<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 6, 1997
---------------------------------
(Date of earliest event reported)
ATRIX LABORATORIES, INC.
-------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-18231 84-1043826
- -------------- ----------------------- -----------------------------
(State or Other (Commission File No.) (IRS Employer Identification
Jurisdiction of No.)
Incorporation)
2579 Midpoint Drive, Fort Collins, Colorado 80525
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(970) 482-5868
--------------------------------------------------
(Registrant's telephone number, including area code)
1
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ITEM 5. OTHER EVENTS.
On November 26, 1997 Atrix Laboratories, Inc. a Delaware
corporation (the "Company"), sold $50,000,000 aggregate principal amount of its
7% Convertible Subordinated Notes due 2004 (the "Notes"), all of which were
sold in reliance upon Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"). The Notes were sold by the Company to
NationsBanc Montgomery Securities, Inc. and SBC Warburg Dillon Read Inc. (the
"Initial Purchasers"), pursuant to a Purchase Agreement, dated November 21,
1997 (the "Purchase Agreement"), at a purchase price of 97.00% of the aggregate
principal amount thereof. The Initial Purchasers' discount was 3.00% of the
aggregate principal amount of the Notes, for an aggregate discount of
$1,500,000. Under the terms of the Purchase Agreement, the Company has granted
the Initial Purchasers an option exercisable for 30 days to purchase up to an
aggregate of $7,500,000 additional principal amount of Notes solely to cover
over-allotments, if any. The price to investors for the Notes sold in the
offering was 100% of the principal amount thereof for an aggregate offering
price of $50,000,000.
The Notes were issued pursuant to the provisions of the
Indenture, dated as of November 15, 1997 (the "Indenture"), by and among the
Company and State Street Bank and Trust Company of California, N.A., as trustee
thereunder. The Notes will bear interest at the rate of 7% per annum until
December 1, 2004. the Notes are convertible into common stock, $.001 par value
(the "Common Stock"), of the Company at any time prior to the close of business
on the maturity date, unless previously redeemed or repurchased, at a
conversion price of $19.00 per share (equivalent to a conversion rate of
approximately 52.63 shares per $1,000 principal amount of Notes), subject to
adjustment in certain circumstances. The payment of principal, premium, if
any, interest and any other amounts payable on or in respect of the Notes by
the Company are on a subordinated basis in accordance with the terms of the
Indenture.
The Notes and the Common Stock issuable upon conversion of the
Notes have not been registered under the Securities Act, in reliance upon the
exemption afforded by Rule 144A under the Securities Act. Accordingly, the
Notes and the Common Stock issuable upon conversion of the Notes were offered
and sold in the United States, in an aggregate principal amount of $50,000,000,
only to qualified institutional buyers in reliance upon Rule 144A under the
Securities Act.
The Company has agreed to file by December 26, 1997, a shelf
registration statement registering the Notes and the Common Stock issuable upon
conversion of the Notes, pursuant to a Registration Rights Agreement dated as
of November 15, 1997, by and among the Company and the Initial Purchasers (the
"Registration Rights Agreement").
The foregoing summary of the Notes, the Indenture and the Registration
Rights Agreement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the Notes,
the Indenture and Registration Rights Agreement, forms of which are filed as
Exhibits to this Current Report on Form 8-K (included in the Indenture in the
case of the form of Note).
2
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ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
4.1 Indenture, dated November 15, 1997, by and among
Atrix Laboratories, Inc. and State Street Bank and
Trust Company of California N.A., as trustee
thereunder.
4.2 Registration Rights Agreement, dated November 15,
1997, by and among Atrix Laboratories, Inc. and
NationsBanc Montgomery Securities, Inc. and SBC
Warburg Dillon Read Inc.
99.1 Text of Press Release dated November 6, 1997.
99.2 Text of Press Release dated November 24, 1997.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, on this 9th day of December, 1997.
ATRIX LABORATORIES, INC.
By: /s/ Brian G. Richmond
---------------------------
Brian G. Richmond
Vice President, Finance
and Assistant Secretary
4
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Indenture, dated November 15, 1997, by and among Atrix Laboratories, Inc. and State Street Bank and
Trust Company of California N.A., as trustee thereunder.
4.2 Registration Rights Agreement, dated November 15, 1997, by and among Atrix Laboratories, Inc. and
NationsBanc Montgomery Securities, Inc. and SBC Warburg Dillon Read Inc.
99.1 Text of Press Release dated November 6, 1997.
99.2 Text of Press Release dated November 24, 1997.
</TABLE>
5
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EXHIBIT 4.1
ATRIX LABORATORIES, INC.
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
--------------------
INDENTURE
Dated as of November 15, 1997
--------------------
7% Convertible Subordinated Notes due 2004
<PAGE> 2
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<S> <C>
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(5) . . . . . . . . . . . . . . . . . . . . 609
(a) . . . . . . . . . . . . . . . . . . . . 608
Section 311 (a) . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . 613
Section 312 (a) . . . . . . . . . . . . . . . . . . . . 701
. . . . . . . . . . . . . . . . . . . . 702(a)
(b) . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313 (a) . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . 1004
(b) . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . 102
Section 315 (a) . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . 514
Section 316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . 502
. . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . 1003
Section 318 (a) . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
i
<PAGE> 3
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
Page
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE Definitions and Other Provisions of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Beneficial Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Cedel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
DTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Definitive Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Designated Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Euroclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Initial Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Institutional Accredited Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Liquidated Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
144A Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
*Note: This table of contents shall not, for any purposes, be deemed to be a
part of the Indenture.
ii
<PAGE> 4
<TABLE>
<S> <C>
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regulation S Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Termination of Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 105. Notices, Etc., to Trustee and Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 114. No Security Interest Created . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 115. Limitation on Individual Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 116. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE TWO Security Forms
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 203. Form of Reverse of Global Securities and Definitive Securities . . . . . . . . . . . . . . 19
</TABLE>
*Note: This table of contents shall not, for any purposes, be deemed to be a
part of the Indenture.
iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 204. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE THREE The Securities
SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . 30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . 35
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE FOUR Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 403. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE FIVE Remedies
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . 42
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . 43
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . . . 45
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE SIX The Trustee
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . 51
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . 53
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
*Note: This table of contents shall not, for any purposes, be deemed to be a
part of the Indenture.
iv
<PAGE> 6
<TABLE>
<S> <C>
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . 55
SECTION 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . 55
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . 58
SECTION 702. Preservation of Information; Communication to Holders . . . . . . . . . . . . . . . . . . 58
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 705. Rule 144A Information Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . 59
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE NINE Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . 60
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . . 61
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 63
SECTION 907. Notice of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE TEN Covenants
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1003. Money for Security Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1004. Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1008. Resale of Certain Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1009. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE ELEVEN Redemption of Securities
SECTION 1101. Right of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1102. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1103. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1104. Selection by Trustee of Securities to be Redeemed . . . . . . . . . . . . . . . . . . . . 68
SECTION 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1106. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1107. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1108. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE TWELVE Subordination of Securities
SECTION 1201. Securities Subordinated to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1202. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . . . . 70
</TABLE>
*Note: This table of contents shall not, for any purposes, be deemed to be a
part of the Indenture.
v
<PAGE> 7
<TABLE>
<S> <C> <C>
SECTION 1203. Prior Payment to Senior Indebtedness upon Acceleration of Securities . . . . . . . . . . . 71
SECTION 1204. Payment When Designated Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . 72
SECTION 1205. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 1206. Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . 74
SECTION 1207. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1208. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 1209. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1210. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . . . 76
SECTION 1212. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . 76
SECTION 1213. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights . . 77
SECTION 1214. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1215. Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1216. No Suspension of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE THIRTEEN Conversion of Securities
SECTION 1301. Conversion Privilege and Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1302. Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1303. Fractions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1304. Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 1305. Notice of Adjustments of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 1306. Notice of Certain Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 1307. Company to Reserve Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1308. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1309. Covenant as to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1310. Cancellation of Converted Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 1311. Provisions of Consolidation, Merger or Sale of Assets . . . . . . . . . . . . . . . . . . 90
SECTION 1312. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE FOURTEEN Right to Require Repurchase
SECTION 1401. Right to Require Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 1402. Notice; Method of Exercising Repurchase Right . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 1403. Deposit of Repurchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 1404. Securities Not Repurchased on Repurchase Date . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 1405. Securities Repurchased in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 1406. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 1407. Merger, Consolidation, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
</TABLE>
*Note: This table of contents shall not, for any purposes, be deemed to be a
part of the Indenture.
vi
<PAGE> 8
INDENTURE, dated as of November 15, 1997, between Atrix Laboratories,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal executive offices
at 3240 Rimrock Lane, Fort Collins, Colorado 80526 and State Street Bank and
Trust Company of California, N.A., a national banking association organized
under the laws of the United States of America, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 7%
Convertible Subordinated Notes due 2004 (herein called the "Securities") of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required and permitted hereunder shall mean such accounting principles as are
generally accepted and accepted and adopted by the Company at the date of this
Indenture; and
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<PAGE> 9
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms used in Articles Twelve, Thirteen and Fourteen are
defined in such Articles.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
The term "Beneficial Owner" is determined in accordance with Rule
13d-3, promulgated by the Commission under the Exchange Act.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
or the city in which the Corporate Trust Office is located are authorized or
obligated to close by law or executive order.
"Cedel" means Cedel Bank societe anonyme.
"Change in Control" has the meaning specified in Section 1406.
"Closing Date" means November 26, 1997.
"Commission" means the Securities and Exchange Commission as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which
has 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 is not subject to
2
<PAGE> 10
redemption by the Company. However, subject to the provisions of Section 1311,
shares issuable on conversion of Securities shall include only shares of the
class designated as Common Stock of the Company at the date of this Indenture
or shares of any class or classes 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, that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President or a Sr. Vice President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall principally be
administered, which office is, at the date as of which this Indenture is dated,
located at 725 South Figueroa Street, Los Angeles, California 90017 (Attention:
Corporate Trust Department - Atrix Laboratories, Inc. 7% Convertible
Subordinated Notes due 2004). State Street Bank and Trust Company, N.A., an
Affiliate of the Trustee, also maintains an office at 61 Broadway, Concourse
Level, Corporate Trust Window, New York, New York 10006 (Attention: Corporate
Trust Department - Atrix Laboratories, Inc. 7% Convertible Subordinated Notes
due 2004) at which it is authorized to receive notices hereunder.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Current Market Price" has the meaning specified in Section 1304.
"DTC" has the meaning specified in Section 305.
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Security" or "Definitive Securities" means a Security or
Securities that are in the form of the Security set forth in Sections 202 and
203 hereof, containing the legend specified for a Definitive Security and not
including the additional language referred to in footnote 1 or the additional
schedule referred to in footnote 2.
"Depositary" has the meaning specified in Section 305.
3
<PAGE> 11
"Designated Senior Indebtedness" means the principal, interest,
premiums, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any indebtedness (a) under any debt
facility with banks or other lenders which provides for revolving credit loans,
term loans, receivables financing (including through the sale of receivables)
or letters of credit to the Company or any of its Subsidiaries, and (b) any
other Senior Indebtedness the principal amount of which is $5.0 million or more
and that, in each case, has been designated by the Company as "Designated
Senior Indebtedness."
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
"Global Security" or "Global Securities" means a Security or Securities
in the form of the Security set forth in Sections 202, 203 and 204 hereof
containing the legend specified for a Global Security, the additional language
referred to in footnote 1 and the additional schedule referred to in footnote
2.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means NationsBanc Montgomery Securities, Inc. and
SBC Warburg Dillon Read Inc.
"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of the
Securities Act.
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Securities.
"Liquidated Damages" has the meaning specified in the Registration
Rights Agreement.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"Non-U.S. Persons" means those persons that are not U.S. persons (as
such term is defined in Regulation S).
4
<PAGE> 12
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President or a Senior Vice
President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company.
"144A Global Security" has the meaning specified in Section 201.
"Opinion of Counsel" means a written opinion of counsel who shall be
reasonably acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount have been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the Holders of such Securities; provided, that
if such Securities, or portions thereof, are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(iv) Securities which have converted into Common Stock,
pursuant to Article Thirteen;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities as to which the Trustee has actual knowledge
of such ownership shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect
to such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
5
<PAGE> 13
"Paying Agent" means any Person authorized by the Company to pay the
principal of and premium, if any, or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means that certain Purchase Agreement, dated
November 21, 1997, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act.
"Record Date" means either a Regular Record Date or a Special Record
Date, as applicable.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture on the applicable Redemption Date.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of November 15, 1997, between the Company and the Initial
Purchasers.
"Regular Record Date," for the interest payable on any Interest
Payment Date means May 15 or November 15 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act of 1933.
"Regulation S Global Security" has the meaning specified in Section
201.
"Repurchase Date" has the meaning specified in Section 1401.
"Repurchase Event" has the meaning specified in Section 1406.
"Repurchase Price" has the meaning specified in Section 1401.
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<PAGE> 14
"Responsible Officer" means, when used with respect to the Trustee, an
officer of the Trustee assigned and duly authorized by the Trustee to
administer its corporate trust matters.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
any Global Securities, or any successor entity thereto.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on (a) all indebtedness of the Company for money borrowed under the
Company's credit facilities and any predecessor or successor credit facilities
thereto, whether outstanding on the date of execution of the Indenture or
thereafter created, incurred or assumed, (b) all indebtedness of the Company
for money borrowed, whether outstanding on the date of execution of this
Indenture or thereafter created, incurred or assumed, except any such other
indebtedness that by the terms of the instrument or instruments by which such
indebtedness was created or incurred expressly provides that it (i) is junior
in right of payment to the Securities or (ii) ranks pari passu in right of
payment with the Securities, and (c) any amendments, renewals, extensions,
modifications, refinancings and refundings of the foregoing. For the purposes
of this definition, "indebtedness for money borrowed" when used with respect to
the Company means (i) any obligation of, or any obligation guaranteed by, the
Company for the repayment of borrowed money (including without limitation fees,
penalties or other obligations in respect thereof), whether or not evidenced by
bonds, debentures, notes or other written instruments, (ii) any deferred
payment obligation of, or any such obligation guaranteed by, the Company for
the payment of the purchase price of property or assets evidenced by a note or
similar instrument, and (iii) any obligation of, or any such obligation
guaranteed by, the Company for the payment of rent or other amounts under a
lease of property or assets which obligation is required to be classified and
accounted for as a capitalized lease on the balance sheet of the Company under
generally accepted accounting principles.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
instalment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
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<PAGE> 15
"Termination of Trading" has the meaning specified in Section 1406.
"Transfer Restricted Security" has the meaning specified in the
Registration Rights Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Vice President," when used with respect to the Company means any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president."
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual or firm signing such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual
or such firm, he has or they have made such examination or investigation as is
necessary to enable him or them to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual or such firm, such condition or covenant has been complied with.
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<PAGE> 16
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any Person may certify to
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certification or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate of public officials or upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining
the Holders entitled to give or take any
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<PAGE> 17
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled
to give or take, or vote on, the relevant action. Notwithstanding the
foregoing, the Company shall not set a record date for, and the provisions of
this paragraph shall not apply with respect to, any Act by the Holders pursuant
to Section 501, 502 or 512.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer therefor or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any Act of Holders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department (Atrix Laboratories, Inc. - 7% Convertible Subordinated Notes due
2004), or at any other address previously furnished in writing to the Holders
and the Company by the Trustee; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company, addressed to
it at the address of its principal executive offices specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, registered or certified with postage
prepaid, if mailed; when answered back if telexed;
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<PAGE> 18
when receipt acknowledged, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by nationally recognized overnight air
courier guaranteeing next day delivery.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if made, given, mailed or otherwise furnished or filed in writing to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver. All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, registered or certified with postage
prepaid, if mailed; when answered back if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by nationally recognized overnight air courier guaranteeing next day
delivery.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act or another provision that would be
required or deemed under such Trust Indenture Act to be a part of and govern
this Indenture if this Indenture were subject thereto, the latter provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
Trustee shall bind each of their respective successors and assigns, whether so
expressed or not.
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SECTION 110. SEPARABILITY CLAUSE.
In case any provision 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 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the Holders of Securities and, with respect to Article Twelve, the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and, except as may otherwise be required by mandatory
provisions of law, the Securities shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to the
principles of conflicts of laws thereof.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal and premium if any, or conversion of the Securities need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date, Repurchase Date,
Redemption Date or at the Stated Maturity, or on such last day for conversion;
provided, that no interest shall accrue for the period from and after such
Interest Payment Date, Repurchase Date, Redemption Date or Stated Maturity, as
the case may be, to the next succeeding Business Day.
SECTION 114. NO SECURITY INTEREST CREATED.
Nothing in this Indenture or in the Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
SECTION 115. LIMITATION ON INDIVIDUAL LIABILITY.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the incorporators, shareholders,
officers or directors, as
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<PAGE> 20
such, of the Company or any successor Person, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom; and that any and all such personal liability of
every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.
SECTION 116. EXECUTION IN COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificate of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with any organizational document, any applicable law or with
the rules of any securities exchange on which the Securities are listed or as
may, consistently herewith, be determined by the Company officers executing
such Securities, as evidenced by their execution of the Securities.
The Securities issued in definitive form shall be substantially in the
form set forth in Section 202 hereof.
Unless issued in definitive form, Securities issued and sold in
reliance on Rule 144A shall be issued in the form of one or more global
securities (the "144A Global Security"), the face of which shall be
substantially in the form set forth in Section 202 hereof and the reverse of
which shall be substantially in the form set forth in Section 203 hereof, which
144A Global Security shall be deposited on behalf of the holders of the
Securities represented thereby with the Trustee, as Securities Custodian for
the Depositary, and registered in the name of the nominee of the Depositary,
duly executed by the Company and authenticated as provided for herein.
