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EXHIBIT 4.1
BEYOND.COM CORPORATION
10 7/8% Convertible Subordinated Notes
Due December 1, 2003
-----------------------------------------------------------
INDENTURE
Dated as of August __, 2000
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LaSalle National Bank
Trustee
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CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TIA Indenture
Section Section
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Section 310(a)(1)....................................................... 9.10
(a)(2).......................................................... 9.10
(a)(3).......................................................... N.A.**
(a)(4).......................................................... N.A.
(a)(5).......................................................... 9.10
(b)............................................................. 9.8; 9.10
(c)............................................................. N.A.
Section 311(a).......................................................... 9.11
(b)............................................................. 9.11
(c)............................................................. N.A.
Section 312(a).......................................................... 2.5
(b)............................................................. 12.3
(c)............................................................. 12.3
Section 313(a).......................................................... 9.6
(b)(1).......................................................... N.A.
(b)(2).......................................................... 9.6
(c)............................................................. 9.6; 12.2
(d)............................................................. 9.6
Section 314(a).......................................................... 6.2; 6.4;12.2
(b)............................................................. N.A.
(c)(1).......................................................... 12.4(a)
(c)(2).......................................................... 12.4(a)
(c)(3).......................................................... N.A.
(d)............................................................. N.A.
(e)............................................................. 12.4(b)
(f)............................................................. N.A.
Section 315(a).......................................................... 9.1(b)
(b)............................................................. 9.5; 12.2
(c)............................................................. 9.1(a)
(d)............................................................. 9.1(c)
(e)............................................................. 8.11
Section 316(a)(last sentence)........................................... 2.9
(a)(1)(A)....................................................... 8.5
(a)(1)(B)....................................................... 8.4
(a)(2).......................................................... N.A.
(b)............................................................. 8.7
</TABLE>
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* This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
** N.A. means Not Applicable.
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<TABLE>
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(c)............................................................. 12.5
Section 317(a)(1)....................................................... 8.8
(a)(2).......................................................... 8.9
(b)............................................................. 2.4
Section 318(a).......................................................... 12.1
</TABLE>
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TABLE OF CONTENTS*
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Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.1. Definitions.......................................................1
SECTION 1.2. Other Definitions.................................................5
SECTION 1.3. Trust Indenture Act Provisions....................................6
ARTICLE 2
THE SECURITIES
SECTION 2.1. Form and Dating...................................................7
SECTION 2.2. Execution and Authentication......................................8
SECTION 2.3. Registrar, Paying Agent and Conversion Agent......................8
SECTION 2.4. Paying Agent to Hold Money In Trust...............................9
SECTION 2.5. Securityholder Lists..............................................9
SECTION 2.6. Transfer and Exchange............................................10
SECTION 2.7. Replacement Securities...........................................10
SECTION 2.8. Outstanding Securities...........................................11
SECTION 2.9. Treasury Securities..............................................11
SECTION 2.10. Temporary Securities.............................................12
SECTION 2.11. Cancellation.....................................................12
SECTION 2.12. Additional Transfer and Exchange Requirements....................12
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.1. Right to Redeem; Notice to Trustee...............................14
SECTION 3.2. Selection of Securities to Be Redeemed...........................14
SECTION 3.3. Notice of Redemption.............................................15
SECTION 3.4. Effect of Notice of Redemption...................................16
SECTION 3.5. Deposit of Redemption Price......................................16
SECTION 3.6. Securities Redeemed in Part......................................16
SECTION 3.7. Conversion Arrangement on Call for Redemption....................16
SECTION 3.8. Purchase of Securities at Option of the Holder Upon Change in
Control..........................................................17
SECTION 3.9. Effect of Change in Control Purchase Notice......................20
SECTION 3.10. Deposit of Change in Control Purchase Price......................20
SECTION 3.11. Securities Purchased In Part.....................................21
SECTION 3.12. Compliance With Securities Laws Upon Purchase of Securities......21
SECTION 3.13. Repayment to the Company.........................................21
</TABLE>
* This Table of Contents shall not, for any purpose, be deemed a part of this
Indenture.
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<TABLE>
<CAPTION>
ARTICLE 4
CONVERSION
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SECTION 4.1. Conversion Privilege.............................................21
SECTION 4.2. Auto Conversion..................................................22
SECTION 4.3. Conversion Procedure.............................................22
SECTION 4.4. Fractional Shares................................................24
SECTION 4.5. Taxes on Conversion..............................................24
SECTION 4.6. Company to Provide Stock.........................................24
SECTION 4.7. Adjustment of Conversion Price...................................24
SECTION 4.8. No Adjustment....................................................28
SECTION 4.9. Adjustment for Tax Purposes......................................29
SECTION 4.10. Notice of Adjustment.............................................29
SECTION 4.11. Notice of Certain Transactions...................................29
SECTION 4.12. Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege.............................................29
SECTION 4.13. Trustee's Disclaimer.............................................30
SECTION 4.14. Voluntary Reduction..............................................31
ARTICLE 5
SUBORDINATION
SECTION 5.1. Securities Subordinated to Senior Indebtedness...................31
SECTION 5.2. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation, Reorganization,
Etc., of the Company.............................................31
SECTION 5.3. Holders to Be Subrogated to Right of Holders of Senior
Indebtedness.....................................................33
SECTION 5.4. Obligations of the Company Unconditional.........................33
SECTION 5.5. Company Not to Make Payment With Respect to Securities in
Certain Circumstances............................................33
SECTION 5.6. Notice to Trustee................................................35
SECTION 5.7. Application by Trustee of Money Deposited With It................35
SECTION 5.8. Subordination Rights Not Impaired by Acts or Omissions of
Company or Holders of Senior Indebtedness........................36
SECTION 5.9. Trustee to Effectuate Subordination..............................36
SECTION 5.10. Right of Trustee to Hold Senior Indebtedness.....................36
SECTION 5.11. Article 5 Not to Prevent Events of Default.......................36
SECTION 5.12. No Fiduciary Duty Created to Holders of Senior Indebtedness......36
SECTION 5.13. Article Applicable to Paying Agents..............................36
ARTICLE 6
COVENANTS
SECTION 6.1. Payment of Securities............................................37
SECTION 6.2. SEC Reports......................................................37
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<TABLE>
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SECTION 6.3. Compliance Certificates..........................................37
SECTION 6.4. Notice of Defaults...............................................38
SECTION 6.5. Further Instruments and Acts.....................................38
SECTION 6.6. Maintenance of Corporate Existence...............................38
ARTICLE 7
SUCCESSOR CORPORATION
SECTION 7.1. When Company May Merge, Etc......................................38
SECTION 7.2. Successor Corporation Substituted................................39
ARTICLE 8
DEFAULT AND REMEDIES
SECTION 8.1. Events of Default................................................39
SECTION 8.2. Acceleration.....................................................41
SECTION 8.3. Other Remedies...................................................41
SECTION 8.4. Waiver of Defaults and Events of Default.........................42
SECTION 8.5. Control by Majority..............................................42
SECTION 8.6. Limitations on Suits.............................................42
SECTION 8.7. Rights of Holders to Receive Payment and to Convert..............43
SECTION 8.8. Collection Suit by Trustee.......................................43
SECTION 8.9. Trustee May File Proofs of Claim.................................43
SECTION 8.10. Priorities.......................................................44
SECTION 8.11. Undertaking for Costs............................................44
SECTION 8.12. Waiver of Usury, Stay or Extension Laws..........................44
ARTICLE 9
TRUSTEE
SECTION 9.1. Duties of Trustee................................................44
SECTION 9.2. Rights of Trustee................................................45
SECTION 9.3. Individual Rights of Trustee.....................................46
SECTION 9.4. Trustee's Disclaimer.............................................46
SECTION 9.5. Notice of Default or Events of Default...........................46
SECTION 9.6. Reports by Trustee to Holders....................................47
SECTION 9.7. Compensation and Indemnity.......................................47
SECTION 9.8. Replacement of Trustee...........................................48
SECTION 9.9. Successor Trustee by Merger, Etc.................................48
SECTION 9.10. Eligibility; Disqualification....................................49
SECTION 9.11. Preferential Collection of Claims Against Company................49
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 10.1. Satisfaction and Discharge of Indenture..........................49
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<TABLE>
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SECTION 10.2. Application of Trust Money.......................................50
SECTION 10.3. Repayment to Company.............................................50
SECTION 10.4. Reinstatement....................................................51
ARTICLE 11
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.1. Without Consent of Holders.......................................51
SECTION 11.2. With Consent of Holders..........................................51
SECTION 11.3. Compliance With Trust Indenture Act..............................52
SECTION 11.4. Revocation and Effect of Consents................................53
SECTION 11.5. Notation on or Exchange of Securities............................53
SECTION 11.6. Trustee to Sign Amendments, etc..................................53
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. Trust Indenture Act Controls.....................................53
SECTION 12.2. Notices..........................................................54
SECTION 12.3. Communications by Holders With Other Holders.....................54
SECTION 12.4. Certificate and Opinion as to Conditions Precedent...............54
SECTION 12.5. Record Date for Vote or Consent of Securityholders...............55
SECTION 12.6. Rules by Trustee, Paying Agent, Registrar and Conversion
Agent............................................................55
SECTION 12.7. Legal Holidays...................................................55
SECTION 12.8. Governing Law....................................................56
SECTION 12.9. No Adverse Interpretation of Other Agreements....................56
SECTION 12.10. No Recourse Against Others.......................................56
SECTION 12.11. Successors.......................................................56
SECTION 12.12. Multiple Counterparts............................................56
SECTION 12.13. Separability.....................................................56
SECTION 12.14. Table of Contents, Headings, etc.................................56
</TABLE>
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THIS INDENTURE dated as of August __, 2000 is between Beyond.com
Corporation, a Delaware corporation (the "Company") and LaSalle National Bank, a
banking corporation duly organized and existing under the laws of the United
States, as Trustee (the "Trustee").
In consideration of the promises and the purchase of the
Securities by the Holders thereof, both parties agree as follows for the benefit
of the other and for the equal and ratable benefit of the registered Holders of
the Company's 10 7/8% Convertible Subordinated Notes Due December 1, 2003.
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"Affiliate" means, with respect to any specified person, 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 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" means any Registrar, Paying Agent or Conversion Agent.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial ownership interests in a global Security, the rules and
procedures of the Depositary that are applicable to such transfer or exchange.
"Board of Directors" means either the board of directors of the
Company or any authorized committee of the Board of Directors empowered to act
for forthwith respect to industry. The term "board of directors", when used with
lower-case letters, means the board of directors of the Company.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" or "capital stock" of any person means any and
all shares, interests, partnership interests, participations, rights or other
equivalents (however designated) of such person's equity interest (however
designated).
"Capitalized Lease Obligation" means any obligation under a
lease of (or other agreement conveying the right to use) any property (whether
real, personal or mixed) that is required to be classified and accounted for as
a capital lease obligation under GAAP, and the amount of such obligation at any
date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash" or "cash" means such coin or currency of the United
States as at any time of payment is legal tender for the payment of public and
private debts.
"Certificated Security" means a Security that is in
substantially the form attached hereto as Exhibit.
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"Common Stock" means the common stock of the Company, $.001 par
value, as it exists on the date of this Indenture and any shares of any class or
classes of capital stock of the Company resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to redemption
by the Company; provided, however, that if at any time there shall be more than
one such resulting class, the shares of each such class then so issuable on
conversion of Securities 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 party named as such in this Indenture until
a successor replaces it pursuant to this Indenture, and thereafter means the
successor.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of this Indenture is
located at 135 South LaSalle Street, Suite 1960, Chicago, Illinois 60603,
Attention: Corporate Trust Department or at any other time at such other address
as the Trustee may designate from time to time by notice to the Company.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect the Company against fluctuations in currency values.
"Default" or "default" means, when used with respect to the
Securities, any event which is or, after notice or passage of time or both,
would be an Event of Default.
"Final Maturity Date" means December 1, 2003.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States of America, which are applicable
from time to time and are consistently applied.
"Global Security" means a permanent global Security that is in
substantially the form attached hereto as Exhibit A and that includes the
information and schedule called for by footnotes 1, 3 and 4 thereof and which is
deposited with the Depositary or its custodian and registered in the name of the
Depositary or its nominee
"Holder" or "Securityholder" means the person in whose name a
Security is registered on the Primary Registrar's books.
"Indebtedness" means , with respect to any person, without
duplication, (a) all liabilities of such person for borrowed money or for the
deferred purchase price of property or services, excluding any trade accounts
payable and other current liabilities incurred in the ordinary course of
business; (b) all obligations of such person evidenced by bonds, notes,
2
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debentures, or other similar instruments; (c) all Capitalized Lease Obligations
of such person; (d) all guarantees of Indebtedness referred to in this
definition by such person; (e) all obligations of such person under or in
respect of Currency Agreements and Interest Rate Protection Obligations of such
person; and (f) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of the types referred to in clauses (a)
through (e) above.
"Indenture" means this Indenture as amended or supplemented from
time to time pursuant to the terms of this Indenture.
"Initial Issuance Date" means August __, 2000.
"Interest Rate Protection Agreement" means any arrangement
between the Company and any other person whereby, directly or indirectly, such
person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include without limitation, interest rate swaps, caps, floors, collars and
similar agreements.
"Interest Rate Protection Obligations" means the obligations of
the Company pursuant to an Interest Rate Protection Agreement.
"Officer" means the Chairman or any Co-Chairman of the Board,
any Vice Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers; provided, however, that for purposes of Sections 4.11 and 6.3,
"Officers' Certificate" means a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company and by one other Officer.
"Opinion of Counsel" means a written opinion from legal counsel.
The counsel may be an employee of or counsel to the Company or the Trustee.
"Person" or "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, or any other entity or organization, including a government or political
subdivision or instrumentality thereof.
"Principal" or "principal" of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.
"Redemption Date" or "redemption date," when used with respect
to any Security to be redeemed, means the date fixed for such redemption
pursuant to this Indenture.
"Redemption Price" or "redemption price," when used with respect
to any Security to be redeemed, means the price fixed for such redemption
pursuant to this Indenture, as set forth in the form of Security annexed as
Exhibit A hereto.
