are no outstanding Registrable Securities registered under the Shelf
Registration Statement. The Company is required to pay Liquidated Damages to
holders of Registrable Securities for failure to comply with the foregoing
registration obligations, all as more fully set forth in the Registration
Rights Agreement.
Whenever in this Security there is a reference, in any
context, to the payment of the principal of, premium, if any, or interest on,
or in respect of, any Security such mention shall be deemed to include mention
of the payment of Liquidated Damages payable as described in the Registration
Rights Agreement to the extent that, in such context, Liquidated Damages are,
were or would be payable in respect of this Security pursuant to the
Registration Rights Agreement, and an express mention of the payment of
Liquidated Damages (if applicable) in any provisions of this Security shall
not be construed as excluding Liquidated Damages in those provisions of this
Security where such express mention is not made.
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If the Holder of this Security [IF THIS SECURITY IS A GLOBAL
SECURITY, THEN INSERT-- (including any Person that has a beneficial interest in
this Security)] elects to sell this Security pursuant to the Shelf Registration
Statement then, by its acceptance hereof, such Holder of this Security agrees to
be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities which are the subject of such election.
If a Change in Control occurs, the Holder of this Security, at
the Holder's option, shall have the right, in accordance with the provisions of
the Indenture, to require the Company to repurchase this Security (or any
portion of the principal amount hereof that is equal to U.S.$1,000 or any
greater integral multiple of U.S.$1,000) for cash at a Repurchase Price equal to
100% of the principal amount thereof plus interest accrued to the Repurchase
Date. At the option of the Company, the Repurchase Price may be paid in cash or,
subject to the conditions provided in the Indenture, by delivery of shares of
Common Stock having a fair market value equal to the Repurchase Price. For
purposes of this paragraph, the fair market value of shares of Common Stock
shall be determined by the Company and shall be equal to 95% of the average of
the Average Sales Price Per Share for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the
Repurchase Date. Whenever in this Security there is a reference, in any context,
to the principal of any Security as of any time, such reference shall be deemed
to include reference to the Repurchase Price payable in respect of such Security
to the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Security shall not be construed as excluding the Repurchase Price so payable in
those provisions of this Security when such express mention is not made;
PROVIDED, HOWEVER, that, for the purposes of the paragraph below concerning the
consequences of an Event of Default, such reference shall be deemed to include
reference to the Repurchase Price only to the extent the Repurchase Price is
payable in cash.
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[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH REGISTERED
SECURITY THAT IS NOT A GLOBAL SECURITY:
In the event of redemption, repurchase or conversion of this
Security in part only, a new Registered Security or Registered Securities for
the unredeemed, unrepurchased or unconverted portion hereof will be issued in
the name of the Holder hereof.]
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH GLOBAL SECURITY:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the Applicable Procedures.]
The indebtedness evidenced by this Security is, to the extent
and in the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full in cash or Cash Equivalents of all Senior
Debt of the Company, and this Security is issued subject to such provisions of
the Indenture with respect thereto. Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the
principal of all the Securities, together with accrued interest to the date of
declaration, may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable, together with accrued interest to the date of
declaration, and (ii) of interest on any overdue principal and, to the extent
permitted by applicable law, overdue interest, all of the Company's obligations
in respect of the payment of the
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principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the written
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium, if any, Liquidated Damages, if any, or
interest hereon on or after the respective due dates expressed herein or for the
enforcement of the right to convert this Security as provided in the Indenture.
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No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, Liquidated Damages, if any, and interest on this Security at the times,
places and rate, and in the coin or currency, herein prescribed or to convert
this Security as provided in the Indenture.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Registered Securities is
registrable on the Security Register upon surrender of a Registered Security for
registration of transfer at the Corporate Trust Office of the Trustee or at such
other office or agency of the Company as may be designated by it for such
purpose in the Borough of Manhattan, The City of New York, or at such other
offices or agencies as the Company may designate, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing, and thereupon one or more new Registered
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees by the
Registrar. No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to recover
any tax or other governmental charge payable in connection therewith.
Prior to due presentation of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Registered Security is
registered as the owner thereof for all purposes, whether or not such Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
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THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF
AMERICA, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to SECTION 13.1 of the Indenture, the undersigned
hereby elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company
to pay it or __________________ an amount in cash equal to 100% of the principal
amount to be repurchased (as set forth below), plus interest accrued to the
Repurchase Date, or, at the Company's election, Common Stock, valued as set
forth in the Indenture.
Dated: ____________________________
____________________________
Signature
____________________________
Signature Guaranteed
Principal amount to be repurchased (must be equal to U.S. $1,000 or any greater
integral multiple of U.S.$1,000):
Remaining principal amount following such repurchase:
__________________________
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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SECTION 2.3 FORM OF CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in
substantially the following form:
Dated: [Date of Authentication]
This is one of the Securities referred to in the
within-mentioned Indenture.
______________________ _______________
as Trustee
By: _____________________________________
Authorized Signatory
SECTION 2.4 FORM OF CONVERSION NOTICE.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably
exercises the option to convert this Security, or any portion of the principal
amount hereof (which is an integral multiple of U.S.$1,000) below designated,
into shares of Common Stock in accordance with the terms of the Indenture
referred to in this Security, and directs that such shares, together with a
check in payment for any fractional share and any Securities representing any
unconverted principal amount hereof, be delivered to and be registered in the
name of the undersigned unless a different name has been indicated below. If
shares of Common Stock or Securities are to be registered in the name of a
Person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the undersigned
on account of interest accompanies this Security.
Dated: ___________________ _________________________
Signature
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If shares or Registered Securities are to be If only a portion of the Securities
is to be registered in the name of a Person other than the Holder, please print
such Person's name and address:
_________________________________
Name
_________________________________
Address
_________________________________
Social Security or other Taxpayer
Identification Number, if any
If only a portion of the Securities is to be converted, please indicate:
1. Principal amount to be converted:
U.S. $_______ (any integral multiple of U.S. $1,000)
2. Principal amount and denomination
of Registered Securities representing
unconverted principal amount to be issued:
Amount: U.S. $ ___________
Denominations:
U.S. $______
(any integral multiple of U.S. $1,000)
___________________________ [Signature Guaranteed]
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ARTICLE THREE
THE SECURITIES
SECTION 3.1 TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to
U.S.$150,000,000(U.S.$200,000,000 if the over-allotment is fully exercised),
except for Securities authenticated and delivered in exchange for, or in lieu
of, other Securities pursuant to SECTION 3.4, 3.5, 3.6, 8.5, 10.8, 11.2 or
13.3(e).
The Securities shall be known and designated as the "6.25%
Convertible Subordinated Notes due December 1, 2004" of the Company. Their
Stated Maturity shall be December 1, 2004 and they shall bear interest on their
principal amount from December 6, 1999, payable semi-annually in arrears on June
1 and December 1 in each year, commencing June 15, 2000, at the rate of 6.25%
per annum until the principal thereof is due and at the rate then in effect on
any overdue principal and, to the extent permitted by law, on any overdue
interest; PROVIDED, HOWEVER, that payments shall only be made on Business Days
as provided in SECTION 1.12.
The principal of, premium, if any, and interest on the
Securities shall be payable as provided in the form of Securities set forth in
SECTION 2.2, and the Repurchase Price, whether payable in cash or in shares of
Common Stock, shall be payable at such places as are identified in the Company
Notice given pursuant to SECTION 13.3 (any city in which any Paying Agent is
located being herein called a "Place of Payment").
The Registrable Securities are entitled to the benefits of a
Registration Rights Agreement as provided by SECTIONS 2.2 and 9.11. The
Securities are entitled to the payment of Liquidated Damages as provided in the
Registration Rights Agreement.
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The Securities shall be redeemable at the option of the
Company, as provided in ARTICLE TEN and in the form of Securities set forth in
SECTION 2.2.
The Securities shall be convertible as provided in ARTICLE
ELEVEN (any city in which any Conversion Agent is located being herein called a
"Place of Conversion").
The Securities shall be subordinated in right of payment to
Senior Debt of the Company as provided in ARTICLE TWELVE.
The Securities shall be subject to repurchase by the Company
at the option of the Holders as provided in ARTICLE THIRTEEN.
SECTION 3.2 DENOMINATIONS.
The Securities shall be issuable only in registered form,
without coupons, in denominations of U.S.$1,000 and integral multiples thereof.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by
its Chairman or Uncle of the Board, its Vice Chairman of the Board, its Chief
Executive Officer, its President, one of its Vice Presidents, its Chief
Financial Officer, its Treasurer or its Controller under a facsimile of its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may
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deliver Securities executed by the Company to the Trustee or to its order for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Securities as
in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.
SECTION 3.4 GLOBAL SECURITIES; NON-GLOBAL SECURITIES.
(A) GLOBAL SECURITIES
(a) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do
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so or (ii) there shall have occurred and be continuing an Event of Default
with respect to such Global Security.
(c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation, as provided in this ARTICLE THREE. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in SECTION 3.5, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this ARTICLE THREE, or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
cancelled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to SECTION 3.5(c) and as
otherwise provided in this ARTICLE THREE, authenticate and make available for
delivery any Securities issuable in exchange for such Global Security (or any
portion thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this ARTICLE THREE if such order, direction or request is given
or made in accordance with the Applicable Procedures.
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(d) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this ARTICLE THREE or otherwise,
shall be authenticated and delivered in the form of, and shall be, a registered
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof, in
which case such Registered Security shall be authenticated and delivered in
definitive, fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under the Indenture and the Registered Securities, and owners of beneficial
interests in a Global Security shall hold such interests pursuant to the
Applicable Procedures. Accordingly, any such owner's beneficial interest in a
Global Security will be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee or
its Agent Members and such owners of beneficial interests in a Global Security
will not be considered the owners or holders thereof.
(B) NON-GLOBAL SECURITIES
Pending the preparation of definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Registered Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Registered
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
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Securities at any office or agency of the Company designated pursuant to
SECTION 9.2, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities the Company shall execute and the
Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE;
RESTRICTIONS ON TRANSFER.
(a) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to SECTION 9.2
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and of transfers of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers and exchanges of
Registered Securities as herein provided.
Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated pursuant to SECTION 9.2 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, and subject to the other
provisions of this SECTION 3.5, Securities may be exchanged for other Securities
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, and subject to the
other
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provisions of this SECTION 3.5, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, the Securities which the
Holder making the exchange is entitled to receive. Every Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Company or the Security Registrar) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and subject to the other provisions of this SECTION 3.5, entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
No service charge shall be made for any registration of
transfer or exchange of Securities except as provided in SECTION 3.6, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to SECTION
3.4, 8.5, 10.8, 11.2 or 13.3(e) (other than where the shares of Common Stock are
to be issued or delivered in a name other than that of the Holder of the
Security) not involving any transfer and other than any stamp and other duties,
if any, which may be imposed in connection with any such transfer or exchange by
the United States or any political subdivision thereof or therein, which shall
be paid by the Company.
In the event of a redemption of the Securities, the Company
will not be required (a) to register the transfer of or exchange Securities for
a period of 15 days immediately preceding the date notice is given identifying
the serial numbers of the Securities called for such redemption or (b) to
register the transfer of or exchange any Security, or portion thereof, called
for redemption.