Securities offered and sold outside the United States in reliance on
Regulation S shall be issued in the form of one or more global securities (the
"Regulation S Global Security"), the face of which shall be substantially in
the form set forth in Section 202 hereof and the reverse of which shall be
substantially in the form set forth in Section 203 hereof, which Regulation S
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<PAGE> 21
Global Security shall be deposited on behalf of the holders of the Securities
represented thereby with the Trustee, as Securities Custodian for the
Depositary, and registered in the name of a nominee of the Depositary, duly
executed by the Company and authenticated as provided herein, for credit to the
accounts of the respective depositaries for Euroclear and Cedel (or such other
accounts as they may direct). Prior to or on the 40th day after the later of
the commencement of the offering of the Securities and the Closing Date (the
"Restricted Period"), beneficial interests in the Regulation S Global Security
may only be held through Morgan Guaranty Trust Company of New York, Brussels
office, as operator of Euroclear or Cedel or another agent member of the
Euroclear System and Cedel acting for and on behalf of them, unless delivery is
made though the 144A Global Security. During the Restricted Period, interests
in the Regulation S Global Security may be exchanged for interests in the 144A
Global Security.
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 and redemptions. 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 Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof. Payment of principal of and interest
and premium, if any, on any Global Security shall be made to the Holder of such
Global Security.
The Definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or
may be produced in any other manner permitted by the rules of any securities
exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. FORM OF FACE OF SECURITY.
[LEGENDS FOR GLOBAL SECURITY:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
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<PAGE> 22
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, NEITHER THIS SECURITY, THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACQUISITION HEREOF, AGREES THAT IT
WILL NOT, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE ORIGINAL ISSUE DATE
HEREOF, RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO ATRIX
LABORATORIES, INC. OR A SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR SUCCESSOR TRUSTEE, AS APPLICABLE),
(D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE
STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY AFTER THE EXPIRATION OF TWO
YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED HEREBY. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
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<PAGE> 23
ATRIX LABORATORIES, INC.
7% Convertible Subordinated Notes due 2004
No. ________ $___________
Atrix Laboratories, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company," which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to __________________________,
or its registered assigns, the principal sum of ________________ Dollars [or
such greater or lesser amount as indicated on the schedule of exchanges of
securities on the reverse hereof](1) on December 1, 2004 upon surrender hereof
to the Paying Agent, and to pay interest thereon from the date of original
issuance of Securities pursuant to the Indenture or from and including the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on June 1 and December 1 in each year, commencing June 1,
1998 at the rate of 7% per annum, until the principal hereof is paid or made
available for payment and promises to pay any Liquidated Damages which may be
payable on the Interest Payment Date. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the May 15 or November 15
(whether or not a Business Day), as the case may be, 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 or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Notice of a Special
Record Date shall be given to Holders of Securities not less than 10 days prior
to such Special Record Date. Payment of the principal of and premium, if any,
and interest on this Security will be made (i) in respect of Securities held of
record by the Depositary or its nominee in same day funds on or prior to the
respective payment dates and (ii) in respect of Securities held of record by
Holders other than the Depositary or its nominee in same day funds at the
office or agency of the Company maintained for that purpose pursuant to Section
1002 of the Indenture, in each case in such coin or currency of the United
States of America as of the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest in respect of Securities held of record by Holders other
than the Depositary or its nominee may be made by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register.
- ---------------
(1)This phrase should be included only if the Security is issued in
global form.
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<PAGE> 24
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ATRIX LABORATORIES, INC.
--------------
By:
---------------
Attest:
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<PAGE> 25
SECTION 203. FORM OF REVERSE OF GLOBAL SECURITIES AND DEFINITIVE
SECURITIES.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 7% Convertible Subordinated Notes due 2004 (herein
called the "Securities"), limited in aggregate principal amount to $57,500,000
(including Securities issuable pursuant to the Initial Purchasers'
over-allotment option, as provided for in the Purchase Agreement dated November
21, 1997 between the Company and the Initial Purchasers), issued and to be
issued under an Indenture, dated as of November 15, 1997 (herein called the
"Indenture"), between the Company and State Street Bank and Trust Company of
California, N.A., as Trustee (herein called the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time following
the date of original issuance of Securities pursuant to the Indenture and on or
before the close of business on December 1, 2004, or in case this Security or a
portion hereof is called for redemption, then in respect of this Security or
such portion hereof until and including, but (unless the Company defaults in
making the payment due upon redemption) not after, the close of business on the
Business Day preceding the Redemption Date, to convert this Security (or any
portion of the principal amount hereof which is $1,000 or an integral multiple
thereof), at the principal amount hereof, or of such portion, into fully paid
and non-assessable shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock at a conversion price equal to $19.00
principal amount for each share of Common Stock (or at the current adjusted
conversion price if an adjustment has been made as provided in the Indenture)
by surrender of this Security, duly endorsed or assigned to the Company or in
blank, to the Company at its office or agency maintained for that purpose
pursuant to Section 1002 of the Indenture, accompanied by written notice to the
Company in the form provided in this Security (or such other notice as is
acceptable to the Company) that the Holder hereof elects to convert this
Security, or if less than the entire principal amount hereof is to be
converted, the portion hereof to be converted, and, in case such surrender
shall be made during the period from the opening of business on any Regular
Record Date next preceding any Interest Payment Date to the close of business
on the Business Day immediately preceding such Interest Payment Date (unless
this Security or the portion thereof being converted has been called for
redemption during the period from the opening of business day on any Regular
Record Date next preceding any Interest Payment Date to close of business on
the Second Business Day next succeeding the following Interest Payment Date),
also accompanied by payment in funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted. If such Security or portion
thereof being converted shall have been called for redemption during the period
from the close of business on the Regular Record Date to the close of business
on the second Business Day next succeeding the following Interest Payment Date,
then such Security or portion thereof shall be accompanied by payment in funds
acceptable to the Company of an amount equal to the difference between (i) the
interest on the principal amount of such Security or portion thereof payable on
such Interest Payment Date and (ii) the amount of accrued interest on the
principal
18
<PAGE> 26
amount of such Security or portion thereof to but not including the date of
conversion. Subject to the aforesaid requirement for payment and, in the case
of a conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right of the
Holder of this Security (or any Predecessor Security) of record at such Regular
Record Date to receive an instalment of interest (with certain exceptions
provided in the Indenture), no payment or adjustment is to be made upon
conversion on account of any interest accrued hereon or on account of any
dividends on the Common Stock issued upon conversion. No fractional shares or
scrip representing fractions of shares will be issued on conversion, but
instead of any fractional share the Company shall pay a cash adjustment as
provided in the Indenture. The conversion price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the sale
or transfer of all or substantially all of the assets of the Company, the
Indenture shall be amended, without the consent of any Holders of Securities,
so that this Security, if then outstanding, will be convertible thereafter only
into the kind and amount of securities, cash and other property receivable upon
the consolidation, merger, sale or transfer by a holder of the number of shares
of Common Stock into which this Security might have been converted immediately
prior to such consolidation, merger, sale or transfer (assuming such holder of
Common Stock failed to exercise any rights of election and received per share
the kind and amount received per share by a plurality of non-electing shares).
The Securities are subject to redemption upon not less than 30 and not
more than 60 days' notice by mail, at any time on or after December 5, 2000, as
a whole or in part, at the election of the Company, at the Redemption Prices
set forth below (expressed as percentages of the principal amount), plus
accrued interest to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning December 1, 2000
(beginning December 5, 2000 and ending on November 30, 2001, in the case of the
first such period) the redemption price shall be:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
<S> <C>
2000 103.00%
2001 102.25
2002 101.50
2003 100.75
2004 100.00%
</TABLE>
in each case together with accrued and unpaid interest and Liquidated Damages,
if any, to, but excluding, the Redemption Date.
In certain circumstances involving the occurrence of a Repurchase
Event (as defined in the Indenture), the Holder hereof shall have the right to
require the Company to repurchase this Security at 100% of the principal amount
hereof, together with accrued and unpaid interest and Liquidated Damages, if
any, to, but excluding, the Repurchase Date, but interest installments whose
Stated Maturity is on or prior to such Repurchase Date will be payable to the
Holders of
19
<PAGE> 27
such Securities, or one or more Predecessor Securities, of record at the close
of business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
In the event of redemption or conversion of this Security in part
only, a new Security or Securities for the unredeemed or unconverted portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
The indebtedness evidenced by this Security is, in all respects,
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness, and this Security is issued subject to the provisions of
the Indenture with respect thereto. Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination so provided, and (c) appoints
the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the
time Outstanding, and, under certain limited circumstances, by the Company and
the Trustee without the consent of the Holders. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
20
<PAGE> 28
The Securities are issuable only in fully registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange except as provided in the Indenture, and the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, except as provided in this Security, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture. The Company will
furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement.
21
<PAGE> 29
[FORM OF CONVERSION NOTICE]
TO ATRIX LABORATORIES, INC.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 or a multiple thereof) designated below, into shares of Common Stock in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon the conversion, together
with any check in payment for a fractional share and any Security representing
any unconverted principal amount hereof, be issued and delivered to the
registered owner hereof unless a different name has been provided below. If
this Notice is being delivered on a date after the close of business on a
Regular Record Date and prior to the close of business on the related Interest
Payment Date, this Notice is accompanied by payment in funds acceptable to the
Company, of an amount equal to the interest payable on such Interest Payment
Date on the principal of this Security to be converted (unless this Security
has been called for redemption). If shares or any portion of this Security not
converted are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest
accompanies this Security.
Dated:
-------------- -------------------------
Signature(s)
Signature(s) must be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership
in an approved signature guarantee medallion program) pursuant to SEC Rule
17Ad-15, if shares of Common Stock are to be delivered, or Securities to be
issued, other than to and in the name of the registered owner.
Signature Guarantee
22
<PAGE> 30
Fill in for registration of shares of Common Stock if they are to be delivered,
or Securities if they are to be issued, other than to and in the name of the
registered owner:
(Name)
(Street Address)
(City, State and zip code)
(Please print name and address)
Register: Common Stock
---- Securities
(Check appropriate line(s)).
Principal amount to be converted (if less than all): $__________,000
Social Security or other Taxpayer
Identification Number of owner
23
<PAGE> 31
[ASSIGNMENT FORM]
For value received _________________________________________________
hereby sell(s), assign(s) and transfer(s) unto_______________________________
(Please insert social security or other Taxpayer Identification Number of
assignee) the within Security, and hereby irrevocably constitutes and appoints
___________________________________________________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution
in the premises.
In connection with any transfer of the within Security within two
years of the date of original issuance of such Security (unless such Security
has been sold pursuant to a registration statement that was effective at the
time of such transfer), the undersigned confirms that such Security is being
transferred:
[ ] To Atrix Laboratories, Inc., or a subsidiary
thereof; or
[ ] Pursuant to and in compliance with Rule 144A
under the Securities Act of 1933, as amended
(the "Securities Act"); or
[ ] To an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) pursuant to and in
compliance with the Securities Act; or Pursuant
to and in compliance with Regulation S under
the Securities Act; or
[ ] Pursuant to and in compliance with Rule 144
under the Securities Act;
and unless the box below is checked, the undersigned confirms that such
Security is not being transferred to an "affiliate" of the Company as defined
in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate").
[ ] The transferee is an Affiliate of the Company.
Dated:
--------------- ---------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible guarantor institution (banks,
stockbrokers, savings and loan associations
and credit unions with membership in an
approved signature guarantee medallion
program) pursuant to SEC Rule 17Ad-15 if
shares of Common Stock are to be issued, or
Securities to be delivered, other than to
or in the name of the registered Holder.
Signature Guarantee
24
<PAGE> 32
[OPTION OF HOLDER TO ELECT PURCHASE]
[ ] If you wish to have this Security purchased by the Company pursuant to
Section 1401 of the Indenture, check the Box:
If you wish to have a portion of this Security (which is $1,000 or an
integral multiple thereof) purchased by the Company pursuant to Section 1401 of
the Indenture, state the amount you wish to have purchased:
$
----------------
Date: Your Signature(s):
--------------- -------------------
--------------
Tax Identification No.:
-----------
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:
-------------------------------------------
The signature to this option of Holder to elect purchase should be guaranteed
by an eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to SEC Rule 17Ad-15.
25
<PAGE> 33
[FORM OF SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES**]
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized signatory of
Date of Exchange Principal Amount Principal Amount Security following Trustee or Securities
of this Global of this Global such decrease (or Custodian
Security Security increase
<S> <C> <C> <C> <C>
1.
2.
3.
4.
5.
</TABLE>
- ---------------
**This Schedule should be included only if the Security is issued in global
form.
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee
By
----------------------
Authorized Signatory
26
<PAGE> 34
ARTICLE THREE
THE SECURITIES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $57,500,000
(including $7,500,000 aggregate principal amount of Securities that may be sold
to the Initial Purchasers by the Company upon exercise of the over-allotment
option granted pursuant to the Purchase Agreement), except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906,
1108, 1302 or 1405.
The Securities shall be known and designated as the "7% Convertible
Subordinated Notes due 2004" of the Company. Their Stated Maturity shall be
December 1, 2004 and they shall bear interest at the rate of 7% per annum, from
the date of original issuance of Securities pursuant to this Indenture or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable semi-annually on June 1 and December
1 commencing June 1, 1998, until the principal thereof is paid or made
available for payment.
The principal of and premium, if any, and interest on the Securities
shall be payable (i) in respect of Securities held of record by the Depositary
or its nominee in same day funds on or prior to the respective payment dates
and (ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee in same day funds at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided,
however, that at the option of the Company payment of interest to Holders of
record other than the Depositary may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
The Securities shall be subject to the transfer restrictions set forth
in Section 305.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
The Securities shall be convertible as provided in Article Thirteen.
The Securities shall be subject to repurchase at the option of the
Holder as provided in Article Fourteen.
27
<PAGE> 35
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President or one of its
Vice Presidents, under its corporate seal or a facsimile thereof reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall either at one time or from time to time pursuant
to such instructions as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise. Such Company Order
shall specify the amount of Securities to be authenticated and the date on
which the original issue of Securities is to be authenticated, and shall
certify that all conditions precedent to the issuance of such Securities
contained in this Indenture have been complied with. The aggregate principal
amount of Securities Outstanding at any time may not exceed the amount set
forth above except as provided in Section 306.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of the Indenture. The Trustee may appoint an Authenticating Agent
pursuant to the terms of Section 614.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of Definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the Definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the
28
<PAGE> 36
officers executing such Securities may determine, as evidenced by their
execution of such Securities. Every such temporary Security shall be executed
by the Company and shall be authenticated and delivered by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the Definitive Security or Securities in lieu of which it is issued.
Not including Global Securities, if temporary Securities are issued,
the Company will cause Definitive Securities to be prepared without
unreasonable delay. After the preparation of Definitive Securities, the
temporary Securities shall be exchangeable for Definitive Securities upon
surrender of the temporary Securities at any office or agency of the Company
designated pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more Definitive Securities of a like principal amount of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as
Definitive Securities.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided. At all reasonable
times the Security Register shall be open for inspection by the Company.
The Company initially appoints The Depository Trust Company ("DTC") to
act as depositary (the "Depositary") with respect to the Global Security(ies).
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Security(ies).
(b) So long as the Securities are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Securities that
are so eligible may be represented by one or more Global Securities registered
in the name of the Depositary or the nominee of the Depositary, except as
otherwise specified below. The transfer and exchange of beneficial interests
in any such Global Security shall be effected through the Depositary in
accordance with this Indenture and the procedures of the Depositary therefor.
Transfers of interests in the Securities between the 144A Global
Security and the Regulation S Global Security will be made in accordance with
the standing instructions and procedures of the Depositary and its
participants. The Trustee shall make appropriate endorsements to reflect
increases or decreases in the principal amounts of such Global Securities as
set forth on the face of the Security ("Principal Amount") to reflect any such
transfers.
29
<PAGE> 37
Except as provided below, beneficial owners of a Global Security shall
not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Global Securities.
(c) So long as the Securities are eligible for book-entry settlement,
or unless otherwise required by law, upon any transfer of a Definitive Security
to a QIB in accordance with Rule 144A or to a Non-U.S. Person in accordance
with Regulation S, and upon receipt of the Definitive Security or Securities
being so transferred, together with a certification, substantially in the form
on the reverse of the Security, from the transferor that the transfer is being
made in compliance with Rule 144A or Regulation S, as the case may be (or other
evidence satisfactory to the Trustee), the Trustee shall make an endorsement on
the 144A Global Security or the Regulation S Global Security, as the case may
be, to reflect an increase in the aggregate Principal Amount of the Securities
in accordance with the standing instructions and procedures of the Depositary,
the aggregate Principal Amount of Securities represented by such Global
Security to be increased accordingly; provided that no Definitive Security, or
portion thereof, in respect of which the Company or an Affiliate of the Company
held any beneficial interest shall be included in such Global Security until
such Definitive Security is freely tradable in accordance with Rule 144(k);
provided further that the Trustee shall issue Definitive Securities upon any
transfer of a beneficial interest in the Global Security to the Company or any
Affiliate of the Company.
Upon any sale or transfer of a Security to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been
declared effective under the Securities Act and remains effective at the time
of such sale or transfer), such Institutional Accredited Investor shall, prior
to such sale or transfer, furnish to the Company and/or the Trustee a signed
letter containing representations and agreements relating to restrictions on
transfer substantially in the form set forth in Exhibit A to this Indenture.
Any Security may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Securities Custodian,
the Depositary or by the National Association of Securities Dealers, Inc. in
order for the Securities to be tradeable on The Portal Market or as may be
required for the Securities to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A or Regulation S or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of Euroclear, Cedel or any securities exchange or automated
quotation system upon which the Securities may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
imitations or restrictions to which any particular Securities are subject.
(d) The Depositary shall be a clearing agency registered under the
Exchange Act. Initially, the 144A Global Security and the Regulation S Global
Security shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Securities
Custodian for Cede & Co.
If a Definitive Security is issued in exchange for any portion of a
Global Security after the close of business at the office or agency where such
exchange occurs on any Record Date
30
<PAGE> 38
and before the opening of business at such office or agency on the next
succeeding Interest Payment Date, interest will not be payable on such Interest
Payment Date in respect to such Security, but will be payable on such Interest
Payment Date, subject to the provisions of Section 307, only to the Person to
whom interest in respect of such portion of such Global Security is payable in
accordance with the provisions of this Indenture.
