Exhibit 4.4

 

THERAVANCE, INC.

 

[·]% CONVERTIBLE SUBORDINATED NOTES DUE 2023

 

INDENTURE

 

DATED AS OF JANUARY [·], 2013

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

 

AS TRUSTEE

 











 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
 
    	
 
    
	
DEFINITIONS AND INCORPORATION BY REFERENCE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 1.01 . Definitions
    	
 
    	
1
    
	
Section 1.02 . Other Definitions
    	
 
    	
9
    
	
Section 1.03 . Trust Indenture Act Provisions
    	
 
    	
11
    
	
Section 1.04 . Rules of Construction
    	
 
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
 
    	
 
    
	
THE SECURITIES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 2.01 . Form and Dating
    	
 
    	
12
    
	
Section 2.02 . Execution and Authentication
    	
 
    	
14
    
	
Section 2.03   . Registrar, Paying Agent and Conversion Agent
    	
 
    	
15
    
	
Section 2.04 . Paying Agent to Hold Money in Trust
    	
 
    	
16
    
	
Section 2.05 . Lists of Holders of Securities
    	
 
    	
16
    
	
Section 2.06 . Transfer and Exchange
    	
 
    	
16
    
	
Section 2.07 . Replacement Securities
    	
 
    	
17
    
	
Section 2.08 . Outstanding Securities
    	
 
    	
18
    
	
Section 2.09 . Treasury Securities
    	
 
    	
18
    
	
Section 2.10 . Temporary Securities
    	
 
    	
19
    
	
Section 2.11 . Cancellation
    	
 
    	
19
    
	
Section 2.12 . Additional Transfer and Exchange Requirements
    	
 
    	
19
    
	
Section 2.13 . CUSIP Numbers
    	
 
    	
21
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
 
    	
 
    
	
NO REDEMPTION; REPURCHASE UPON A FUNDAMENTAL CHANGE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 3.01 . No Optional Redemption
    	
 
    	
22
    
	
Section 3.02 . Repurchase of Securities at Option of the Holder upon a   Fundamental Change
    	
 
    	
22
    
	
Section 3.03 . Effect of Fundamental Change Repurchase Notice
    	
 
    	
24
    
	
Section 3.04 . Deposit of Fundamental Change Repurchase Price
    	
 
    	
25
    
	
Section 3.05 . Repayment to the Company
    	
 
    	
26
    
	
Section 3.06 . Securities Purchased in Part
    	
 
    	
26
    
	
Section 3.07 . Compliance with Securities Laws upon Purchase of Securities
    	
 
    	
26
    
	
Section 3.08 . Purchase of Securities in Open Market
    	
 
    	
26
    


 

i











 

	
ARTICLE 4
    	
 
    	
 
    
	
CONVERSION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 4.01 . Conversion Privilege and Conversion Rate
    	
 
    	
27
    
	
Section 4.02 . Conversion Procedure
    	
 
    	
29
    
	
Section 4.03 . Fractional Shares
    	
 
    	
30
    
	
Section 4.04 . Taxes on Conversion
    	
 
    	
30
    
	
Section 4.05 . Company to Provide Stock
    	
 
    	
30
    
	
Section 4.06 . Adjustment of Conversion Rate
    	
 
    	
31
    
	
Section 4.07 . No Adjustment
    	
 
    	
40
    
	
Section 4.08 . Notice of Adjustment
    	
 
    	
41
    
	
Section 4.09 . Notice of Certain Transactions
    	
 
    	
41
    
	
Section 4.10 . Effect of Recapitalization, Reclassification, Consolidation,   Merger or Sale
    	
 
    	
41
    
	
Section 4.11 . Trustee’s Disclaimer
    	
 
    	
42
    
	
Section 4.12 . Voluntary Increase
    	
 
    	
43
    
	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
 
    	
 
    
	
SUBORDINATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 5.01 . Agreement of Subordination
    	
 
    	
43
    
	
Section 5.02 . Payments to Holders
    	
 
    	
43
    
	
Section 5.03 . Subrogation of Securities
    	
 
    	
46
    
	
Section 5.04 . Authorization to Effect Subordination
    	
 
    	
47
    
	
Section 5.05 . Notice to Trustee
    	
 
    	
47
    
	
Section 5.06 . Trustee’s Relation to Senior Indebtedness
    	
 
    	
48
    
	
Section 5.07 . No Impairment of Subordination
    	
 
    	
48
    
	
Section 5.08 . Certain Conversions Deemed Payment
    	
 
    	
49
    
	
Section 5.09 . Article Applicable to Paying Agents
    	
 
    	
49
    
	
Section 5.10 . Senior Indebtedness Entitled to Rely
    	
 
    	
49
    
	
Section 5.11 . Reliance on Judicial Order or Certificate of Liquidating Agent
    	
 
    	
49
    
	
Section 5.12 . Rights of Trustee as Holder of Senior Indebtedness; Preservation   of Trustee’s Rights
    	
 
    	
50
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
 
    	
 
    
	
COVENANTS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 6.01 . Payment of Securities
    	
 
    	
50
    
	
Section 6.02 . SEC and Other Reports
    	
 
    	
51
    
	
Section 6.03 . Compliance Certificates
    	
 
    	
51
    
	
Section 6.04 . Further Instruments and Acts
    	
 
    	
52
    
	
Section 6.05 . Maintenance of Corporate Existence
    	
 
    	
52
    
	
Section 6.06 . Stay, Extension and Usury Laws
    	
 
    	
52
    
	
Section 6.07 . Maintenance of Office or Agency
    	
 
    	
52
    


 

 

ii











 

	
ARTICLE 7
    	
 
    	
 
    
	
CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER OR LEASE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 7.01 . Company May Consolidate, Etc., Only on Certain Terms
    	