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(b) SECURITIES ACT LEGENDS. All Securities shall bear the
applicable Restricted Securities Legend subject to the following:
(i) subject to the following clauses of this SECTION
3.5(b), a Security or any portion thereof which is exchanged, upon
transfer or otherwise, for a Global Security or any portion thereof
shall bear the Securities Act Legend borne by such Global Security
while represented thereby;
(ii) subject to the following clauses of this SECTION
3.5(b), a new Security which is not a Global Security and is issued in
exchange for another Security (including a Global Security) or any
portion thereof, upon transfer or otherwise, shall bear the Securities
Act Legend borne by such other Security;
(iii) any Securities which are sold or otherwise disposed
of pursuant to an effective registration statement under the Securities
Act (including the Shelf Registration Statement), together with their
Successor Securities shall not bear a Securities Act Legend; the
Company shall inform the Trustee in writing of the effective date of
any such registration statement registering the Securities under the
Securities Act and shall notify the Trustee at any time when
prospectuses may not be delivered with respect to Securities to be sold
pursuant to such registration statement. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith
in accordance with the aforementioned registration statement;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Security which does not bear a Securities Act Legend may be
issued in exchange for or in lieu of a Security (other than
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a Global Security) or any portion thereof which bears such a legend
if the Trustee has received an Unrestricted Securities Certificate,
satisfactory to the Trustee and duly executed by the Holder of such
legended Security or his attorney duly authorized in writing, and after
such date and receipt of such certificate, the Trustee shall
authenticate and make available for delivery such a new Security in
exchange for or in lieu of such other Security as provided in this
ARTICLE THREE;
(v) a new Security which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Security (other
than a Global Security) or any portion thereof which bears such a
legend if, in the Company's judgment, placing such a legend upon such
new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and make available for
delivery such a new Security as provided in this ARTICLE THREE; and
(vi) notwithstanding the foregoing provisions of this
SECTION 3.5(b), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and make available for delivery a new Security
bearing a Restricted Securities Legend in exchange for such Successor
Security as provided in this ARTICLE THREE.
(c) Neither the Trustee, the Paying Agent nor any of their
agents shall (1) have any duty to monitor compliance with or with respect to any
federal or state or other securities or tax laws or (2) have any duty to obtain
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documentation on any transfers or exchanges other than as specifically
required hereunder.
SECTION 3.6 MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee:
(1) evidence to their satisfaction of the destruction, loss
or theft of any Security, and
(2) such security or indemnity as may be satisfactory to the
Company and the Trustee to save each of them and any agent of either of
them harmless,
then, in the absence of actual notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and the Trustee shall authenticate and make available for delivery, in lieu of
any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion,
but subject to any conversion rights, may, instead of issuing a new Security,
pay such Security, upon satisfaction of the conditions set forth in the
preceding paragraph.
Upon the issuance of any new Security under this SECTION 3.6,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto (other than
any stamp and other duties, if any, which may be imposed in connection therewith
by the United States or any political
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subdivision thereof or therein, which shall be paid by the Company) and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this SECTION 3.6 in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and such new Security shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this SECTION 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies of any Holder with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such
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Defaulted Interest, which shall be fixed in the following manner.
Number, if any The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security, the
date of the proposed payment and the Special Record Date, and at
the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. The Special Record Date for the payment
of such Defaulted Interest shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at such
Holder's address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall not longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
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Subject to the foregoing provisions of this SECTION 3.7 and
SECTION 3.5, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Interest on any Security which is converted in accordance with
SECTION 11.2 during a Record Date Period shall be payable in accordance with the
provisions of SECTION 11.2.
SECTION 3.8 PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of, premium, if
any, and (subject to SECTION 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.9 CANCELLATION.
All Securities surrendered for payment, redemption,
repurchase, registration of transfer or exchange or conversion shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Securities so delivered to the Trustee shall be canceled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this SECTION 3.9. The Trustee shall dispose
of all canceled Securities in accordance with applicable law and its customary
practices in effect from time to time.
SECTION 3.10 COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
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SECTION 3.11 CUSIP NUMBERS.
The Company in issuing Securities may use "CUSIP" numbers (if
then generally in use) in addition to serial numbers; the Trustee shall use such
CUSIP numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers
either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Securities, and any such redemption
or repurchase shall not be affected by any defect in or omission of such CUSIP
numbers. The Company shall promptly notify the Trustee in writing of any change
in any such CUSIP number.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of conversion, or registration
of transfer or exchange, or replacement of Securities herein expressly provided
for and any right to receive Liquidated Damages as provided in the form of
Securities set forth in SECTION 2.2 and the Company's obligations to the Trustee
pursuant to SECTION 6.7), and the Trustee, at the expense of the Company, shall
execute proper instruments in form and substance satisfactory to the Trustee
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
SECTION 3.6 and (ii) Securities for whose payment money has
theretofore been
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deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged
from such trust, as provided in SECTION 9.3) have
been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee or its agent for cancellation (other than Securities
referred to in clauses (i) and (ii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of clause (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds (immediately available to the Holders
in the case of clause (i) above) an amount sufficient to pay
and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal, premium, if any, interest and Liquidated Damages,
if any, to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
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Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under SECTION 6.7, the
obligations of the Company to any Authenticating Agent under SECTION 6.12, the
obligation of the Company to pay Liquidated Damages, if money shall have been
deposited with the Trustee pursuant to clause (1)(B) of this SECTION 4.1, the
obligations of the Trustee under SECTION 4.2 and the last paragraph of SECTION
9.3 and the obligations of the Company and the Trustee under SECTION 3.5 and
ARTICLE ELEVEN shall survive. Funds held in trust pursuant to this SECTION 4.1
are not subject to the provisions of ARTICLE TWELVE.
SECTION 4.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of SECTION
9.3, all money deposited with the Trustee pursuant to SECTION 4.1 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Persons entitled
thereto, of the principal, premium, if any, Liquidated Damages, if any, and
interest for whose payment such money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to SECTION 4.1
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of ARTICLE TWELVE or be voluntary or
invol-
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untary or be effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative
or governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Security at its Maturity, whether or not the such payment
is prohibited by the subordination provisions of this Indenture; or
(2) default in the payment of any interest or Liquidated
Damages upon any Security when it becomes due and payable, and
continuance of such default for a period of 30 days, whether or not the
such payment is prohibited by the subordination provisions of this
Indenture; or
(3) failure by the Company to give the Company Notice in
accordance with SECTION 13.3; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or breach of which is
specifically dealt with elsewhere in this SECTION 5.1), and continuance
of such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(5) a default in the payment when due of the principal of any
indebtedness under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Subsidiary or
under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness
for money borrowed by the Company or any Subsidiary with a principal
amount then outstanding in excess of U.S. $25,000,000, whether such
indebtedness now exists or
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shall hereafter be created, if the indebtedness is not discharged,
or if such indebtedness has been accelerated, such acceleration is not
rescinded or annulled, within a period of 30 days after there shall
have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities a written
notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default"
hereunder; or
(6) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any
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applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or similar relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or any Significant Subsidiary
or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in SECTION 5.1(6) or 5.1(7)) occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Securities to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in SECTION 5.1(6) or 5.1(7) occurs, the principal of,
and accrued interest on, all the Securities shall IPSO FACTO become immediately
due and payable without any declaration or other Act of the Holder or any act on
the part of the Trustee.
At any time after such declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this ARTICLE FIVE provided, the
Holders of a majority in principal amount of the Outstanding Securities, by
written notice to the Company
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and the Trustee, may rescind and annul such declaration and its consequences
if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest and Liquidated Damages, if any,
on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate borne by the Securities,
(C) to the extent permitted by applicable law, interest
upon overdue interest at the rate then in effect, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel;
and
(2) all Events of Default, other than the nonpayment of the
principal of, and any premium and interest on, Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in SECTION 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest or
Liquidated Damages on any Security when it
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becomes due and payable and such default continues for a period of
30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will upon demand of the Trustee pay to it, for the benefit of the
Holders of such Securities the whole amount then due and payable on such
Securities for principal, premium, if any, Liquidated Damages, if any, and
interest on any overdue principal, premium, if any, Liquidated Damages, if any,
and, to the extent permitted by applicable law, on any overdue interest at the
rate then in effect, and in addition thereto, such further amount as shall be
sufficient to cover the reasonable costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders of Securities by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
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SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or the
creditors of either, the Trustee (irrespective of whether the principal of, and
any interest on, the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(1) to file and prove a claim for the whole amount of
principal, premium, if any, Liquidated Damages, if any, and interest
owing and unpaid in respect of the Securities and take such other
actions, including participating as a member, voting or otherwise, of
any official committee of creditors appointed in such matter, and to
file such other papers or documents, in each of the foregoing cases, 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 its counsel)
and of the Holders of Securities allowed in such judicial proceeding,
and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities 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 of Securities to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the
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Trustee, its agents and its counsel and any other amounts due the Trustee
under SECTION 6.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
of a Security any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder of a
Security in any such proceeding; PROVIDED, HOWEVER, that the Trustee may, on
behalf of such Holders, vote for the election of a trustee in bankruptcy or
similar official.
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, be for the ratable benefit of the Holders of the
Securities in respect of which judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED.
Subject to ARTICLE TWELVE, any money collected by the
Trustee pursuant to this ARTICLE FIVE shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal, premium, if any, or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
SECTION 6.7;
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SECOND: To the payment of the amounts then due and unpaid for
principal of, premium, if any, Liquidated Damages, if any, or interest
on, the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities
for principal, premium, if any, Liquidated Damages, if any, and
interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7 LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request; and
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
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other of such Holders, or to obtain or seek to obtain priority or preference
over any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all such Holders.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of, premium, if any,
Liquidated Damages, if any, and (subject to SECTION 3.7) interest on such
Security on the respective Stated Maturities expressed in such Security (or,
in the case of redemption or repurchase, on the Redemption Date or Repurchase
Date, as the case may be), and to convert such Security in accordance with
ARTICLE ELEVEN, and to institute suit for the enforcement of any such payment
and right to convert, and such rights shall not be impaired without the
consent of such Holder.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Security has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders of Securities shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and such Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in
the last paragraph of SECTION 3.6, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders of Securities is intended to be
exclusive of any other right or remedy, and every right and
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remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Event of Default or any acquiescence therein. Every right and remedy given by
this ARTICLE FIVE or by law to the Trustee or to the Holders of Securities
may be exercised from time to time, and as often as may be deemed expedient,
by the Trustee or (subject to the limitations contained in this Indenture) by
the Holders of Securities as the case may be.
SECTION 5.12 CONTROL BY HOLDERS OF SECURITIES.
The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
The Holders, either (a) through the written consent of not
less than a majority in principal amount of the Outstanding Securities, or
(b) by the adoption of a resolution, at a meeting of Holders of the
Outstanding Securities at which a quorum is present, by the Holders of at
least a majority in principal amount of the Outstanding
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Securities represented at such meeting, may on behalf of the Holders of all
the Securities waive any past default hereunder and its consequences, except
a default (1) in the payment of the principal of, premium, if any or interest
on any Security, or (2) in respect of a covenant or provision hereof which
under ARTICLE EIGHT cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this SECTION 5.14
shall not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Securities, or to any suit instituted by any Holder of any Security for the
enforcement of the payment of the principal of, premium, if any, Liquidated
Damages, if any, or interest on any Security on or after the respective
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption or repurchase, on or after the Redemption Date or Repurchase Date,
as the case may be) or for the enforcement of the right to convert any
Security in accordance with ARTICLE ELEVEN.
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SECTION 5.15 WAIVER OF STAY, USURY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, usury or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede by reason of such law the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they
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conform to the requirements of this Indenture, but not to verify the
contents thereof.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, EXCEPT that
(1) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this SECTION 6.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the
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conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this SECTION 6.1.
SECTION 6.2 NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any default
hereunder as to which the Trustee has actually received written notice, the
Trustee shall give to all Holders of Securities, in the manner provided in
SECTION 1.6, notice of such default, unless such default shall have been
cured or waived; PROVIDED, HOWEVER, that, except in the case of a default in
the payment of the principal of, premium, if any, or interest on any Security
the Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders; and
PROVIDED, FURTHER, that in the case of any default of the character specified
in SECTION 5.1(4), no such notice to Holders of Securities shall be given
until at least 60 days after the occurrence thereof. For the purpose of this
SECTION 6.2, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default.