"SEC" or "Commission" means the Securities and Exchange
Commission.
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"Securities" means the 10 7/8% Convertible Subordinated Notes
Due December 1, 2003 or any of them (each, a "Security"), as amended or
supplemented from time to time, that are issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor thereto.
"Senior Indebtedness" means the principal of and premium, if
any, interest and other amounts payable on or in respect of any Indebtedness of
the Company, whether outstanding on the date of this Indenture or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to, or shall be junior in right of payment to,
or shall be pari passu in right of payment with, the Securities. Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (a) the Securities, (b)
the Company's 7 1/4% Convertible Subordinated Notes Due December 1, 2003, (c)
Indebtedness which, when incurred and without respect to any election under
Section 1111(d) of Title 11, United States Code (or any successor provision
thereto), is without recourse to the Company, (e) trade accounts payable or
other current liabilities incurred in the ordinary course of business, (f)
Indebtedness of or amounts owed by the Company for compensation to employees or
for services rendered to the Company, (g) any liability for federal, state,
local or other taxes owed or owing by the Company, (h) Indebtedness of the
Company to a Subsidiary of the Company and (i) amounts owing under leases (other
than Capitalized Lease Obligations). For the purposes of this definition of
Senior Indebtedness under this Indenture, it is the intent of the parties hereto
that the Securities issued under this Indenture be "Senior Debt" (as defined
under that certain Indenture, dated November 23, 1998 between the Software.net
(doing business as Beyond.com) and LaSalle National Bank (the "Existing Notes
Trustee") (the "Existing Notes Indenture") for purposes of the Existing Notes
Indenture and 7 1/4% Convertible Subordinated Notes due December 1, 2003 issued
thereunder (the "Existing Notes"), and in furtherance thereof, the parties
hereto agree that nothing contained in this Indenture or in the definition of
Senior Debt under this Indenture is meant to or shall be construed to expressly
provide that the Securities issued under this Indenture are not superior to the
Existing notes.
"Significant Subsidiary" means any Subsidiary of the Company
which is a "significant subsidiary" within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission, as such Rule is in effect on the
date of this Indenture, but substituting 50% for 10% in each instance that 10%
appears in such Rule.
"Subsidiary" means, with respect to any person, (i) a
corporation a majority of whose outstanding Voting Stock is at the time of
determination thereof, directly or indirectly, owned by such person, by one or
more Subsidiaries of such person or by such person and one or more of its
Subsidiaries and (ii) any other person (other than a corporation), including,
without limitation, a joint venture, in which such person, one or more
Subsidiaries of such person or such person and one or more of its Subsidiaries,
directly or indirectly, at the date of determination thereof, owns at least a
majority of the ownership interests entitled to vote in the election of
directors, managers or trustees thereof (or other persons performing similar
functions). For
4
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purposes of this definition, any directors' qualifying shares or investments by
foreign nationals mandated by applicable law shall be disregarded in determining
the ownership of a Subsidiary.
"TIA" means the Trust Indenture Act of 1939, as amended, as in
effect on the date of this Indenture, except as provided in Section 11.3, and
except to the extent any amendment to the Trust Indenture Act expressly provides
for application of the Trust Indenture Act as in effect on another date.
"Trading Day" means, with respect to any security, each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any day on which securities
are not generally traded on the principal exchange or market in which such
security is traded.
"Trustee" means the party named as such in this Indenture until
a successor replaces it in accordance with the provisions of this Indenture, and
thereafter means the successor.
"Trust Officer" means, with respect to the Trustee, any officer
assigned to the Corporate Trust Office, including any managing director, vice
president, assistant vice president, assistant treasurer, assistant secretary or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and having direct
responsibility for the administration of this Indenture, and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof under ordinary circumstances have the
power to vote in the election of the board of directors, managers or trustees of
any person (or other persons performing similar functions), irrespective of
whether or not, at the time, Capital Stock of any other class or classes shall
have, or might have, voting power by reason of the happening of any contingency.
SECTION 1.2. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
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"Agent Members"....................................... 2.1
"Bankruptcy Law"...................................... 8.1
"Change in Control"................................... 3.8
"Change in Control Purchase Date"..................... 3.8
"Change in Control Purchase Notice"................... 3.8
"Change in Control Purchase Price".................... 3.8
"Closing price"....................................... 4.6
"Company Order"....................................... 2.2
"Conversion Agent".................................... 2.3
"Conversion Date"..................................... 4.2
"Conversion Price".................................... 4.6
"current market price"................................ 4.6
"Custodian"........................................... 8.1
"DTC"................................................. 2.1
</TABLE>
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<TABLE>
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"Default Notice"........................................................ 5.5
"Depositary"............................................................ 2.1
"Determination Date".................................................... 4.6
"Distribution Date"..................................................... 4.6
"Event of Default"...................................................... 8.1
"Exchange Act".......................................................... 2.12
"Expiration Date"....................................................... 4.6
"Expiration Time"....................................................... 4.6
"Legal Holiday"......................................................... 12.7
"NYSE".................................................................. 4.6
"Paying Agent".......................................................... 2.3
"Primary Registrar"..................................................... 2.3
"Purchase Agreement".................................................... 2.1
"Purchased Shares"...................................................... 4.6
"Registrar"............................................................. 2.3
"Transfer Certificate".................................................. 2.12
"Triggering Distribution"............................................... 4.6
"Unissued Shares"....................................................... 3.8
</TABLE>
SECTION 1.3. TRUST Indenture ACT PROVISIONS.
Whenever this Indenture refers to a provision of the TIA, that
provision is incorporated by reference in and made a part of this Indenture. The
Indenture shall also include those provisions of the TIA required to be included
herein by the provisions of the Trust Indenture Reform Act of 1990. The
following TIA terms used in this Indenture have the following meanings:
"Indenture securities" means the Securities;
"Indenture security holder" means a Securityholder;
"Indenture to be qualified" means this Indenture;
"Indenture trustee" or "institutional trustee" means the
Trustee; and
"Obligor" on the Indenture securities means the Company or any
other obligor on the Securities.
All other terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.4. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
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(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) words in the singular include the plural, and words
in the plural include the singular;
(4) provisions apply to successive events and
transactions;
(5) the term "merger" includes a statutory share
exchange and the term "merged" has a correlating meaning;
(6) the masculine gender includes the feminine and the
neuter;
(7) references to agreements and other instruments
include subsequent amendments thereto; and
(8) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE 2
THE SECURITIES
SECTION 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication
shall be substantially in the respective forms set forth in Exhibit A, which
Exhibit is incorporated in and made part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication.
(a) Global Securities in General. Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, purchases or
conversions of such Securities. Any endorsement of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Securities Custodian in accordance with
the standing instructions and procedures existing between the Depositary and the
Securities Custodian.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or under the Global Security, and the
Depositary (including, for this purpose, its nominee) may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner and Holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall (A) prevent the Company, the
Trustee or any
7
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agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or (B)
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Certificated Securities. Certificated Securities shall be
issued only under the limited circumstances provided in Section 2.12(a)(1)
hereof.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Securities for the Company by manual
or facsimile signature. The Company's seal or a facsimile thereof shall be
affixed to or reproduced on the Securities and attested by the manual or
facsimile signature of the Secretary or an Assistant Secretary of the Company.
Typographic and other minor errors or defects in any such reproduction of the
seal or any such facsimile signature shall not affect the validity or
enforceability of any Security which has been authenticated and delivered by the
Trustee.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$42,670,000 upon receipt of a written order or orders of the Company signed by
two Officers of the Company (a "Company Order"). The Company Order shall specify
the amount of Securities to be authenticated, shall provide that all such
Securities will be represented by a Global Security and the date on which each
original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $42,670,000, except
as provided above and in Section 2.7.
The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3. REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain one or more offices or agencies where
Securities may be presented for registration of transfer or for exchange (each,
a "Registrar"), one or more offices or agencies where Securities may be
presented for payment (each, a "Paying Agent"), one
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or more offices or agencies where Securities may be presented for conversion
(each, a "Conversion Agent") and one or more offices or agencies where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will at all times maintain a Paying Agent,
Conversion Agent, Registrar and an office or agency where notices and demands to
or upon the Company in respect of the Securities and this Indenture may be
served in Chicago, Illinois and, if any Certificated Securities are issued, in
the Borough of Manhattan, the City of New York. One of the Registrars (the
"Primary Registrar") shall keep a register of the Securities and of their
transfer and exchange.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
agent for service of notices and demands in any place required by this
Indenture, or fails to give the foregoing notice, the Trustee shall act as such.
The Company or any Affiliate of the Company may act as Paying Agent (except for
the purposes of Section 6.1 and Article 10).
The Company initially appoints the Trustee, acting through its
Corporate Trust Office in Chicago, Illinois, as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands in connection with
the Securities.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST.
Prior to 11:00 a.m., New York City time, on each due date of the
principal of or interest on any Securities, the Company shall deposit with a
Paying Agent a sum sufficient to pay such principal or interest so becoming due.
Subject to Section 5.7, a Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities, and shall notify the
Trustee of any default by the Company (or any other obligor on the Securities)
in making any such payment. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall, before 11:00 a.m., New York City time, on each due
date of the principal of or interest on any Securities, segregate the money and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee, and the Trustee may at any
time during the continuance of any default, upon written request to a Paying
Agent, require such Paying Agent to forthwith pay to the Trustee all sums so
held in trust by such Paying Agent. Upon doing so, the Paying Agent (other than
the Company) shall have no further liability for the money.
SECTION 2.5. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Primary Registrar, the Company shall
furnish to the Trustee on or before each semiannual interest payment date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Securityholders.
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SECTION 2.6. TRANSFER AND EXCHANGE.
(a) Subject to compliance with any applicable additional
requirements contained in Section 2.12, when a Security is presented to a
Registrar with a request to register a transfer thereof or to exchange such
Security for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided, however, that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Registrar duly
executed by the Holder thereof or its attorney duly authorized in writing. To
permit registration of transfers and exchanges, upon surrender of any Security
for registration of transfer or exchange at an office or agency maintained
pursuant to Section 2.3, the Company shall execute and the Trustee shall
authenticate Securities of a like aggregate principal amount at the Registrar's
request. Any exchange or transfer shall be without charge, except that the
Company or the Registrar may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto, and
provided further that this sentence shall not apply to any exchange pursuant to
Section 2.10, 2.12(a)(1), 3.6, 3.11, 4.2 (last paragraph) or 11.5.
Neither the Company, any Registrar nor the Trustee shall be
required to exchange or register a transfer of (a) any Securities for a period
of 15 days next preceding any selection of Securities to be redeemed, (b) any
Securities or portions thereof selected or called for redemption (except, in the
case of redemption of a Security in part, the portion not to be redeemed) or (c)
any Securities or portions thereof in respect of which a Change in Control
Purchase Notice has been delivered and not withdrawn by the Holder thereof
(except, in the case of the purchase of a Security in part, the portion not to
be purchased).
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Company, evidencing the same debt
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
(b) Any Registrar appointed pursuant to Section 2.3 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
SECTION 2.7. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Company, a
Registrar or the Trustee, or the Company, a Registrar and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company, the applicable Registrar and
the Trustee such Security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Company, such Registrar
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount, 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, or is about to be redeemed or
purchased by the Company
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pursuant to Article 3, the Company in its discretion may, instead of issuing a
new Security, pay, redeem or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.7,
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 and any other
reasonable expenses (including the reasonable fees and expenses of the Trustee
or the Registrar) in connection therewith.
Every new Security issued pursuant to this Section 2.7 in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are (to the extent lawful)
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.
SECTION 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities
authenticated by the Trustee, except for those canceled by it, those delivered
to it for cancellation and those described in this Section 2.8 as not
outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to
be outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If a Paying Agent (other than the Company or an Affiliate of the
Company) holds on a redemption date, a Change in Control Purchase Date or the
Final Maturity Date money sufficient to pay the principal of (including premium,
if any) and accrued interest on Securities (or portions thereof) payable on that
date, then on and after that date such Securities (or portions thereof, as the
case may be) cease to be outstanding and interest on them ceases to accrue.
Subject to the restrictions contained in Section 2.9, a Security
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Security.
SECTION 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal
amount of Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that, for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Securities and that the pledgee is not the
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Company or any other obligor on the Securities or any Affiliate of the Company
or of such other obligor.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company
may prepare and execute, and, upon receipt of a Company Order, the Trustee shall
authenticate and deliver, temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company with the consent of the Trustee considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and deliver definitive Securities in exchange for
temporary Securities.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee or its agent any Securities surrendered to them for
transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, redemption, payment, conversion or cancellation and
shall deliver the canceled Securities to the Company. All Securities which are
redeemed, purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates prior to the Final Maturity Date shall be delivered
to the Trustee for cancellation and the Company may not hold or resell such
Securities or issue any new Securities to replace any such Securities or any
Securities that any Holder has converted pursuant to Article 4. Without
limitation to the foregoing, any Securities acquired by any investment bankers
or other purchasers pursuant to Section 3.7 shall be surrendered for conversion
and thereafter cancelled, and may not be reoffered, sold or otherwise
transferred.
SECTION 2.12. ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS.
(a) Transfer and Exchange of Global Securities.
(1) Certificated Securities shall be issued in exchange
for interests in the global Securities only if (x) the
Depositary notifies the Company that it is unwilling or unable
to continue as depositary for the global Securities or if it at
any time ceases to be a "clearing agency" registered under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), if so required by applicable law or regulation and a
successor depositary is not appointed by the Company within 90
days, or (y) an Event of Default has occurred and is continuing.
In either case, the Company shall execute, and the Trustee
shall, upon receipt of a Company Order (which the Company agrees
to delivery promptly), authenticate and deliver Certificated
Securities in an aggregate principal amount equal to the
principal amount of such global Securities in exchange
therefore. Certificated Securities issued in exchange for
beneficial interests in global Securities shall be registered in
such names and shall be in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The
Trustee shall
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deliver or cause to be delivered such Certificated Securities to
the persons in whose names such Securities are so registered.
Such exchange shall be effected in accordance with the
Applicable Procedures.