Definitive Securities issued in exchange for all or a part of a Global
Security pursuant to this Section 305 shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
Upon execution and authentication, the Trustee shall deliver such Definitive
Securities to the Persons in whose names such Definitive Securities are so
registered.
At such times as all interests in a Global Security have been
redeemed, repurchased, converted, canceled, exchanged for Definitive Securities
or transferred to a transferee who receives Definitive Securities thereof, such
Global Security shall, upon receipt thereof, be canceled by the Trustee in
accordance with standing procedures and instructions existing between the
Depositary and the Securities Custodian. At any time prior to such
cancellation, if any interest in a Global Security is exchanged for Definitive
Securities or redeemed, converted, repurchased or canceled, exchanged for
Definitive Securities or transferred to a transferee who receives Definitive
Securities therefor or any Definitive Security is exchanged or transferred for
part of a Global Security, the principal amount of such Global Security shall,
in accordance with the standing procedures and instructions existing between
the Depositary and the Securities Custodian, be appropriately reduced or
increased, as the case may be, and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction of the
Trustee, to reflect such reduction or increase.
(e) Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in subsection (c) of this Section 305), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(f) The following relates to the authentication of Definitive
Securities in absence of the Depositary. If at any time: (i) the Depositary for
the Global Securities notifies the Company that the Depositary is unwilling or
unable to continue as Depositary for the Global Securities and a successor
Depositary for the Global Securities is not appointed by the Company within 90
days after delivery of such notice; or (ii) the Company, at its sole
discretion, notifies the Trustee in writing that it elects to cause the
issuance of Definitive Securities under this Indenture, then the Company will
execute, and the Trustee, upon receipt of a Company Order in accordance with
Section 303 requesting the authentication and delivery of Definitive
Securities, will authenticate and deliver Definitive Securities in an aggregate
principal amount equal to the principal amount of the Global Securities, in
exchange for such Global Securities.
(g) Until two years after the date of original issuance of the
Securities, each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the
31
<PAGE> 39
following form, unless otherwise agreed by the Company in writing, with notice
to the Trustee (unless such Security shall be sold pursuant to a registration
statement that is effective at the time of such sale):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, NEITHER THIS SECURITY, THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACQUISITION HEREOF, AGREES THAT IT
WILL NOT, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF, RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO
ATRIX LABORATORIES, INC. OR A SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR SUCCESSOR TRUSTEE, AS
APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF SUCH SECURITY, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A., AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO
IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE
STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A., AS TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
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OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY AFTER THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE SECURITY EVIDENCED
HEREBY. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
(h) All Definitive Securities and Global Securities issued upon any
registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
(i) To the extent requested by the Trustee, all Securities the
transfer, exchange and/or registration of which is effectuated pursuant to this
Section 305 shall be accompanied by an Officers' Certificate of the Company,
certifying that such transfer, exchange and/or registration is authorized by
the Company and permitted hereunder.
(j) Any Security or Common Stock issued upon the conversion or
exchange of a Security that, on or prior to two years after the original
issuance of the Securities, is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Securities or Common Stock issuable upon conversion thereof, as the
case may be, no longer being "restricted securities" (as defined under Rule
144).
(k) To permit registrations of transfer and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Security Registrar's request.
(l) No service charge to a Holder shall be made for any registration
of transfer or exchange of Securities except as provided in Section 306. The
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section
304, 906, 1108, 1302 or 1405 not involving any transfer.
(m) The Company or the Security Registrar shall not be required (i) to
issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities selected for redemption under Section 1104
and ending at the close of business on the day of such mailing, (ii) to
register the transfer of or exchange any Definitive Security or beneficial
interest in any Global Security so selected for redemption in whole or in part,
except the unredeemed portion of any Definitive Security being redeemed in part
or (iii) to register the transfer of or exchange of any Definitive
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Security or beneficial interest in any Global Security surrendered for
conversion pursuant to Article Thirteen or repurchase (and not withdrawn)
pursuant to Article Fourteen.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a
number not contemporaneously outstanding. The Trustee may charge the Company
for the Trustee's expenses in replacing such Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, 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
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 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 the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest. Payment
of interest will be made (i) in respect of Securities held by the Depositary or
its nominee, in same day funds on or prior to the respective Interest Payment
Dates and (ii) in respect of Securities held of record by Holders other than
the Depositary or its nominee, in same day funds at the office or agency of the
Trustee in New York, New York or at
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such other office or agency of the Company as it shall maintain for that
purpose pursuant to Section 1002, provided, however, that, at the option of the
Company, interest on any Security held of record by Holders other than the
Depositary or its nominee may be paid by mailing checks to the addresses of the
Holders thereof as such addresses appear in the Securities Register.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause
(2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security. In the
case of any Security which is converted after any Regular Record Date and on or
prior to the Business Day immediately preceding such Interest Payment Date
(other than any
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Security whose Maturity is prior to such Interest Payment Date), interest whose
Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date; provided,
however, that Securities so surrendered for conversion shall (except in the
case of Securities or portions thereof called for redemption which is addressed
in Section 1302 below) be accompanied by payment in funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount being surrendered for conversion. Except as
otherwise expressly provided above in this subsection (2) and in Section 1302,
in the case of any Security which is converted, interest whose Stated Maturity
is after the date of conversion of such Security shall not be payable.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and premium, if
any, and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer, exchange or conversion shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be destroyed by the Trustee, unless
otherwise directed by a Company Order.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as expressly provided for in this Article Four), and the
Trustee, 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 306 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) 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 their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, or
(iv) are delivered to the Trustee for Conversion
in accordance with Article Thirteen, and the Company, in the case of (i), (ii),
(iii) or (iv) above, has irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose an amount in cash
sufficient (without consideration of any investment of such cash) to pay and
discharge the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation for principal and premium, if any, and interest
to the date of such deposit (in the case of Securities which have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be;
provided that the Trustee shall have been irrevocably instructed to apply such
amount to said payments with respect to the Securities;
(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 following rights or obligations under the Securities and this
Indenture shall survive until otherwise terminated or discharged hereunder: (a)
Article Thirteen, Article Fourteen and the Company's obligations under Sections
304, 305, 306, 1002 and 1003, in each case with respect to any Securities
described in subclause (B) of Clause (1) of this Section, (b) this Article
Four, (c) the rights, powers, trusts, duties and immunities of the Trustee
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hereunder, including the obligations of the Company to the Trustee under
Section 607, and the obligations of the Trustee to any Authenticating Agent
under Section 614 and (d) if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the rights of Holders
of any Securities described in subclause (B) of Clause (1) of this Section to
receive, solely from the trust fund described in such subclause (B), payments
in respect of the principal of, and premium (if any) and interest on, such
Securities when such payment are due.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003 and
Section 506, all money deposited with the Trustee pursuant to Section 401 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
premium, if any, and interest for whose payment such money has been deposited
with the Trustee. All moneys deposited with the Trustee pursuant to Section 401
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
SECTION 403. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Four 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 this Article Four until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with respect to the Securities;
provided, however, that if the Company makes any payment of principal of, or
any premium or interest on, any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
the Securities to receive such payment from the money so held in trust.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body);
(1) default in the payment of the principal of, or premium, if any, on
any Security at its Maturity, whether or not such payment is prohibited by the
provisions of Article Twelve; or
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(2) default in the payment of any interest (including Liquidated
Damages, if any) upon any Security when it becomes due and payable, whether or
not such payment is prohibited by the provisions of Article Twelve, and
continuance of such default for a period of 30 days; or
(3) failure to provide timely notice of a Repurchase Event as required
in accordance with the provisions of Article Fourteen; or
(4) default in the payment of the Repurchase Price in respect of any
Security on the Repurchase Date therefor in accordance with the provisions of
Article Fourteen, whether or not such payment is prohibited by the provisions
of Article Twelve; or
(5) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(6) default under one or more bonds, debentures, notes or other
evidences of indebtedness for money borrowed by the Company or any Subsidiary
or under one or more mortgages, indentures or instruments under which there may
be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any Subsidiary, whether such indebtedness now
exists or shall hereafter be created, which default individually or in the
aggregate shall constitute a failure to pay the principal of indebtedness in
excess of $5,000,000 when due and payable after the expiration of any
applicable grace period with respect thereto or shall have resulted in
indebtedness in excess of $5,000,000 becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
without such indebtedness having been discharged, or such acceleration having
been rescinded or annulled, within a period of 30 days after there shall have
been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities a written notice specifying such default
and requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; or
(7) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Subsidiary in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a decree or
order adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary
under any applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or any Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
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(8) the commencement by the Company or any Subsidiary of a voluntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company or any
Subsidiary in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary or of any substantial part of
its property, or the making by it of a general assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
or any Subsidiary in furtherance of any such action.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501, a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which record date shall
be the close of business on the day the Trustee receives such Notice of
Default. The Holders of Outstanding Securities on such record date (or their
duly appointed agents), and only such Persons, shall be entitled to join in
such Notice of Default, whether or not such Holders remain Holders after such
record date: provided, that unless such Notice of Default shall have become
effective by virtue of the Holders of the requisite principal amount of
Outstanding Securities on such record date (or their duly appointed agents)
having joined therein on or prior to the 90th day after such record date, such
Notice of Default shall automatically and without any action by any Person be
canceled and of no further force or effect.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than as specified in subparagraph (7) or
(8) of Section 501) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal plus
any interest accrued on the Securities to the date of declaration shall become
immediately due and payable. If an Event of Default specified in subparagraph
(7) or (8) of Section 501 occurs and is continuing with respect to the Company,
then the principal of, premium, if any, and accrued and unpaid interest, if
any, on all of the Securities 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 of Securities.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this
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Article provided, the Holders of a majority in principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including Liquidated Damages, if
any) on all Securities,
(B) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee and each
predecessor Trustee, their respective agents and counsel hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee
and each predecessor Trustee, their respective agents and counsel; and
(2) all Events of Default, other than the nonpayment of the principal
of, premium, if any, and interest on the Securities that has become due solely
by such declaration of acceleration, have been cured or waived as provided in
Section 513. No such rescission and waiver shall affect any subsequent default
or impair any right consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 502,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding Securities
entitled to join in such declaration, or rescission and annulment, as the case
may be, which record date shall be the close of business on the day the Trustee
receives such declaration, or rescission and annulment, as the case may be. The
Holders of Outstanding Securities on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to join in such declaration,
or rescission and annulment, as the case may be, whether or not such Holders
remain Holders after such record date; provided, that unless such declaration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of Holders of the requisite principal amount of Outstanding Securities
on such record date (or their duly appointed agents) having joined therein on
or prior to the 90th day after such record date, such declaration, or
rescission and annulment, as the case may be, shall automatically and without
any action by any Person be canceled and of no further force or effect.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
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(1) default is made in the payment of any interest (including
Liquidated Damages, if any) on any Security when such interest becomes due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal of, and premium, if any, and interest, and, to the
extent that payment of such interest (including Liquidated Damages, if any)
shall be legally enforceable, interest, on any overdue principal and premium,
if any, and on any overdue interest (including Liquidated Damages, if any), at
the rate borne by the Securities, and, in addition thereto, 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 and each predecessor Trustee, their respective agents and counsel, and
any other amounts due the Trustee or any predecessor Trustee under Section 607.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid and may
prosecute any such proceeding to judgment or final decree, and may enforce the
same against the Company (or any other obligor upon the Securities) and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company (or any other obligor upon the Securities),
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have the claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it and
each predecessor Trustee for the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor Trustee and
their respective agents and counsel, and any other amounts due the Trustee
under Section 607.
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No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the 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; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
Creditors' Committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee and each predecessor Trustee and
their respective agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or premium,
if any, or interest (including Liquidated Damages, if any), upon presentation
of the Securities and the notation thereon of the payment if only partially
paid and upon surrender thereof if fully paid:
FIRST: To payment of all amounts due the Trustee under Section 607;
SECOND: Subject to Article Twelve, to the holders of Senior
Indebtedness;
THIRD: To the payment of the amounts then due and unpaid for
principal of and premium, if any, and interest and Liquidated Damages, if any
on the Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal and
premium, if any, and interest and Liquidated Damages, if any, respectively; and
FOURTH: The balance, if any, to the Company or any other Person or
Persons determined to be entitled thereto upon provision of an Officer's
Certificate or other evidence reasonably satisfactory to the Trustee by the
Company or such other person verifying such entitlement.
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SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; 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 Outstanding Securities; it being understood and
intended that no one or more holders shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holders, or to obtain or
to seek to obtain priority or preference over any other Holders or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal and ratable benefit of all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and (subject to
Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date or, in the case of a repurchase pursuant to Article Fourteen, on the
Repurchase Date) and to convert such Security in accordance with Article
Thirteen and to institute suit for the enforcement of any such payment and
right to convert, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(3) subject to the provisions of Section 601, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall determine that the action so directed would involve the Trustee in
personal liability or would be unduly prejudicial to Holders not joining in
such direction.
Upon receipt by the Trustee of any such direction, a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders of Outstanding Securities entitled to join in such
direction, which record date shall be the close of business on the day the
Trustee receives such direction. The Holders of Outstanding Securities on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such Holders remain Holders
after such record date; provided, that unless such direction shall have become
effective by virtue of Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such direction
shall automatically and without any action by any Person be canceled and of no
further force or effect.
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SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or premium, if any, or interest
on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in
the Trust Indenture Act; provided, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company, in any suit instituted by the Trustee, a suit by a Holder pursuant to
Section 508, or a suit by a Holder or Holders of more than 10% in principal
amount of the outstanding Securities.
ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
this Indenture and the Trust Indenture Act for securities issued pursuant to
indentures qualified thereunder. Except as otherwise provided herein,
notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability or risk in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity satisfactory
to it against such risk or liability is not reasonably assured to it. Whether
or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section. The Trustee
shall not be liable (x) for any error of judgment made in
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good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts or (y) with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of the holders of not less
than a majority in aggregate principal amount of the Securities at the time
Outstanding relating to the time, method and place of conducting any proceeding
or any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture. Prior to the occurrence of
an Event of Default and after the curing or waiving of all Events of Default
which may have occurred: (i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and in the Trust
Indenture Act, and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this Indenture
and in the Trust Indenture Act, and no implied covenants or obligations shall
be read in to this Indenture against the Trustee; and (ii) in the absence of
bad faith on the part of the Trustee, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions therein, upon
any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture and believed by the Trustee to
be genuine and to have been signed or presented by the proper party or parties;
but in the case of any such statements, certificates or opinions which by any
provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not
they conform on their face to the requirements of this Indenture. If a default
or an Event of Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in its exercise thereof as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder of
which it has actual knowledge as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 501(5), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely conclusively upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to the provisions of
Section 102, and the Trustee shall be protected and shall not be liable for any
action it takes or omits to take in good faith and without gross negligence in
reliance on such certificate or opinion;
(g) the Trustee shall not be required to give any bond or surety in
respect of the performance of its power and duties hereunder;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(i) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of
the Company, and the Trustee and any Authenticating Agent assume no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee and any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
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SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law. The
Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (including its services as Security
Registrar or Paying Agent, if so appointed by the Company) as may be mutually
agreed upon in writing by the Company and the Trustee (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
connection with the performance of its duties under any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel and all other persons not regularly in
its employ) except to the extent any such expense, disbursement or advance may
be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and each predecessor Trustee (each an
"indemnitee") for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder (including its services as Security
Registrar or Paying Agent, if so appointed by the Company), including
enforcement of this Section 607 and including the costs and expenses of
defending itself against or investigating any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. The
Company shall defend any claim or threatened claim asserted against an
indemnitee for which it may seek indemnity, and the indemnitee shall cooperate
in the defense unless, in the reasonable opinion of the indemnitee's counsel,
the indemnitee has an interest adverse to the Company or a potential conflict
of interest exists between the indemnitee and the Company, in which case the
indemnitee may have separate counsel and the Company shall pay
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the reasonable fees and expenses of such counsel; provided that the Company
shall only be responsible for the reasonable fees and expenses of one law firm
(in addition to local counsel) in any one action or separate substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, such law firm to be designated by the indemnitee.
As security for the performance of the obligations of the Company
under this Section 607, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities,
and the Securities are hereby subordinated to such prior lien. The obligations
of the Company under this Section to compensate and indemnify the Trustee and
any predecessor Trustee and to pay or reimburse the Trustee and any predecessor
Trustee for expenses, disbursements and advances, and any other amounts due the
Trustee or any predecessor Trustee under Section 607, shall constitute an
additional obligation hereunder and shall survive the satisfaction and
discharge of this Indenture.
When the Trustee or any predecessor Trustee incurs expenses or renders
services in connection with the performance of its obligations hereunder
(including its services as Security Registrar or Paying Agent, if so appointed
by the Company) after an Event of Default specified in Section 501(7) or (8)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any applicable bankruptcy,
insolvency or other similar federal or state law to the extent provided in
Section 503(b)(5) of Title 11 of the United States Code, as now or hereafter in
effect.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
Person that (i) is eligible pursuant to the Trust Indenture Act to act as such,
(ii) has (or, in the case of a corporation included in a bank holding company
system, whose related bank holding company has) a combined capital and surplus
of at least $50,000,000 and (iii) has an office where it provides corporate
trust services, or at which it is authorized to receive notices hereunder, in
the Borough of Manhattan, The City of New York, or a designated agent. If such
Person publishes reports of conditions at least annually, pursuant to law or to
the requirements of a Federal or state supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
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SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the resigning Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of
a majority in principal amount of the Outstanding Securities delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for the last six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company by a Board
Resolution may remove the Trustee, or (ii) subject to Section 514, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
such successor Trustee shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611 become the successor
Trustee and supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders
and accepted appointment in the manner required by Section 611, any Holder who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in
the manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
(including the trust created by this Indenture) of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents acceptable
to and at the expense of the Company which shall be authorized to act on behalf
of the Trustee to authenticate Securities issued upon original issue and upon
exchange, registration of transfer, partial
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conversion or partial redemption or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a Person organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having (or, in case of a
corporation included in a bank holding company system, its bank holding company
shall have) a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Person succeeding to all or substantially all of the
corporate agency or corporate trust business of an Authenticating Agent
(including the authenticating agency contemplated by this Indenture), shall
continue to be an Authenticating Agent, provided such Person shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail notice of such
appointment by first-class mail, postage prepaid, to all Holders as their names
and addresses appear in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment under this Section shall become vested
with all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible to act as such under
the provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment
as Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
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Securities when presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or conversions thereof
or pursuant to Section 306; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee, appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the provisions of
this Section . Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee to indemnify the Trustee
against any loss, liability or expense incurred by the Trustee and to defend
any claim asserted against the Trustee by reason of any acts or failures to act
of such Authenticating Agent, but such Authenticating Agent shall have no
liability for any action taken by it in accordance with the specific written
direction of the Trustee.