SECTION 6.3 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of SECTION 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of
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the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) 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 in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) 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 of Securities pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document, but the Trustee may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney; and
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any
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misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities (except
the Trustee's certificates of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture, of the Securities or of the Common Stock
issuable upon the conversion of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 6.5 MAY HOLD SECURITIES, ACT AS TRUSTEE UNDER OTHER INDENTURES.
The Trustee, any Authenticating Agent, any Paying Agent,
any Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent,
Conversion Agent or such other agent.
The Trustee may become and act as trustee under other
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.
SECTION 6.6 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
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SECTION 6.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any and all
loss, damage, claim, liability or expense, including taxes (other than
taxes based on the income of the Trustee), incurred without negligence,
bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this trust,
including the reasonable costs, expenses and reasonable attorneys' fees
of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in SECTION 5.1(6) or SECTION
5.1(7) with respect to the Company, the expenses (including the reasonable
charges of its counsel) and the compensation for the services are intended to
constitute expenses of the administration under
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any applicable Federal or State bankruptcy, insolvency or other similar law.
The Trustee shall have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this SECTION 6.7, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
The provisions of this SECTION 6.7 shall survive the
termination of this Indenture or the earlier resignation or removal of the
Trustee.
SECTION 6.8 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall
be a Person that is eligible pursuant to the Trust Indenture Act to act as
such, having a combined capital and surplus (or for such purposes, the combined
capital and surplus of any parent holding company) of at least U.S.
$25,000,000, subject to supervision or examination by Federal or State
authority, in good standing and having an established place of business in the
Borough of Manhattan, The City of New York. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
SECTION 6.8, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this SECTION 6.8, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article and a successor shall be appointed pursuant to SECTION 6.9.
SECTION 6.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of
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appointment by the successor Trustee in accordance with the applicable
requirements of SECTION 6.10.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee or the Company may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and the Company. If the instrument of acceptance by a
successor Trustee required by SECTION 6.10 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of removal, the removed
Trustee or the Company may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under SECTION 6.8
and shall fail to resign after written request therefor by the Company
or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, (i) in any such case the Company may remove the Trustee, or (ii) in the
case of d(1) above only and subject to SECTION 5.14, any Holder of a Security
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the
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removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company shall promptly appoint a successor Trustee and shall
comply with the applicable requirements of this SECTION 6.9 and SECTION 6.10.
If, within one year after such resignation, removal or incapability, or
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of SECTION 6.10, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders of Securities and accepted appointment in the manner required by this
SECTION 6.9 and SECTION 6.10, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The successor Trustee shall give notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee to all Holders of Securities in the manner provided in SECTION 1.6.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office.
SECTION 6.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee. Such retiring
Trustee shall, upon payment of its charges, promptly execute and deliver an
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instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be eligible under this
Article.
SECTION 6.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, PROVIDED such corporation shall be otherwise eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 6.12 AUTHENTICATING AGENTS.
The Trustee may, with the consent of the Company, appoint an
Authenticating Agent or Agents acceptable to the Company with respect to the
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon exchange or substitution pursuant to this
Indenture.
Securities authenticated by an Authenticating Agent shall be
entitled to the benefits of this Indenture
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and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder, and every reference in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be subject to acceptance by the Company and shall at
all times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent and subject to
supervision or examination by government or other fiscal authority. If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this SECTION 6.12, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this SECTION 6.12.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, PROVIDED such corporation shall be
otherwise eligible under this SECTION 6.12, without the execution or filing of
any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this SECTION 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall
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become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this SECTION 6.12.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this SECTION 6.12.
If an Authenticating Agent is appointed with respect to the
Securities pursuant to this SECTION 6.12, the Securities may have endorsed
thereon, in addition to or in lieu of the Trustee's certification of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities referred to in the
within-mentioned Indenture.
______________________________,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By ___________________________
Authorized Signature
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SECTION 6.13 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 7.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any
other Person or convey, transfer or lease all its properties and assets
substantially as an entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the
Company is merged, or the Person which acquires by conveyance or
transfer, or which leases the properties and assets of the Company
substantially as an entirety, shall be a corporation, limited liability
company, partnership or trust, shall be organized and validly existing
under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee,
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the due and punctual payment of the principal of, premium, if any,
Liquidated Damages, if any, and interest on all of the Securities as
applicable, and the performance or observance of every covenant of
this Indenture on the part of the Company to be performed or observed
and shall have provided for conversion rights in accordance with
ARTICLE ELEVEN;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event that after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with, together with any documents required under
SECTION 8.3.
SECTION 7.2 SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the
Company into any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company in accordance with
SECTION 7.1, the successor Person formed by such consolidation or into or with
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS OF
SECURITIES.
Without the consent of any Holders of Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities as permitted by
this Indenture; or
(2) to add to the covenants of the Company for the benefit of
the Holders of Securities or to surrender any right or power herein
conferred upon the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights of
Holders of Securities pursuant to SECTION 11.11; or
(5) to make any changes or modifications to this Indenture
necessary in connection with the registration of any Registrable
Securities under the Securities Act as contemplated by the Registration
Rights Agreement, PROVIDED, such action pursuant to this clause (5)
shall not, in the judgment of the Company, adversely affect the
interests of the Holders of Securities in any material respect; or
(6) to comply with the requirements of the Trust Indenture Act
or the rules and regulations of the Commission thereunder in order to
effect or maintain the qualification of this Indenture under the Trust
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Indenture Act, as contemplated by this Indenture or otherwise; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or which is otherwise defective, or to make any other provisions
with respect to matters or questions arising under this Indenture as
the Company and the Trustee may deem necessary or desirable, PROVIDED
such action pursuant to this clause (8) shall not, in the judgment of
the Company, adversely affect the interests of the Holders of
Securities in any material respect.
Upon Company Request, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and subject to
and upon receipt by the Trustee of the documents described in SECTION 8.3
hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
therein contained.
SECTION 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS OF
SECURITIES.
With either (a) the written consent of the Holders of not
less than a majority in principal amount of the Outstanding Securities, by the
Act of said Holders delivered to the Company and the Trustee, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of a majority in principal amount
of the Outstanding Securities represented at such meeting, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any
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manner the rights of the Holders of Securities under this Indenture; PROVIDED,
HOWEVER, that no such supplemental indenture shall, without the consent or
affirmative vote of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount or the rate of interest payable thereon, in a manner adverse to
the Holders, or change the coin or currency in which any Security or
the interest or any premium thereon or any other amount in respect
thereof is payable, or impair the right to institute suit for the
enforcement of any payment in respect of any Security on or after the
Stated Maturity thereof (or, in the case of redemption or any
repurchase, on or after the Redemption Date or Repurchase Date, as the
case may be) or, except as permitted by SECTION 11.11, adversely affect
the right to convert any Security as provided in Article Eleven, or
modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders of
Securities; or
(2) reduce the percentage in principal amount of the
Outstanding Securities the consent of whose Holders is required for any
such supplemental indenture or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in
this Indenture; or
(3) modify any of the provisions of this SECTION 8.2, except
to increase any percentage contained herein or therein or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby; or
(4) after the Holder's right to require the Company to
repurchase the Securities arises upon a Change in Control modify the
provisions of Article Thirteen in a manner adverse to the Holders.
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It shall not be necessary for any Act of Holders of
Securities under this SECTION 8.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
The quorum at any meeting called to adopt a resolution will
be Holders representing a majority in aggregate principal amount of Securities
at the time Outstanding.
SECTION 8.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to SECTIONS 6.1 AND 6.3) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
such supplemental indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 8.4 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder appertaining thereto shall be bound thereby.
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SECTION 8.5 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Company and the Trustee, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
SECTION 8.6 NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company and the Trustee
of any supplemental indenture pursuant to the provisions of SECTION 8.2, the
Company shall give notice to all Holders of Securities of such fact, setting
forth in general terms the substance of such supplemental indenture, in the
manner provided in SECTION 1.6. Any failure of the Company to give such notice,
or any defect therein, shall not in any way impair or affect the validity of
any such supplemental indenture.
ARTICLE NINE
COVENANTS
SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees that it will duly and
punctually pay the principal of and premium, if any, and interest on the
Securities in accordance with the terms of the Securities and this Indenture.
The Company will deposit or cause to be deposited with the Trustee, no later
than 12:00 noon Eastern time on the date of the Stated Maturity of any Security
or no later than 12:00 noon Eastern time on the due date for any installment of
interest, all payments so due, which payments shall be in immediately available
funds on the date of such Stated Maturity or due date, as the case may be.
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SECTION 9.2 MAINTENANCE OF OFFICES OR AGENCIES.
The Company hereby appoints the Corporate Trust Office of the
Trustee or such other office or agency of the Trustee as its agent in the
Borough of Manhattan, The City of New York, where Securities may be presented
or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion, and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.
The Company may at any time and from time to time vary or
terminate the appointment of any such agent or appoint any additional agents
for any or all of such purposes; PROVIDED, HOWEVER, that until all of the
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the
Securities have been made available for payment and either paid or returned to
the Company pursuant to the provisions of SECTION 9.3, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Securities may be presented or surrendered for payment and conversion,
where Securities may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee, and notice to the Holders in accordance with
SECTION 1.6, of the appointment or termination of any such agents and of the
location and any change in the location of any 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, presentations and surrenders may be made and notices and
demands may be served on the Corporate Trust Office of the Trustee.
SECTION 9.3 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall act as its own Paying Agent, it will, on
or before each due date of the principal of,
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premium, if any, or interest on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal, premium, if any, or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
the Company will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, no later than 12:00 noon Eastern time on each due date of the principal
of, premium, if any, or interest on any Securities, deposit with the Trustee a
sum sufficient to pay the principal, premium, if any, or interest so becoming
due, such sum to be held for the benefit of the Persons entitled to such
principal, premium, if any, or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
SECTION 9.3, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct
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any Paying Agent to pay, to the Trustee all sums held in trust by the Company
or such Paying Agent, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by the Company or such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Anything contained herein to the contrary notwithstanding,
any money held by the Trustee or any Paying Agent in trust for the payment and
discharge of the principal of, premium, if any, or interest on any Security
which remains unclaimed for two (2) years after the date when each payment of
such principal, premium or interest has become payable shall be repaid within
sixty (60) days of such date by the Trustee to the Company as its absolute
property free from trust, and the Trustee shall thereupon be released and
discharged with respect thereto and the Holders shall look only to the Company
for the payment of the principal, premium or interest on such Security. The
Trustee shall not be liable to the Company or any Holder for interest on funds
held by it for the payment and discharge of the principal, premium or interest
on any of the Securities to any Holder. The Company shall not be liable for any
interest on the sums paid to it pursuant to this paragraph and shall not be
regarded as a trustee of such money.
SECTION 9.4 EXISTENCE.
Subject to ARTICLE SEVEN, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right or franchise
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 that the
loss thereof is not disadvantageous in any material respect to the Holders.
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SECTION 9.5 MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this SECTION 9.5 shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 9.6 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge, or cause to be paid or
discharged, before the same may become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary, (2)
all claims for labor, materials and supplies which, if unpaid, might by law
become a lien or charge upon the property of the Company or any Subsidiary, and
(3) all stamps and other duties, if any, which may be imposed by the United
States or any political subdivision thereof or therein in connection with the
issuance, transfer, exchange or conversion of any Securities or with respect to
this Indenture; PROVIDED, HOWEVER, that, in the case of clauses (1) and (2),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (a) if the failure to do
so will not, in the aggregate, have a material adverse impact on the Company,
or (b) if the amount, applicability or validity is being contested in good
faith by appropriate proceedings.
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SECTION 9.7 REGISTRATION AND LISTING.