(2) Notwithstanding any other provisions of this
Indenture other than the provisions set forth in Section
2.12(a)(1), a Global Security may not be transferred as a whole
except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee
of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(b) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented by a Holder to a Registrar with a request:
(x) to register the transfer of the Certificated
Securities to a person who will take delivery thereof in the
form of Certificated Securities only; or
(y) to exchange such Certificated Securities for an
equal principal amount of Certificated Securities of other
authorized denominations,
such Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Certificated Securities presented or surrendered for
register of transfer or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in accordance with the proviso to the
first paragraph of Section 2.6; and
(c) Transfers of Certificated Securities for Beneficial Interest
in Global Securities. In the event that Certificated Securities are issued in
exchange for beneficial interests in Global Securities and, thereafter, the
events or conditions specified in Section 2.12(a)(1) which required such
exchange shall have ceased to exist, the Company shall mail notice to the
Trustee and to the Holders stating that Holders may exchange Certificated
Securities for interests in Global Securities by complying with the procedures
set forth in this Indenture and briefly describing such procedures and the
events or circumstances requiring that such notice be given. Thereafter, if
Certificated Securities are presented by a Holder to a Registrar with a request:
(x) to register the transfer of such Certificated
Securities to a person who will take delivery thereof in the
form of a beneficial interest in a Global Security; or
(y) to exchange such Certificated Securities for an
equal principal amount of beneficial interests in a global
Security, which beneficial interests will be owned by the Holder
transferring such Certificated Securities,
the Registrar shall register the transfer or make the exchange as requested by
canceling such Certificated Security and causing, or directing the Securities
Custodian to cause, the aggregate principal amount of the applicable Global
Security to be increased accordingly and, if no such Global Security is then
outstanding, the Company shall issue and the Trustee shall authenticate
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and deliver a new Global Security; provided, however, that the Certificated
Securities presented or surrendered for registration of transfer or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in accordance with the proviso to Section
2.6;
(d) Transfers to the Company. Nothing in this Indenture or in
the Securities shall prohibit the sale or other transfer of any Securities
(including beneficial interests in global Securities) to the Company or any of
its Subsidiaries, which Securities shall thereupon be cancelled in accordance
with the last sentence of Section 2.11.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.1. RIGHT TO REDEEM; NOTICE TO TRUSTEE.
The Securities may be redeemed at the election of the Company,
as a whole or from time to time in part, at any time on or after December 6,
2001, at the redemption prices together with accrued interest up to but not
including the Redemption Date.
If the Company elects to redeem Securities pursuant to this
Section 3.1, it shall notify the Trustee at least 35 days prior to the
redemption date as fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee) of the redemption date and the principal amount of
Securities to be redeemed. If fewer than all of the Securities are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall not be less than ten
days after the date of notice to the Trustee.
SECTION 3.2. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed, the
Trustee shall, not more than 60 days prior to the redemption date, select the
Securities to be redeemed. The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption, by lot, pro
rata or by another method the Trustee considers fair and appropriate. Securities
in denominations of $1,000 may only be redeemed in whole. The Trustee may select
for redemption portions (equal to $1,000 or any multiple thereof) of the
principal of Securities that have denominations larger than $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
If any 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
to be the portion selected for redemption. Securities which have been converted
during a selection of Securities to be redeemed shall be treated by the Trustee
as outstanding for the purpose of such selection.
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SECTION 3.3. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed a notice of redemption to
each Holder of Securities to be redeemed at such Holder's address as it appears
on the Primary Registrar's books.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the then current Conversion Price;
(4) the name and address of each Paying Agent and
Conversion Agent;
(5) that Securities called for redemption must be
presented and surrendered to a Paying Agent to collect the
redemption price;
(6) that the Securities called for redemption may be
converted at any time before the close of business on the
Business Day immediately preceding the redemption date;
(7) that Holders who wish to convert Securities must
surrender such Securities for conversion no later than the close
of business on the Business Day immediately preceding the
redemption date and must satisfy the other requirements required
under the terms of the Exchange Offer;
(8) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
shall cease accruing on and after the redemption date and the
only remaining right of the Holder shall be to receive payment
of the redemption price, plus accrued interest, if any upon
presentation and surrender to a Paying Agent of the Securities;
and
(9) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed
and that, after the redemption date, upon presentation and
surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion
thereof will be issued.
If any of the Securities to be redeemed is in the form of a
global Security, then the Company shall modify such notice to the extent
necessary to accord with the procedures of the Depositary applicable to
redemptions.
At the Company's written request, which request shall (i) be
irrevocable once given and (ii) set forth all relevant information required by
clauses (1) through (9) of the second preceding paragraph, the Trustee shall
give the notice of redemption in the Company's name and at the Company's
expense.
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SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price stated in the notice, together with accrued interest, if any, except for
Securities that are converted in accordance with the provisions of Article 4.
Upon presentation and surrender to a Paying Agent, Securities called for
redemption shall be paid at the redemption price, plus accrued interest up to
but not including the redemption date; provided that installments of interest
which are due and payable on interest payment dates falling on or prior to a
redemption date will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record dates.
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE.
Prior to 11:00 a.m. New York City time, on the redemption date,
the Company shall deposit with a Paying Agent (or, if the Company acts as Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest on all Securities to be redeemed on that date,
other than Securities or portions thereof called for redemption on that date
which have been delivered by the Company to the Trustee for cancellation or have
been converted. The Paying Agent shall return to the Company any money not
required for that purpose because of the conversion of Securities pursuant to
Article 4 or, if such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from the trust.
SECTION 3.6. SECURITIES REDEEMED IN PART.
Upon presentation and surrender of a Security that is redeemed
in part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.
SECTION 3.7. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities called for redemption
by an agreement with one or more investment bankers or other purchasers to
purchase such Securities by paying to a Paying Agent (other than the Company or
any of its Affiliates) in trust for the Securityholders, on or before 11:00 A.M.
New York City time on the Redemption Date, an amount that, together with any
amounts deposited with such Paying Agent by the Company for the redemption of
such Securities, is not less than the Redemption Price, together with interest
accrued to, but not including, the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, shall be deemed to be satisfied and discharged
to the extent such amount is so paid by such purchasers; provided, however, that
nothing in this Section 3.7 shall relieve the Company of its obligation to pay
the Redemption Price, plus accrued interest to but excluding the relevant
redemption date, on Securities called for redemption. If such an agreement is
entered into, any Securities called for redemption and not surrendered for
conversion by the Holders thereof prior to the relevant redemption date may, at
the option of the Company upon written notice to the Trustee, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such Holders
and (notwithstanding anything to the contrary
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contained in Article 4) surrendered by such purchasers for conversion, all as of
11:00 A.M. New York City time on the Redemption Date, subject to payment of the
above amount as aforesaid. The Paying Agent shall hold and pay to the Holders
whose Securities are selected for redemption any such amount paid to it for
purchase in the same manner as it would money deposited with it by the Company
for the redemption of Securities. Without the Paying Agent'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 Paying Agent as set forth
in this Indenture, and the Company agrees to indemnify the Paying Agent from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Paying Agent 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.
SECTION 3.8. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON
CHANGE IN CONTROL.
(a) If at any time that Securities remain outstanding there
shall occur a Change in Control, Securities shall be purchased by the Company at
the option of the Holders thereof as of the date that is 30 Business Days after
the occurrence of the Change in Control (the "Change in Control Purchase Date")
at a purchase price equal to 105% of the principal amount thereof (the "Change
in Control Purchase Price") plus accrued interest up to but not including the
Change in Control Purchase Date, subject to satisfaction by or on behalf of any
Holder of the requirements set forth in subsection (c) of this Section 3.8. The
Company may elect, at the Company's sole option, to pay the Change in Control
Purchase Price in cash, common stock or a combination of cash and common stock.
A "Change in Control" shall be deemed to have occurred if any of
the following occurs after the Initial Issuance Date:
(1) any "person" or "group" (as such terms are defined
below) is or becomes the "beneficial owner" (as defined below),
directly or indirectly, of shares of Voting Stock of the Company
representing 50% or more of the total voting power of all
outstanding classes of Voting Stock of the Company or has the
power, directly or indirectly, to elect a majority of the
members of the board of directors of the Company; or
(2) the Company consolidates with, or merges with or
into, another Person or the Company sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially
all of the assets of the Company, or any Person consolidates
with, or merges with or into, the Company, in any such event
other than pursuant to a transaction in which the Persons that
"beneficially owned" (as defined below), directly or indirectly,
shares of Voting Stock of the Company immediately prior to such
transaction "beneficially own" (as defined below), directly or
indirectly, shares of Voting Stock of the Company representing
at least a majority of the total voting power of all outstanding
classes of Voting Stock of the surviving or transferee Person;
or
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(3) there shall occur the liquidation or dissolution of
the Company.
For the purpose of the definition of "Change in Control", (i) "person" and
"group" have the meanings given such terms under Section 13(d) and 14(d) of the
Exchange Act or any successor provision to either of the foregoing, and the term
"group" includes any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act (or any successor provision thereto), (ii) a "beneficial owner"
shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in
effect on the date of this Indenture, except that the number of shares of Voting
Stock of the Company shall be deemed to include, in addition to all outstanding
shares of Voting Stock of the Company and Unissued Shares deemed to be held by
the "person" or "group" (as such terms are defined above) or other Person with
respect to which the Change in Control determination is being made, all Unissued
Shares deemed to be held by all other Persons, and (iii) the terms "beneficially
owned" and "beneficially own" shall have meanings correlative to that of
"beneficial owner". The term "Unissued Shares" means shares of Voting Stock not
outstanding that are subject to options, warrants, rights to purchase or
conversion privileges exercisable within 60 days of the date of determination of
a Change in Control.
Notwithstanding the foregoing, a Change in Control will be
deemed not to have occurred (i) if the closing price of the Common Stock for any
five Trading Days during the ten Trading Days immediately preceding the Change
in Control is at least equal to 105% of the Conversion Price in effect
immediately preceding the Change in Control or (ii) if at least 90% of the
consideration (excluding cash payments for fractional shares or cash payments
for appraisal rights) in the transaction or transactions constituting the Change
in Control consists of shares of common stock or securities convertible into
shares of common stock that are, or upon issuance will be, traded on a national
securities exchange in the United States of America or through the Nasdaq
National Market.
(b) Within 10 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control to the
Trustee and to each Holder (and to beneficial owners as required by applicable
law) and shall cause a copy of such notice to be published in a daily newspaper
of national circulation. The notice shall include the form of a Change in
Control Purchase Notice to be completed by the Holder and shall state:
(1) the date of such Change in Control and, briefly, the
events causing such Change in Control;
(2) the date by which the Change in Control Purchase
Notice pursuant to this Section 3.8 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) briefly, the conversion rights of the Securities;
(6) the name and address of each Paying Agent and
Conversion Agent;
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(7) the then current Conversion Price;
(8) that Securities as to which a Change in Control
Purchase Notice has been given may be converted into Common
Stock only to the extent that the Change in Control Purchase
Notice has been withdrawn in accordance with the terms of this
Indenture;
(9) the procedures that the Holder must follow to
exercise rights under this Section 3.8;
(10) the procedures for withdrawing a Change in Control
Purchase Notice, including a form of notice of withdrawal; and
(11) that the Holder must satisfy the requirements set
forth in the Securities in order to convert the Securities.
If any of the Securities is in the form of a global Security,
then the Company shall modify such notice to the extent necessary to accord with
the procedures of the Depositary applicable to the repurchase of global
securities.
(c) A Holder may exercise its rights specified in subsection (a)
of this Section 3.8 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A hereto and which may be delivered
by letter, overnight courier, hand delivery, facsimile transmission or in any
other written form and, in the case of global Securities, may be delivered
electronically or by other means in accordance with the Depositary's customary
procedures) of the exercise of such rights (a "Change in Control Purchase
Notice") to any Paying Agent at any time prior to the close of business on the
Business Day next preceding the Change in Control Purchase Date.
The delivery of such Security to any Paying Agent (together with
all necessary endorsements) at the office of such Paying Agent shall be a
condition to the receipt by the Holder of the Change in Control Purchase Price
therefore.
The Company shall purchase from the Holder thereof, pursuant to
this Section 3.8, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security pursuant to Sections
3.8 through 3.13 also apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder
delivering to a Paying Agent the Change in Control Purchase Notice contemplated
by this subsection (c) shall have the right to withdraw such Change in Control
Purchase Notice in whole or in a portion thereof that is $1,000 or in an
integral multiple thereof at any time prior to the close of business on the
Business Day next preceding the Change in Control Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 3.9.
A Paying Agent shall promptly notify the Company of the receipt
by it of any Change in Control Purchase Notice or written withdrawal thereof.
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Anything herein to the contrary notwithstanding, in the case of
global Securities, any Change in Control Purchase Notice may be delivered or
withdrawn and such Securities may be surrendered or delivered for purchase in
accordance with the applicable procedures of the Depositary as in effect from
time to time.
SECTION 3.9. EFFECT OF CHANGE IN CONTROL PURCHASE NOTICE.
Upon receipt by any Paying Agent of the Change in Control
Purchase Notice specified in Section 3.8(c), the Holder of the Security in
respect of which such Change in Control Purchase Notice was given shall (unless
such Change in Control Purchase Notice is withdrawn as specified below)
thereafter be entitled to receive the Change in Control Purchase Price with
respect to such Security plus accrued interest thereon up to but not including
the Change in Control Purchase Date. Such Change in Control Purchase Price and
accrued interest shall be paid to such Holder promptly following the later of
(a) the Change in Control Purchase Date with respect to such Security (provided
the conditions in Section 3.8(c) have been satisfied) and (b) the time of
delivery of such Security to a Paying Agent by the Holder thereof in the manner
required by Section 3.8(c). Securities in respect of which a Change in Control
Purchase Notice has been given by the Holder thereof may not be converted into
shares of Common Stock on or after the date of the delivery of such Change in
Control Purchase Notice unless such Change in Control Purchase Notice has first
been validly withdrawn.