The Trustee shall not be liable for any act or any failure of the
Authenticating Agent to perform any duty either required herein or authorized
herein to be performed by such person in accordance with this Indenture.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
As Trustee
By
--------------------------
As Authenticating Agent
By
--------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee (a)
semi-annually, not more than 15 days after each Regular Record Date, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the Holders as of such Regular Record Date,
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and (b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished.
Notwithstanding the foregoing, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATION TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act or otherwise in accordance with this
Indenture.
SECTION 703. REPORTS BY TRUSTEE.
(a) Not later than 60 days following each May 15, the Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided, that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
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SECTION 705. RULE 144A INFORMATION REQUIREMENT.
The Company will furnish to the Holders or beneficial holders of the
Securities and prospective purchasers of the Securities designated by the
Holders of the Securities, upon their request, information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act until the
earlier of (i) the date on which the Securities and the underlying Common Stock
are registered under the Securities Act or (ii) two years after the original
issuance of the Securities.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease all or substantially all of its properties
and assets to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer,
or which leases, all or substantially all of the properties and assets of the
Company shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and premium, if any, and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the Company to be
performed or observed and shall have provided for conversion rights in
accordance with Section 1311;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) such consolidation, merger, conveyance, transfer or lease does not
adversely affect the validity or enforceability of the Securities; and
(4) the Company or the successor Person has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or
substantially all of the properties and assets
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of the Company in accordance with Section 801, the successor Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a transfer by lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution and the provisions hereunder, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cause this Indenture to be qualified under the Trust Indenture
Act; or
(2) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(3) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power conferred herein or in the
Securities upon the Company; or
(4) to add any additional Events of Default; or
(5) to permit or facilitate the issuance of Securities in
uncertificated form; or
(6) to secure the Securities; or
(7) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Section 1311 or the repurchase rights of
Holders pursuant to Section 1407; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(9) to cure any ambiguity, to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with any
other provision herein or in the Securities, or to make any other provisions
with respect to matters or questions arising under this Indenture which shall
not be inconsistent with the provisions of this Indenture; provided, that such
action pursuant to this Clause (9) shall not adversely affect the interests of
the Holders in any material respect and the Trustee may rely upon an opinion of
counsel to that effect.
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SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption thereof, or
change the place of payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or adversely affect the right to convert any Security as provided in
Article Thirteen (except as permitted by Section 901(7)), or modify the
provisions of Article Fourteen (except as provided by Section 901(7)), or the
provisions of this Indenture with respect to the subordination of the
Securities, in a manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby; provided,
however, that this Clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1006, or the deletion of this
proviso, in accordance with the requirements of Section 901(8).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture.
The Trustee may, but
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shall not be obligated to, enter into any such supplemental indenture which
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and (at
the specific direction of the Company) authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURE.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental
indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of and premium,
if any, and interest, including Liquidated Damages, if any, on the Securities
in accordance with the terms of the Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in New York, New York an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, where Securities may be
surrendered for exchange or conversion and
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where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served, which office or agency shall initially be the
office of State Street Bank and Trust Company, N.A., an Affiliate of the
Trustee, located at 61 Broadway, Concourse Level, Corporate Trust Window, New
York, New York 10006. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in New
York, New York for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of and premium, if any, or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or prior to 10:00 a.m. (New York City time) on each due date of the principal
of, and premium, if any, or interest (including Liquidated Damages, if any) on
any Securities, deposit with a Paying Agent a sum in same day funds sufficient
to pay the principal and any premium and interest (including Liquidated
Damages, if any) so becoming due, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee or the
Company to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will (i) comply with the provisions of the
Trust Indenture Act and this Indenture applicable to it as a Paying Agent and
hold all sums held by it for the payment of principal of, or any premium or
interest (including Liquidated Damages, if any) on, the Securities in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided; (ii) give the Trustee
written notice of any default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities; and
(iii) at any time during the continuance of any Event of Default by the Company
(or any other obligor upon the
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Securities) in the making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent for payment in respect of the Securities, and
account for any funds disbursed.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
The Trustee shall not be liable for any act or failure to act of any
Paying Agent (other than the Trustee acting in such capacity) to perform any
duty either required herein or authorized herein to be performed by such person
in accordance with this Indenture.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and premium, if
any, or interest (including Liquidated Damages, if any) on any Security and
remaining unclaimed for two years after such principal and premium, if any, or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in a newspaper published in the English language, customarily published
on each Business Day and of general circulation in New York, New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such
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default or Event of Default and further stating what action the Company has
taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 1004 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the Company's
existence, rights (charter and statutory) and franchises and the existence,
rights (charter and statutory) and franchises of each Subsidiary; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge, or cause to be paid or discharged,
before the same may become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become
a lien or charge upon the property of the Company or any Subsidiary, and (iii)
all stamps and other duties, if any, which may be imposed by the United States
or any political subdivision thereof or therein in connection with the
issuance, transfer, exchange or conversion of any Securities or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do
so will not, in the aggregate, have a material adverse impact on the Company,
or (B) if the amount, applicability or validity is being contested in good
faith by appropriate proceedings.
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SECTION 1008. RESALE OF CERTAIN SECURITIES.
During the period beginning on the last date of original issuance of
the Securities and ending on the date that is two years from such date (or such
shorter period under Rule 144(k) under the Securities Act or any successor
rule), the Company will not, and will use reasonable efforts not to permit any
of its Subsidiaries or other "affiliates" (as defined under Rule 144 under the
Securities Act or any successor provision thereto) controlled by the Company
to, resell (i) any Securities which constitute "restricted securities" under
Rule 144 or (ii) any securities into which the Securities have been converted
under this Indenture which constitute "restricted securities" under Rule 144,
that in either case have been reacquired by any of them. The Trustee shall
have no responsibility in respect of the Company*s performance of its agreement
in the preceding sentence.
SECTION 1009. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 1005, 1006 and 1007, if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company and the duties of the
Trustee in respect of any such covenant or condition shall remain in full force
and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. RIGHT OF REDEMPTION.
The Securities may be redeemed at the election of the Company, in
whole or from time to time in part, at any time on or after December 5, 2000,
at the Redemption Prices specified in the form of Security hereinbefore set
forth, together with accrued and unpaid interest (including Liquidated Damages,
if any) to, but excluding, the Redemption Date.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company as permitted
by any provision of this Indenture shall be made in accordance with such
provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter period shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed. In case of any redemption at the election of the
Company of all of the Securities, the
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Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter period shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date.
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot, or by another method deemed fair and appropriate
by the Trustee.
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
(so far as may be) 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. In any
case where more than one Security is registered in the same name, the Trustee
in its discretion may treat the aggregate principal amount so registered as if
it were represented by one Security.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to the Trustee and to each Holder of Securities to be redeemed, at his
address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities are to be redeemed,
the identification (and, in the case of partial redemption of any Securities,
the principal amounts) of the particular Securities to be redeemed,
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(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that (unless the Company
shall default in payment of the Redemption Price) interest thereon will cease
to accrue on and after said date,
(e) the conversion price, the date on which the right to convert the
Securities to be redeemed will terminate (which right shall extend at least
until one business day prior to the Redemption Date) and the place or places
where such Securities may be surrendered for conversion, and
(f) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request received
by the Trustee at least 30 days prior to the Redemption Date, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
On or prior to 10:00 a.m. (New York City time) on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in same day funds sufficient to
pay the Redemption Price of, and accrued and unpaid interest (including
Liquidated Damages, if any) on, all the Securities or portions thereof which
are to be redeemed on that date other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held
in trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued and
unpaid interest (including Liquidated Damages, if any) to, but excluding, the
Redemption Date; provided, however, that installments of interest whose
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such
at the close of business on the relevant Record Dates according to their terms
and the provisions of Section 307.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company maintained for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 1201. SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS. The Company
covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, at all times and in all respects, the
indebtedness represented by the Securities and the payment of the principal of
and premium, if any, and interest on each and all of the Securities are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness.
SECTION 1202. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding, relative to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (c) any
general assignment for the benefits of creditors or any other marshaling of
assets and liabilities of the Company, then and in any such event the holders
of Senior Indebtedness shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Senior Indebtedness; or
provision shall be made for such payment in money or money's worth, before the
Holders of the Securities are entitled to receive any payment or distribution
of any kind or character, whether in cash, property or securities, on account
of principal of or premium, if any, or interest on the Securities, and to that
end the holders of Senior Indebtedness shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities, which may be payable or deliverable in respect of the Securities in
any such case, proceeding, dissolution, liquidation or other winding up or
event.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full or payment thereof
provided for, and if such fact shall, at or prior to the time of such payment
or distribution, have been made known to the Trustee or such Holder, as the
case may be, then and in such event such payment or distribution shall be paid
over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of the Company 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 holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, general assignment for the benefit of creditors or marshaling
of assets and liabilities of the Company for the purposes of this Section if
the Person formed by such consolidation or into which the Company is merged or
which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article Eight.
SECTION 1203. PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON
ACCELERATION OF SECURITIES.
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior
Indebtedness outstanding at the time such Securities so become due and payable
shall be entitled to receive payment in full of all amounts due on or in
respect of such Senior Indebtedness, or provision shall be made for such
payment in money or money's worth, before the Holders of the Securities are
entitled to receive any payment (including any payment which may be payable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities) by the Company on account of the
principal of or premium, if any, or interest on the Securities or on account of
the purchase or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section,
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and if such fact shall, at or prior to the time of such payment, have been made
known to the Trustee or such Holder, as the case may be, then and in such event
such payment shall be paid over the delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1204. PAYMENT WHEN DESIGNATED SENIOR INDEBTEDNESS IN DEFAULT.
No payment shall be made with respect to the principal of, or premium,
if any, or interest on any Security (including, but not limited to, the
redemption price or the Repurchase Price with respect to the Security to be
called for redemption in accordance with Article 11 or submitted for repurchase
in accordance with Article 16, as the case may be, as provided in this
Agreement), except payments and distributions made by the Trustee as permitted
by Section 1210, if:
(a) a default in the payment of principal, premium, interest, rent or
other obligations due on any Designated Senior Indebtedness occurs and is
continuing (or, in the case of Designated Senior Indebtedness for which there
is a period of grace, in the event of such a default that continues beyond the
period of grace, if any, specified in the instrument or lease evidencing such
Designated Senior Indebtedness), unless and until such default shall have been
cured or waived or shall have ceased to exist (a "Payment Default"); or
(b) a default, other than a Payment Default, on any Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity (a "Non Payment
Default") and the Trustee receives a notice of default (a "Payment Blockage
Notice") from (a) if such Nonpayment Default shall have occurred under any debt
facility referred to in the definition of "Designated Senior Indebtedness", the
representative of such debt facility, or (b) if such Nonpayment Default shall
have occurred with respect to any other issue of Designated Senior
Indebtedness, the holders, or a representative of the holders, of at least 20%
of such Designated Senior Indebtedness, as the case may be.
If the Trustee receives any payment Blockage Notice pursuant to clause
(b) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the effectiveness of the immediately prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for
a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:
(i) in the case of a Payment Default respecting
Designated Senior Indebtedness, on the date of which
that default is cured or waived or ceases to exist
and
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(ii) in the case of a Nonpayment Default respecting
Designated Senior Indebtedness, the earliest of (a)
the date on which that Nonpayment Default is cured or
waived or ceases to exist, (b) the date the
applicable Payment Blockage Notice is retracted by
written notice to the Trustee from the holders or a
representative of the holders of the Designated
Senior Indebtedness which have given that Payment
Blockage Notice and (c) 179 days after the date on
which the applicable Payment Blockage Notice is
received by the Trustee, unless any Payment Default
has occurred and is continuing or an Event of Default
of the type referred to in (7) or (8) of Section 501
of this Indenture has occurred with respect to the
Company.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to the Trustee or such Holder,
as the case may be, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 1202 would be applicable.
SECTION 1205. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, general assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1202 or under the
conditions described in Section 1203 or 1204, from making payments at any time
of principal of and premium, if any, or interest on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of and premium, if any, or interest
on the Securities or the retention of such payment by the Holders, if, at the
time of such application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this Article.
SECTION 1206. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all amounts due on or in respect of
Senior Indebtedness, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to
receive payments and distributions of cash, property and securities applicable
to the Senior Indebtedness until the principal of and premium, if any, and
Interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to
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which the Holders of the Securities or the Trustee would otherwise be entitled
except for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Indebtedness by Holders of
the Securities or the Trustee, shall, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness.
SECTION 1207. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and premium, if any, and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders
of Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1208. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 1209. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder 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 any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in
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any manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 1210. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have
received the notice directing that a payment or distribution not be made
provided for in this Section and Section 1204 at least two Business Days prior
to the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of and
premium, if any, or interest on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it within two Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (including, without
limitation, Designated Senior Indebtedness) (or a trustee or representative
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
(or a trustee or representative therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior 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 such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1211. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which
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such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior 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.
SECTION 1212. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
it shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other Person cash, property or
securities to which holders of Senior Indebtedness shall be entitled by virtue
of this Article or otherwise. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Article against the Trustee.
SECTION 1213. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1214. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1213 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1215. CERTAIN CONVERSIONS DEEMED PAYMENT.
For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article
Thirteen shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on
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Securities or on account of the purchase or other acquisition of Securities,
and (2) the payment, issuance or delivery of cash (other than for payments of
fractional shares pursuant to Section 1303), property or securities (other than
junior securities) upon conversion of a Security shall be deemed to constitute
payment on account of the principal of such Security. For the purposes of this
Section, the term "junior securities" means (a) shares of any class of capital
stock of the Company and (b) securities of the Company which are subordinated
in right of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, the right, which is absolute and unconditional, of
the Holder of any Security to convert such Security in accordance with Article
Thirteen.
SECTION 1216. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of the Securities to take any action to accelerate the maturity
of the Securities pursuant to the provisions described under Article Five and
as set forth in this Indenture or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article of the
holders, from time to time, of Senior Indebtedness to receive the cash,
property or securities receivable upon the exercise of such rights or remedies.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
SECTION 1301. CONVERSION PRIVILEGE AND CONVERSION PRICE.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof which equals $1,000 or any integral multiple thereof may be
converted at any time after the date of original issuance of Securities under
this Indenture at the principal amount thereof, or of such portion thereof,
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock, at the conversion price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall expire at the close of business on December 1, 2004. In
case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or portion so called shall expire at the close
of business on the business day next preceding the applicable Redemption Date,
unless the Company defaults in making the payment due upon redemption. A
Security for which a Holder has delivered a Repurchase Event purchase notice
exercising the option of such holder to require the Company to repurchase such
Security pursuant to Article Fourteen may be converted only if such notice is
withdrawn by a written notice of withdrawal delivered by the Holder to the
Company prior to the close of business on the Business Day immediately
preceding the Repurchase Date.
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The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $19.00 per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in Section 1304.
SECTION 1302. EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege, the Holder of any
Security shall surrender such Security, duly endorsed or assigned to the
Company or in blank, at any office or agency of the Company maintained pursuant
to Section 1002, accompanied by written notice to the Company in the form
provided in the Security (or such other notice as is acceptable to the Company)
at such office or agency that the Holder elects to convert such Security or, if
less than the entire principal amount thereof is to be converted, the portion
thereof to be converted.
Securities surrendered for conversion during the period after any
Regular Record Date next preceding any Interest Payment Date to the close of
business on the Business Day immediately preceding such Interest Payment Date
shall (unless such Security or portion thereof being converted shall have been
called for redemption during the period from the close of business on such
Regular Record Date to the close of business on the second Business Day next
succeeding the following Interest Payment Date, as described in the succeeding
sentence) be accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount being surrendered for conversion; provided, however, that no
such payment need be made if there shall exist at the time of conversion a
default in the payment of interest on the Security. If such Security or
portion thereof being converted shall have been called for redemption during
the period from the close of business on the Regular Record Date to the close
of business on the second Business Day next succeeding the following Interest
Payment Date, then such Security or portion thereof shall be accompanied by
payment in funds acceptable to the Company of an amount equal to the difference
between (i) the interest on the principal amount of such Security or portion
thereof payable on such Interest Payment Date and (ii) the amount of accrued
interest on the principal amount of such Security or portion thereof to but not
including the date of conversion. Except as provided above in this Section
1302 and subject to the fourth paragraph of Section 307, no payment or
adjustment shall be made upon any conversion on account of any interest accrued
on the Securities surrendered for conversion or on account of any dividends on
the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes of the record holder or holders of such Common Stock as and
after such time. As promptly as practicable on or after the conversion date,
the Company shall issue and shall deliver at such office or agency a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 1303.
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In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
SECTION 1303. FRACTIONS OF SHARES.
No fractional share of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the Closing Price
(as hereinafter defined) at the close of business on the day of conversion (or,
if such day is not a Trading Day (as hereafter defined), on the Trading Day
immediately preceding such day).
SECTION 1304. ADJUSTMENT OF CONVERSION PRICE.
(a) In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in Common Stock or shall pay or
make a dividend or other distribution on any other class of capital stock of
the Company which dividend or distribution includes Common Stock, the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purpose of
this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company shall not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company.