Within a reasonable time after the issuance of the Global
Security, the Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Securities may be lawfully issued and delivered,
and qualified or listed as contemplated by clause (ii) (it being understood
that the Company shall not be required to register the Securities under the
Securities Act, except pursuant to the Registration Rights Agreement); and (ii)
will cause the shares of Common Stock required to be issued and delivered upon
conversion of Securities, prior to such issuance or delivery, to be approved
for quotation on The Nasdaq National Market or, if the Common Stock is not then
approved for quotation on The Nasdaq National Market, list the Common Stock or
qualify the Common Stock for quotation on each national securities exchange or
quotation system on which outstanding Common Stock is listed or quoted at the
time of such delivery. Nothing in this SECTION 9.7 will limit the application
of SECTION 9.11.
SECTION 9.8 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate (one of the signers of which shall be the Company's
principal executive, principal financial or principal accounting officer),
stating whether or not to the best knowledge of the signers thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
The Company will deliver to the Trustee, forthwith upon
becoming aware of any default in the
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performance or observance of any covenant, agreement or condition contained in
this Indenture, or any Event of Default, an Officers' Certificate specifying
with particularity such default or Event of Default and further stating what
action the Company has taken, is taking or proposes to take with respect
thereto.
Any notice required to be given under this SECTION 9.8 shall
be delivered to the Trustee at its Corporate Trust Office.
SECTION 9.9 DELIVERY OF CERTAIN INFORMATION.
At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, upon the request of a Holder of a Security or the
holder of shares of Common Stock issued upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder of Securities or such holder of shares of Common
Stock issued upon conversion of Securities, or to a prospective purchaser of
any such security designated by any such Holder or holder, as the case may be,
to the extent required to permit compliance by such Holder or holder with Rule
144A under the Securities Act (or any successor provision thereto) in
connection with the resale of any such security; PROVIDED, HOWEVER, that the
Company shall not be required to furnish such information in connection with
any request made on or after the date which is two years from the later of (i)
the date such a security (or any such predecessor security) was last acquired
from the Company or (ii) the date such a security (or any such predecessor
security) was last acquired from an "affiliate" of the Company within the
meaning of Rule 144 under the Securities Act (or any successor provision
thereto). "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).
SECTION 9.10 RESALE OF CERTAIN SECURITIES; REPORTING ISSUER.
During the period beginning on the last date of original
issuance of the Securities and ending on the date
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that is two years from such date, the Company will not, and will not permit
any of its subsidiaries or other "affiliates" (as defined under Rule 144
under the Securities Act or any successor provision thereto) controlled by it
to, resell (x) any Securities which constitute "restricted securities" under
Rule 144 or (y) any securities into which the Securities have been converted
under this Indenture which constitute "restricted securities" under Rule 144,
that in either case have been reacquired by any of them. The Trustee shall
have no responsibility in respect of the Company's performance of its
agreement in the preceding sentence.
SECTION 9.11 INTENTIONALLY OMITTED .
SECTION 9.12 WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any covenant or conditions set forth in SECTIONS 9.5 and 9.6, inclusive (other
than a covenant or condition which under ARTICLE EIGHT cannot be modified or
amended without the consent of the Holder of each Outstanding Security
affected), if before the time for such compliance the Holders shall, through the
written consent of, not less than a majority in principal amount of the
Outstanding Securities, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee or any Paying or Conversion Agent
in respect of any such covenant or condition shall remain in full force and
effect.
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ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 10.1 RIGHT OF REDEMPTION.
The Securities may be redeemed in accordance with the
provisions of the form of Securities set forth in SECTION 2.2.
SECTION 10.2 APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of the Securities or this
Indenture, shall be made in accordance with such provision and this ARTICLE TEN.
SECTION 10.3 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
In case of any redemption at the election of the Company of
any of the Securities, the Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date.
SECTION 10.4 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the
particular Securities to be redeemed shall be selected by the Trustee within
three Business Days after it receives the notice described in SECTION 10.3, from
the Outstanding Securities not previously called for redemption, by such method
as the Trustee may deem fair and appropriate.
If any Registered Security selected for partial redemption is
converted in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have
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been converted during a selection of Securities 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 each
Security Registrar in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal amount
and certificate numbers thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 10.5 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
SECTION 1.6 to the Holders of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date, and such notice shall be
irrevocable.
All notices of redemption shall identify the Securities to be
redeemed (including CUSIP numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price, and accrued interest, if any,
(3) if less than all Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price, and
accrued interest, if any, will become due and payable upon each such
Security to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
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(5) the Conversion Rate, the date on which the right to
convert the Securities to be redeemed will terminate and the places
where such Securities may be surrendered for conversion, and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest,
if any.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name of and at the expense of the
Company. Notice of redemption of Securities to be redeemed at the election of
the Company received by the Trustee shall be given by the Trustee to each Paying
Agent in the name of and at the expense of the Company.
SECTION 10.6 DEPOSIT OF REDEMPTION PRICE.
Not less than one Business Day prior to any Redemption Date,
the Company shall deposit with the Trustee (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in SECTION 9.3) an
amount of money (which shall be in immediately available funds on such
Redemption Date) sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or so segregated and held in trust for the redemption
of such Security shall (subject to any right of the Holder of such Security or
any Predecessor Security to receive interest as provided in the last paragraph
of SECTION 3.7) be paid to the Company on Company Request or, if then held by
the Company, shall be discharged from such trust.
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SECTION 10.7 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price,
including accrued interest) such Securities shall cease to bear interest. Upon
surrender of any Security for redemption in accordance with said notice such
Security shall be paid by the Company at the Redemption Price together with
accrued and unpaid interest to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest on Securities whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of SECTION 3.7.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal amount of, premium, if any,
and, to the extent permitted by applicable law, accrued interest on such
Security shall, until paid, bear interest from the Redemption Date at the rate
then in effect and such Security shall remain convertible until the principal of
such Security (or portion thereof, as the case may be) shall have been paid or
duly provided for.
SECTION 10.8 SECURITIES REDEEMED IN PART.
Any Security 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 9.2 (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
Security without service charge, a new Registered Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the
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unredeemed portion of the principal of the Security so surrendered.
SECTION 10.9 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of the Securities, the
Company may arrange for the purchase and conversion of any Securities by an
agreement with one or more investment bankers or other purchasers (the
"Purchasers") to purchase such Securities by paying to the Trustee in trust for
the Holders, on or before the Redemption Date, an amount not less than the
applicable Redemption Price, together with interest accrued and unpaid to the
Redemption Date, of such Securities. Notwithstanding anything to the contrary
contained in this ARTICLE TEN, the obligation of the Company to pay the
Redemption Price, together with interest accrued and unpaid to the Redemption
Date, shall be deemed to be satisfied and discharged to the extent such amount
is so paid by such Purchasers. If such an agreement is entered into (a copy of
which shall be filed with the Trustee prior to the close of business on the
second Business Day immediately prior to the Redemption Date), any Securities
called for redemption that are not duly surrendered for conversion by the
Holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, and consistent with any agreement or agreements with
such Purchasers, to be acquired by such Purchasers from such Holders and
(notwithstanding anything to the contrary contained in this ARTICLE TEN)
surrendered by such Purchasers for conversion, all as of immediately prior to
the close of business on the Redemption Date (and the right to convert any such
Securities shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it by the Purchasers to the Holders in the
same manner as it would monies deposited with it by the Company for the
redemption of Securities. Without the Trustee's prior written consent, no
arrangement between the Company and such Purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with
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any such arrangement for the purchase and conversion of any Securities
between the Company and such Purchasers, including the costs and expenses,
including reasonable legal fees, incurred by the Trustee in the defense of
any claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations
under this Indenture.
ARTICLE ELEVEN
CONVERSION OF SECURITIES
SECTION 11.1 CONVERSION PRIVILEGE AND CONVERSION RATE.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion of the
principal amount thereof that is U.S.$1,000 or an integral multiple of
U.S.$1,000 may be converted into fully paid and nonassessable shares (calculated
as to each conversion to the nearest 1/100th of a share) of Common Stock of the
Company at the Conversion Rate, determined as hereinafter provided, in effect at
the time of conversion. Such conversion right shall commence upon the original
issuance of the Securities and expire at the close of business on December 1,
2004, subject, in the case of conversion of any Global Security, to any
Applicable Procedures. In case a Security or portion thereof is called for
redemption at the election of the Company or the Holder thereof exercises his
right to require the Company to repurchase the Security, such conversion right
in respect of the Security, or portion thereof so called, shall expire at the
close of business on the Business Day immediately preceding the Redemption Date
or the Repurchase Date, as the case may be, unless the Company defaults in
making the payment due upon redemption or repurchase, as the case may be (in
each case subject as aforesaid to any Applicable Procedures with respect to any
Global Security).
The rate at which shares of Common Stock shall be delivered
upon conversion (herein called the "Conversion Rate") shall be initially 13.5323
shares of Common Stock for each U.S.$1,000 principal amount of Securities. The
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Conversion Rate shall be adjusted in certain instances as provided in this
ARTICLE ELEVEN.
SECTION 11.2 EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege, the Holder of
any Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to SECTION 9.2, accompanied by a duly
signed conversion notice substantially in the form set forth in SECTION 2.4
stating that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to be
converted. Each Security surrendered for conversion (in whole or in part) during
the period from the close of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date shall (except in the case of any Security or portion thereof which has been
called for redemption on a Redemption Date, or is to be repurchased on a
Repurchase Date, with the consequence that the conversion right of such Security
would terminate between such Regular Record Date and the close of business on
such Interest Payment Date) be accompanied by payment in New York Clearing House
funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date on the principal amount of such
Security (or part thereof, as the case may be) being surrendered for conversion.
The interest so payable on such Interest Payment Date with respect to any
Security (or portion thereof, if applicable) which is surrendered for conversion
during the period from the close of business on any Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date and which Security has been called for redemption on a Redemption Date, or
is repurchasable on a Repurchase Date, with the consequence that the conversion
right of such Security would terminate between such Regular Record Date and the
close of business on such Interest Payment Date, shall be paid to the Holder of
such Security being converted in an amount equal to the interest that would have
been payable on such Security if such Security had been converted as of the
close of business on such Interest
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Payment Date. The interest so payable on such Interest Payment Date in
respect of any Security (or portion thereof, as the case may be) which has
not been called for redemption on a Redemption Date, or is not eligible for
repurchase on a Repurchase Date, with the consequence of termination of the
conversion right as aforesaid, which Security (or portion thereof, as the
case may be) is surrendered for conversion during the period from the close
of business on any Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date, shall be paid to the
Holder of such Security as of such Regular Record Date. Interest payable in
respect of any Security surrendered for conversion on or after an Interest
Payment Date shall be paid to the Holder of such Security as of the next
preceding Regular Record Date, notwithstanding the exercise of the right of
conversion. Except as provided in this paragraph and subject to the last
paragraph of SECTION 3.7, no cash payment or adjustment shall be made upon
any conversion on account of any interest accrued from the Interest Payment
Date next preceding the conversion date, in respect of any Security (or part
thereof, as the case may be) surrendered for conversion, or on account of any
dividends on the Common Stock issued upon conversion. The Company's delivery
to the Holder of the number of shares of Common Stock (and cash in lieu of
fractions thereof, as provided in this Indenture) into which a Security is
convertible will be deemed to satisfy the Company's obligation to pay the
principal amount of the Security.
Securities shall be deemed to have been converted on the day
of surrender of such Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as practicable
on or after the conversion date, the Company shall issue and deliver to the
Trustee, for delivery to the Holder, a certificate or certificates for the
number of full shares of Common Stock issuable upon conversion, together with
payment in lieu of any fraction of a share, as provided in SECTION 11.3.
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All shares of Common Stock delivered upon such conversion of
Securities shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Securities pursuant to SECTION 3.5 and
shall be subject to the restrictions on transfer provided in such legends.
Neither the Trustee nor any agent maintained for the purpose of such conversion
shall have any responsibility for the inclusion or content of any such
restrictive legends on such Common Stock; provided, HOWEVER, that the Trustee or
any agent maintained for the purpose of such conversion shall have provided to
the Company or to the Company's transfer agent for such Common Stock, prior to
or concurrently with a request to the Company to deliver such Common Stock,
written notice that the Securities delivered for conversion are Securities.