A Change in Control Purchase Notice may be withdrawn by a Holder
by means of a written notice (which may be delivered by letter, overnight
courier, hand delivery, facsimile transmission or in any other written form and,
in the case of global Securities, may be delivered electronically or by other
means in accordance with the Depositary's customary procedures) of withdrawal
delivered by the Holder to a Paying Agent at any time prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date, specifying the principal amount of the Security or portion
thereof (which must be $1,000 or an integral multiple of $1,000 in excess
thereof) with respect to which such notice of withdrawal is being submitted.
SECTION 3.10. DEPOSIT OF CHANGE IN CONTROL PURCHASE PRICE.
Before 11:00 AM New York City time, on the Change in Control
Purchase Date, the Company shall deposit with the Trustee or with a Paying Agent
(other than the Company or an Affiliate of the Company) an amount of money
sufficient to pay the aggregate Change in Control Purchase Price of all the
Securities or portions thereof that are to be purchased as of such Change in
Control Purchase Date plus accrued interest thereon up to but not including the
Change in Control Purchase Date. The manner in which the deposit required by
this Section 3.10 is made by the Company shall be at the option of the Company,
provided that such deposit shall be made in a manner such that the Trustee or a
Paying Agent shall have immediately available funds on the Change in Control
Purchase Date.
If a Paying Agent holds, in accordance with the terms hereof,
money sufficient to pay the Change in Control Purchase Price of any Security
tendered for purchase plus accrued interest thereon to but not including the
Change in Control Purchase Date, then, on the Change in Control Purchase Date,
such Security will cease to be outstanding and the rights of the Holder in
respect thereof shall terminate (other than the right to receive the Change in
Control Purchase Price plus accrued interest as aforesaid). The Company shall
publicly announce the principal
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<PAGE> 28
amount of Securities purchased as a result of such Change in Control on or as
soon as practicable after the Change in Control Purchase Date.
SECTION 3.11. SECURITIES PURCHASED IN PART.
Any Security that is to be purchased only in part shall be
surrendered at the office of a Paying Agent and promptly after the Change in
Control Purchase Date the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of such authorized denomination or denominations
as may be requested by such Holder, in aggregate principal amount equal to, and
in exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.
SECTION 3.12. COMPLIANCE WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES.
In connection with any offer to purchase or purchase of
Securities under Section 3.8, the Company shall (a) comply with Rule 13e-3, Rule
13e-4 and Rule 14e-1 (or any successor to any such Rule), if applicable, under
the Exchange Act, (b) file the related Schedule to (or any successor or similar
schedule, form or report) if required under the Exchange Act, and (c) otherwise
comply with all federal and state securities laws in connection with such offer,
all so as to permit the rights of the Holders and obligations of the Company
under Sections 3.8 through 3.11 to be exercised in the time and in the manner
specified therein.
SECTION 3.13. REPAYMENT TO THE COMPANY.
Subject to the provisions of Section 5.7, to the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 3.10
exceeds the aggregate Change in Control Purchase Price of the Securities or
portions thereof that the Company is obligated to purchase, plus accrued
interest thereon up to but not including the Change in Control Purchase Date,
then promptly after the Change in Control Purchase Date the Trustee or a Paying
Agent, as the case may be, shall return any such excess to the Company.
ARTICLE 4
CONVERSION
SECTION 4.1. CONVERSION PRIVILEGE.
Subject to the further provisions of this Section 4.1, a Holder
of a Security may convert the principal amount of such Security (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into Common Stock at any time prior to the close of business on the Final
Maturity Date, at the Conversion Price then in effect; provided, however, that,
if such Security is called for redemption pursuant to Article 3, such conversion
right shall terminate at the close of business on the Business Day immediately
preceding the Redemption Date for such Security or such earlier date as the
Holder presents such Security for redemption (unless the Company shall default
in making the Redemption Payment when due, in which case the conversion right
shall terminate at the close of business on the date such default is
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<PAGE> 29
cured and such Security is redeemed). The number of shares of Common Stock
issuable upon conversion of a Security shall be determined by dividing the
principal amount of the Security or portion thereof surrendered for conversion
by the Conversion Price in effect on the Conversion Date. The initial Conversion
Price is set forth in the Registration Statement on Form S-4 in the "Terms of
The Exchange Offer" and is subject to adjustment as provided in this Article 4.
A Holder may convert a portion of a Security equal to $1,000 or
any integral multiple thereof. Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of a
Security.
A Security in respect of which a Holder has delivered a Change
in Control Purchase Notice pursuant to Section 3.8(c) exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such Change in Control Purchase Notice is withdrawn by a written notice
of withdrawal delivered to a Paying Agent prior to the close of business on the
Business Day immediately preceding the Change in Control Purchase Date in
accordance with Section 3.9.
A Holder of Securities is not entitled to any rights of a holder
of Common Stock until such Holder has converted its Securities to Common Stock,
and only to the extent such Securities are deemed to have been converted into
Common Stock pursuant to this Article 4.
SECTION 4.2. AUTO CONVERSION.
The Company may elect to automatically convert the Exchange
Notes on or prior to maturity if the Common Stock price has exceeded 150% of the
conversion price for at least 20 trading days during a 30-day trading period
ending five trading days prior to the notice of automatic conversion. If an
automatic conversion occurs on or prior to December 6, 2001, the Company will
pay additional interest in cash or, at our option, in Common Stock equal to [18
months] worth of interest on the converted Exchange Notes, less any interest
actually paid prior to automatic conversion. If the Company elects to pay the
additional interest in Common Stock, the shares of Common Stock will be valued
at 90% of the average of the closing prices for the five trading days
immediately preceding the second trading day prior to the Conversion Date.
SECTION 4.3. CONVERSION PROCEDURE.
To convert a Security, a Holder must (a) complete and manually
sign the conversion notice on the back of the Security and deliver such notice
to a Conversion Agent, (b) surrender the Security to a Conversion Agent, (c)
furnish appropriate endorsements and transfer documents if required by a
Registrar or a Conversion Agent, and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is
the "Conversion Date." As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder through a Conversion Agent a certificate for
the number of whole shares of Common Stock issuable upon the conversion and cash
in lieu of any fractional shares pursuant to Section 4.4. Anything herein to the
contrary notwithstanding, in the case of Global Securities, conversion notices
may be delivered and such Securities may be surrendered for conversion in
accordance with the applicable procedures of the Depositary as in effect from
time to time.
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The person in whose name the Common Stock certificate is
registered shall be deemed to be a shareholder of record on the Conversion Date;
provided, however, that no surrender of a Security on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the person or persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; provided, further, that such
conversion shall be at the Conversion Price in effect on the Conversion Date as
if the stock transfer books of the Company had not been closed. Upon conversion
of a Security, such person shall no longer be a Holder of such Security. No
payment or adjustment will be made for dividends or distributions on shares of
Common Stock issued upon conversion of a Security.
Except as otherwise provided in this Section 4.3, no payment or
adjustment will be made for accrued interest on a converted Security; provided,
however, that interest accrued to but excluding December 6, 2001 shall be paid
on any Security called for redemption pursuant to Article 3 and surrendered for
conversion pursuant to this Article 4 on or before the close of business on the
Business Day immediately preceding December 6, 2001 (with interest accrued from
and including December 1, 2001 through and including December 6, 2001 being paid
to the Holder surrendering such Security for conversion). If any Holder
surrenders a Security for conversion after the close of business on the record
date for the payment of an installment of interest and before the close of
business on the related interest payment date, then, notwithstanding such
conversion, the interest payable on such interest payment date shall be paid to
the Holder in whose name such Security was registered at the close of business
on such record date; and, in such event, unless such Security has been called
for redemption, such Security, when surrendered for conversion, must be
accompanied by delivery by such Holder of payment (which may be in the form of a
check or draft payable to the Conversion Agent) in an amount equal to the
interest payable on such interest payment date on the principal amount of such
Security or portion thereof so converted. If the Company defaults in the payment
of interest payable on such interest payment date, the Company shall promptly
repay such funds to such Holder.
Nothing in this Section shall affect the right of a Holder in
whose name any Security is registered at the close of business on a record date
to receive the interest payable on such Security on the related interest payment
date in accordance with the terms of this Indenture and the Securities.
If a Holder converts more than one Security at the same time,
the number of shares of Common Stock issuable upon the conversion shall be based
on the aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Security equal in principal amount to the unconverted portion of
the Security surrendered.
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<PAGE> 31
SECTION 4.4. FRACTIONAL SHARES.
The Company will not issue fractional shares of Common Stock
upon conversion of Securities. In lieu thereof, the Company will pay an amount
in cash based upon the closing price of the Common Stock on the Trading Day
immediately prior to the Conversion Date.
SECTION 4.5. TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon such conversion. However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificate representing the Common Stock being issued in a name other than the
Holder's name until the Conversion Agent receives a sum sufficient to pay any
tax which will be due because the shares are to be issued in a name other than
the Holder's name. Nothing herein shall preclude any tax withholding required by
law or regulation.
SECTION 4.6. COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Securities
hereunder, and from time to time as may be necessary, reserve, out of its
authorized but unissued Common Stock, a sufficient number of shares of Common
Stock to permit the conversion of all outstanding Securities into shares of
Common Stock.
All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares, shall be duly authorized, validly
issued, fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal
and state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or on
the Nasdaq National Market or other over-the-counter market or such other market
on which the Common Stock is then listed or quoted.
SECTION 4.7. ADJUSTMENT OF CONVERSION PRICE.
The conversion price as stated in the Registration Statement on
Form S-4 in the "Terms of The Exchange Offer" (the "Conversion Price") shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend on its Common
Stock in shares of Common Stock, (ii) make a distribution on its Common Stock in
shares of Common Stock, (iii) subdivide its outstanding Common Stock into a
greater number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive that number of shares of
Common Stock which it would have owned had such Security been converted
immediately prior to the happening of such event. An adjustment made pursuant to
this subsection (a) shall become
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<PAGE> 32
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of subdivision or combination.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the current market price per
share of Common Stock (as determined in accordance with subsection (e) of this
Section 4.7) on the record date for the determination of shareholders entitled
to receive such rights or warrants, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
such record date by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on such record date plus the number of shares
which the aggregate offering price of the total number of shares of Common Stock
so offered (or the aggregate conversion price of the convertible securities so
offered, which shall be determined by multiplying the number of shares of Common
Stock issuable upon conversion of such convertible securities by the conversion
price per share of Common Stock pursuant to the terms of such convertible
securities) would purchase at the current market price per share (as defined in
subsection (e) of this Section 4.7) of Common Stock on such record date, and of
which the denominator shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock offered
(or into which the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever any such rights or warrants are
issued, and shall become effective immediately after such record date. If at the
end of the period during which such rights or warrants are exercisable not all
rights or warrants shall have been exercised, the adjusted Conversion Price
shall be immediately readjusted to what it would have been based upon the number
of additional shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually
issued).
(c) In case the Company shall distribute to all or substantially
all holders of its Common Stock any shares of capital stock of the Company
(other than Common Stock), evidences of indebtedness or other non-cash assets
(including securities of any person other than the Company), or shall distribute
to all or substantially all holders of its Common Stock rights or warrants to
subscribe for or purchase any of its securities (excluding those rights and
warrants referred to in subsection (b) of this Section 4.7 and also excluding
the distribution of rights to all holders of Common Stock pursuant to the
adoption of a stockholders rights plan or the detachment of such rights under
the terms of such stockholder rights plan), then in each such case the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the current Conversion Price by a fraction of which
the numerator shall be the current market price per share (as defined in
subsection (e) of this Section 4.7) of the Common Stock on the record date
mentioned below less the fair market value on such record date (as determined by
the Board of Directors, whose determination shall be conclusive evidence of such
fair market value and which shall be evidenced by an Officers' Certificate
delivered to the Trustee) of the portion of the capital stock, evidences of
indebtedness or other non-cash assets so distributed or of such rights or
warrants applicable to one share of Common Stock (determined on the basis of the
number of shares of Common Stock outstanding on the record date), and of
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<PAGE> 33
which the denominator shall be the current market price per share (as defined in
subsection (e) of this Section 4.7) of the Common Stock on such record date.
Such adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(d)(1) In case the Company shall, by dividend or otherwise, at
any time distribute (a "Triggering Distribution") to all or substantially all
holders of its Common Stock cash in an aggregate amount that, together with the
aggregate amount of (A) any cash and the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive evidence thereof and
which shall be evidenced by an Officers' Certificate delivered to the Trustee)
of any other consideration payable in respect of any tender offer by the Company
or a Subsidiary of the Company for Common Stock consummated within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.7 has been made
and (B) all other cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.7 has been made, exceeds an amount equal to 12.5% of
the product of the current market price per share of Common Stock (as determined
in accordance with subsection (e) of this Section 4.7) on the Business Day (the
"Determination Date") immediately preceding the day on which such Triggering
Distribution is declared by the Company multiplied by the number of shares of
Common Stock outstanding on the Determination Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying such Conversion Price in effect
immediately prior to the Determination Date by a fraction of which the numerator
shall be the current market price per share of the Common Stock (as determined
in accordance with subsection (e) of this Section 4.7) on the Determination Date
less the sum of the aggregate amount of cash and the aggregate fair market value
(determined as aforesaid) of any such other consideration so distributed, paid
or payable within such 12 months (including, without limitation, the Triggering
Distribution) applicable to one share of Common Stock (determined on the basis
of the number of shares of Common Stock outstanding on the Determination Date)
and the denominator shall be such current market price per share of the Common
Stock (as determined in accordance with subsection (e) of this Section 4.7) on
the Determination Date, such reduction to become effective immediately prior to
the opening of business on the day following the date on which the Triggering
Distribution is paid.