(b) Subject to paragraph (g) of this Section, in case the Company
shall pay or make a dividend or other distribution on the Common Stock
consisting exclusively of, or shall otherwise issue to all holders of the
Common Stock, rights or warrants entitling the holders thereof to subscribe for
or purchase shares of Common Stock at a price per share less than the Current
Market Price (determined as provided in paragraph (j) of this Section) on the
date fixed for the determination of stockholders entitled to receive such
rights or warrants, the conversion price in effect at the opening of business
on the day following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or
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purchase would purchase at such Current Market Price and the denominator shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (b), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company. The Company shall not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the Company. In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for
such rights or warrants, the value of such consideration, if other than cash,
to be determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the conversion price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which subdivision or combination
becomes effective.
(d) Subject to the last sentence of this paragraph (d) and to
paragraph (g) of this Section, in case the Company shall, by dividend or
otherwise, distribute to all holders of the Common Stock evidences of its
indebtedness, shares of any class of its capital stock, cash or other assets
(including securities, but excluding any rights or warrants referred to in
paragraph (b) of this Section, excluding any dividend or distribution paid
exclusively in cash and excluding any dividend or distribution referred to in
paragraph (a) of this Section), the conversion price shall be reduced by
multiplying the conversion price in effect immediately prior to the close of
business on the date fixed for the determination of stockholders entitled to
such distribution by a fraction of which the numerator shall be the Current
Market Price (determined as provided in paragraph (j) of this Section) on such
date less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on such
date of the portion of the evidences of indebtedness, shares of capital stock,
cash and other assets to be distributed applicable to one share of Common Stock
and the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the day
following such date. If the Board of Directors determines the fair market value
of any distribution for purposes of this paragraph (d) by reference to the
actual or when-issued trading market for any securities comprising part or all
of such distribution, it must in doing so consider the prices in such market
over the same period used in computing the Current Market Price pursuant to
paragraph (j) of this Section, to the extent possible. For purposes of this
paragraph (d), any dividend or distribution that includes shares of Common
Stock, rights or warrants to subscribe for or purchase shares of Common Stock
or securities convertible into or exchangeable for shares of Common Stock shall
be deemed to be (x) a dividend or distribution of
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the evidences of indebtedness, cash, assets or shares of capital stock other
than such shares of Common Stock, such rights or warrants or such convertible
or exchangeable securities (making any conversion price reduction required by
this paragraph (d)) immediately followed by (y) in the case of such shares of
Common Stock or such rights or warrants, a dividend or distribution thereof
(making any further conversion price reduction required by paragraph (a) and
(b) of this Section, except any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
paragraph (a) of this Section), or (z) in the case of such convertible or
exchangeable securities, a dividend or distribution of the number of shares of
Common Stock as would then be issuable upon the conversion or exchange thereof,
whether or not the conversion or exchange of such securities is subject to any
conditions (making any further conversion price reduction required by paragraph
(a) of this Section, except the shares deemed to constitute such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of paragraph (a) of this
Section).
(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Stock cash (excluding any cash that is
distributed as part of a distribution referred to in paragraph (d) of this
Section or in connection with a transaction to which Section 1311 applies) in
an aggregate amount that, together with (A) the aggregate amount of any other
distributions to all holders of the Common Stock made exclusively in cash
within the 12 months preceding the date fixed for the determination of
stockholders entitled to such distribution and in respect of which no
conversion price adjustment pursuant to this paragraph (e) has been made
previously and (B) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) as of such date of determination of
consideration payable in respect of any tender offer by the Company or a
Subsidiary for all or any portion of the Common Stock consummated within the 12
months preceding such date of determination and in respect of which no
conversion price adjustment pursuant to paragraph (f) of this Section has been
made previously, exceeds the greater of (I) 10.0% of the product of the Current
Market Price (determined as provided in paragraph (j) of this Section) on such
date of determination times the number of shares of Common Stock outstanding on
such date or (II) the Company's retained earnings on the date fixed for
determining the stockholders entitled to such distribution the conversion price
shall be reduced by multiplying the conversion price in effect immediately
prior to the close of business on such date of determination by a fraction of
which the numerator shall be the Current Market Price (determined as provided
in paragraph (j) of this Section) on such date less the amount of cash to be
distributed at such time applicable to one share of Common Stock and the
denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day after such
date.
(f) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall be consummated and such tender
offer shall involve an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) as of the last time (the "Expiration
Time") that tenders may be made pursuant to such tender offer (as it shall have
been amended) that, together with (A) the aggregate of the cash plus the fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in
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a Board Resolution) as of the Expiration Time of the other consideration paid
in respect of any other tender offer by the Company or a Subsidiary for all or
any portion of the Common Stock consummated within the 12 months preceding the
Expiration Time and in respect of which no conversion price adjustment pursuant
to this paragraph (f) has been made previously and (B) the aggregate amount of
any distributions to all holders of the Common Stock made exclusively in cash
within the 12 months preceding the Expiration Time and in respect of which no
conversion price adjustment pursuant to paragraph (e) of this Section has been
made previously, exceeds the greater of (I) 10.0% of the product of the Current
Market Price (determined as provided in paragraph (j) of this Section)
immediately prior to the Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares) at the Expiration Time or
(II) the Company's retained earnings as of the Expiration Time, the conversion
price shall be reduced by multiplying the conversion price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be (x) the product of the Current Market Price (determined as provided in
paragraph (j) of this Section) immediately prior to the Expiration Time times
the number of shares of Common Stock outstanding (including any tendered shares
at the Expiration Time minus (y) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders upon
consummation of such tender offer and the denominator shall be the product of
(A) such Current Market Price times (B) such number of outstanding shares at
the Expiration Time minus the number of shares accepted for payment in such
tender offer (the "Purchased Shares"), such reduction to become effective
immediately prior to the opening of business on the day following the
Expiration Time; provided, that if the number of Purchased Shares or the
aggregate consideration payable therefor have not been finally determined by
such opening of business, the adjustment required by this paragraph (f) shall,
pending such final determination, be made based upon the preliminarily
announced results of such tender offer, and, after such final determination
shall have been made, the adjustment required by this paragraph (f) shall be
made based upon the number of Purchased Shares and the aggregate consideration
payable therefor as so finally determined.
(g) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding and
shall involve the payment by such person of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors,
whose determination shall be conclusive, and described in a resolution of the
Board of Directors) at the last time (the "Offer Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds the Current Market Price of the Common Stock on
the Trading Day next succeeding the Offer Expiration Time, and in which, as of
the Offer Expiration Time the Board of Directors is not recommending rejection
of the offer, the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the Offer Expiration Time by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) on the Offer Expiration Time multiplied by
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Offer Expiration Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Offer
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Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Offer Purchased Shares") and (y) the product of the number
of shares of Common Stock outstanding (less any Offer Purchased Shares) on the
Offer Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Offer Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Offer Expiration Time. In the event that such person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such person is
permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the conversion price shall again be adjusted
to be the conversion price which would then be in effect if such tender or
exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 1304 shall not be made if, as of the Offer
Expiration Time, the offering documents with respect to such offer disclose a
plan or intention to cause the Company to engage in any transaction described
in Article Eight.
(h) In case the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per share (or
having a conversion or exchange price per share) that is less than the then
Current Market Price of the Common Stock (but excluding, among other things,
issuances: (a) pursuant to any bona fide plan for the benefit of employees,
directors or consultants of the Company now or hereafter in effect; (b) to
acquire all or any portion of a business in an arm's-length transaction between
the Company and an unaffiliated third party including, if applicable, issuances
upon exercise of options or warrants assumed in connection with such an
acquisition; (c) in a bona fide public offering pursuant to a firm commitment
underwriting (or a similar type of offering made pursuant to Rule 144A and/or
Regulation S under the Securities Act) or sales at the market pursuant to a
continuous offering stock program; (d) pursuant to the exercise of warrants,
rights (including, without limitation, earnout rights) or options, or upon the
conversion of convertible securities, which are issued and outstanding on the
date hereof, or which may be issued in the future at fair value and with an
exercise price or conversion price at least equal to the Current Market Price
of the Common Stock at the time of issuance of such warrant, right, option or
convertible security; and (e) pursuant to a dividend reinvestment plan or other
plan hereafter adopted for the reinvestment of dividends or interest provided
that such Common Stock is issued at a price at least equal to 95% of the
Current Market Price of the Common Stock at the time of such issuance), the
conversion price shall be adjusted so that the holder of each Security shall be
entitled to receive, upon the conversion thereof, the number of shares of
Common Stock determined by multiplying (i) the conversion price on the day
immediately prior to such date of issuance by (ii) a fraction, the numerator of
which shall be the sum of (A) the number of shares of Common Stock outstanding
on such date and (B) the number of additional shares of Common Stock issued (or
into which the convertible securities may convert), and the denominator of
which shall be the sum of (1) the number of shares of Common Stock outstanding
on such date and (2) the number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of shares of
Common Stock so issued (or into which the convertible securities may convert)
would purchase at such conversion price on such date. An adjustment made
pursuant to this paragraph (h) shall be made on the next Business Day following
the date on which any such issuance is made and shall be effective
retroactively immediately after the close of business on such date. For
purposes of this paragraph (h), the aggregate consideration receivable by the
Company in connection with the issuance of shares of Common Stock or of
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securities convertible into shares of Common Stock shall be deemed to be equal
to the sum of the aggregate offering price (before deduction of underwriting
discounts or commissions and expenses payable to third parties) of all such
securities plus the minimum aggregate amount, if any, payable upon conversion
of any such convertible securities into shares of Common Stock.
(i) The reclassification of Common Stock into securities which include
securities other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 1311 applies) shall be deemed to
involve (i) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to such distribution" within the meaning of paragraph (d) of this Section), and
(ii) a subdivision or combination, as the case may be, of the number of shares
of Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective," as the case may be, and "the day upon which
such subdivision or combination becomes effective" within the meaning of
paragraph (c) of this Section).
In the event that the Company implements a stockholders' rights plan,
such rights plan must provide that upon conversion of the Securities the
Holders will receive, in addition to the Common Stock issuable upon such
conversion, such rights whether or not such rights have been separated from the
Common Stock at the time of such conversion.
Rights or warrants issued by the Company to all holders of the Common
Stock entitling the holders thereof to subscribe for or purchase shares of
Common Stock (either initially or under certain circumstances), which rights or
warrants (i) are deemed to be transferred with such shares of Common Stock,
(ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Event"), shall for purposes
of this Section 1304 not be deemed issued or distributed until the occurrence
of the earliest Trigger Event, whereupon such rights and warrants shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Price shall be made under this Section 1304. If
any such rights or warrants, including any such existing rights or warrants
distributed prior to the date of this Indenture are subject to subsequent
events, upon the occurrence of each of which such rights or warrants shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets, then the occurrence of each such event shall be deemed to be
such date of issuance and record date with respect to new rights or warrants
(and a termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any distribution
(or deemed distribution) of rights or warrants, or any Trigger Event with
respect thereto, that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 1304
was made, (1) in the case of any such rights or warrant which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase
to give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a
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holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants which shall have expired or been
terminated without exercise by any holders thereof, the Conversion Price shall
be readjusted as if such rights and warrants had not been issued.
Notwithstanding any other provision of this Section 1304 to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash
or other assets (including, without limitation, any rights distributed pursuant
to any stockholder rights plan) shall be deemed not to have been distributed
for purposes of this Section 1304 if the Company makes proper provision so that
each holder of Securities who converts a Security (or any portion thereof)
after the date fixed for determination of stockholders entitled to receive such
distribution shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversions, the amount and kind
of such distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date, converted such
Security into Common Stock.
(j) For purposes of this Section 1304, the following terms shall have
the meaning indicated:
(1) "Closing Price" with respect to any securities on any day
shall mean the last reported sales price regular way or, in case no
such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on
the New York Stock Exchange or, if the Common Stock is not listed or
admitted to trading on such exchange, 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, on the Nasdaq National Market or, if the Common
Stock is not listed or admitted to trading on any national securities
exchange or quoted on such National Market, the average of the closing
bid and asked prices in the over-the-counter market as furnished by
any New York Stock Exchange member firm selected from time to time by
the Company for that purpose.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices for the 10 consecutive Trading Days immediately prior
to the date in question; provided, however, that (i) if the "ex" date
for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the conversion price
pursuant to paragraph (a), (b), (c), (d), (e), (f), (g) or (h) above
occurs during such 10 consecutive Trading Days, the Closing Price for
each Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by
which the conversion price is so required to be adjusted as a result
of such other event, (ii) if the "ex" date for any event (other than
the issuance or distribution requiring such computation) that requires
an adjustment to the conversion price pursuant to paragraph (a), (b),
(c), (d), (e), (f), (g) or (h) above occurs on or after the "ex" date
for the issuance or distribution requiring such computation and on or
prior to the date in question, the Closing Price for each Trading Day
on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction
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by which the conversion price is so required to be adjusted as a
result of such other event, and (iii) if the "ex" date for the
issuance or distribution requiring such computation is on or prior to
the date in question, after taking into account any adjustment
required pursuant to clause (ii) of this proviso, the Closing Price
for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value on the
date in question (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of
paragraph (d), (e), (f) or (g) of this Section, whose determination
shall be conclusive and described in a Board Resolution) of the
evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock as of the close of
business on the day before such "ex" date. For the purpose of any
computation under paragraph (f) or (g) of this Section, the Current
Market Price on any date shall be deemed to be the average of the
daily Closing Prices for such day and the next two succeeding Trading
Days; provided, however, that if the "ex" date for any event (other
than the tender offer or exchange offer requiring such computation)
that requires an adjustment to the conversion price pursuant to
paragraph (a), (b), (c), (d), (e), (f), (g) or (h) above occurs on or
after the Expiration Time or Offer Expiration Time as the case may be,
for the tender offer or exchange offer requiring such computation and
prior to the day in question, the Closing Price for each Trading Day
prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the
conversion price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "'ex' date,"
(i) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or
distribution, (ii) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes
effective, and (iii) when used with respect to any tender offer or
exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration
Time or Offer Expiration Time, as the case may be.
(3) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock
Exchange or another national security exchange is open for business or
(y) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made on thereon or (z) if the
applicable security is not so listed, admitted for trading or quoted,
any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by
law or executive order to close.
(k) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (a), (b), (c), (d), (e), (f), (g) and
(h) of this Section, as it considers to be advisable (as evidenced by a Board
Resolution) in order that any event treated for federal income tax purposes as
a dividend of stock or stock rights shall not be taxable to the recipients or,
if that is not possible, to diminish any income taxes that are otherwise
payable because of such event.
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(l) No adjustment in the conversion price shall be required unless
such adjustment (plus any other adjustments not previously made by reason of
this paragraph (l)) would require an increase or decrease of at least 1% in the
conversion price; provided, however, that any adjustments which by reason of
this paragraph (l) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(m) Notwithstanding any other provision of this Section 1304, no
adjustment to the conversion price shall reduce the conversion price below the
then par value per share of the Common Stock, and any such purported adjustment
shall instead reduce the conversion price to such par value. The Company hereby
covenants not to take any action to increase the par value per share of the
Common Stock.
SECTION 1305. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 1304 and shall prepare an Officers' Certificate signed
by the Treasurer of the Company setting forth the adjusted conversion price and
showing in reasonable detail the facts upon which such adjustment is based, and
such certificate shall forthwith be filed (with a copy to the Trustee) at each
office or agency maintained for the purpose of conversion of Securities
pursuant to Section 1002; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice shall be mailed by the
Company to all Holders at their last addresses as they shall appear in the
Security Register.
Unless and until a Responsible Officer of the Trustee shall have
received an Officer's Certificate setting forth an adjustment in the conversion
price, the Trustee may assume without injury that no such adjustment has been
made and that the last conversion price of which it has received notice remains
in effect.
SECTION 1306. NOTICE OF CERTAIN CORPORATE ACTION.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require a conversion price
adjustment pursuant to paragraph (e) of Section 1304; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any other rights (excluding shares of capital
stock or option for capital stock issued pursuant to a benefit plan for
employees, officers or directors of the Company); or
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(c) of any reclassification of the Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock), or of
any consolidation, merger or share exchange to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender offer for
all or a portion of the outstanding shares of Common Stock (or shall amend any
such tender offer to change the maximum number of shares being sought or the
amount or type of consideration being offered therefor);
then the Company shall cause to be filed (with a copy to the Trustee) at each
office or agency maintained pursuant to Section 1002, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 21 days (or 11 days in any case specified in clause
(a), (b) or (e) above) prior to the applicable record, effective or expiration
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or granting of
rights or warrants, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record who will be entitled to such dividend,
distribution, rights or warrants are to be determined, (y) the date on which
such reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the
date on which such tender offer commenced, the date on which such tender offer
is scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto).
Neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of any action described in clauses (a) through (e) of
this Section 1306.
SECTION 1307. COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the authorized but unissued Common Stock or out of
the Common Stock held in treasury, for the purpose of effecting the conversion
of Securities, the full number of shares of Common Stock then issuable upon the
conversion of all outstanding Securities. Shares of Common Stock issuable upon
conversion of outstanding Securities shall be issued out of the Common Stock
held in Treasury to the extent available.
SECTION 1308. TAXES ON CONVERSIONS.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company
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shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such tax has
been paid.
SECTION 1309. COVENANT AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1308, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 1310. CANCELLATION OF CONVERTED SECURITIES.
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
SECTION 1311. PROVISIONS OF CONSOLIDATION, MERGER OR SALE OF ASSETS.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock) or any sale or
transfer of all or substantially all of the assets of the Company, the Person
formed by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
Outstanding shall have the right thereafter, during the period such Security
shall be convertible as specified in Section 1301, to convert such Security
only into the kind and amount of securities, cash and other property, if any,
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock into which such Security might have been
converted immediately prior to such consolidation, merger, sale or transfer,
assuming such holder of Common Stock (i) is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer is not the same
for each share of Common Stock held immediately prior to such consolidation,
merger, sale or transfer by other than a Constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("nonelecting share"), then for the purpose of this Section the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each nonelecting share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
nonelecting shares). Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments
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provided for in this Article. The above provisions of this Section shall
similarly apply to successive consolidations, mergers, sales or transfers.
SECTION 1312. TRUSTEE'S DISCLAIMER.