In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Holder thereof, at the
expense of the Company, a new Registered Security or Securities of authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the principal amount of such Security. A Security may be converted in part,
but only if the principal amount of such Security to be converted is any
integral multiple of U.S.$1,000 and the principal amount of such security to
remain Outstanding after such conversion is equal to U.S.$1,000 or any integral
multiple of U.S.$1,000 in excess thereof.
SECTION 11.3 FRACTIONS OF SHARES.
No fractional shares of Common Stock shall be issued upon
conversion of any Security or Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall calculate and pay a cash
adjustment in
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respect of such fraction (calculated to the nearest 1/100th of a share) in an
amount equal to the same fraction of the Average Sales Price Per Share at the
close of business on the day of conversion.
SECTION 11.4 ADJUSTMENT OF CONVERSION RATE.
The Conversion Rate shall be subject to adjustments from time
to time as follows:
(1) In case the Company shall pay or make a dividend or
other distribution on any class of capital stock of the Company payable in
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
increased by dividing such Conversion Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such increase to become effective (subject
to paragraph (12) of this SECTION 11.4) immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (1), 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.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the current
market price per share (determined as provided in paragraph (8) of this SECTION
11.4) of the Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights, options or warrants (other than
any rights, options or warrants (a) that by their terms will
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also be issued to any Holder upon conversion of a Security into shares of
Common Stock without any action required by the Company or any other Person or
(b) that are only exercisable upon the occurrence of specified triggering event
and such triggering event has not occurred), the Conversion Rate in effect at
the opening of business on the day following the date fixed for such
determination shall be increased by dividing such Conversion Rate by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such increase to become
effective (subject to paragraph (12)of this SECTION 11.4) immediately after the
opening of business on the day following the date fixed for such determination.
For the purposes of this paragraph (2), 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
issue any rights, options or warrants in respect of shares of Common Stock held
in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase
or reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision or
combination becomes effective.
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(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of any class of capital stock, or other property (including cash or
assets or securities, but excluding (i) any rights, options or warrants
referred to in paragraph (2) of this SECTION 11.4, (ii) any dividend or
distribution paid in cash, except as set forth in paragraphs (5) and (6) of
this SECTION 11.4, (iii) any dividend or distribution referred to in paragraph
(1) of this SECTION 11.4 and (iv) any merger or consolidation to which SECTION
11.11 applies), the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the current market price per share (determined as provided
in paragraph (8) of this SECTION 11.4) of the Common Stock on the date fixed
for such determination less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution) of the portion of the assets, shares or evidences of
indebtedness so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such adjustment to become effective (subject to paragraph (12) of this SECTION
11.4) immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which SECTION 11.11 applies) in
an aggregate amount that, combined together with (I) the aggregate amount of
any other cash distributions to all holders of its Common Stock made
exclusively in cash within the 365-day period preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to this
paragraph (5) has been made and (II) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors, whose determination
shall be
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conclusive and described in a Board Resolution) of consideration payable in
respect of any tender offer by the Company or any of its subsidiaries for all
or any portion of the Common Stock concluded within the 365-day period
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to paragraph (6) of this SECTION 11.4 has been made (the
"combined cash and tender amount") exceeds 10% of the product of the current
market price per share (determined as provided in paragraph (8) of this SECTION
11.4) of the Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution times the number
of shares of Common Stock outstanding on such date (the "aggregate current
market price"), then, and in each such case, immediately after the close of
business on such date for determination, subject to paragraph (12) of SECTION
11.4, the Conversion Rate shall be adjusted so that the same shall equal the
rate determined by dividing the Conversion Rate in effect immediately prior to
the close of business on the date fixed for determination of the stockholders
entitled to receive such distribution by a fraction (i) the numerator of which
shall be equal to the current market price per share (determined as provided in
paragraph (8) of this SECTION 11.4) of the Common Stock on the date fixed for
such determination less an amount equal to the quotient of (x) the excess of
such combined cash and tender amount over 10% of such aggregate current market
price divided by (y) the number of shares of Common Stock outstanding on such
date fixed for determination and (ii) the denominator of which shall be equal
to the current market price per share (determined as provided in paragraph (8)
of this SECTION 11.4) of the Common Stock on such date fixed for determination.
(6) In case a tender offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall be completed for an
aggregate consideration consisting of cash and/or property having a fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) that combined together with (I)
the aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution), of
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consideration payable in respect of any other tender offer by the Company or
any Subsidiary for all or any portion of the Common Stock concluded within the
365-day period preceding the completion of such tender offer and in respect of
which no adjustment pursuant to this paragraph (6) has been made and (II) the
aggregate amount of any distributions to all holders of the Company's Common
Stock made exclusively in cash within the 365-day period preceding the
completion of such tender offer and in respect of which no adjustment pursuant
to paragraph (5) of this SECTION 11.4 has been made (the "combined tender and
cash amount") exceeds 10% of the product of the current market price per share
of the Common Stock (determined as provided in paragraph (8) of this SECTION
11.4) as of the completion of such tender offer (the "Completion Date") times
the number of shares of Common Stock outstanding (including any tendered
shares) as of the Completion Date, then, and in each such case, immediately
prior to the opening of business on the day after the date of the Completion
Date, the Conversion Rate shall be adjusted so that the same shall equal the
rate determined by dividing the Conversion Rate immediately prior to close of
business on the Completion Date by a fraction (i) the numerator of which shall
be equal to (A) the product of (I) the current market price per share of the
Common Stock (determined as provided in paragraph (8) of this SECTION 11.4) on
the Completion Date multiplied by (II) the number of shares of Common Stock
outstanding (including any tendered shares) on the Completion Date less (B) the
combined tender and cash amount, and (ii) the denominator of which shall be
equal to the product of (A) the current market price per share of the Common
Stock (determined as provided in paragraph (8) of this SECTION 11.4) as of the
Completion Date multiplied by (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Completion Date less the
number of all shares validly tendered and not withdrawn as of the Completion
Date(the shares deemed so accepted up to any such maximum, being referred to as
the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including other than Common Stock (other than any reclassification upon a
consolidation or merger to which SECTION 11.11 applies) shall be deemed to
involve (a)
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a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed
to be "the date fixed for the determination of stockholders entitled to receive
such distribution" and "the date fixed for such determination" within the
meaning of paragraph (4) of this SECTION 11.4), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of this
SECTION 11.4).
(8) For the purpose of any computation under paragraphs (2),
(4), (5) or (6) of this SECTION 11.4, the current market price per share of
Common Stock on any date shall be calculated by the Company and be deemed to be
the average of the daily Average Sales Prices Per Share for the five
consecutive Trading Days selected by the Company commencing not more than 10
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date", when used with respect to any issuance or distribution, means
the first date on which the Common Stock trades regular way in the applicable
securities market or on the applicable securities exchange without the right to
receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required
unless such adjustment (plus any adjustments not previously made by reason of
this paragraph (9)) would require an increase or decrease of at least one
percent in such rate; PROVIDED, HOWEVER, that any adjustments which by reason
of this paragraph (9) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
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(10) The Company may make such increases in the Conversion
Rate, for the remaining term of the Securities or any shorter term, in addition
to those required by paragraphs (1), (2), (3), (4), (5) and (6) of this SECTION
11.4, as it considers to be advisable in order to avoid or diminish any income
tax liability to any holders of shares of Common Stock resulting from any
dividend or distribution of Common Stock or issuance of rights or warrants to
purchase or subscribe for Common 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 increase the Conversion Rate by any amount for any period of
time if the period is at least twenty (20) days and the Board of Directors
shall have made a determination that such increase would be in the best
interests of the Company, which determination shall be conclusive; PROVIDED,
HOWEVER, that such increase shall not be taken into account for purposes of
determining whether the Average Sales Price Per Share of the Common Stock
exceeds the Conversion Price by 105% in connection with an event which would
otherwise be a Change in Control. Whenever the Conversion Rate is increased
pursuant to the preceding sentence, the Company shall give notice of the
increase to the Holders of Securities in the manner provided in Section 1.6 at
least fifteen (15) days prior to the date the increased Conversion Rate takes
effect, and such notice shall state the increased Conversion Rate and the
period during which it will be in effect.
(11) Notwithstanding the foregoing provisions of this SECTION
11.4, no adjustment of the Conversion Rate shall be required to be made (a)
upon the issuance of shares of Common Stock pursuant to any present or future
plan for the reinvestment of dividends, (b) because of a tender or exchange
offer of the character described in Rule 13e-4(h)(5) under the Exchange Act or
any successor rule thereto or (c) as a result of a rights plan or poison pill
implemented by the Company.
(12) In any case in which this SECTION 11.4 shall require
that an adjustment be made immediately following a record date, the Company may
elect to defer the
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effectiveness of such adjustment (but in no event until a date later than the
effective time of the event giving rise to such adjustment), in which case the
Company shall, with respect to any Security converted after such record date
and on and before such adjustment shall have become effective (i) defer paying
any cash payment pursuant to SECTION 11.3 hereof or issuing to the Holder of
such Security the number of shares of Common Stock issuable upon such
conversion in excess of the number of shares of Common Stock issuable thereupon
only on the basis of the Conversion Rate prior to adjustment, and (ii) not
later than five Business Days after such adjustment shall have become
effective, pay to such Holder the appropriate cash payment pursuant to SECTION
11.3 hereof and issue to such Holder the additional shares of Common Stock
issuable on such conversion. Notwithstanding the foregoing, no adjustment of
the Conversion Rate shall be made if the event giving rise to such adjustment
does not occur.
SECTION 11.5 NOTICE OF ADJUSTMENTS OF CONVERSION RATE.
Whenever the Conversion Rate is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with SECTION 11.4 and shall prepare a certificate signed by
the Chief Financial Officer of the Company setting forth the adjusted
Conversion Rate and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall promptly be filed
with the Trustee and with the Conversion Agent; and
(2) upon each such adjustment, a notice stating that the
Conversion Rate has been adjusted and setting forth the adjusted
Conversion Rate shall be required, and as soon as practicable after it
is required, such notice shall be provided by the Company to all
Holders in accordance with SECTION 1.6.
Neither the Trustee nor the Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
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Securities desiring inspection thereof at its office during normal business
hours.
SECTION 11.6 NOTICE OF CERTAIN CORPORATE ACTION.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that would
require any adjustment pursuant to SECTION 11.4; or
(b) the Company shall authorize the granting to the holders
of its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights; or
(c) of any reclassification of the Common Stock of the
Company, or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any stockholders of the
Company is required, or of the conveyance, sale, transfer or lease of
all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to SECTION 9.2, and shall
cause to be provided to all Holders in accordance with SECTION 1.6, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options 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
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such dividend, distribution, rights, options or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give such notice
or the notice referred to in the following paragraph nor any defect therein
shall affect the legality or validity of the proceedings described in clauses
(a) through (d) of this SECTION 11.6. If at the time the Trustee shall not be
the Conversion Agent, a copy of such notice shall also forthwith be filed by
the Company with the Trustee.
The Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to SECTION 9.2,
and shall cause to be provided to all Holders in accordance with SECTION 1.6,
notice of any tender offer by the Company or any Subsidiary for all or any
portion of the Common Stock at or about the time that such notice of tender
offer is provided to the public generally.
SECTION 11.7 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of Securities, the full number of
shares of Common Stock then issuable upon the conversion of all Outstanding
Securities.
SECTION 11.8 TAXES ON CONVERSIONS.
Except as provided in the next sentence, the Company will pay
any and all taxes and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant hereto.
The Company shall not, however, be required to pay any tax or duty which may be
payable in respect of any transfer
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involved in the issue and delivery of shares of Common Stock in a name other
than that of the Holder of the Security or Securities to be converted, and no
such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of any such tax or duty, or has
established to the satisfaction of the Company that such tax or duty has been
paid.