(2) In case any tender offer made by the Company or any of its
Subsidiaries for Common Stock shall expire and such tender offer (as amended
upon the expiration thereof) shall involve the payment of aggregate
consideration in an amount (determined as the sum of the aggregate amount of
cash consideration and the aggregate fair market value (as determined by the
Board of Directors, whose determination shall be conclusive evidence thereof and
which shall be evidenced by an Officers' Certificate delivered to the Trustee
thereof ) of any other consideration) that, together with the aggregate amount
of (A) any cash and the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive evidence thereof and which
shall be evidenced by an Officers' Certificate delivered to the Trustee) of any
other consideration payable in respect of any other tender offers by the Company
or any Subsidiary of the Company for Common Stock consummated within the 12
months preceding the date of the Expiration Date (as defined below) and in
respect of which no Conversion Price
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<PAGE> 34
adjustment pursuant to this Section 4.7 has been made and (B) all cash
distributions to all or substantially all holders of its Common Stock made
within the 12 months preceding the Expiration Date and in respect of which no
Conversion Price adjustment pursuant to this Section 4.7 has been made, exceeds
an amount equal to 12.5% of the product of the current market price per share of
Common Stock (as determined in accordance with subsection (e) of this Section
4.7) as of the last date (the "Expiration Date") tenders could have been made
pursuant to such tender offer (as it may be amended) (the last time at which
such tenders could have been made on the Expiration Date is hereinafter
sometimes called the "Expiration Time") multiplied by the number of shares of
Common Stock outstanding (including tendered shares but excluding any shares
held in the treasury of the Company) at the Expiration Time, then, immediately
prior to the opening of business on the day after the Expiration Date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
close of business on the Expiration Date by a fraction of which the numerator
shall be the product of the number of shares of Common Stock outstanding
(including tendered shares but excluding any shares held in the treasury of the
Company) at the Expiration Time multiplied by the current market price per share
of the Common Stock (as determined in accordance with subsection (e) of this
Section 4.7) on the Trading Day next succeeding the Expiration Date and the
denominator shall be the sum of (x) the aggregate consideration (determined as
aforesaid) payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares of Common Stock
validly tendered and not withdrawn as of the Expiration Time (the shares of
Common Stock deemed so accepted, up to any such maximum, being referred to as
the "Purchased Shares") and (y) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares and excluding any shares held in
the treasury of the Company) at the Expiration Time and the current market price
per share of Common Stock (as determined in accordance with subsection (e) of
this Section 4.7) on the Trading Day next succeeding the Expiration Date, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Date. In the event that the Company is
obligated to purchase shares of Common Stock pursuant to any such tender offer,
but the Company is permanently prevented by applicable law from effecting any or
all such purchases or any or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would have been
in effect based upon the number of shares of Common Stock actually purchased. If
the application of this Section 4.7(d)(2) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 4.7(d)(2).
(3) For purposes of this Section 4.7(d), the term "tender offer"
shall mean and include both tender offers and exchange offers, all references to
"purchases" of shares of Common Stock in tender offers (and all similar
references) shall mean and include both the purchase of shares of Common Stock
in tender offers and the acquisition of shares pursuant to exchange offers, and
all references to "tendered shares" (and all similar references) shall mean and
include shares of Common Stock tendered in both tender offers and exchange
offers.
(e) For the purpose of any computation under subsections (b),
(c) and (d) of this Section 4.7, the current market price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
for the 30 consecutive Trading Days commencing 45 Trading Days before (i) the
Determination Date or the Expiration Date, as the case may be, with respect to
distributions or tender offers under subsection (d) of this Section 4.7
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<PAGE> 35
or (ii) the record date with respect to distributions, issuances or other events
requiring such computation under subsection (b) or (c) of this Section 4.7. The
closing price for each day shall be the last reported sales price or, in case no
such reported sale takes place on such date, the average of the reported closing
bid and asked prices in either case on the New York Stock Exchange (the "NYSE")
or, if the Common Stock is not listed or admitted to trading on the NYSE, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the last reported sales price of the Common Stock as quoted
on NASDAQ (the term "NASDAQ" shall include, without limitation, the Nasdaq
National Market) or, in case no reported sales takes place, the average of the
closing bid and asked prices as quoted on NASDAQ or any comparable system or, if
the Common Stock is not quoted on NASDAQ or any comparable system, the closing
sales price or, in case no reported sale takes place, the average of the closing
bid and asked prices, as furnished by any two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If no such prices are available, the current market
price per share shall be the fair value of a share of Common Stock as determined
by the Board of Directors (which shall be evidenced by an Officers' Certificate
delivered to the Trustee).
(f) In any case in which this Section 4.7 shall require that an
adjustment be made following a record date or a Determination Date or Expiration
Date, as the case may be, established for purposes of this Section 4.7, the
Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee of the certificate described in Section
4.10) issuing to the Holder of any Security converted after such record date or
Determination Date or Expiration Date the shares of Common Stock and other
capital stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such shares. If any
distribution in respect of which an adjustment to the Conversion Price is
required to be made as of the record date or Determination Date or Expiration
Date therefore is not thereafter made or paid by the Company for any reason, the
Conversion Price shall be readjusted to the Conversion Price which would then be
in effect if such record date had not been fixed or such effective date or
Determination Date or Expiration Date had not occurred.
SECTION 4.8. NO ADJUSTMENT.
No adjustment in the Conversion Price shall be required unless
the adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 4.8 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in
Section 4.7 if all Securityholders are entitled to participate in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which
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<PAGE> 36
holders of Common Stock participate in the transaction. The Company shall give
notice to the Trustee of any such determination.
No adjustment need be made for issuances of Common Stock
pursuant to a Company plan for reinvestment of dividends or interest or for a
change in the par value or a change to no par value of the Common Stock.
To the extent that the Securities become convertible into the
right to receive cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
SECTION 4.9. ADJUSTMENT FOR TAX PURPOSES.
The Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by Section 4.7, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its shareholders shall not be taxable.
SECTION 4.10. NOTICE OF ADJUSTMENT.
Whenever the Conversion Price or conversion privilege is
adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment and file with the Trustee an Officers' Certificate briefly stating
the facts requiring the adjustment and the manner of computing it.
SECTION 4.11. NOTICE OF CERTAIN TRANSACTIONS.
In the event that:
(1) the Company takes any action which would require an
adjustment in the Conversion Price;
(2) the Company consolidates or merges with, or
transfers all or substantially all of its property and assets
to, another corporation and shareholders of the Company must
approve the transaction; or
(3) there is a dissolution or liquidation of the
Company,
the Company shall mail to Holders and file with the Trustee a notice stating the
proposed record or effective date, as the case may be. The Company shall mail
the notice at least ten days before such date. Failure to mail such notice or
any defect therein shall not affect the validity of any transaction referred to
in clause (1), (2) or (3) of this Section 4.11.
SECTION 4.12. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (a) any
reclassification or change of shares of Common Stock issuable upon conversion of
the Securities (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
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subdivision or combination, or any other change for which an adjustment is
provided in Section 4.7); (b) any consolidation or merger to which the Company
is a party other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification of, or change
(other than a change in name, or in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock; or (c) any sale or
conveyance of all or substantially all of the property and assets of the Company
to any person, then the Company, or such successor, purchasing or transferee
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental Indenture providing that the Holder of
each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. Such
supplemental Indenture shall provide for adjustments of the Conversion Price
which shall be as nearly equivalent as may be practicable to the adjustments of
the Conversion Price provided for in this Article 4. If, in the case of any such
consolidation, merger, sale or conveyance, the stock or other securities and
property (including cash) receivable thereupon by a holder of Common Stock
include shares of stock or other securities and property of a person other than
the successor, purchasing or transferee corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental Indenture
shall also be executed by such other person and shall contain such additional
provisions to protect the interests of the Holders of the Securities as the
Board of Directors shall reasonably consider necessary by reason of the
foregoing. The provisions of this Section 4.12 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales or
conveyances.
In the event the Company shall execute a supplemental Indenture
pursuant to this Section 4.12, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefore, the kind or
amount of shares of stock or other securities or property (including cash)
receivable by Holders of the Securities upon the conversion of their Securities
after any such reclassification, change, consolidation, merger, sale or
conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel that
all conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders.
SECTION 4.13. TRUSTEE'S DISCLAIMER.
The Trustee shall have no duty to determine when an adjustment
under this Article 4 should be made, how it should be made or what such
adjustment should be, but may accept as conclusive evidence of that fact or the
correctness of any such adjustment, and shall be protected in relying upon, an
Officers' Certificate including the Officers' Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to Section
4.10. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee shall
not be responsible for the Company's failure to comply with any provisions of
this Article 4.
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The Trustee shall not be under any responsibility to determine
the correctness of any provisions contained in any supplemental Indenture
executed pursuant to Section 4.12, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.12.
SECTION 4.14. VOLUNTARY REDUCTION.
The Company from time to time may reduce the Conversion Price by
any amount for any period of time if the period is at least 20 days or such
longer period as may be required by law and if the reduction is irrevocable
during the period; provided, however, that in no event may the Company reduce
the Conversion Price to be less than the par value of a share of Common Stock.
ARTICLE 5
SUBORDINATION
SECTION 5.1. SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of Securities
issued hereunder by its acceptance thereof likewise covenants and agrees, that
all Securities shall be issued subject to the provisions of this Article 5; and
each person holding any Security, whether upon original issue or upon transfer
or assignment thereof, accepts and agrees to be bound by such provisions.
The payment of all amounts on account of all Securities issued
hereunder shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full of all
Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter created, assumed or guaranteed.
SECTION 5.2. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL
SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION,
REORGANIZATION, ETC., OF THE COMPANY.
Upon the payment or distribution of the assets of the Company of
any kind or character, whether in cash, property or securities (including any
collateral at any time securing the Securities), to creditors upon any
dissolution, winding-up, liquidation or reorganization of the Company (whether
voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation, receivership proceedings, or upon an assignment for the benefit of
creditors, or any other marshaling of the assets and liabilities of the Company,
or in any similar proceedings), then in such event:
(a) all Senior Indebtedness shall first be paid in full,
in cash, before any payment is made on account of the
Securities, whether by way of the payment of principal of or
interest on the indebtedness evidenced by the
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Securities, a deposit pursuant to Section 10.1, a repurchase,
redemption or other acquisition of the Securities or otherwise
(collectively, "pay the Securities");
(b) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or
securities (other than securities of the Company as reorganized
or readjusted, or securities of the Company or any other person
provided for by a plan of reorganization or readjustment,
junior, or the payment of which is otherwise subordinate, at
least to the extent provided in this Article 5, with respect to
the Securities, to the payment of all Senior Indebtedness), to
which the Holders or the Trustee on behalf of the Holders would
be entitled except for the provisions of this Article 5,
including any such payment or distribution which may be payable
or deliverable by reason of the payment of another debt of the
Company being subordinated to the payment of the Securities,
shall be paid or delivered by any debtor, Custodian or other
person making such payment or distribution, directly to the
holders of the Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness have been issued, ratably according to
the aggregate amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, for application to
payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full after
giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 5.2, any payment or distribution of
assets of the Company of any kind or character, whether in cash,
property or securities (other than securities of the Company as
reorganized or readjusted, or securities of the Company or any
other person provided for by a plan of reorganization or
readjustment, junior, or the payment of which is otherwise
subordinate, at least to the extent provided for in this Article
5, with respect to the Securities, to the payment of all Senior
Indebtedness), shall be received by the Trustee or any Paying
Agent or the Holders before all Senior Indebtedness is paid in
full, such payment or distribution (subject to the provisions of
Sections 5.6 and 5.7) shall be held in trust for the benefit of,
and shall be immediately paid or delivered by the Trustee, such
Paying Agent or such Holders, as the case may be, to, the
holders of Senior Indebtedness remaining unpaid or unprovided
for, or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness have been
issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented
by each, for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay
all Senior Indebtedness in full after giving effect to any
concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of the Company.
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Upon any distribution of assets of the Company referred to in
this Article 5, the Trustee and the Holders shall be entitled to rely
conclusively upon any order or decree by any court of competent jurisdiction in
which such dissolution, winding-up, liquidation or reorganization proceeding is
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the Trustee or to the Holders, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 5.
SECTION 5.3. HOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS OF
SENIOR INDEBTEDNESS.
Subject to the prior payment in full of all Senior Indebtedness
then due, the Holders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until the principal of and interest on the
Securities shall be paid in full, and, for purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of assets,
whether in cash, property or securities, distributable to the holders of Senior
Indebtedness under the provisions hereof to which the Holders would be entitled
except for the provisions of this Article 5, and no payment pursuant to the
provisions of this Article 5 to the holders of Senior Indebtedness by the
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 5 are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
SECTION 5.4. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article 5 or elsewhere in this
Indenture or in any Security is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and interest on the Securities, as and when
the same shall become due and payable in accordance with the terms of the
Securities and this Indenture, or to affect the relative rights of the Holders
and other creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
the happening of an Event of Default under this Indenture, subject to the
provisions of Article 8, and the rights, if any, under this Article 5 of the
holders of Senior Indebtedness to receive assets, whether in cash, property or
securities, of the Company otherwise payable or deliverable to the Trustee or
such Holder upon the exercise of any such remedy.
SECTION 5.5. COMPANY NOT TO MAKE PAYMENT WITH RESPECT TO
SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) Upon the happening of a default in payment (whether at
maturity or at a date fixed for prepayment or by acceleration or otherwise) of
the principal of, or premium, if any, or interest on any Senior Indebtedness, as
such default is defined under or in respect of such Senior Indebtedness or in
any agreement pursuant to which such Senior Indebtedness has been
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incurred, then, unless and until the amount of such Senior Indebtedness then due
shall have been paid in full or provision made therefore in a manner
satisfactory to the holders of such Senior Indebtedness, or such default shall
have been cured or waived or shall have ceased to exist, the Company shall not
pay the Securities.
(b) Upon the happening of an event of default with respect to
any Senior Indebtedness (other than under circumstances when the terms of
subsection (a) of this Section 5.5 are applicable), as such event of default is
defined under or in respect of such Senior Indebtedness or in any agreement
pursuant to which such Senior Indebtedness has been incurred, permitting the
holders thereof to accelerate the maturity thereof, and upon written notice
thereof given to the Company and the Trustee by any one or more holders of such
Senior Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness have been issued (a "Default Notice"), then, unless and
until such event of default shall have been cured or waived or shall have ceased
to exist, the Company shall not pay the Securities; provided, however, that the
foregoing provisions of this sentence shall not prevent the making of any such
payment (which is not otherwise prohibited by subsection (a) of this Section
5.5) for more than 180 days after the Default Notice shall have been given
unless the Senior Indebtedness in respect of which such event of default exists
has been declared due and payable in its entirety, in which case no such payment
may be made until such acceleration has been waived, rescinded or annulled, or
such Senior Indebtedness shall have been paid in full, or payment thereof shall
be duly provided for in cash or in any other manner satisfactory to the holders
of such Senior Indebtedness. Notwithstanding the foregoing, not more than one
Default Notice shall be given with respect to the same issue of Senior
Indebtedness within a period of 360 consecutive days, and no event of default
which existed or was continuing on the date of any Default Notice and was known
to the holders of such issue of Senior Indebtedness shall be made the basis for
the giving of a subsequent Default Notice by the holders of such issue of Senior
Indebtedness.