The Trustee and any other conversion agent shall not at any time be
under any duty or responsibility to any holder of Securities to determine
whether any facts exist that may require any adjustment of the conversion price
or notice thereof, or with respect to the nature or extent or calculation of
any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same and shall be protected in relying upon the Officers' Certificate with
respect thereto which the Company is required to file with the Trustee pursuant
to Section 1305. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities or property, that may at any
time be issued or delivered upon the conversion of any Security; and the
Trustee and any other conversion agent make no representations with respect
thereto or any actions or omission by the Company in such regard. Neither the
Trustee nor any conversion agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or cash upon the surrender of any
debenture for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article
Thirteen.
The Trustee shall not be under any responsibility to determine or
verify the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 1311, but may accept as conclusive
evidence of the correctness thereof, and shall be protected in relying upon,
the Officers' Certificate with respect thereto which the Company is obligated
to file with the Trustee pursuant to Section 1311.
ARTICLE FOURTEEN
RIGHT TO REQUIRE REPURCHASE
SECTION 1401. RIGHT TO REQUIRE REPURCHASE.
In the event that there shall occur a Repurchase Event (as defined in
Section 1406), then each Holder shall have the right, at such Holder's option,
to require the Company to purchase, and upon the exercise of such right, the
Company shall, subject to the provisions of Section 1203, purchase, all or any
part of such Holder's Securities on the date (the "Repurchase Date") that is 30
days after the date the Company gives notice of the Repurchase Event as
contemplated in Section 1402(a) at a price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
and Liquidated Damages, if any, to the Repurchase Date.
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SECTION 1402. NOTICE; METHOD OF EXERCISING REPURCHASE RIGHT.
(a) On or before the 15th day after the occurrence of a Repurchase
Event, the Company, or at the written request of the Company received by the
Trustee at least 40 days prior to the Repurchase Date, the Trustee (in the name
and at the expense of the Company), in its capacity as tender agent (for which
services it shall be reasonably compensated), shall give notice of the
occurrence of the Repurchase Event and of the repurchase right set forth herein
arising as a result thereof by first-class mail, postage prepaid, to the
Trustee and to each Holder of the Securities at such Holder's address appearing
in the Security Register. The Company shall also deliver a copy of such notice
of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the event constituting the Repurchase Event and the
date thereof,
(2) the Repurchase Date,
(3) the date by which the repurchase right must be
exercised,
(4) that such repurchase right, once exercised, may be
withdrawn on or prior to the close of business on the
Business Day immediately prior to the Repurchase
Date.
(5) the Repurchase Price, and
(6) the instructions a Holder must follow to exercise a
repurchase right.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Repurchase
Event.
(b) To exercise a repurchase right, a Holder shall deliver to the
Company (or an agent designated by the Company for such purpose in the notice
referred to in (a) above) and to the Trustee on or before the close of business
on the Repurchase Date (i) written notice of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal
amount of the Security or Securities (or portion of a Security) to be
repurchased, and a statement that an election to exercise the repurchased right
is being made thereby, and (ii) the Security or Securities with respect to
which the repurchase right is being exercised, duly endorsed for transfer to
the Company. The repurchase right, once exercised by such Holder, may be
withdrawn on or prior to the close of business on the Business Day immediately
prior to the Repurchase Date. If the Repurchase Date falls between any Regular
Record Date and the next succeeding Interest Payment Date, Securities to be
repurchased must be accompanied by payment from the Holder of an amount equal
to the interest thereon which the registered Holder thereof is to receive on
such Interest Payment Date.
In the event a repurchase right shall be exercised in accordance with
the terms hereof, the Company shall on the Repurchase Date pay or cause to be
paid in cash to the Holder thereof the Repurchase Price of the Security or
Securities as to which the repurchase right had been
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exercised. In the event that a repurchase right is exercised with respect to
less than the entire principal amount of a surrendered Security, the Company
shall execute and deliver to the Trustee and the Trustee shall authenticate for
issuance in the name of the Holder a new Security or Securities in the
aggregate principal amount of the unrepurchased portion of such surrendered
security.
SECTION 1403. DEPOSIT OF REPURCHASE PRICE.
On or prior to 10:00 a.m. (New York City time) on any Repurchase Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money in same day funds sufficient to
pay the Repurchase Price of the Securities which are to be repaid on the
Repurchase Date.
SECTION 1404. SECURITIES NOT REPURCHASED ON REPURCHASE DATE.
If any Security surrendered for repurchase shall not be so paid on the
Repurchase Date, the principal shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the rate per annum
borne by such Security.
SECTION 1405. SECURITIES REPURCHASED IN PART.
Any Security which is to be repurchased only in part shall be
surrendered at any office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unrepurchased portion of the principal of the Security so
surrendered.
SECTION 1406. CERTAIN DEFINITIONS.
For purposes of this Article:
(a) A "Repurchase Event" shall have occurred upon the occurrence of a
Change in Control or Termination of Trading after the date of this Indenture.
(b) A "Change in Control" shall occur when :
(i) all or substantially all of the Company's assets are
sold as an entirety to any person or related group of persons;
(ii) there shall be consummated any consolidation or
merger of the Company (A) in which the Company is not the continuing or
surviving corporation (other than a
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consolidation or merger with a wholly owned subsidiary of the Company in which
all shares of Common Stock outstanding immediately prior to the effectiveness
thereof are changed into or exchanged for the same consideration) or (B)
pursuant to which the Common Stock would be converted into cash, securities or
other property, in each case, other than a consolidation or merger of the
Company in which the holders of the Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority of
the total voting power of all classes of capital stock entitled to vote
generally in the election of directors of the continuing or surviving
corporation immediately after such consolidation or merger in substantially the
same proportion as their ownership of Common Stock immediately before such
transaction;
(iii) any person, or any persons acting together which
would constitute a "group" for purposes of Section 13(d) of the Exchange Act (a
"Group"), together with any Affiliates thereof, shall beneficially own (as
defined in Rule 13d-3 under the Exchange Act) at least 50% of the total voting
power of all classes of capital stock of the Company entitled to vote generally
in the election of directors of the Company; or
(iv) at any time during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stockholders of
the Company was approved by a vote of 66 2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then
in office; or
(v) the Company is liquidated or dissolved or adopts a
plan of liquidation or dissolution.
(c) A "Termination of Trading" shall occur if the Common Stock (or
other common stock into which the Securities are then convertible) is neither
listed for trading on a U.S. national securities exchange nor approved for
trading on an established automated over-the-counter trading market in the
United States.
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1407. MERGER, CONSOLIDATION, ETC.
In the case of any merger, consolidation, sale or transfer of all or
substantially all of the assets of the Company to which Section 1311 applies,
in which the Common Stock of the Company is changed or exchanged as a result
into the right to receive securities, cash or other property which includes
Common Stock of the Company or common stock of another Person that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading
market in the United States and such shares constitute at the time such change
or exchange becomes effective in
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excess of 50% of the aggregate fair market value of such shares of stock and
other securities, property and assets (including cash) (as determined by the
Company, which determination shall be conclusive and binding), then the Company
and the Person resulting from such merger, consolidation, sale or transfer, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (which shall comply with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of Holders to cause the Company to
repurchase the Securities following a Repurchase Event, including without
limitation the applicable provisions of this Article Fourteen and the
definitions of the Common Stock and Change of Control, as appropriate, and such
other related definitions set forth herein as determined in good faith by the
Company and the Company (which determination shall be conclusive and binding),
to make such provisions apply in the event of a subsequent Repurchase Event to
the common stock and the issuer thereof if different from the Company and the
Common Stock of the Company (in lieu of the Company and Common Stock of the
Company).
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
ATRIX LABORATORIES, INC.
By: /s/ Brian G. Richmond
----------------------
Name: Brian G. Richmond
Title: Vice President, Finance and
and Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: /s/ Jeanie Mar
-----------------------------
Name: Jeanie Mar
Title: Assistant Vice President
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EXHIBIT A
FORM OF LETTER TO BE DELIVERED
BY INSTITUTIONAL ACCREDITED INVESTORS
Atrix Laboratories, Inc.
3579 Midpoint Drive
Fort Collins, Colorado 80525
State Street Bank and Trust Company of California, N.A.
725 South Figueroa Street
Los Angeles, California 90017
Gentlemen:
We are delivering this letter in connection with an offering of 7%
Convertible Subordinated Notes due 2004 (the "Notes"), which are convertible
into shares of the Company's Common Stock, $0.001 par value (the "Common
Stock"), all as described in the Offering Memorandum, dated as of November 21,
1997 (the "Offering Memorandum"), relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933 (the
"Securities Act") or an entity in which all of the equity
owners are accredited investors within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act (an
"Institutional Accredited Investor");
(ii) (A) any purchase of Notes by us will be for our own account or
for the account of one or more other Institutional Accredited
Investors or as fiduciary for the account of one or more
trusts, each of which is an "accredited investor" within the
meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion or (B) we
are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other
institution described in Section 3(a)(5)(A) of the Securities
Act that is acquiring the Notes as fiduciary for the account
of one or more institutions for which we exercise sole
investment discretion;
(iii) in the event that we purchase any Notes, we will acquire Notes
having a minimum principal amount of not less than $250,000
for our own account or for any separate account for which we
are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits
and risks of purchasing the Notes;
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<PAGE> 100
(v) we are not acquiring Notes with a view to distribution thereof
or with a present intention of offering or selling Notes or
the Common Stock issuable upon conversion thereof, except as
permitted below; provided that the disposition of our property
and property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to
ask such questions of representatives of the Company and
receive answers thereto, as we deem necessary in connection
with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of
the Securities Act and that the Notes and the shares of Common Stock issuable
upon conversion thereof have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we acquire
any Notes, that if in the future we decide to resell or otherwise transfer such
Notes or the Common Stock issuable upon conversion thereof, such Notes and
Common Stock may be resold or otherwise transferred only (i) to Atrix
Laboratories, Inc. or any subsidiary thereof, or (ii) inside the United States
to a person who is a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in a transaction meeting the requirements of Rule
144A, or (iii) inside the United States to an Institutional Accredited Investor
that, prior to such transfer, furnishes to the transfer agent or registrar for
such securities a signed letter containing certain representations and
agreements relating to the restrictions on transfer of such securities (the
form of which letter can be obtained from such transfer agent or registrar), or
(iv) outside the United States in compliance with Rule 904 under the Securities
Act, (v) pursuant to the exemption from registration provided by Rule 144 under
the Securities Act (if available) or (vi) pursuant to a registration statement
which has been declared effective under the Securities Act (and which continues
to be effective at the time of such transfer), and in each case, in accordance
with any applicable securities laws of any State of the United States or any
other applicable jurisdiction and in accordance with the legends set forth on
the Notes or the Common Stock issuable upon conversion thereof, as the case may
be. We further agree to provide any persons purchasing any of the Notes or the
Common Stock issuable upon conversion thereof other than pursuant to clauses
(v) and (vi) above from us a notice advising such purchaser that resales of
such securities are restricted as stated herein. We understand that the
registrar and transfer agent for the Notes and the Common Stock issuable upon
conversion of the Notes will not be required to accept for registration or
transfer any Notes or any shares of Common Stock issued upon conversion of the
Notes except upon presentation of evidence satisfactory to the Company that the
foregoing restrictions on transfer have been complied with. We further
understand that any Notes and any shares of Common Stock issuable upon
conversion of the Notes will be in the form of physical certificates and any
certificates will bear a legend reflecting the substance of this paragraph
other than certificates representing Notes or any shares of Common Stock
issuable upon conversion of the Notes transferred pursuant to clauses (v) and
(vi) above
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<PAGE> 101
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
--------------------------------------------
(Name of Purchaser)
By:
----------------------------------------
Name:
Title:
Address:
A-3
<PAGE> 1
Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
Dated as of November 15, 1997
relating to
$50,000,000 in Aggregate Principal Amount
of 7% Convertible Subordinated Notes due 2004
by and between
Atrix Laboratories, Inc.
and
NationsBanc Montgomery Securities, Inc.
and
SBC Warburg Dillon Read Inc.
as Initial Purchasers
<PAGE> 2
This Registration Rights Agreement (the "Agreement") is made and
entered into as of November 15, 1997, by and between Atrix Laboratories, Inc.,
a Delaware corporation (the "Company"), and NationsBanc Montgomery Securities,
Inc. and SBC Warburg Dillon Read Inc. (the "Initial Purchasers"), who will
purchase $50,000,000 in aggregate principal amount of 7% Convertible
Subordinated Notes due 2004 (the "Notes") of the Company (excluding up to an
additional $7,500,000 aggregate principal amount that may be purchased by the
Initial Purchasers pursuant to their over-allotment option) pursuant to the
Purchase Agreement dated November 21, 1997 (the "Purchase Agreement"), between
the Company and the Initial Purchasers. In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in the Purchase Agreement. All defined terms used but not
defined herein shall have the meanings ascribed to them in the Indenture (as
defined herein).
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
BUSINESS DAY: As defined in the Indenture.
CLOSING DATE: The date on which all the Notes are first sold by the
Company to the Initial Purchasers pursuant to the Purchase Agreement.
COMMISSION: The Securities and Exchange Commission.
COMMON STOCK: The common stock, par value $.001 per share, of the
Company.
DAMAGES PAYMENT DATE: With respect to the Notes or the Common Stock,
as applicable, each Interest Payment Date as defined in the Indenture.
EFFECTIVENESS TARGET DATE: As defined in Section 4.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Notes to (i) certain "qualified institutional buyers" (as
such term is defined in Rule 144A under the Act), (ii) to certain persons in
offshore transactions in reliance on Regulation S under the Act and (iii) to a
limited number of institutional "accredited investors" as defined in Rule
501(a)(1), (2), (3) or (7).
HOLDER: As defined in Section 2(b) hereof.
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<PAGE> 3
INDENTURE: The Indenture, dated as of November 15, 1997, among the
Company and State Street Bank and Trust Company of California, N.A., as trustee
(the "Trustee"), pursuant to which the Notes are to be issued, as such
Indenture is amended or supplemented from time to time in accordance with the
terms thereof.
INTEREST PAYMENT DATE: As defined in the Indenture.
LIQUIDATED DAMAGES: As defined in Section 4.
NASD: National Association of Securities Dealers, Inc.
OFFERING MEMORANDUM: The Offering Memorandum, dated November 21,
1997, and all amendments and supplements thereto, relating to the Notes.
PERSON: An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
PRELIMINARY PROSPECTUS: As defined in Section 3(g).
PROSPECTUS: The prospectus included in the Shelf Registration
Statement, as amended or supplemented by any Prospectus Supplement with respect
to the terms of the offering of any portion of the Transfer Restricted
Securities (as defined herein) covered by the Shelf Registration Statement and
by all other amendments and supplements to the prospectus, including
post-effective amendments, and all material which may be incorporated by
reference into such prospectus.
PROSPECTUS SUPPLEMENT: As defined in Section 5(b).
RECORD HOLDER: (i) With respect to any Damages Payment Date relating
to the Notes, each Person who is registered on the books of the Registrar as
the holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur and (ii) with respect to
any Damages Payment Date relating to the Common Stock, each Person who is a
holder of record of such Common Stock 15 days prior to the Damages Payment
Date.
REGISTRATION EXPENSES: As defined in Section 6(a).
REQUISITE INFORMATION: As defined in Section 3(g).
SHELF REGISTRATION STATEMENT: As defined in Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb), as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note and share of Common Stock
issuable upon conversion of a Note, until each such Note or share (i) has been
effectively registered under the
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<PAGE> 4
Securities Act and disposed of in accordance with the registration statement
covering it, (ii) is distributed to the public pursuant to Rule 144 or (iii)
may be sold or transferred pursuant to Rule 144(k) (or any similar provisions
then in force) under the Securities Act.
UNDERWRITER: Any underwriter, placement agent, selling broker, dealer
manager, qualified independent underwriter or similar securities industry
professional.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: An offering in
which securities of the Company are sold to an Underwriter or with the
assistance of such Underwriter for reoffering to the public on a firm
commitment or best efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. SHELF REGISTRATION
(a) FILING OF REGISTRATION STATEMENT. The Company shall use its best
efforts to file or cause to be filed with the Commission on or prior to the
date 30 days after the Closing Date, a shelf registration statement pursuant to
Rule 415 (as may then be amended) under the Act (the "Shelf Registration
Statement") on Form S-1 or Form S-3, if the use of such form is then available
and as determined by the Company, to cover resales of Transfer Restricted
Securities by the Holders thereof. The Company shall use its best efforts to
cause such Shelf Registration Statement to be declared effective by the
Commission on or prior to the date 90 days after the Closing Date. The Company
shall use its best efforts to keep such Shelf Registration Statement
continuously effective, supplemented and amended to the extent necessary to
ensure that it is available for resales of Transfer Restricted Securities for a
period ending two years from the effective date thereof or such shorter period
that will terminate when each of the Transfer Restricted Securities covered by
the Shelf Registration Statement shall cease to be a Transfer Restricted
Security (as further described in Section 5 below); provided that the Company
shall not be obligated to keep the Shelf Registration Statement effective as to
any period with respect to which the Company has received a written opinion,
which has been furnished to and is reasonably acceptable to the Initial
Purchasers, from the Company's counsel, Morrison & Foerster LLP, or other
counsel designated by the Company and reasonably acceptable to the Initial
Purchasers ("Company Counsel"), to the effect that the Transfer Restricted
Securities can be freely offered and sold in the public markets without the
continued effectiveness of the Shelf Registration Statement. The Company
further agrees to use its best efforts to prevent the happening of any event
that would cause the Shelf Registration Statement to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or to
be not effective and usable for
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<PAGE> 5
resale of the Transfer Restricted Securities during the period that such Shelf
Registration Statement is required to be effective and usable.
Upon the occurrence of any event that would cause the Shelf
Registration Statement (i) to contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) to be not effective and
usable for resale of Transfer Restricted Securities during the period that such
Shelf Registration Statement is required to be effective and usable, the
Company upon knowledge of such an event, shall as promptly as practicable file
an amendment to the Shelf Registration Statement, in the case of clause (i),
correcting any such misstatement or omission, and, in the case of either clause
(i) or (ii), use its best efforts to cause such amendment to be declared
effective and such Shelf Registration Statement to become usable as soon as
practicable thereafter.