SECTION 11.9 COVENANT AS TO COMMON STOCK.
The Company agrees that all shares of Common Stock which may
be delivered upon conversion of Securities, upon such delivery, will be newly
issued shares and will have been duly authorized and validly issued and will be
fully paid and nonassessable and, except as provided in SECTION 11.8, the
Company will pay all taxes, liens and charges with respect to the issue thereof.
SECTION 11.10 CANCELLATION OF CONVERTED SECURITIES.
All Securities delivered for conversion shall be delivered to
the Trustee or its agent to be canceled by or at the direction of the Trustee,
which shall dispose of the same as provided in SECTION 3.9.
SECTION 11.11 PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.
In case of any consolidation or merger of the Company with or
into any other Person, any merger of another Person with or into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Company)
or any conveyance, sale, transfer or lease of all or substantially all of the
assets of the Company, the Person formed by such consolidation or resulting from
such merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in SECTION 11.1, to
convert such Security only into the kind and amount of securities, cash
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and other property receivable upon such consolidation, merger, conveyance,
sale, transfer or lease by a holder of the number of shares of Common Stock
of the Company into which such Security might have been converted immediately
prior to such consolidation, merger, conveyance, sale, transfer or lease,
assuming such holder of Common Stock of the Company (i) is not a Person with
which the Company consolidated or merged with or into or which merged into or
with the Company or to which such conveyance, sale, transfer or lease was
made, as the case may be ("Constituent Person"), or an Affiliate of a
Constituent Person and (ii) failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, sale, transfer or
lease (PROVIDED that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale,
transfer, or lease is not the same for each share of Common Stock of the
Company held immediately prior to such consolidation, merger, conveyance,
sale, transfer or lease by others than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("Non-electing Share"), then for the purpose of this SECTION 11.11
the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, sale, transfer or lease by the
holders of 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, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Article. The above provisions of this SECTION 11.11 shall similarly
apply to successive consolidations, mergers, conveyances, sales, transfers or
leases. Notice of the execution of such a supplemental indenture shall be
given by the Company to the Holder of each Security as provided in SECTION
1.6 promptly upon such execution.
Neither the Trustee nor the Conversion Agent shall be under
any responsibility to determine the correctness of any provisions contained in
any such supplemental indenture relating either to the kind or
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amount of shares of stock or other securities or property or cash receivable
by Holders of Securities upon the conversion of their Securities after any
such consolidation, merger, conveyance, transfer, sale or lease or to any
such adjustment, but may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon, an Officers
Certificate or an Opinion of Counsel with respect thereto, which the Company
shall cause to be furnished to the Trustee upon request.
SECTION 11.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
The Trustee, subject to the provisions of SECTION 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of SECTION 6.1, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of SECTION 6.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver any shares of Common
Stock or share certificates or other securities or property or cash upon the
surrender of any Security for the purpose of conversion; and the Trustee,
subject to the provisions of SECTION 6.1, and any Conversion Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
of the Company contained in this Article.
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ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 12.1 SECURITIES SUBORDINATE TO SENIOR DEBT.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article (subject to the
provisions of Article Four), the indebtedness represented by the Securities and
the payment of the principal of (and premium, if any) and interest on, and any
payment of the Repurchase Price with respect to, each and all of the Securities
are hereby expressly made subordinate and subject in right of payment to the
prior payment in full in cash or Cash Equivalents of all Senior Debt.
SECTION 12.2 NO PAYMENTS IN CERTAIN CIRCUMSTANCES; PAYMENT OVER OF
PROCEEDS UPON DISSOLUTION, ETC.
No payment on account of principal of, premium, if any, or
interest (and Liquidated Damages, if any) on, or redemption or repurchase of,
the Securities shall be made if, at the time of such payment: (i) a default in
the payment of principal, premium, if any, or interest or other amounts due on
any Senior Debt, including any default under any redemption or repurchase
obligation, occurs and is continuing (or, in the case of Senior Debt for which
there is a period of grace, in the event of such a default that continues beyond
the period of grace, if any, specified in the instrument or lease evidencing
such Senior Debt), unless and until such default shall have been cured or waived
or shall have ceased to exist; or (ii) a default, other than a payment default,
on Designated Senior Debt occurs and is continuing that then permits holders of
such Designated Senior Debt to accelerate its maturity and the Trustee receives
a notice of the default (a "Payment Blockage Notice") from a Representative.
Notwithstanding the foregoing, the Company may make, and the Trustee may receive
and shall apply, any payment in respect of the Securities (for principal,
premium, if any, or interest
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(and Liquidated Damages, if any) or repurchase) if such payment was made
prior to the occurrence of any of the contingencies specified in clauses (i)
and (ii) above.
If the Trustee receives any Payment Blockage Notice pursuant
to clause (ii) above, no subsequent Payment Blockage Notice shall be effective
for purposes of this SECTION 12.2 unless and until (A) at least 365 days shall
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice, and (B) all scheduled payments of principal, premium, if any, and
interest on the Securities that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Securities (including missed payments, if any) upon the
earlier of: (i) the date upon which the default is cured or waived, or (ii) in
the case of a default referred to in clause (ii) of the second preceding
paragraph, 179 days after notice is received if the maturity of such Designated
Senior Debt has not been accelerated, unless this Article otherwise prohibits
the payment or distribution at the time of such payment or distribution.
Upon (i) any acceleration of the principal amount due on the
Securities or (ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution, winding up or total or partial liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, premium, if any, sinking
fund and interest or other amounts due or to become due upon all Senior Debt
shall first be paid in full in cash or Cash Equivalents, or payment thereof
provided for in cash or Cash Equivalents in accordance with its terms, before
any payment is made on account of the principal of, premium, if any, or interest
(and Liquidated Damages, if any) on, or repurchase of, the indebtedness
evidenced by the Securities, and upon any such dissolution or winding up
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or liquidation or reorganization any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee under this Indenture would
be entitled, except for the provisions hereof, shall be paid by the Company
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
as the case may be, directly to the holders of Senior Debt (pro rata to each
such holder on the basis of the respective amounts of Senior Debt held by
such holder) or their representatives, to the extent necessary to pay all
Senior Debt in full, in cash or Cash Equivalents, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt,
before any payment or distribution is made to the Holders of the Securities
or to the Trustee under this Indenture.
In the event that, contrary to the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than junior securities, as defined in SECTION
12.11), shall be received by the Trustee or the Holders of the Securities before
all Senior Debt is paid in full in cash or Cash Equivalents or provision made
for such payment, in accordance with its terms, such payment or distribution
shall be paid over or delivered to, the holders of such Senior Debt or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
have been issued, as their respective interests may appear, for application to
the payment of all Senior Debt remaining unpaid to the extent necessary to pay
all such Senior Debt in full in cash or Cash Equivalents in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Debt.
Subject to the payment in full in cash or Cash Equivalents of
all Senior Debt, the Holders of the Securities (together with the holders of any
other indebtedness of the Company which is subordinated in right
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of payment to the payment in full of all Senior Debt, which is not
subordinated in right of payment to the Securities and which by its terms
grants such right of subrogation to the holders thereof) shall be subrogated
to the rights of the holders of Senior Debt to receive payments or
distribution of assets of the Company made on the Senior Debt until the
principal of, premium, if any, and interest on, or amounts payable upon
repurchase of, the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of Senior Debt
of any cash, property or securities to which the Holders of the Securities or
the Trustee would be entitled except for the provisions of this Article, and
no payment over pursuant to the provisions of this Article to the holders of
Senior Debt by the Holders of the Securities or the Trustee, shall, as
between the Company, its creditors other than the holders of Senior Debt, and
the Holders of Securities, be deemed to be a payment by the Company to the
holders of or on account of Senior Debt, it being understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one
hand, and the holders of Senior Debt, on the other hand.
SECTION 12.3 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
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SECTION 12.4 NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder of any Senior
Debt, or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 12.5 NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities. Notwithstanding the provisions
of this Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a
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holder of Senior Debt or from any trustee, agent or representative therefor;
and, prior to the receipt of any such written notice, the Trustee, subject to
the provisions of SECTION 6.1, shall be entitled in all respects to assume
that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall not
have received the notice provided for in this SECTION 12.5 prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium,
if any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the contrary which
may be received by it within two Business Days prior to such date.
Subject to the provisions of SECTION 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee, agent or
representative therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee, agent or representative therefor). In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 12.6 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of SECTION
6.1, and the Holders of the
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Securities shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 12.7 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Debt shall be entitled by virtue of this Article or
otherwise. With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this ARTICLE TWELVE, and no implied covenants or
obligations with respect to holders of Senior Debt shall be read into this
Indenture against the Trustee.
SECTION 12.8 RELIANCE BY HOLDERS OF SENIOR DEBT ON SUBORDINATION
PROVISIONS.
Each Holder by accepting a Security acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Debt and such holder of Senior Debt shall be deemed conclusively to have relied
on such
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subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.
SECTION 12.9 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to SECTION 6.7.
SECTION 12.10 ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that SECTION 12.9 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 12.11 CERTAIN CONVERSIONS AND REPURCHASES DEEMED PAYMENT.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
ARTICLE ELEVEN or upon the repurchase of Securities in accordance with ARTICLE
THIRTEEN shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest or Liquidated Damages on Securities
or on account of the purchase or other acquisition of Securities, and (2) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion
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of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this SECTION 12.11, the term
"junior securities" means (a) shares of any stock of any class of the Company
and any cash, property or securities into which the Securities are
convertible pursuant to ARTICLE ELEVEN and (b) securities of the Company
which are subordinated in right of payment to all Senior Debt which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. Nothing contained in this
ARTICLE TWELVE or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Debt and the Holders of the Securities, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with ARTICLE ELEVEN or to exchange such Security for
Common Stock in accordance with ARTICLE THIRTEEN if the Company elects to
satisfy the obligations under ARTICLE THIRTEEN by the delivery of Common
Stock.
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION
OF THE HOLDER UPON A CHANGE IN CONTROL
SECTION 13.1 RIGHT TO REQUIRE REPURCHASE.
In the event that a Change in Control (as hereinafter defined)
shall occur, then each Holder shall have the right, at the Holder's option, but
subject to the provisions of SECTION 13.2, to require the Company to repurchase,
and upon the exercise of such right the Company shall repurchase, all of such
Holder's Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to U.S.$1,000 or any greater integral
multiple of U.S.$1,000, on the date (the "Repurchase Date") that is no later
than 75 days after the occurrence of the Change in Control at a cash purchase
price equal to 100% of the principal amount of the Securities to be repurchased
plus interest accrued to the
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Repurchase Date (the "Repurchase Price"); PROVIDED, HOWEVER, that
installments of interest on Securities whose Stated Maturity is on or prior
to the Repurchase Date shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such on the relevant Record
Date according to their terms and the provisions of SECTION 3.7. Such right
to require the repurchase of the Securities shall not continue after a
discharge of the Company from its obligations with respect to the Securities
in accordance with ARTICLE FOUR, unless a Change in Control shall have
occurred prior to such discharge. At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the fulfillment by the
Company of the conditions set forth SECTION 13.2, by delivery of shares of
Common Stock having a fair market value equal to the Repurchase Price.
Whenever in this Indenture (including SECTIONS 2.2, 3.1, 5.1(1) and 5.8)
there is a reference, in any context, to the principal of any Security as of
any time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Indenture shall not
be construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made; PROVIDED, HOWEVER, that for
the purposes of ARTICLE TWELVE such reference shall be deemed to include
reference to the Repurchase Price only to the extent the Repurchase Price is
payable in cash.
For purposes of this SECTION 13.1, the fair market value of
shares of Common Stock shall be determined by the Company and shall be equal to
95% of the average of the Average Sales Price Per Share for the five consecutive
Trading Days immediately preceding and including the third Trading Day prior to
the Repurchase Date;
SECTION 13.2 CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE REPURCHASE
PRICE IN COMMON STOCK.