(c) In the event that, notwithstanding the foregoing provisions
of this Section 5.5, the Company shall pay the Securities and such payment shall
be received by the Trustee, any Holder or any Paying Agent (or, if the Company
is acting as its own Paying Agent, money for any such payment shall be
segregated and held in trust), after the happening of a default or event of
default, as the case may be, under any Senior Indebtedness of the type specified
in subsections (a) and (b) of this Section 5.5, then, unless and until the
amount of such Senior Indebtedness then due shall have been paid in full or
provision made therefore or such default or event of default, as the case may
be, shall have been cured or waived or shall have ceased to exist or any such
acceleration referred to in the proviso to subsection (b) of this Section 5.5
shall have been waived, rescinded or annulled, such payment (subject, in each
case, to the provisions of Sections 5.6 and 5.7 and the proviso contained in
subsection (b) of this Section 5.5) shall be held in trust for the benefit of,
and shall be immediately paid over to, the holders of Senior Indebtedness or
their representative or representatives or the trustee or trustees under any
indenture under which any instruments evidencing any of the Senior Indebtedness
may have been issued ratably according to the aggregate amounts remaining unpaid
on account of the Senior Indebtedness held or represented by each, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of Senior Indebtedness.
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SECTION 5.6. 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 5 or any other provision of this 40 48 Indenture, the Trustee
shall not at any time be charged with knowledge of the existence of any facts
which would prohibit the making of any payment to or by the Trustee, unless and
until the Trustee shall have received written notice thereof from the Company or
from the holder or holders of Senior Indebtedness or from their representative
or representatives or from the trustee or trustees under any indenture pursuant
to which any instruments evidencing any of such Senior Indebtedness have been
issued; and, prior to the receipt of any such written notice, the Trustee shall
be entitled to assume conclusively that such facts do not exist.
The Trustee shall be entitled to rely conclusively on the
delivery to it of a written notice by a person representing himself or herself
to be a holder of Senior Indebtedness (or a representative of such holder or the
trustee under any indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness have been issued) to establish that such notice has
been given by a holder of Senior Indebtedness or a representative of any such
holder. 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 Indebtedness to participate in any payment or distribution pursuant to
this Article 5, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each person under this Article 5, 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 5.7. APPLICATION BY TRUSTEE OF MONEY DEPOSITED WITH IT.
Money deposited in trust with the Trustee pursuant to Section
10.1 and not in violation of this Article 5 shall be for the sole benefit of
Holders and shall thereafter not be subject to the subordination provisions of
this Article 5. Otherwise, any deposit of money by the Company with the Trustee
or any Paying Agent (whether or not in trust) for the payment of the principal
of or interest on any Securities shall be subject to the provisions of Sections
5.1, 5.2, 5.3 and 5.5; except that, if two Business Days prior to the date on
which by the terms of this Indenture any such money may become payable for any
purpose (including, without limitation, the payment of either the principal of
or interest on any Security) the Trustee shall not have received with respect to
such money the notice provided for in Section 5.6, then the Trustee or any
Paying Agent shall have full power and authority to receive such money and to
apply such money to the purpose for which it was received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such date. This Section 5.7 shall be construed solely for the benefit of the
Trustee and the Paying Agent and shall not otherwise affect the rights that
holders of Senior Indebtedness may have to recover any such payments from the
Holders in accordance with the provisions of this Article 5.
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SECTION 5.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR
OMISSIONS OF COMPANY OR HOLDERS OF SENIOR
INDEBTEDNESS.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination, as herein provided, shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof which any such holder may
have or be otherwise charged with. The holders of any Senior Indebtedness may
extend, renew, modify or amend the terms of such Senior Indebtedness or any
security therefore and release, sell or exchange such security and otherwise
deal freely with the Company, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders.
SECTION 5.9. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by its acceptance thereof authorizes
and directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 5 and
appoints the Trustee its attorney-in-fact for any and all such purposes.
SECTION 5.10. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
The Trustee, in its individual capacity, shall be entitled to
all of the rights set forth in this Article 5 in respect of any Senior
Indebtedness at any time held by it to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 9.7.
SECTION 5.11. ARTICLE 5 NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of the principal of or
interest on the Securities by reason of any provision in this Article 5 shall
not be construed as preventing the occurrence of a default or an Event of
Default.
SECTION 5.12. NO FIDUCIARY DUTY CREATED TO HOLDERS OF SENIOR
INDEBTEDNESS.
Notwithstanding any other provision in this Article 5, the
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article 5.
SECTION 5.13. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 5 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
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such Paying Agent were named in this Article 5 in addition to or in place of the
Trustee; provided, however, that Sections 5.6, 5.10 and 5.12 shall not apply to
the Company if it acts as Paying Agent.
ARTICLE 6
COVENANTS
SECTION 6.1. PAYMENT OF SECURITIES.
The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities and this
Indenture. An installment of principal or interest shall be considered paid on
the date it is due if the Paying Agent (other than the Company) holds by 11:00
a.m., New York City time, on that date money, deposited by the Company or an
Affiliate thereof, sufficient to pay the installment. The Company shall, to the
fullest extent permitted by law, pay interest on overdue principal (including
premium, if any) and overdue installments of interest at the rate borne by the
Securities per annum.
SECTION 6.2. SEC REPORTS.
The Company shall file all reports and other information and
documents which it is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act, and within 15 days after it files them with the SEC,
the Company shall file copies of all such reports, information and other
documents with the Trustee.
In the event the Company is at any time no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will prepare, for the first three quarters of each fiscal year, quarterly
financial statements substantially equivalent to the financial statements
required to be included in a report on Form 10-Q under the Exchange Act. The
Company will also prepare, on an annual basis, complete audited consolidated
financial statements, including, but not limited to, a balance sheet, a
statement of operations, a statement of cash flows and all appropriate notes.
All such financial statements will be prepared in accordance with generally
accepted accounting principles. The Company will cause a copy of such financial
statements to be filed with the Trustee and mailed to the Holders of the
Securities within 50 days after the end of each of the first three quarters of
each fiscal year and within 95 days after the close of each fiscal year. The
Company will also comply with the other provisions of TIA Section 314(a).
SECTION 6.3. COMPLIANCE CERTIFICATES.
The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate as to the
signer's knowledge of the Company's compliance with all conditions and covenants
on its part contained in this Indenture and stating whether or not the signer
knows of any default or Event of Default. If such signer knows of such a default
or Event of Default, the Officers' Certificate shall describe the default or
Event of Default and the efforts to remedy the same. For the purposes of this
Section 6.3,
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compliance shall be determined without regard to any grace period or requirement
of notice provided pursuant to the terms of this Indenture.
SECTION 6.4. NOTICE OF DEFAULTS.
In the event (a) that indebtedness of the Company or any
Significant Subsidiary in an aggregate principal amount in excess of $10,000,000
is declared due and payable before its maturity because of the occurrence of any
default under such indebtedness, or (b) of the occurrence of any event which
entitles the holder or holders of such indebtedness to declare such indebtedness
due and payable before its maturity and with respect to which any applicable
grace period has lapsed or expired, the Company will promptly give written
notice to the Trustee of such declaration or event.
SECTION 6.5. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
SECTION 6.6. MAINTENANCE OF CORPORATE EXISTENCE.
Subject to Article 7, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises, and the existence,
rights (charter and statutory) and franchises of its Subsidiaries; provided,
however, that the Company will not be required to preserve any such right or
franchise or the existence of any Subsidiary if the Board of Directors
determines that the preservation thereof is no longer desirable in the conduct
of its business and that the loss thereof is not disadvantageous in any material
respect to the Holders of the outstanding Securities.
ARTICLE 7
SUCCESSOR CORPORATION
SECTION 7.1. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge with or into, or
sell, lease, convey, assign or otherwise transfer all or substantially all of
its property and assets to, any person unless:
(a) either the Company shall be the resulting or
surviving corporation or such person is a corporation organized
and existing under the laws of the United States of America, any
State thereof or the District of Columbia, and such person
expressly assumes, by supplemental indenture executed and
delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of and interest on
all of the outstanding Securities and the due and punctual
performance and observance of all other covenants, agreements
and conditions contained in this Indenture and the Securities to
be performed or
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observed by the Company (including, without limitation, the
obligations of the Company under Article 4 hereof); and
(b) immediately after giving effect to such transaction
and treating any indebtedness which becomes an obligation of the
Company or such successor corporation as a result of such
transaction as having been incurred by the Company or such
successor corporation, as the case may be, at the time of such
transaction, no default or Event of Default shall have occurred
and be continuing.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate and an Opinion of Counsel, each of which
shall comply with Section 12.4 and shall state that such transaction and any
such supplemental indenture comply with this Article 7 and that all conditions
precedent herein provided for relating to such transaction have been complied
with; provided, however, that such Opinion of Counsel shall address only the
matters referred to in clause (a) of this Section 7.1.
SECTION 7.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease,
conveyance, assignment or other transfer of all or substantially all of the
property and assets of the Company in accordance with Section 7.1, the successor
corporation (if other than the Company) formed by such consolidation or into
which the Company is merged or to which such sale, lease, conveyance, assignment
or other transfer 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 corporation had been named as the Company
herein, and the predecessor corporation (except in the case of a lease) shall be
released from all of its obligations under this Indenture and the Securities.
ARTICLE 8
DEFAULT AND REMEDIES
SECTION 8.1. EVENTS OF DEFAULT.
An "Event of Default" shall occur if:
(1) the Company defaults in the payment of any interest
on any Security when the same becomes due and payable and the
default continues for a period of 30 days;
(2) the Company defaults in the payment of any principal
of (including, without limitation, any premium, if any, on) any
Security when the same becomes due and payable (whether at
maturity, upon redemption, on a Change of Control Purchase Date
or otherwise);
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(3) the Company fails to comply with any of its other
agreements contained in the Securities or this Indenture and the
default continues for the period and after the notice specified
below;
(4) a default shall occur under any bond, debenture,
note or other evidence of indebtedness for money borrowed of the
Company or any Significant Subsidiary having an aggregate
outstanding principal amount in excess of $10,000,000, which
default shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it
would otherwise have been due and payable, without such
indebtedness having been discharged, or such acceleration having
been rescinded or annulled, within a period of 10 days following
the occurrence of such acceleration;
(5) the Company or any Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its property;
or
(D) makes a general assignment for the benefit
of its creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case or
proceeding;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all
of the property of the Company or any Significant
Subsidiary; or
(C) orders the liquidation of the Company or any
Significant Subsidiary;
and in each case the order or decree remains unstayed and in
effect for 60 days.
The term "Bankruptcy Law" means Title 11 of the United States
Code (or any successor thereto) or any similar federal or state law for the
relief of debtors. The term "Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.
A default under clause (3) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the
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Securities then outstanding notify the Company and the Trustee, of the default,
and the Company does not cure the default within 60 days after receipt of such
notice. The notice given pursuant to this Section 8.1 must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default."
When any default under this Section 8.1 is cured, it ceases.
The Trustee shall not be charged with knowledge of any Event of
Default unless written notice thereof shall have been given to a Trust Officer
at the Corporate Trust Office of the Trustee by the Company, a Paying Agent, any
Holder or any agent of any Holder.
SECTION 8.2. ACCELERATION.
If an Event of Default (other than an Event of Default specified
in clause (5) or (6) of Section 8.1) occurs and is continuing, the Trustee may,
by notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may, by notice to the Company and the
Trustee, declare all unpaid principal of and accrued interest to the date of
acceleration on the Securities then outstanding (if not then due and payable) to
be due and payable upon any such declaration, and the same shall become and be
immediately due and payable. If an Event of Default specified in clause (5) or
(6) of Section 8.1 occurs, all unpaid principal of and accrued interest on the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an acceleration
and its consequences if (a) all existing Events of Default, other than the
nonpayment of the principal of and accrued interest on the Securities which has
become due solely by such declaration of acceleration, have been cured or
waived; (b) to the extent the payment of such interest is lawful, interest
(calculated at the rate per annum borne by the Securities) on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid; (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (d) all payments due to the Trustee and any predecessor
Trustee under Section 9.7 have been made. Anything herein contained to the
contrary notwithstanding (other than the provisions of this sentence), in the
event of any acceleration pursuant to this Section 8.2, the Company shall not be
obligated to pay any premium which it would have had to pay if it had then
elected to redeem the Securities pursuant to paragraph 5 of the Securities,
except in the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium which it would have had to pay
if it had then elected to redeem the Securities pursuant to paragraph 5 of the
Securities, in which case an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law, and except that any
premium payable in respect of any Securities which shall have been called for
redemption shall be due and payable upon such acceleration.
SECTION 8.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may, but shall not be obligated to, pursue any available remedy by proceeding at
law or in equity to collect the payment of the principal of or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
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The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 8.4. WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 8.7 and 11.2, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
waive an existing default or Event of Default and its consequence, except a
default or Event of Default in the payment of the principal of or interest on
any Security or any default or Event of Default in respect of any provision of
this Indenture or the Securities which, under Section 11.2, cannot be modified
or amended without the consent of the Holder of each Security affected. When a
default or Event of Default is waived, it is cured and ceases.
SECTION 8.5. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Securities
then outstanding may 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 it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of another Holder or the Trustee, or that may
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 8.6. LIMITATIONS ON SUITS.
A Holder may not pursue any remedy with respect to this
Indenture or the Securities (except actions for payment of overdue principal or
interest or for the conversion of the Securities pursuant to Article 4) unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the then outstanding Securities make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity;
and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Securities then
outstanding.