Notwithstanding anything to the contrary in this Section 3, subject to
compliance with Sections 4 and 5(b), if applicable, the Company may prohibit
offers and sales of Transfer Restricted Securities pursuant to the Shelf
Registration Statement at any time if (A) (i) it is in possession of material
non-public information, (ii) the Board of Directors of the Company determines
based on advice of counsel (which counsel shall be experienced in securities
laws matters) that such prohibition is necessary in order to avoid a
requirement to disclose such material non-public information and (iii) the
Board of Directors of the Company determines in good faith that disclosure of
such material non-public information would not be in the best interests of the
Company and its stockholders or (B) the Company has made a public announcement
relating to an acquisition or business combination transaction including the
Company and/or one or more of its subsidiaries (i) that is material to the
Company and its subsidiaries taken as a whole and (ii) the Board of Directors
of the Company determines in good faith that offers and sales of Transfer
Restricted Securities pursuant to the Shelf Registration Statement prior to the
consummation of such transaction (or such earlier date as the Board of
Directors shall determine) is not in the best interests of the Company and its
stockholders (the period during which any such prohibition of offers and sales
of Transfer Restricted Securities pursuant to the Shelf Registration Statement
is in effect pursuant to clause (A) or (B) of this subparagraph (a) is referred
to herein as a "Suspension Period"). A Suspension Period shall commence on and
include the date on which the Company provides written notice to Holders
covered by the Shelf Registration Statement that offers and sales of Transfer
Restricted Securities cannot be made thereunder in accordance with this Section
3 and shall end three Business Days after the earlier to occur of (x) the date
on which such material information is disclosed to the public or ceases to be
material or the Company is able to so comply with its disclosure obligations
and Commission requirements or (y) 45 days after written notice is provided by
the Company to the Holders of such Suspension Period. Each notice shall state
to the extent, if any, as is practicable, an estimate of the expected duration
of the Suspension Period.
(b) RESTRICTION ON SECURITIES INCLUDED IN REGISTRATION STATEMENT.
None of the Company nor any of its security holders (other than the Holders of
Transfer Restricted Securities in such capacity) shall have the right to
include any of the Company's securities in the Shelf Registration Statement.
4
<PAGE> 6
(c) UNDERWRITTEN OFFERING. If the Holders of a majority of the
outstanding Transfer Restricted Securities so elect (with holders of Common
Stock constituting Transfer Restricted Securities being deemed to be Holders of
the aggregate principal amount of Notes converted into such Common Stock for
purposes of such calculation), an offering of Transfer Restricted Securities
pursuant to the Shelf Registration Statement may be effected in the form of an
Underwritten Offering. Such election shall be evidenced by a written notice
(the "Underwriting Notice") delivered to the Company. The Holders of the
Transfer Restricted Securities to be registered shall pay all underwriting
discounts and commissions of such Underwriters, and the Company shall be
obligated to pay all expenses described in Section 6 below.
(d) SELECTION OF UNDERWRITERS. If any of the Transfer Restricted
Securities covered by the Shelf Registration Statement are to be sold in an
Underwritten Offering, the Underwriter(s) that will administer the offering
will be selected by the Holders of a majority of the outstanding Transfer
Restricted Securities (with holders of Common Stock constituting Transfer
Restricted Securities being deemed to be Holders of the aggregate principal
amount of Notes converted into such Common Stock for purposes of such
calculation); provided, however, that such Underwriter(s) shall be reasonably
satisfactory to the Company.
(e) LOCK-UP BY HOLDER. Each Holder whose Transfer Restricted
Securities are covered by a Shelf Registration Statement filed pursuant to this
Section 3 agrees, upon the request of the Underwriter(s) in any Underwritten
Offering, not to effect any sale or distribution of securities of the Company
of the same class as the securities included in such Shelf Registration
Statement, for a period of up to 90 days beginning on the date any such
Underwritten Offering made pursuant to such Shelf Registration Statement
commences, to the extent timely notified in writing by such Underwriter(s).
(f) COMPANY LOCK-UP. The Company agrees not to effect any public or
private offer, sale or distribution of securities of the same quality and
nature as any of the Transfer Restricted Securities to be registered in an
Underwritten Offering during the 90-day period (the "Lock-up Period") beginning
on the date any such Underwritten Offering made pursuant to the Shelf
Registration Statement commences, to the extent timely notified in writing by
the Underwriter(s) (except as part of such registration, if permitted, pursuant
to registrations on Forms S-4 or S-8 or any successor form to such Forms),
unless the Underwriter(s) shall consent in writing to a shorter period of time;
provided, however, that any such agreement shall permit (A) the issuance by the
Company of any shares of Common Stock issued to employees of the Company or to
any other eligible person pursuant to any employee stock option plan, stock
ownership plan, stock bonus plan or stock compensation plan of the Company in
effect on the date of such Underwritten Offering, (B) the issuance by the
Company of Common Stock upon the conversion of securities, or the exercise of
options or warrants, outstanding at the date of such Underwritten Offering and
(C) the issuance by the Company of any such securities in connection with an
acquisition transaction if the transferee or transferees of such securities
agree during the Lock-up Period not to publicly offer or sell such securities
without the prior written consent of such Underwriter(s). Notwithstanding the
foregoing, the Company shall be entitled to suspend its lock-up obligations
under this Section 3(f) for a period not to exceed 180 days after the delivery
of the Underwriting
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Notice in order to complete an issuance and sale of securities provided that it
notifies the sender of the Underwriting Notice within five Business Days of its
receipt of such notice.
(g) HOLDER INFORMATION. Each Holder shall furnish to the Company such
information regarding the distribution of its Transfer Restricted Securities as
is required by law to be disclosed in the applicable Shelf Registration
Statement (the "Requisite Information") prior to effecting any sale pursuant to
such Shelf Registration Statement.
The Company shall file, within five Business Days after the
receipt of notice from any Holder which includes the Requisite Information with
respect to such Holder, a Prospectus supplement pursuant to Rule 424 or
otherwise amend or supplement such Shelf Registration Statement to include in
the Prospectus the Requisite Information as to such Holder (and the Transfer
Restricted Securities held by such Holder), and the Company shall provide such
Holder within two Business Days after receipt of such notice with a copy of
such prospectus as so amended or supplemented containing the Requisite
Information in order to permit such Holder to comply with the Prospectus
delivery requirements of the Securities Act in a timely manner with respect to
any proposed disposition of such Holder's Transfer Restricted Securities.
If any such Shelf Registration Statement refers to any Holder
by name or otherwise as the Holder of any securities of the Company, then such
Holder shall have the right to require, in the event that such reference to
such Holder by name or otherwise is not required by the Securities Act or any
similar Federal statute then in force, the deletion of the reference to such
Holder in such Shelf Registration Statement at any time subsequent to the time
that such reference ceases to be required. It shall be the sole responsibility
of each Holder to notify the Company of any change of address or change of
ownership of the Transfer Restricted Securities of such Holder.
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SECTION 4. LIQUIDATED DAMAGES
If (i) the Shelf Registration Statement is not filed with the
Commission on or prior to 30 days after the Closing Date, (ii) the Shelf
Registration Statement has not been declared effective by the Commission within
90 days after the Closing Date (the "Effectiveness Target Date"), or (iii) the
Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement filed and declared effective) or useable for
resale for a period of time (including any Suspension Period) which shall
exceed 60 days in the aggregate in any one-year period (each such event
referred to in clauses (i) through (iii), a "Registration Default"), the
Company will pay liquidated damages ("Liquidated Damages") to each Holder of
Transfer Restricted Securities. The amount of Liquidated Damages payable
during any period during which a Registration Default shall have occurred and
be continuing is that amount which is equal to one-quarter of one percent (25
basis points) per annum per $1,000 principal amount of Notes or, if applicable,
on an equivalent basis per share of Common Stock (subject to adjustment in the
event of stock splits, stock recombinations, stock dividends and the like)
constituting Transfer Restricted Securities for each subsequent 90-day period
until the applicable registration statement is filed and the applicable
registration statement is declared effective, or the Shelf Registration
Statement again becomes effective or usable, as the case may be, up to a
maximum amount of Liquidated Damages of one and one- quarter of one percent
(125 basis points) per annum per $1,000 principal amount of Notes or, if
applicable, on an equivalent basis per share of Common Stock (subject to
adjustment as set forth above) of Common Stock constituting Transfer Restricted
Securities. The Company shall notify the Trustee and the Initial Purchasers
within one Business Day after each and every date on which a Registration
Default occurs. All accrued Liquidated Damages shall be paid to Record Holders
by wire transfer of immediately available funds or by federal funds check by
the Company on each Damages Payment Date. Following the cure of all
Registration Defaults, Liquidated Damages will cease to accrue with respect to
such Registration Default.
All of the Company's obligations to pay Liquidated Damages set forth
in the preceding paragraph which are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such security shall have been satisfied in full.
The parties hereto agree that the Liquidated Damages provided in this
Section 4 constitute a reasonable estimate of the damages that will be incurred
by Holders of Transfer Restricted Securities by reason of the failure of the
Shelf Registration Statement to be filed, declared effective or to remain
effective, as the case may be.
SECTION 5. REGISTRATION PROCEDURES
In connection with the Shelf Registration Statement, the Company will
use its best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution or disposition thereof, and pursuant thereto
the Company will as expeditiously as possible after the Closing Date:
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<PAGE> 9
(a) FILING OF REGISTRATION STATEMENT. On or prior to the date 30 days
after the Closing Date, prepare and file with the Commission a Shelf
Registration Statement relating to the registration on Form S-1 or Form S-3, if
the use of such form is then available and as determined by the Company, for
the sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof and shall include all financial
statements required to be included or incorporated by reference therein. The
Company shall take such action as may be reasonably necessary so that (i) the
Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any supplement or amendment thereto complies in all
material respects with the Act and the rules and regulations thereunder, (ii)
the Shelf Registration and any amendment thereto (in either case, other than
with respect to the Requisite Information furnished to the Company by or on
behalf of any Holder specifically for inclusion therein) does not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make any statement therein not misleading
and (iii) the Prospectus and any supplement thereto (in either case, other than
with respect to such Requisite Information from Holders), does not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
The Company agrees to cooperate and assist in any filings required to
be made with the NASD and use its best efforts to cause such Shelf Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders to consummate the
disposition of such Transfer Restricted Securities; provided, however, that
before filing a Shelf Registration Statement or any Prospectus, or any
amendments or supplements thereto, the Company will furnish to the Initial
Purchasers, each Holder who may have requested the same in writing and the
Underwriter(s), if any, copies of all such documents proposed to be filed
(except that the Company shall not be required to furnish any exhibits to such
documents, including those incorporated by reference, unless so requested by an
Initial Purchaser, Holder or Underwriter in writing), and the Company will not
file any Shelf Registration Statement or amendment thereto or any Prospectus or
any supplement thereto to which (i) the Initial Purchasers or the
Underwriter(s), if any, shall reasonably object or (ii) if there are no
Underwriters, the Initial Purchasers or the Holders of a majority of the
outstanding Transfer Restricted Securities shall reasonably object (with
holders of Common Stock constituting Transfer Restricted Securities being
deemed to be Holders of the aggregate principal amount of Notes converted into
such Common Stock for purposes of such calculation), in each such case within
five Business Days after the receipt thereof. An Initial Purchaser, Holder or
Underwriter, if any, shall be deemed to have reasonably objected to such filing
if the Shelf Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading which misstatement or
omission is specifically identified to the Company in writing within such five
Business Days.
(b) AMENDMENTS AND SUPPLEMENTS. The Company agrees to prepare and
file with the Commission such amendments and post-effective amendments to the
Shelf Registration Statement as may be necessary to keep the Shelf Registration
Statement effective for the applicable period set forth in Section 3(a) hereof;
cause the Prospectus to be supplemented by any required supplement thereto (a
"Prospectus Supplement"), and as so supplemented to be filed
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<PAGE> 10
pursuant to Rule 424 under the Act, and to comply with the applicable
provisions of Rules 424 and 430A under the Act in a timely manner; and comply
with the provisions of the Act with respect to the disposition of all
securities covered by such Shelf Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Shelf Registration Statement, Prospectus or
Prospectus Supplement.
(c) FILINGS OF AMENDMENTS OR SUPPLEMENTS IN CONNECTION WITH
UNDERWRITTEN OFFERINGS. The Company agrees, if requested in writing by the
Holders of Transfer Restricted Securities, or if the Transfer Restricted
Securities are being sold in an Underwritten Offering, the Underwriter(s) of
such Underwritten Offering, promptly incorporate in the Prospectus, any
Prospectus Supplement or post-effective amendment to the Shelf Registration
Statement such information as the Underwriters and/or the Holders of Transfer
Restricted Securities agree should be included therein relating to the plan of
distribution of the Transfer Restricted Securities, including, without
limitation, information with respect to the principal amount of Notes and/or
the number of shares of Common Stock being sold to such Underwriter(s), the
purchase price being paid therefor and any other terms with respect to the
offering of the Transfer Restricted Securities to be sold in such offering; and
make all required filings of such Prospectus, Prospectus Supplement or post-
effective amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus, Prospectus Supplement or
post-effective amendment.
(d) COMMUNICATION WITH SECURITIES EXCHANGE COMMISSION; NOTICE OF
REQUIREMENT TO AMEND OR SUPPLEMENT. The Company agrees to advise the Initial
Purchasers, the Underwriter(s), if any, and Holders promptly and, if requested
by such Persons, to confirm such advice in writing, (i) when the Prospectus or
any Prospectus Supplement or post-effective amendment to the Shelf Registration
Statement has been filed, and, with respect to the Shelf Registration Statement
or any post-effective amendment thereto, when the same has become effective,
(ii) of any request by the Commission for amendments to the Shelf Registration
Statement or amendments or supplements to the Prospectus or for additional
information relating thereto, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Shelf Registration Statement
under the Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (iv) if at any time the representations and warranties of the Company
contemplated by paragraph (m)(i) below cease to be true and correct, and (v) of
the existence of any fact and the happening of any event that makes any
statement of a material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated
by reference therein untrue, or that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Shelf Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.
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<PAGE> 11
(e) COPIES OF DOCUMENTS INCORPORATED BY REFERENCE IN REGISTRATION
STATEMENT. The Company agrees promptly following the filing of any document
that is to be incorporated by reference into the Shelf Registration Statement
or the Prospectus subsequent to the initial filing of the Shelf Registration
Statement, provide copies of such document (excluding exhibits, unless
specifically requested by an Initial Purchaser or a Holder in writing) to the
Initial Purchasers and each Holder who may have requested the same in writing.
(f) COPIES OF REGISTRATION STATEMENT AND AMENDMENTS. The Company
agrees to furnish to each Initial Purchaser, each Holder and each of the
Underwriter(s), if any, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein
and all exhibits (excluding exhibits to documents incorporated by reference
therein unless requested by such Initial Purchaser, Holder or Underwriter).
(g) COPIES OF PRELIMINARY PROSPECTUS AND PROSPECTUS. The Company
agrees to deliver to each Initial Purchaser, each Holder and each of the
Underwriter(s), if any, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto as such
Persons may reasonably request; the Company consents to the use of any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto by each of the Holders and each of the Underwriter(s), if any, in
connection with the public offering and the sale of the Transfer Restricted
Securities covered by any Preliminary Prospectus and the Prospectus or any
amendments or supplements thereto; provided that such use of the Preliminary
Prospectus or Prospectus, and such offering and sale, conform to the Plan of
Distribution set forth in the Prospectus and comply with all applicable laws.
(h) BLUE SKY. The Company agrees, prior to any public offering of
Transfer Restricted Securities, to cooperate with the Holders, the
Underwriter(s), if any, and their respective counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the Holders or
Underwriter(s) may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdiction of the Transfer
Restricted Securities covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required (i) to register or qualify as a
foreign corporation where it is not now so qualified or (ii) to take any action
that would subject it to the service of process in suits, other than as to
matters and transactions relating to the Shelf Registration Statement, in any
jurisdiction where it is not now so subject.
(i) CERTIFICATES. The Company agrees to cooperate with the Holders
and the Underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to be sold
pursuant to the Shelf Registration Statement (which shall not bear any
restrictive legends); and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
Underwriter(s), if any, may request at least two Business Days prior to any
sale of Transfer Restricted Securities.
(j) OTHER GOVERNMENT AGENCIES. The Company agrees to use its best
efforts to cause the Transfer Restricted Securities covered by the Shelf
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to
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enable the seller or sellers thereof or the Underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities, subject to
the proviso contained in clause (h) above.
(k) POST-EFFECTIVE AMENDMENTS OR SUPPLEMENTS TO UPDATE. The Company
agrees to, if any fact or event contemplated by clause (d)(ii) through (v)
above shall exist or have occurred, prepare a post-effective amendment or
supplement to the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer Restricted
Securities, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading.
(l) CUSIP. The Company agrees to provide a CUSIP number for all Notes
to be sold pursuant to the Shelf Registration Statement not later than the
effective date of the Shelf Registration Statement and provide the Trustee
under the Indenture and/or the transfer agent for the Common Stock with
certificates for the Transfer Restricted Securities to be sold pursuant to the
Shelf Registration Statement which are in a form eligible for deposit with the
Depository Trust Company.