The Company may elect to pay the Repurchase Price by delivery of shares
of Common Stock pursuant to SECTION 13.1 if and only if the following conditions
shall have been satisfied:
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(a) As to each Holder, the Repurchase Price shall be paid only
in cash in the event any shares of Common Stock to be issued to such Holder upon
repurchase of Securities hereunder (i) require registration under any federal
securities law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act upon repurchase
and if such registration is not completed or does not become effective prior to
the Repurchase Date, and/or (ii) require registration with or approval of any
governmental authority under any state law or any other federal law before such
shares may be validly issued or delivered upon repurchase and if such
registration is not completed or does not become effective or such approval is
not obtained prior to the Repurchase Date;
(b) Payment of the Repurchase Price may not be made in Common
Stock unless such stock is, or shall have been, approved for quotation on The
Nasdaq National Market or listed or quoted on a national securities exchange or
other quotation system, in either case, prior to the Repurchase Date; and
(c) All shares of Common Stock which may be issued upon
repurchase of Securities will be issued out of the Company's authorized but
unissued Common Stock and, will upon issue, be duly and validly issued and fully
paid and non-assessable and free of any preemptive rights.
If all of the conditions set forth in this SECTION 13.2 are
not satisfied in accordance with the terms thereof, the Repurchase Price shall
be paid by the Company only in cash.
SECTION 13.3 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC.
(a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Securities, on or before the thirtieth day
after the occurrence of a Change in Control, the Company or, at the request and
expense of the Company on or before the thirtieth day after such occurrence, the
Trustee, shall give to all Holders of
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Securities, in the manner provided in SECTION 1.6, notice (the "Company
Notice") of the occurrence of the Change in Control and of the repurchase
right set forth herein arising as a result thereof. 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 whether the Repurchase Price
shall be paid by the Company in cash or by delivery of shares of Common
Stock,
(4) a description of the procedure which a Holder must follow
to exercise a repurchase right, and the place or places where such
Securities, are to be surrendered for payment of the Repurchase Price
and accrued interest, if any,
(5) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any, will become due and payable upon each such
Security designated by the Holder to be repurchased, and that interest
thereon shall cease to accrue on and after said date,
(6) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Securities to be
repurchased will terminate and the place or places where such
Securities may be surrendered for conversion,
(7) the place or places that the Notice of Election of Holder
to Require Repurchase as provided in SECTION 2.2, shall be delivered,
and the form of such notice, and
(8) the Cusip number or numbers of such Securities.
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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 Securities.
If any of the foregoing provisions or other provisions of this
ARTICLE THIRTEEN are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to
the Trustee on or before the thirtieth day after the date of the Company Notice
(i) written notice of the Holder's exercise of such right, which notice shall
set forth the name of the Holder, the principal amount of the Securities to be
repurchased (and, if any Security is to repurchased in part, the serial number
thereof, the portion of the principal amount thereof to be repurchased and the
name of the Person in which the portion thereof to remain Outstanding after such
repurchase is to be registered) and a statement that an election to exercise the
repurchase right is being made thereby, and, in the event that the Repurchase
Price shall be paid in shares of Common Stock, the name or names (with
addresses) in which the certificate or certificates for shares of Common Stock
shall be issued, and (ii) the Securities with respect to which the repurchase
right is being exercised. Such written notice shall be irrevocable, except that
the right of the Holder to convert the Securities 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.
(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 or shares of Common Stock, as provided
above, for payment to the Holder on the Repurchase Date or, if shares of Common
Stock are to be paid, as promptly after the Repurchase Date as practicable,
together with accrued and unpaid interest to the Repurchase Date payable with
respect to the Securities as to which the purchase right has been exercised;
PROVIDED, HOWEVER, that installments of interest that mature on or prior to the
Repurchase Date shall be payable in cash to the Holders of such Securities,
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or one or more Predecessor Securities, registered as such at the close of
business on the relevant Regular Record Date.
(d) If any Security (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Security (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 rate then in effect per annum, and each Security shall remain convertible
into Common Stock until the principal of such Security (or portion thereof, as
the case may be) shall have been paid or duly provided for.
(e) Any Security 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
Security without service charge, a new Security or Securities, 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 Security so surrendered.
(f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
PROVIDED, HOWEVER, that any surrender for repurchase on a date when the stock
transfer books of the Company shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open.
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No payment or adjustment shall be made for dividends or distributions on any
Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Security or Securities, the Company will
deliver to the applicable Holder its check for the current market value of such
fractional share. The current market value of a fraction of a share is
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
SECTION 13.3, the current market price of a share of Common Stock is the average
of the high and low sales price per Share of the Common Stock on the Trading Day
immediately preceding the Repurchase Date.
(h) Any issuance and delivery of certificates for shares of
Common Stock on repurchase of Securities shall be made without charge to the
Holder of Securities being repurchased for such certificates or for any tax or
duty in respect of the issuance or delivery of such certificates or the
securities represented thereby; PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax or duty which may be payable in respect of (i) income of
the Holder or (ii) any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of the Holder
of the Securities being repurchased, and no such issuance or delivery shall be
made unless and until the Person requesting such issuance or delivery has paid
to the Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered
to the Trustee to be canceled at the
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direction of the Trustee, which shall dispose of the same as provided in
SECTION 3.9.
SECTION 13.4 CERTAIN DEFINITIONS.
For purposes of this ARTICLE THIRTEEN,
(a) the term "beneficial owner" shall mean, with respect to
any security of the Company, any Person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise has or shares:
(1) voting power, which includes the power to vote, or to direct the voting of,
such security; and/or (2) investment power, which includes the power to dispose,
or to direct the disposition of, such security. Any Person who, directly or
indirectly, creates or uses a trust, proxy, power of attorney, pooling
arrangement or any other contract, arrangement or device with the purpose or
effect of divesting such Person of beneficial ownership of a security of the
Company or preventing the vesting of such beneficial ownership as part of a plan
or scheme to evade the reporting requirements of Section 13(d) or 13(g) of the
Exchange Act (or the successor provisions to such sections of the Exchange Act),
shall be deemed the "beneficial owner" of such security. A Person shall be
deemed the "beneficial owner" of a security of the Company if such Person has
the right to acquire beneficial ownership of such security within sixty (60)
days and any security of the Company not outstanding which is subject to an
option, warrant, right or conversion privilege exercisable within sixty (60)
days shall be deemed outstanding and beneficially owned by the Person holding
such option, warrant, right or conversion privilege (however, such security
shall not be deemed beneficially owned by the Person holding the option,
warrant, right or conversion privilege relating thereto, for purposes of
determining under the Change in Control definition the percentage ownership of
the total voting power of all shares of capital stock or other ownership
interests held by other Persons). A member of a national securities exchange
shall not be deemed to be a beneficial owner of a security of the Company that
it holds directly or indirectly on behalf of another Person solely because such
member is the record holder of such security and, pursuant to the rules of such
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exchange, may direct the vote of such security, without instruction, on other
than contested matters or matters that may affect substantially the rights or
privileges of the holder of such security, but is otherwise precluded by the
rules of such exchange from voting without instruction. A Person engaged in
business as an underwriter of securities who acquires a security of the Company
through participation in good faith in a firm commitment underwriting registered
under the Securities Act shall not be deemed a "beneficial owner" of such
security until forty (40) days after the date of such acquisition. A Person who
in the ordinary course of business is a pledgee of a security of the Company
under a written pledge agreement shall not be deemed to be the "beneficial
owner" of such security until such Person takes all formal steps needed to
declare a default and determines that the power to vote or to direct to vote or
to dispose or to direct the disposition of such security will be exercised,
provided that (i) the pledge agreement is bona fide and was not entered into
with the purpose nor with the effect of changing or influencing the control of
the Company, nor in connection with any transaction having such purpose or
effect; (ii) such Person is a person described in Rule 13d-1(b)(1)(ii),
promulgated by the Commission pursuant to the Exchange Act (as amended from time
to time during the term hereof), (iii) the pledge agreement, prior to default,
does not grant such Person (A) the power to vote or to direct the vote of such
security, or (B) the power to dispose or to direct the disposition of such
security, other than the grant of such power(s) pursuant to a pledge agreement
under which credit is extended subject to Regulation T and in which such Person
is a broker or dealer registered under Section 15 of the Exchange Act.
(b) a "Change in Control" shall be deemed to have occurred at
the time, after the original issuance of the Securities, of:
(i) the acquisition by any Person of beneficial
ownership, directly or indirectly, through a
purchase, merger or other acquisition
transaction or series of transactions, of
shares of capital stock of the Company
entitling
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such Person to exercise more than 50% of
the total voting power of all shares of
capital stock of the Company entitled to
vote generally in the elections of
directors, other than any such
acquisition by the Company, any
Subsidiary or any employee benefit plan
of the Company; or
(ii) any consolidation or merger of the Company
with or into any other Person, or any merger
of another Person with or into the Company
(other than (a) any such transaction (x)
which does not result in any
reclassification, conversion, exchange or
cancellation of outstanding shares of Common
Stock and (y) pursuant to which holders of
Common Stock immediately prior to such
transaction have the entitlement to
exercise, directly or indirectly, more than
50% of the total voting power of all shares
of capital stock or other ownership
interests entitled to vote generally in the
election of directors of the continuing or
surviving Person immediately after such
transaction and (b) any merger which is
effected solely to change the jurisdiction
of incorporation of the Company and results
in a reclassification, conversion or
exchange of outstanding shares of Common
Stock into solely shares of common stock of
the Company or another Person); or
(iii) any conveyance, transfer, sale, lease or
similar disposition of all or substantially
all of the Company's assets to another
Person, other than any such transaction
pursuant to which holders of Common Stock
immediately prior to such transaction have
the entitlement to exercise, directly or
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indirectly, more than 50% of the total
voting power of all shares of capital stock
or other ownership interest entitled to vote
generally in the election of directors of
the transferee Person immediately after such
transaction;
PROVIDED, HOWEVER, that a Change in Control shall not be deemed to have occurred
if the Average Sales Price Per Share on any five Trading Days within the (A)
period of 10 consecutive Trading Days ending immediately after the later of the
date of the Change in Control or the date of the public announcement of the
Change in Control (in the case of a Change in Control under clause (i) above but
not clause (ii) or (iii) above) or (B) the period of 10 consecutive Trading Days
ending immediately prior to the date of the Change in Control (in the case of a
Change in Control under Clause (ii) or (iii) above) shall, in either case, equal
or exceed 105% of the Conversion Price of the Securities in effect on each such
Trading Day;
(c) the term "Conversion Price" shall equal U.S. $1,000
divided by the Conversion Rate; and
(d) for purposes of SECTION 13.4(b)(i), the term "Person"
shall include any syndicate or group which would be deemed to be a "person"
under Section 13(d)(3) of the Exchange Act, as in effect on the date of the
original execution of this Indenture.
ARTICLE FOURTEEN
HOLDERS LISTS AND REPORTS
BY TRUSTEE AND COMPANY; NON-RECOURSE
SECTION 14.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the
Trustee:
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(a) semi-annually, not more than 15 days after the Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Securities as of
such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 14.2 PRESERVATION OF INFORMATION.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in SECTION 14.1 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in SECTION 14.1 upon receipt of a new list so furnished.
(b) After this Indenture has been qualified under the Trust
Indenture Act, the rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to names and addresses of Holders
made pursuant to the Trust Indenture Act.
SECTION 14.3 NO RECOURSE AGAINST OTHERS.
An incorporator or any past, present or future director,
officer, employee or stockholder, as such, of the
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Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Security,
each Holder shall waive and release all such liability. Such waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 14.4 REPORTS BY TRUSTEE.