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A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
SECTION 8.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO
CONVERT.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Security to receive payment of the principal of and interest
on the Security, on or after the respective due dates expressed in the Security
and this Indenture, to convert such Security in accordance with Article 4 and to
bring suit for the enforcement of any such payment on or after such respective
dates or the right to convert, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.
SECTION 8.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in the payment of principal or interest
specified in clause (1) or (2) of Section 8.1 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or another obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with, to the extent
that payment of such interest is lawful, interest on overdue principal and on
overdue installments of interest, in each case at the rate per annum borne by
the Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 8.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor on the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any money or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 9.7, and to the extent that such payment
of the reasonable compensation, expenses, disbursements and advances in any such
proceedings shall be denied for any reason, payment of the same shall be secured
by a lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other property which the Holders may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to, or, on behalf of any
Holder, to authorize, accept or adopt 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 in any such proceeding.
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SECTION 8.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 8, it
shall pay out the money in the following order:
First, to the Trustee for amounts due under Section 9.7;
Second, to the holders of Senior Indebtedness to the extent
required by Article 5;
Third, to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Fourth, to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 8.10.
SECTION 8.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 8.11 does not apply to a suit made by the Trustee, a suit
by a Holder pursuant to Section 8.7, or a suit by Holders of more than 10% in
principal amount of the Securities then outstanding.
SECTION 8.12. WAIVER OF USURY, STAY 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 usury, stay 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 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 9
TRUSTEE
SECTION 9.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of
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care and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no others; and
(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. The Trustee, however, shall
examine any certificates and opinions which by any provision
hereof are specifically required to be delivered to the Trustee
to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of
subsection (b) of this Section 9.1;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 8.5.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers unless the Trustee shall have received adequate indemnity in
its opinion against potential costs and liabilities incurred by it relating
thereto.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to subsections (a), (b), (c) and (d) of this Section 9.1.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 9.2. RIGHTS OF TRUSTEE.
Subject to Section 9.1:
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(a) The Trustee may rely conclusively on any document
believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Section 12.4(b). The Trustee shall not be
liable for any action it takes or omits to take in good faith in
reliance on such Certificate or Opinion.
(c) The Trustee may act through its agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(e) The Trustee may consult with counsel, and the advice
or opinion of such counsel as to matters of law shall be full
and complete authorization and protection in respect of any such
action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
SECTION 9.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 9.10 and 9.11.
SECTION 9.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 9.5. NOTICE OF DEFAULT OR EVENTS OF DEFAULT.
If a default or an Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the default or Event of Default within 90 days after it occurs. Except
in the case of a default or an Event of Default in payment of the principal of
or interest on any Security, the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
notice is in the interests of Securityholders.
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SECTION 9.6. REPORTS BY TRUSTEE TO HOLDERS.
If such report is required by TIA Section 313, within 60 days
after each January 15, beginning with the January 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated as
of such January 15 that complies with TIA Section 313(a). The Trustee also shall
comply with TIA Section 313(b)(2) and (c).
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the SEC and each
stock exchange, if any, on which the Securities are listed. The Company shall
notify the Trustee whenever the Securities become listed on any stock exchange
or listed or admitted to trading on any quotation system and any changes in the
stock exchanges or quotation systems on which the Securities are listed or
admitted to trading.
SECTION 9.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to
time-reasonable compensation (as agreed to from time to time by the Company and
the Trustee) for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee (which for purposes of
this Section 9.7 shall include its officers, directors, employees and agents)
for, and hold it harmless against, any loss, liability or expense (including
reasonable legal fees and expenses) incurred by it in connection with its duties
under this Indenture or any action or failure to act as authorized or within the
discretion or rights or powers conferred upon the Trustee hereunder including
the reasonable costs and expenses of the Trustee and its counsel in defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The Company need not pay for any settlement without its written
consent, which shall not be unreasonably withheld.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it resulting from its
gross negligence or bad faith.
To secure the Company's payment obligations in this Section 9.7,
the Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of and interest on the
Securities. The obligations of the Company under this Section 9.7 shall survive
the satisfaction and discharge of this Indenture or the resignation or removal
of the Trustee.
When the Trustee incurs expenses or renders services after an
Event of Default specified in clause (5) or (6) of Section 8.1 occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
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SECTION 9.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders
of a majority in principal amount of the Securities then outstanding may remove
the Trustee by so notifying the Trustee and may, with the Company's written
consent, appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. The resignation or removal of a Trustee shall not be
effective until a successor Trustee shall have delivered the written acceptance
of its appointment as described below.
If a successor Trustee does not take office within 45 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of 10% in principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 9.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities that the retiring Trustee may have incurred while acting as Trustee)
hereunder, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
A retiring Trustee shall not be liable for the acts or omissions
of any successor Trustee after its succession.
Notwithstanding replacement of the Trustee pursuant to this
Section 9.8, the Company's obligations under Section 9.7 shall continue for the
benefit of the retiring Trustee.
SECTION 9.9. SUCCESSOR TRUSTEE BY MERGER, ETC..
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee, provided such
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transferee corporation shall qualify and be eligible under Section 9.10. Such
successor Trustee shall promptly mail notice of its succession to the Company
and each Holder.
SECTION 9.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall always satisfy the requirements of paragraphs
(1), (2) and (5) of TIA Section 310(a). If at any time the Trustee shall cease
to satisfy any such requirements, it shall resign immediately in the manner and
with the effect specified in this Article 9. The Trustee shall be subject to the
provisions of TIA Section 310(b). Nothing herein shall prevent the Trustee from
filing with the SEC the application referred to in the penultimate paragraph of
TIA Section 310(b).
SECTION 9.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 10.1. SATISFACTION AND DISCHARGE OF Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for and except as further provided below),
and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments 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 2.7 and (ii) Securities
for whose payment money has theretofore been deposited
in trust and thereafter repaid to the Company as
provided in Section 10.3) have been delivered to the
Trustee for cancellation; or
(B) all such Securities not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Final Maturity Date within one year, or
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(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 irrevocably deposited or caused to be irrevocably deposited
with the Trustee or a Paying Agent (other than the Company or any
of its Affiliates) as trust funds in trust for the purpose cash
in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest to the date
of such deposit (in the case of Securities which have become due
and payable) or to the Final Maturity Date 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 and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 9.7 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of clause
(1) of this Section, the provisions of Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.12,
3.8, 3.9, 3.10, 3.11, 3.12, 3.13 and 12.5, Article 4, the last paragraph of
Section 6.2 and this Article 10, shall survive.
SECTION 10.2. APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 10.3, the Trustee or a
Paying Agent shall hold in trust, for the benefit of the Holders, all money
deposited with it pursuant to Section 10.1 and shall apply the deposited money
in accordance with this Indenture and the Securities to the payment of the
principal of and interest on the Securities. Money so held in trust shall not be
subject to the subordination provisions of Article 5.
SECTION 10.3. REPAYMENT TO COMPANY.
The Trustee and each Paying Agent shall promptly pay to the
Company upon request any excess money (i) deposited with them pursuant to
Section 10.1 and (ii) held by them at any time.
The Trustee and each Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years after a right to such money has matured; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such payment, may at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed
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and that after a date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance of such money
then remaining will be repaid to the Company. After payment to the Company,
Holders entitled to money must look to the Company for payment as general
creditors.
SECTION 10.4. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money
in accordance with Section 10.2 by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 10.1 until such
time as the Trustee or such Paying Agent is permitted to apply all such money in
accordance with Section 10.2; provided, however, that if the Company has made
any payment of the principal of or interest on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive any such payment from the money
held by the Trustee or such Paying Agent.
ARTICLE 11
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.1. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this
Indenture or the Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.12 and 7.1;
(b) to cure any ambiguity, defect or inconsistency
or to make any other change that does not
adversely affect the rights of any
Securityholder;
(c) to comply with the provisions of the TIA; or
(d) to appoint a successor Trustee.
SECTION 11.2. WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this
Indenture or the Securities with the written consent of the Holders of at least
a majority in aggregate principal amount of the Securities then outstanding. The
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding may waive compliance in a particular instance by the Company
with any provision of this Indenture or the Securities without notice to any
Securityholder. However, notwithstanding the foregoing but subject to Section
11.4, without the written consent of each Securityholder affected, an amendment,
supplement or waiver, including a waiver pursuant to Section 8.4, may not:
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(1) reduce the percentage of the aggregate principal
amount of the outstanding Securities whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or premium on or change the
fixed maturity of any Security or change the definition of
"Change in Control" or "Change in Control Purchase Date"
applicable to any Security or the amount payable by the Company
to the Holder of any Security upon a Change in Control, or alter
any of the other Change in Control provisions or any of the
redemption provisions in a manner adverse to the Holder of any
Security;
(4) alter the conversion provisions with respect to any
Security in a manner adverse to the Holder thereof;
(5) waive a default in the payment (whether at maturity,
upon redemption, on an interest payment date, on a Change in
Control Purchase Date or otherwise) of the principal of
(including any premium) or interest on any Security;
(6) make any changes in Section 8.4 or in this Section
11.2, except to increase any percentage in aggregate principal
amount of outstanding Securities required for any amendment,
supplement or waiver;
(7) modify the provisions of Article 5 in a manner
adverse to the Holders; or
(8) make any Security payable in money other than that
stated in the Security.
It shall not be necessary for the consent of the Holders under
this Section 11.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 11.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
An amendment or supplement under this Section 11.2 or under
Section 11.1 may not make any change that adversely affects the rights under
Article 5 of any holder of an issue of Senior Indebtedness unless the holders of
that issue, pursuant to its terms, consent to the change.
SECTION 11.3. COMPLIANCE WITH TRUST Indenture ACT.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as in effect at the date of such amendment
or supplement.
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SECTION 11.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to its Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver
becomes effective.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (8) of Section 11.2. In that case the amendment, supplement
or waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 11.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 11.6. TRUSTEE TO SIGN AMENDMENTS, ETC..
The Trustee shall sign any amendment or supplement authorized
pursuant to this Article 11 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, in its sole discretion, but need not sign it. In signing or
refusing to sign such amendment or supplement, the Trustee shall be entitled to
receive and, subject to Section 9.1, shall be fully protected in relying upon,
an Opinion of Counsel stating that such amendment or supplement is authorized or
permitted by this Indenture. The Company may not sign an amendment or supplement
until the Board of Directors approves it.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. TRUST Indenture ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by any of Sections 310 to 317, inclusive, of the TIA
through operation of Section 318(c) thereof, such imposed duties shall control.
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SECTION 12.2. NOTICES.
Any notice, request or communication shall be given in writing
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
If to the Company:
Beyond.com
1195 West Fremont Avenue
Sunnyvale, California 94087
Attention: Chief Financial Officer
If to the Trustee:
Attention:
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed by first-class mail to it at its address shown on the register kept by
the Primary Registrar.
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication to a Securityholder is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 12.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
(a) Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee at the request of the Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent (including any
covenants, compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent (including any
covenants, compliance with which constitutes a condition
precedent) have been complied with.
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(b) Each Officers' Certificate and Opinion of Counsel with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such
person, he or she has made such examination or investigation as
is necessary to enable him or her to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been
complied with; provided, however, that with respect to matters of
fact an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 12.5. RECORD DATE FOR VOTE OR CONSENT OF
SECURITYHOLDERS.
The Company (or, in the event deposits have been made pursuant to
Section 10.1, the Trustee) may set a record date for purposes of determining the
identity of Holders entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture, which record date shall be the
later of ten days prior to the first solicitation of such vote or consent or the
date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 2.5 prior to such solicitation. Notwithstanding the
provisions of Section 11.4, if a record date is fixed, those persons who were
Holders of Securities at the close of business on such record date (or their
duly designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Holders after such record date.
SECTION 12.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR AND
CONVERSION AGENT.
The Trustee may make reasonable rules (not inconsistent with the
terms of this Indenture) for action by or at a meeting of Holders. Any
Registrar, Paying Agent or Conversion Agent may make reasonable rules for its
functions.
SECTION 12.7. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, Sunday or a day on which state
or federally chartered banking institutions in New York, New York are not
required to be open. If a payment date is a Legal Holiday, payment may be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
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SECTION 12.8. GOVERNING LAW.
This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 12.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.10. NO RECOURSE AGAINST OTHERS.
All liability described in paragraph 18 of the Securities of any
director, officer, employee or shareholder, as such, of the Company is waived
and released.
SECTION 12.11. SUCCESSORS.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.12. MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 12.13. SEPARABILITY.
In case any provisions in this Indenture or in 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 12.14. TABLE OF CONTENTS, HEADINGS, ETC..
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands as of the date and year first above written.
BEYOND.COM CORPORATION
By: /s/______________________
Name:
Title: Chairman of the Board
of Directors
[Trustee], as Trustee
By: /s/______________________
Name: Title: Trust Officer
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EXHIBIT A
[FORM OF FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.].1
-------------
(1) These paragraphs should be included only if the Security is a global
Security.
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<PAGE> 66
BEYOND.COM CORPORATION
INCORPORATED UNDER THE
LAWS OF THE STATE OF DELAWARE
CUSIP: [For Global Securities] R-_____
10 7/8% Convertible Subordinated Notes Due December 1, 2003
Beyond.com Corporation, a Delaware corporation (the "Company" or
"Beyond.com", which terms shall include any successor corporation under the
Indenture referred to on the reverse hereof), promises to pay to ___________, or
registered assigns, the principal sum of ______________ Dollars
($______________) on December 1, 2003 [or such greater or lesser amount as is
indicated on the Schedule of Exchanges of Notes on the other side of this
Note].2
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
This Note is convertible as specified on the other side of this
Note. Additional provisions of this Note are set forth on the other side of this
Note.
--------------
(2) This phrase should be included only if the Security is a global
Security.
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<PAGE> 67
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
BEYOND.COM CORPORATION
By:__________________________
Name:
Title:
[SEAL]
Attest:
By: ____________________________________
Name: Title:
Dated:
Trustee's Certificate of Authentication:
This is one of the Securities referred to in the within-mentioned
Indenture.