(m) UNDERTAKINGS IN CONNECTION WITH UNDERWRITTEN OFFERINGS. The
Company agrees to, in connection with an Underwritten Registration, enter into
such agreements (including an underwriting agreement) and take all such other
actions in connection therewith as may reasonably be required in order to
expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to the Shelf Registration Agreement (including without limitation,
providing in a supplement or post-effective amendment, such information
relating to the plan of distribution as is necessary, information concerning
the purchase price being paid and such other information with respect to the
offering as may be reasonably requested), and (i) make such representations and
warranties to the Underwriter(s), in form, substance and scope as they may
reasonably request and as are customarily made by issuers to Underwriters in
Underwritten Offerings and covering matters, including, but not limited to,
those set forth in the Purchase Agreement; (ii) obtain opinions of counsel for
the Company and updates thereof in customary form and covering matters
reasonably requested by the Underwriter(s) of the type customarily covered in
legal opinions to Underwriters in connection with Underwritten Offerings
addressed to the Underwriter requesting the same and covering the matters as
may be reasonably requested by such Holders and Underwriters; (iii) obtain
"cold comfort" letters and updates thereof from the Company's independent
certified public accountants addressed to the Underwriters requesting the same,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters to Underwriters in connection
with Underwritten Offerings; (iv) set forth in full or incorporate by reference
in the underwriting agreement the indemnification provisions and procedures of
Section 7 hereof with respect to all parties to be indemnified pursuant to said
Section; and (v) deliver such documents and certificates as may be reasonably
requested by the Underwriter(s) of such Underwritten Offering to evidence
compliance with clause (i) above and with any customary conditions contained in
the underwriting agreement entered into by the Company pursuant to this clause
(m). The above shall be done at or prior to each closing under such
underwriting agreement, as and to the extent required thereunder.
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(n) DUE DILIGENCE. The Company agrees to make available at reasonable
times and in a reasonable manner to a representative of the Holders of the
Transfer Restricted Securities, any Underwriter participating in any
disposition pursuant to such Shelf Registration Statement and any attorney or
accountant retained by such Holders or any of the Underwriters representatives
of the Company for discussion of customary due diligence matters, and furnish
such documents and financial and other information as may be reasonably
requested by such persons in connection with such due diligence; provided,
however, that such representatives, attorneys or accountants shall agree to
keep confidential (which agreement shall be confirmed in writing in advance to
the Company if the Company shall so request) all information, records or
documents made available to such persons which are not otherwise available to
the general public unless disclosure of such records, information or documents
is required by court or administrative order and to use such information
obtained pursuant to this provision only in connection with the transaction for
which such information was obtained, and not for any other purpose.
(o) COMPLIANCE WITH RULES AND REGULATIONS. The Company agrees to
otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to its security
holders, as soon as practicable, in a regular filing on Form 10-Q or Form 10-K,
a consolidated earnings statement, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act, for the twelve-month period
(i) commencing at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to Underwriters in a firm commitment or best efforts
Underwritten Offering or (ii) if not sold to Underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Shelf Registration Statement.
(p) INDENTURE. The Company agrees to the extent required by the TIA
to cause the Indenture to be qualified under the TIA, and, in connection
therewith, cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best efforts to
cause the Trustee to execute, all documents as may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner.
(q) LISTING, ETC. The Company agrees to cause all Transfer
Restricted Securities covered by the Shelf Registration Statement to be listed
on each securities exchange or quotation system on which similar securities
issued by the Company are then listed, provided that such listing shall only be
required with respect to the Notes only to the extent requested by the Holders
of a majority of the outstanding Notes or the Underwriters, if any. The
Company agrees to cause the Notes covered by the Shelf Registration Statement
to be rated with the appropriate rating agencies, if so requested by the
Holders of a majority in aggregate principal amount of such Notes then
outstanding or the Underwriters.
(r) NASD. The Company agrees to cooperate and assist in any filings
required to be made with the NASD and in the performance of any due diligence
investigation by any Underwriter (including any "qualified independent
Underwriter" that is required to be retained in accordance with the rules and
regulations of the NASD).
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(s) AGREEMENTS OF HOLDERS. Each Holder as to which any Shelf
Registration Statement is being effected agrees prior to effecting any sale of
Transfer Restricted Securities thereunder to furnish promptly to the Company
all information required to be disclosed in order to make any Requisite
Information previously furnished to the Company by such Holder not materially
misleading or necessary to cause such Shelf Registration Statement not to omit
a material fact with respect to such Holder necessary in order to make the
statements therein not misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence
of any fact of the kind described in Section 5(d)(v) hereof (an "Amendment
Notice"), such Holder will forthwith discontinue disposition of Transfer
Restricted Securities until such Holder's receipt of (i) copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or
until counsel for the Company shall have determined that such disclosure is not
required due to subsequent events, (ii) notice in writing from the Company that
the use of the Prospectus may be resumed, and (iii) copies of any additional or
supplemental filings with respect to the Prospectus. In the event Company
shall give any such notice, the time period regarding the effectiveness of the
Shelf Registration Statement set forth in Section 3(a) hereof shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 5(d)(v) hereof to and including the
date when each Holder covered by such Shelf Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 5(k) hereof or shall have received the Advice and any additional or
supplemental filings with respect to the Prospectus.
SECTION 6. REGISTRATION EXPENSES
(a) EXPENSES OF COMPANY. All expenses incident to the Company's
performance of or compliance with this Agreement (the "Registration Expenses")
will be borne by the Company, regardless of whether a Shelf Registration
Statement becomes effective, including without limitation:
(i) all registration and filing fees and expenses (including
filings made with the NASD);
(ii) fees and expenses of compliance with federal
securities or state blue sky laws;
(iii) expenses of printing (including, without limitation,
expenses of printing or engraving certificates for the Transfer Restricted
Securities in a form eligible for deposit with Depository Trust Company and of
printing the Prospectus and any Preliminary Prospectus), messenger and delivery
services and telephone;
(iv) fees and disbursements of counsel for the Company and
for the Holders (subject to the provisions of Section 6(b) hereof);
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
"cold comfort" letters required by or
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incidental to the preparation and filing of a Shelf Registration Statement and
Prospectus and the disposition of Transfer Restricted Securities); and
(vi) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in accordance with
Section 5(q) hereof.
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, rating
agency fees and the fees and expenses of any Person, including special experts,
retained by the Company. The Company shall not be responsible for commissions,
fees and discounts of brokers, dealers and agents. The Holders of Transfer
Restricted Securities shall bear the expense of any broker's commission or
Underwriter's discount or commission.
(b) COUNSEL TO HOLDERS. In connection with the Shelf Registration
Statement, the Company will reimburse the Holders of Transfer Restricted
Securities being registered pursuant to such Shelf Registration Statement for
the reasonable fees and disbursements of not more than one counsel ("Special
Counsel"), which shall initially be Wilson Sonsini Goodrich & Rosati,
Professional Corporation (unless and until another Special Counsel shall have
been selected by the Holders of a majority of the outstanding Transfer
Restricted Securities (with holders of Common Stock constituting Transfer
Restricted Securities being deemed to be Holders of the aggregate principal
amount of Notes converted into such Common Stock for purposes of such
calculation)).
Notwithstanding the provisions of this Section 6(b), each Holder of
Transfer Restricted Securities shall pay all Registration Expenses to the
extent required by applicable law, and if the Shelf Registration Statement is
to be effected in the form of an Underwritten Offering, the discounts and
commissions of the Underwriters.
SECTION 7. INDEMNIFICATION
(a) COMPANY INDEMNIFICATION. The Company agrees to indemnify and hold
harmless (i) each of the Initial Purchasers, (ii) each Holder, (iii) each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) any of the Initial Purchasers or any Holder
(any of the persons referred to in this clause (iii) being hereinafter referred
to as a "controlling person") and (iv) the respective officers, directors,
partners, employees, representatives and agents of any of the Initial
Purchasers or any Holder or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as a
"Non-Company Indemnitee"), to the fullest extent lawful, from and against any
and all losses, claims, damages, liabilities, reasonable expenses and judgments
arising out of or based on any untrue statement or alleged untrue statement of
a material fact contained in the Shelf Registration Statement, Prospectus or
Preliminary Prospectus (or any amendments or supplements thereto), including
any document incorporated by reference therein, or arising out of or based on
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except, with respect to any Non-Company Indemnitee, insofar as such losses,
claims, damages, liabilities, expenses or
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judgments (1) are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to the
Company by such Non-Company Indemnitee expressly for use therein (which shall
include written information provided by such Non-Company Indemnitee pursuant to
Section 3(g) herein expressly for use therein), or (2) with respect to any
Preliminary Prospectus, result from the fact that such Non-Company Indemnitee
sold Transfer Restricted Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
final Prospectus, as amended or supplemented, if the Company shall have
previously furnished copies thereof to such Non-Company Indemnitee in
accordance with this Agreement and the final Prospectus, as amended or
supplemented, would have corrected such untrue statement or omission. The
indemnification in this subsection (a) shall be in addition to any liability
which the Company may have at common law or otherwise.
The Company also agrees to indemnify or contribute to losses of, as
provided in Section 7(d), any underwriters of Transfer Restricted Securities
registered under the Shelf Registration Statement, their officers and directors
and each Person, if any, who controls any such underwriter (within the meaning
of the Act) on substantially the same basis as that of the indemnification of
the Holders provided in this Section 7(a) and shall, if requested by any
Holder, enter into an underwriting agreement reflecting such agreement, as
provided in Section 5(m) hereof.
(b) INDEMNIFICATION PROCEDURES. In case any action shall be brought
against any Non-Company Indemnitee, based upon the Shelf Registration
Statement, Prospectus, or Preliminary Prospectus (or any amendments or
supplements thereto), and with respect to which indemnity may be sought against
the Company, such Non-Company Indemnitee shall promptly notify the Company in
writing and the Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses; provided, however,
that the omission so to notify the Company shall not relieve the Company from
any liability that it may have to any Non-Company Indemnitee (except to the
extent that the Company is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). Such Non-Company
Indemnitee shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of counsel
shall be paid by such Non-Company Indemnitee, unless (i) the employment of such
counsel shall have been specifically authorized in writing by the Company, (ii)
the Company shall have failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any impleaded parties) include
both such Non-Company Indemnitee and the Company and it would be inappropriate
for the same counsel to represent such Non-Company Indemnitee and the Company
(in which case the Company shall not have the right to assume the defense of
such action on behalf of such Non-Company Indemnitee, it being understood,
however, that the Company shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for the Non-Company Indemnitees, which firm shall be
designated in writing by the Non-Company Indemnitees and shall be subject to
the Company's approval, not to be unreasonably withheld, and whose fees and
expenses reasonably incurred shall be reimbursed as they are incurred). The
Company shall not be liable for any settlement of any
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such action effected without the written consent of the Company, which consent
shall not be unreasonably withheld or delayed, and if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Non-Company Indemnitee from and against any amounts payable pursuant to such
written consent in connection with such settlement. The Company shall not,
without the prior written consent of such Non-Company Indemnitee, effect any
settlement of any pending or threatened proceeding in respect of which such
Non-Company Indemnitee is or could have been a party and indemnity could have
been sought hereunder by such Non-Company Indemnitee, unless such settlement
includes an unconditional release of such Non-Company Indemnitee from all
liability on claims that are the subject matter of such proceeding.
(c) INDEMNIFICATION BY HOLDER. Each Holder of Transfer Restricted
Securities agrees to indemnify and hold harmless (i) the Company, (ii) each of
the Initial Purchasers, (iii) each other Holder, (iv) any person controlling
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company, any of the Initial Purchasers and each other Holder and (v) the
respective officers, directors, partners, employees, representatives and agents
of each of the parties referred to in clauses (i), (ii), (iii) and (iv), to the
same extent as the foregoing indemnity from the Company to each of the
Non-Company Indemnitees, but only with respect to claims and actions based on
information relating to such Holder that was furnished in writing by such
Holder expressly for use in the Shelf Registration Statement or Prospectus (or
any amendment or supplement thereto) (including without limitation the
information provided in writing by a Holder pursuant to Section 3(g) expressly
for use therein). In no event shall the liability of any Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Transfer Restricted Securities giving rise to such
indemnification obligation.
(d) CONTRIBUTION. If the indemnification provided for in this Section
7 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to herein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments in such proportion as is appropriate
to reflect the relative fault of the indemnifying party, on the one hand, and
the indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party, on the one hand, and the indemnified
party, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party, on the one hand, or the
indemnified party, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The indemnity and contribution obligations of each
indemnifying party set forth herein shall be in addition to any liability or
obligation such indemnifying party may otherwise have to any Indemnified Party,
including under this Agreement.
The Company, each of the Initial Purchasers and each Holder of
Transfer Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section
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7(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The losses, claims, damages,
liabilities or judgments of an indemnified party referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim prior to the indemnifying party's assumption of the defense thereof or
subsequent thereto to the extent permitted by the second sentence of Section
7(b) hereof. Notwithstanding the provisions of this Section 7, none of the
Holders shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total amount of net process received by such Holder
with respect to the sale of Transfer Restricted Securities exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective principal amount of Notes held by each of the Holders hereunder and
not joint.
SECTION 8. RULE 144A AND RULE 144
(a) RULE 144A. The Company hereby agrees with each Holder, for so
long as any of the Notes or shares of Common Stock that are Transfer Restricted
Securities remain outstanding and during any such period in which the Company
is not subject to Section 13 or 15(d) of the Exchange Act, to make available to
any Initial Purchaser or any beneficial owner of the Notes or shares of such
Common Stock in connection with any sale thereof and any prospective purchaser
of such Notes or Common Stock from such Initial Purchaser or beneficial owner,
the information required by Rule 144A(d)(4) under the Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
(b) RULE 144. The Company shall use commercially reasonable efforts
to file the reports required to be filed by it under the Act and the Exchange
Act in a timely manner and covenants that it will take such further action as
any Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time, to enable such Holder to sell securities
without registration under the Act within the limitation of the exemptions
provided by Rule 144.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements, (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of
such underwriting arrangements and (c) furnishes the Company the Requisite
Information and agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration
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Statement and any person controlling the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the extent contemplated by
Section 7(c).
SECTION 10. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering in accordance with Section 3(c) herein.
In any such Underwritten Offering, the Underwriter(s) that will administer the
offering will be selected by the Holders of the Transfer Restricted Securities
included in such offering in the manner specified in Section 3(c); provided,
however, that such Underwriters must be reasonably satisfactory to the Company.
SECTION 11. MISCELLANEOUS
(a) REMEDIES. Each party agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not on or after
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders of
Transfer Restricted Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders of Transfer
Restricted Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any other agreements in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of a majority of the outstanding Transfer Restricted Securities (with holders
of Common Stock constituting Transfer Restricted Securities being deemed to be
Holders of the aggregate principal amount of Notes converted into such Common
Stock for purposes of such calculation). Notwithstanding the foregoing, a
waiver or consent to departure from the provisions hereof that relates
exclusively to the rights of Holders of Transfer Restricted Securities whose
securities are being sold pursuant to such Shelf Registration Statement and
that does not directly or indirectly affect the rights of other Holders of
Transfer Restricted Securities shall be valid only with the written consent of
Holders of at least 66-2/3% of the Transfer Restricted Securities being sold,
in each case calculated in accordance with the provisions of Section 3(c).
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
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(i) if to a Holder of Transfer Restricted Securities, at the
address set forth on the records of the Registrar under the Indenture, with a
copy to the Registrar; and
(ii) if to the Company or an Initial Purchaser, initially
at its address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
receipt acknowledged, if telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder of Transfer Restricted Securities unless
and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder; and provided further that nothing herein shall be
deemed to permit any assignment, transfer or any disposition of Transfer
Restricted Securities in violation of the terms of the Purchase Agreement. If
any transferee of any Holder shall acquire Transfer Restricted Securities, in
any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement and by
taking and holding such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW RULES THEREOF.
(i) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
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(j) ENTIRE AGREEMENT. This Agreement together with all documents
and agreements referred to herein is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
ATRIX LABORATORIES, INC.
By: /s/ John E. Urheim
------------------------------
Name: John E. Urheim
Title: Chief Executive Officer
NATIONSBANC MONTGOMERY SECURITIES, INC.
SBC WARBURG DILLON READ INC.
BY: NATIONSBANC MONTGOMERY SECURITIES, INC.
By: /s/ JEFFREY B. CHILD
--------------------------------------------
Name: Jeffrey B. Child
Title: Managing Director
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Exhibit 99.1
Atrix Announces Proposed $50 Million Private Placement of Convertible Notes
FORT COLLINS, Colo., Nov. 6 /PRNewswire/ -- Atrix Laboratories, Inc.
(Nasdaq: ATRX) announced today that, subject to market and other conditions, it
intends to raise $50 million (excluding proceeds of the over-allotment option,
if any) through a private placement of convertible subordinated notes within
the United States to qualified institutional investors, and outside the United
States to non-U.S. investors. It is contemplated that the notes will be
convertible into Atrix common stock. The Company intends to use the proceeds
from the sale of the notes for general corporate purposes, including research
and development, commercialization of its periodontal products and to acquire
complementary products, technologies or businesses.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the notes.
The securities offered will not be registered under the Securities Act of
1933, as amended, or applicable state securities laws, and may not be offered
or sold in the United States absent registration under the Securities Act of
1933 and applicable state securities laws or available exemptions from
registration requirements.
<PAGE> 1
Exhibit 99.2
Atrix Completes $50 Million Private Offering of
7% Convertible Subordinated Notes due 2004
FORT COLLINS, Colo., November 24, 1997 -- Atrix Laboratories, Inc. (Nasdaq:
ATRX) announced today that it has completed an agreement to sell $50 million of
its 7% convertible subordinated notes due 2004 (the "Notes") in an offering
within the United States to qualified institutional investors and outside the
United States to non-U.S. investors. The offering is expected to close on
November 26, 1997. The Company has granted the initial purchasers a 30-day
option to purchase an additional $7.5 million of notes to cover
over-allotments, if any.
The Notes will be convertible into shares of common stock of the Company at
a conversion price of $19 per share for a total of approximately 2.63 million
shares of common stock of the Company (3.03 million shares if the initial
purchasers' over-allotment option is exercised in full). The notes have a
seven-year term and will be non-callable for the first three years.
The Company stated that it intends to use the proceeds of the offering for
general corporate purposes, including research and development,
commercialization of its products and to acquire complementary products,
technologies and businesses.
This announcement is neither an offer to sell nor a solicitation to buy any
of these securities.
The securities to be offered will not be registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws, and unless
so registered, may not be offered or sold in the United States except pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Act and applicable state securities laws.
Atrix Laboratories, Inc. develops, manufactures and markets dental, medical
and veterinary products based on its proprietary ATRIGEL(R) biodegradable
polymeric technology, which can be used for a broad range of drug delivery and
biomaterial applications.