(a) After this Indenture has been qualified under the Trust
Indenture Act, the Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each May 15 following the date of this
Indenture, deliver to Holders a brief report, dated as of such May 15, which
complies with the provisions of such SECTION 313(a).
(b) After this Indenture has been qualified under the Trust
Indenture Act, a copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the
Company. The Company will promptly notify the Trustee when the Securities are
listed on any stock exchange.
SECTION 14.5 REPORTS BY COMPANY.
After this Indenture has been qualified under the Trust
Indenture Act, the Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant to such Act; PROVIDED
that any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed
with the Commission.
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Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt thereof
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
---------------------
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
eToys Inc.
By /s/ STEVEN J. SCHOCH
-------------------------------------
Name: Steven J. Schoch
Title: Senior Vice President and
Chief Financial Officer
U.S. Bank Trust National Association, a
national banking association, Trustee
By /s/ RICHARD H. PROKOSCH
-------------------------------------
Name: Richard H. Prokosch
Title: Assistant Vice President
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TABLE OF CONTENTS
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RECITALS........................................................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 Definitions............................................................................2
Act.............................................................................................2
Affiliate.......................................................................................2
Agent Member....................................................................................2
Applicable Procedures...........................................................................3
Authenticating Agent............................................................................3
Average Sales Price Per Share...................................................................3
Board of Directors..............................................................................3
Board Resolution................................................................................3
Business Day....................................................................................3
Change in Control...............................................................................4
Code............................................................................................4
Commission......................................................................................4
Common Stock....................................................................................4
Company.........................................................................................5
Company Notice..................................................................................5
Company Request or Company Order................................................................5
Constituent Person..............................................................................5
Conversion Agent................................................................................5
Conversion Price................................................................................5
Conversion Rate.................................................................................6
Corporate Trust Office..........................................................................6
Corporation.....................................................................................6
Defaulted Interest..............................................................................6
Depositary......................................................................................6
Designated Senior Debt..........................................................................6
Dollar or U.S.$.................................................................................6
DTC ..........................................................................................6
Event of Default................................................................................6
Exchange Act....................................................................................7
Global Security.................................................................................7
Holder..........................................................................................7
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Indenture.......................................................................................7
Initial Purchasers..............................................................................7
Interest Payment Date...........................................................................7
Liquidated Damages..............................................................................7
Maturity........................................................................................7
Non-electing Share..............................................................................7
Notice of Default...............................................................................8
Officers' Certificate...........................................................................8
Opinion of Counsel..............................................................................8
Outstanding.....................................................................................8
Paying Agent....................................................................................9
Person..........................................................................................9
Place of Conversion.............................................................................9
Place of Payment................................................................................9
Predecessor Security...........................................................................10
Purchase Agreement.............................................................................10
Record Date....................................................................................10
Record Date Period.............................................................................10
Redemption Date................................................................................10
Redemption Price...............................................................................10
Registered Securities..........................................................................10
Registrable Securities.........................................................................10
Registration Default...........................................................................10
Registration Rights Agreement..................................................................10
Regular Record Date............................................................................10
Repurchase Date................................................................................11
Repurchase Price...............................................................................11
Responsible Officer............................................................................11
Restricted Global Security.....................................................................11
Restricted Securities Legend...................................................................11
Rule 144A......................................................................................12
Rule 144A Information..........................................................................12
Securities.....................................................................................12
Securities Act.................................................................................12
Securities Act Legend..........................................................................12
Security Register and Security Registrar.......................................................12
Senior Debt....................................................................................12
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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Shelf Registration Statement...................................................................13
Special Record Date............................................................................13
Stated Maturity................................................................................14
Subsidiary.....................................................................................14
Successor Security.............................................................................14
Trading Days...................................................................................14
Trust Indenture Act............................................................................15
Trustee........................................................................................15
United States..................................................................................15
Vice President.................................................................................15
SECTION 1.2 Compliance Certificates and Opinions.........................................15
SECTION 1.3 Form of Documents Delivered to the Trustee...................................16
SECTION 1.4 Acts of Holders of Securities................................................17
SECTION 1.5 Notices, Etc., to Trustee and Company........................................20
SECTION 1.6 Notice to Holders of Securities; Waiver......................................21
SECTION 1.7 Effect of Headings and Table of Contents.....................................22
SECTION 1.8 Successors and Assigns.......................................................22
SECTION 1.9 Separability Clause..........................................................22
SECTION 1.10 Benefits of Indenture........................................................22
SECTION 1.11 Governing Law................................................................23
SECTION 1.12 Legal Holidays...............................................................23
SECTION 1.13 Conflict with Trust Indenture Act............................................23
ARTICLE TWO
SECURITY FORMS
SECTION 2.1 Form Generally...............................................................24
SECTION 2.2 Form of Security............................................................26
SECTION 2.3 Form of Certificate of Authentication.......................................46
SECTION 2.4 Form of Conversion Notice....................................................46
ARTICLE THREE
THE SECURITIES
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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SECTION 3.1 Title and Terms..............................................................48
SECTION 3.2 Denominations................................................................49
SECTION 3.3 Execution, Authentication, Delivery and Dating...............................49
SECTION 3.4 Global Securities; Non-Global Securities.....................................50
SECTION 3.5 Registration, Registration of Transfer and Exchange; Restrictions on
Transfer.....................................................................53
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities..............................57
SECTION 3.7 Payment of Interest; Interest Rights Preserved...............................58
SECTION 3.8 Persons Deemed Owners........................................................60
SECTION 3.9 Cancellation.................................................................60
SECTION 3.10 Computation of Interest......................................................60
SECTION 3.11 CUSIP Numbers................................................................61
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture......................................61
SECTION 4.2 Application of Trust Money...................................................63
ARTICLE FIVE
REMEDIES
SECTION 5.1 Events of Default............................................................63
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment...........................66
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee..............67
SECTION 5.4 Trustee May File Proofs of Claim.............................................69
SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities..................70
SECTION 5.6 Application of Money Collected...............................................70
SECTION 5.7 Limitation on Suits..........................................................71
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium and Interest
and to `Convert..............................................................72
SECTION 5.9 Restoration of Rights and Remedies...........................................72
SECTION 5.10 Rights and Remedies Cumulative...............................................72
SECTION 5.11 Delay or Omission Not Waiver.................................................73
SECTION 5.12 Control by Holders of Securities.............................................73
SECTION 5.13 Waiver of Past Defaults......................................................73
SECTION 5.14 Undertaking for Costs........................................................74
SECTION 5.15 Waiver of Stay, Usury or Extension Laws......................................75
ARTICLE SIX
THE TRUSTEE
SECTION 6.1 Certain Duties and Responsibilities..........................................75
SECTION 6.2 Notice of Defaults...........................................................77
SECTION 6.3 Certain Rights of Trustee....................................................77
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.......................79
SECTION 6.5 May Hold Securities, Act as Trustee Under Other Indentures...................79
SECTION 6.6 Money Held in Trust..........................................................79
SECTION 6.7 Compensation and Reimbursement...............................................80
SECTION 6.8 Corporate Trustee Required; Eligibility......................................81
SECTION 6.9 Resignation and Removal; Appointment of Successor............................81
SECTION 6.10 Acceptance of Appointment by Successor.......................................83
SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business..................84
SECTION 6.12 Authenticating Agents........................................................84
SECTION 6.13 Disqualification; Conflicting Interests......................................87
SECTION 6.14 Preferential Collection of Claims Against Company............................87
ARTICLE SEVEN
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1 Company May Consolidate, Etc., Only on Certain Terms.........................87
SECTION 7.2 Successor Substituted........................................................88
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Holders of Securities.............89
SECTION 8.2 Supplemental Indentures with Consent of Holders of Securities................90
SECTION 8.3 Execution of Supplemental Indentures.........................................92
SECTION 8.4 Effect of Supplemental Indentures............................................92
SECTION 8.5 Reference in Securities to Supplemental Indentures...........................93
SECTION 8.6 Notice of Supplemental Indentures............................................93
ARTICLE NINE
COVENANTS
SECTION 9.1 Payment of Principal, Premium and Interest...................................93
SECTION 9.2 Maintenance of Offices or Agencies...........................................94
SECTION 9.3 Money for Security Payments To Be Held in Trust..............................94
SECTION 9.4 Existence....................................................................96
SECTION 9.5 Maintenance of Properties....................................................97
SECTION 9.6 Payment of Taxes and Other Claims............................................97
SECTION 9.7 Registration and Listing.....................................................98
SECTION 9.8 Statement by Officers as to Default..........................................98
SECTION 9.9 Delivery of Certain Information..............................................99
SECTION 9.10 Resale of Certain Securities; Reporting Issuer...............................99
SECTION 9.11 INTENTIONALLY OMITTED.......................................................100
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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SECTION 9.12 Waiver of Certain Covenants.................................................100
ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 10.1 Right of Redemption.........................................................101
SECTION 10.2 Applicability of Article....................................................101
SECTION 10.3 Election to Redeem; Notice to Trustee.......................................101
SECTION 10.4 Selection by Trustee of Securities To Be Redeemed...........................101
SECTION 10.5 Notice of Redemption........................................................102
SECTION 10.6 Deposit of Redemption Price.................................................103
SECTION 10.7 Securities Payable on Redemption Date.......................................104
SECTION 10.8 Securities Redeemed in Part.................................................104
SECTION 10.9 Conversion Arrangement on Call for Redemption...............................105
ARTICLE ELEVEN
CONVERSION OF SECURITIES
SECTION 11.1 Conversion Privilege and Conversion Rate....................................106
SECTION 11.2 Exercise of Conversion Privilege............................................107
SECTION 11.3 Fractions of Shares.........................................................109
SECTION 11.4 Adjustment of Conversion Rate...............................................110
SECTION 11.5 Notice of Adjustments of Conversion Rate....................................117
SECTION 11.6 Notice of Certain Corporate Action..........................................118
SECTION 11.7 Company to Reserve Common Stock.............................................119
SECTION 11.8 Taxes on Conversions........................................................119
SECTION 11.9 Covenant as to Common Stock.................................................120
SECTION 11.10 Cancellation of Converted Securities........................................120
SECTION 11.11 Provision in Case of Consolidation, Merger or Sale of Assets................120
SECTION 11.12 Responsibility of Trustee for Conversion Provisions.........................122
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 12.1 Securities Subordinate to Senior Debt.......................................123
SECTION 12.2 No Payments in Certain Circumstances;
Payment Over of Proceeds Upon Dissolution, Etc..............................123
SECTION 12.3 Trustee to Effectuate Subordination.........................................126
SECTION 12.4 No Waiver of Subordination Provisions.......................................127
SECTION 12.5 Notice to Trustee...........................................................127
SECTION 12.6 Reliance on Judicial Order or Certificate of Liquidating Agent..............128
SECTION 12.7 Trustee Not Fiduciary for Holders of Senior Debt............................129
SECTION 12.8 Reliance by Holders of Senior Debt on Subordination Provisions..............129
SECTION 12.9 Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights............................................130
SECTION 12.10 Article Applicable to Paying Agents.........................................130
SECTION 12.11 Certain Conversions and Repurchases Deemed Payment..........................130
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL
SECTION 13.1 Right to Require Repurchase.................................................131
SECTION 13.2 Conditions to the Company's Election to Pay the Repurchase Price in
Common Stock................................................................132
SECTION 13.3 Notices; Method of Exercising Repurchase Right, Etc.........................133
SECTION 13.4 Certain Definitions.........................................................138
ARTICLE FOURTEEN
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE
SECTION 14.1 Company to Furnish Trustee Names and ..........................................
Addresses of Holders........................................................141
SECTION 14.2 Preservation of Information.................................................142
SECTION 14.3 No Recourse Against Others..................................................142
SECTION 14.4 Reports by Trustee..........................................................143
SECTION 14.5 Reports by Company..........................................................143
</TABLE>
Note: This table of contents shall not, for any pupose, be deemed to be a part
of the Indenture.
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