[Trustee],
as Trustee
By: ___________________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
BEYOND.COM CORPORATION
10 7/8% Convertible Subordinated Notes Due December 1, 2003
1. Interest
Beyond.com Corporation, a Delaware corporation (the "Company" or
"Beyond.com", which terms shall include any successor corporation under the
Indenture hereinafter referred to), promises to pay interest on the principal
amount of this Note at the rate of 10 7/8% per annum. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid in cash, or at the Company election, in
Common Stock in accordance with the provisions of the Indenture, be paid in
cash, or at the Company election, in Common Stock in accordance with the
provisions of the Indenture, to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the
Record Date for such interest, (whether or not a Business Day), next preceding
such Interest Payment Date. 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 Trustee, noticed whereof shall be given to Holders of Securities of this
series not less than 10 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 of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. The Company shall pay interest semiannually on June
1 and December 1 of each year, commencing December 1, 2000. Interest on the
Notes shall accrue from the Initial Issuance Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
The Company shall pay interest on this Note (except defaulted interest)
to the person who is the Holder of this Note at the close of business on the May
15th or November 15th, as the case may be, next preceding the related interest
payment date. The Holder must surrender this Note to a Paying Agent to collect
payment of principal. The Company will pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. The Company may, however, pay principal and interest
in respect of any Certificated Security by check or wire payable in such money.
It may mail an interest check to the Holder's registered address.
Notwithstanding the foregoing, so long as this
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Note is registered in the name of a Depositary or its nominee, all payments
hereon shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.
3. Paying Agent, Registrar and Conversion Agent
Initially, LaSalle National Bank (the "Trustee", which term
shall include any successor trustee under the Indenture hereinafter referred to)
will act as Paying Agent, Registrar and Conversion Agent. The Company may change
any Paying Agent, Registrar or Conversion Agent without notice to the Holder.
The Company or any of its Subsidiaries may, subject to certain limitations set
forth in the Indenture, act as Paying Agent or Registrar.
4. Indenture, Limitations
This Note is one of a duly authorized issue of Securities of the
Company designated as its 10 7/8% Convertible Subordinated Notes Due December 1,
2003 (the "Notes"), issued under an Indenture dated as of August __, 2000
(together with any supplemental Indentures thereto, the "Indenture"), between
the Company and the Trustee. The terms of this Note include those stated in the
Indenture and those required by or made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended, as in effect on the date of the
Indenture. This Note is subject to all such terms, and the Holder of this Note
is referred to the Indenture and said Act for a statement of them.
The Notes are subordinated unsecured obligations of the Company
limited to $42,710,000 aggregate principal amount, subject to Section 2.2 of the
Indenture. The Indenture does not limit other debt of the Company, secured or
unsecured, including Senior Indebtedness.
5. Optional Redemption
The Notes are subject to redemption, at any time on or after
December 6, 2001, as a whole or from time to time in part, at the election of
the Company. The Redemption Prices (expressed as percentages of the principal
amount) are as follows for Notes redeemed during the periods set forth below:
<TABLE>
<S> <C>
December 6, 2001 through November 30, 2002....................106.215%
December 1, 2002 and thereafter...............................103.108%
</TABLE>
in each case together with accrued interest up to but not including the
Redemption Date; provided that installments of interest that are due and payable
on interest payment dates falling on or prior to the relevant Redemption Date
will be payable to the Holders in whose names the Notes are registered at the
close of business on the relevant record dates.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at its registered address. Notes in denominations larger
than $1,000 may be redeemed in part, but only in whole multiples of $1,000. On
and after the Redemption Date, subject to the deposit with the
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Paying Agent of funds sufficient to pay the Redemption Price plus accrued
interest, if any, accrued to but excluding the Redemption Date, interest ceases
to accrue on Notes or portions of them called for redemption.
7. Purchase of Notes at Option of Holder Upon a Change in Control
At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase all
or any part specified by the Holder (so long as the principal amount of such
part is $1,000 or an integral multiple of $1,000 in excess thereof) of the Notes
held by such Holder on the date that is 30 Business Days after the occurrence of
a Change in Control, at a purchase price equal to 105% of the principal amount
thereof together with accrued interest up to but not including the Change in
Control Purchase Date. The Company, at its election, may pay the repurchase
price in cash, or subject to the terms of the Indenture, in Common Stock or a
combination of cash and Common Stock. The Holder shall have the right to
withdraw any Change in Control Purchase Notice (in whole or in a portion thereof
that is $1,000 or an integral multiple of $1,000 in excess thereof) at any time
prior to the close of business on the Business Day next preceding the Change in
Control Purchase Date by delivering a written notice of withdrawal to the Paying
Agent in accordance with the terms of the Indenture provided that the shares of
Common Stock delivered has 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 Closing Prices Per Share for the five consecutive Trading Days immediately
preceding the second 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 succeeding paragraph, such reference shall be deemed to
include reference to the Repurchase Price only to the extent the Repurchase
Price is payable in cash.
8. Conversion
A Holder of a Note may convert the principal amount of such Note
(or any portion thereof equal to $1,000 or any integral multiple of $1,000 in
excess thereof) into shares of Common Stock at any time prior to the close of
business on December 1, 2003; provided, however, that if the Note is called for
redemption, the conversion right will terminate at the close of business on the
Business Day immediately preceding the redemption date for such Note or such
earlier date as the Holder presents such Note for redemption (unless the Company
shall default in making the redemption payment when due, in which case the
conversion right shall terminate at the close of business on the date such
default is cured and such Note is redeemed). The initial Conversion Price is
$4.00 per share, subject to adjustment under certain circumstances. The number
of shares of Common Stock issuable upon conversion of a Note is determined by
dividing the principal amount of the Note or portion thereof converted by the
Conversion Price in effect on the Conversion Date. No payment or adjustment will
be made for accrued interest on a converted Note, except as described in the
next succeeding paragraph, or for dividends or distributions on shares of Common
Stock issued upon conversion of a Note. No
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fractional shares will be issued upon conversion; in lieu thereof, an amount
will be paid in cash based upon the closing price (as defined in the Indenture)
of the Common Stock on the Trading Day immediately prior to the Conversion Date.
The Company may elect to automatically convert the Exchange Notes
on or prior to maturity if the Common Stock price has exceeded 150% of the
conversion price for at least 20 trading days during a 30-day trading period
ending five trading days prior to the notice of automatic conversion. If an
automatic conversion occurs on or prior to December 6, 2001, the Company will
pay additional interest in cash or, at our option, in Common Stock equal to [18
months] worth of interest on the converted Exchange Notes, less any interest
actually paid prior to automatic conversion. If the Company elects to pay the
additional interest in Common Stock, the shares of Common Stock will be valued
at 90% of the average of the closing prices for the five trading days
immediately preceding the second trading day prior to the Conversion Date.
To convert a Note, a Holder must (a) complete and manually sign
the conversion notice set forth below and deliver such notice to a Conversion
Agent, (b) surrender the Note to a Conversion Agent, (c) furnish appropriate
endorsements and transfer documents if required by a Registrar or a Conversion
Agent, and (d) pay any transfer or similar tax, if required. Interest accrued to
but excluding December 6, 2001 shall be paid on any Note called for redemption
and surrendered for conversion on or before the close of business on the
Business Day immediately preceding December 6, 2001 (with interest accrued from
and including December 1, 2001 to but excluding December 6, 2001 being paid to
the Holder surrendering such Note for conversion). If a Holder surrenders a Note
for conversion after the close of business on the record date for the payment of
an installment of interest and before the close of business on the related
interest payment date then, notwithstanding such conversion, the interest
payable on such interest payment date shall be paid to the Holder in whose name
such Note was registered at the close of business on such record date. In such
event, unless the Note has been called for redemption, such Note, when
surrendered for conversion, must be accompanied by payment of an amount equal to
the interest payable on such interest payment date on the principal amount of
the Note or portion thereof then converted. If the Company defaults in the
payment of interest payable on such interest payment date, the Company shall
promptly repay such funds to such Holder. A Holder may convert a portion of a
Note equal to $1,000 or any integral multiple thereof.
A Note in respect of which a Holder had delivered a Change in
Control Purchase Notice exercising the option of such Holder to require the
Company to purchase such Note may be converted only if the Change in Control
Purchase Notice is withdrawn in accordance with the terms of the Indenture.
9. Conversion Arrangement on Call for Redemption
Any Notes called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such Notes at an amount not less than the
Redemption Price, together with accrued interest, if any, to, but not including,
the Redemption Date, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Notes from the Holders, to convert
them into Common Stock of the Company and to make payment for such Notes to the
Paying Agent in trust for such Holders.
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10. Subordination
The indebtedness evidenced by the Notes is, to the extent and in
the manner provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Company. Any
Holder by accepting this Note agrees to and shall be bound by such subordination
provisions and authorizes the Trustee to give them effect.
In addition to all other rights of Senior Indebtedness described
in the Indenture, the Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any terms of any
instrument relating to the Senior Indebtedness or any extension or renewal of
the Senior Indebtedness.
11. Denominations, Transfer, Exchange
The Notes are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of or exchange Notes in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes or other governmental charges that may be imposed
in relation thereto by law or permitted by the Indenture.
12. Persons Deemed Owners
The Holder of a Note may be treated as the owner of it for all
purposes.
13. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent will pay the money back to
the Company at its written request. After that, Holders entitled to money must
look to the Company for payment.
14. Amendment, Supplement and Waiver
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and an existing default or
Event of Default and its consequence or compliance with any provision of the
Indenture or the Notes may be waived in a particular instance with the consent
of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of or notice to any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or make any other change that does not
adversely affect the rights of any Holder.
15. Successor Corporation
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture in accordance with the terms and
conditions of the Indenture, the
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<PAGE> 73
predecessor corporation will (except in certain circumstances specified in the
Indenture) be released from those obligations.
16. Defaults and Remedies
An Event of Default is: default for 30 days in payment of any
interest on any Notes; default in payment of any principal (including, without
limitation, any premium, if any) on the Notes when due (whether at maturity,
upon redemption, on a Change of Control Purchase Date, or otherwise); failure by
the Company for 60 days after notice to it to comply with any of its other
agreements contained in the Indenture or the Notes; certain events of
bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary; and the acceleration of certain other indebtedness of the Company or
any Significant Subsidiary. If an Event of Default (other than as a result of
certain events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the Notes then outstanding may declare all
unpaid principal of and accrued interest to the date of acceleration on the
Notes then outstanding to be due and payable immediately, all as and to the
extent provided in the Indenture. If an Event of Default occurs as a result of
certain events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary, unpaid principal of and accrued interest on the Notes
then outstanding shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and to
the extent provided in the Indenture. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company is required to file periodic reports
with the Trustee as to the absence of default.
17. Trustee Dealings With the Company
LaSalle National Bank, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
18. No Recourse Against Others
A director, officer, employee or shareholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes or the Indenture nor for any claim based on, in respect of or by
reason of such obligations or their creation. The Holder of this Note by
accepting this Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Note.
19. Discharge Prior to Maturity
If all of the Notes have been delivered to the Trustee for
cancellation (subject to certain exceptions provided in the Indenture) or all
the Notes not theretofore delivered to the
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<PAGE> 74
Trustee for cancellation have become due and payable or will become due and
payable at their Final Maturity Date within one year or are to be called for
redemption within one year, all on the terms and conditions provided in the
Indenture, and if the Company deposits with the Trustee or a Paying Agent cash
in an amount sufficient to pay the principal of and interest on the Notes to the
date of such deposit (in the case of Notes which have become due and payable) or
to the Final Maturity Date or the Redemption Date, as the case may be, the
Company will be discharged from the Indenture except for certain provisions
thereof.
20. Authentication
This Note shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on the
other side of this Note.
21. Abbreviations and Definitions
Customary abbreviations may be used in the name of the Holder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
All terms defined in the Indenture and used in this Note but not
specifically defined herein are defined in the Indenture and are used herein as
so defined.
22. Indenture to Control; Governing Law
In the case of any conflict between the provisions of this Note
and the Indenture, the provisions of the Indenture shall control. This Note
shall be governed by, and construed in accordance with, the laws of the State of
New York.
The Company will furnish to any Holder, upon written request and without
charge, a copy of the Indenture. Requests may be made to: Beyond.com, 3200
Patrick Henry Drive, Santa Clara, California 95054, Attention: Chief Financial
Officer.
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<PAGE> 75
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
-------------------------------
Date:
-------------------- -------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
*Signature guaranteed by:
-------------------------------------------------------
By:
-----------------------------------------------------------------------------
* The signature must be guaranteed by an institution which is a member of one
of the following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
(iv) such other guaranty program acceptable to the Trustee.
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<PAGE> 76
CONVERSION NOTICE
To convert this Note into Common Stock of the Company, check the
box: [ ]
To convert only part of this Note, state the principal amount to
be converted (must be $1,000 or a multiple of $1,000): $_____________
If you want the stock certificate made out in another person's
name, fill in the form below:
--------------------------------------------------------------------------------
(Insert other person's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
--------------------------------
Date:
---------------- --------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
*Signature guaranteed by:
-------------------------------------------------------
By:
-----------------------------------------------------------------------------
--------------
* The signature must be guaranteed by an institution which is a member of one
of the following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
(iv) such other guaranty program acceptable to the Trustee.
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<PAGE> 77
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased, in whole or in
part, by the Company pursuant to Section 3.9 of the Indenture, check the
following box: [ ] If you want to have only part of this Note purchased by the
Company, state the principal amount you want to be purchased (must be $1,000 or
a multiple of $1,000): $_____________
Your Signature:
--------------------------------
Date:
---------------- --------------------------------
(Sign exactly as your name
appears on the other side of
this Note)
*Signature guaranteed by:
-------------------------------------------------------
By:
-----------------------------------------------------------------------------
--------------
* The signature must be guaranteed by an institution which is a member of one of
the following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
(iv) such other guaranty program acceptable to the Trustee.
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<PAGE> 78
SCHEDULE OF EXCHANGES OF NOTES(4)
The following exchanges, redemptions, repurchases or conversions
of a part of this global Note have been made:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Date of Transaction Amount of Amount of Principal amount Signature of
decrease in increase in of this global Authorized
principal amount principal amount Note following Signatory
of this global of this global such decrease Securities
Note Note or increase Custodian
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
</TABLE>
----------
(4) This schedule should be included only if the Security is a global Security.
71