 
    	
53
    
	
Section 7.02 . Successor Substituted
    	
 
    	
53
    
	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
 
    	
 
    
	
DEFAULT AND REMEDIES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 8.01 . Events of Default
    	
 
    	
54
    
	
Section 8.02 . Acceleration
    	
 
    	
56
    
	
Section 8.03 . Other Remedies
    	
 
    	
57
    
	
Section 8.04 . Waiver of Defaults and Events of Default
    	
 
    	
57
    
	
Section 8.05 . Control by Majority
    	
 
    	
57
    
	
Section 8.06 . Limitations on Suits
    	
 
    	
58
    
	
Section 8.07 . Rights of Holders to Receive Payment and to Convert
    	
 
    	
58
    
	
Section 8.08 . Collection Suit by Trustee
    	
 
    	
58
    
	
Section 8.09 . Trustee May File Proofs of Claim
    	
 
    	
59
    
	
Section 8.10 . Priorities
    	
 
    	
59
    
	
Section 8.11 . Undertaking for Costs
    	
 
    	
60
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
 
    	
 
    
	
TRUSTEE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 9.01 . Obligations of Trustee
    	
 
    	
60
    
	
Section 9.02 . Rights of Trustee
    	
 
    	
61
    
	
Section 9.03 . Individual Rights of Trustee
    	
 
    	
63
    
	
Section 9.04 . Trustee’s Disclaimer
    	
 
    	
63
    
	
Section 9.05 . Notice of Default or Events of Default
    	
 
    	
63
    
	
Section 9.06 . Reports by Trustee to Holders
    	
 
    	
63
    
	
Section 9.07 . Compensation and Indemnity
    	
 
    	
64
    
	
Section 9.08 . Replacement of Trustee
    	
 
    	
65
    
	
Section 9.09 . Successor Trustee by Merger, Etc.
    	
 
    	
66
    
	
Section 9.10 . Eligibility; Disqualification
    	
 
    	
66
    
	
Section 9.11 . Preferential Collection of Claims Against Company
    	
 
    	
66
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
 
    	
 
    
	
SATISFACTION AND DISCHARGE OF INDENTURE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 10.01 . Satisfaction and Discharge of Indenture
    	
 
    	
66
    
	
Section 10.02 . Application of Trust Money
    	
 
    	
67
    
	
Section 10.03 . Repayment to Company
    	
 
    	
67
    
	
Section 10.04 . Reinstatement
    	
 
    	
68
    


 

iii











 

	
ARTICLE 11
    	
 
    	
 
    
	
AMENDMENTS; SUPPLEMENTS AND WAIVERS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 11.01 . Without Consent of Holders
    	
 
    	
68
    
	
Section 11.02 . With Consent of Holders
    	
 
    	
69
    
	
Section 11.03 . Compliance with Trust Indenture Act
    	
 
    	
70
    
	
Section 11.04 . Revocation and Effect of Consents
    	
 
    	
70
    
	
Section 11.05 . Notation on or Exchange of Securities
    	
 
    	
70
    
	
Section 11.06 . Trustee to Sign Amendments, Etc.
    	
 
    	
71
    
	
Section 11.07 . Effect of Supplemental Indentures
    	
 
    	
71
    
	
 
    	
 
    	
 
    
	
ARTICLE 12
    	
 
    	
 
    
	
MISCELLANEOUS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Section 12.01 . Trust Indenture Act Controls
    	
 
    	
71
    
	
Section 12.02 . Notices
    	
 
    	
71
    
	
Section 12.03 . Communications by Holders with Other Holders
    	
 
    	
73
    
	
Section 12.04 . Certificate and Opinion as to Conditions Precedent
    	
 
    	
73
    
	
Section 12.05 . Record Date for Vote or Consent of Holders of Securities
    	
 
    	
74
    
	
Section 12.06 . Rules by Trustee, Paying Agent, Registrar and Conversion Agent
    	
 
    	
74
    
	
Section 12.07 . Legal Holidays
    	
 
    	
74
    
	
Section 12.08 . Governing Law
    	
 
    	
75
    
	
Section 12.09 . No Adverse Interpretation of Other Agreements
    	
 
    	
75
    
	
Section 12.10 . No Recourse Against Others
    	
 
    	
75
    
	
Section 12.11 . No Security Interest Created
    	
 
    	
75
    
	
Section 12.12 . Successors
    	
 
    	
75
    
	
Section 12.13 . Multiple Counterparts
    	
 
    	
75
    
	
Section 12.14 . Separability
    	
 
    	
75
    
	
Section 12.15 . Table of Contents, Headings, Etc.
    	
 
    	
75
    
	
Section 12.16 . Waiver of Jury Trial
    	
 
    	
76
    
	
Section 12.17 . Force Majeure
    	
 
    	
76
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
 
    	
A-1
    


 

iv











 

CROSS REFERENCE TABLE*

 

	
TIA Section
    	
 
    	
Indenture Section
    
	
 
    	
 
    	
 
    
	
Section 310
    	
 
    	
12.01
    
	
310(a)(1)
    	
 
    	
9.10
    
	
(a)(2)
    	
 
    	
9.10
    
	
(a)(3)
    	
 
    	
N/A
    
	
(a)(4)
    	
 
    	
N/A
    
	
(a)(5)
    	
 
    	
9.10
    
	
(b)
    	
 
    	
9.10
    
	
(c)
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    
	
Section 311
    	
 
    	
12.01
    
	
311(a)
    	
 
    	
9.11
    
	
(b)
    	
 
    	
9.11
    
	
(c)
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    
	
Section 312
    	
 
    	
12.01
    
	
312(a)
    	
 
    	
N/A
    
	
(b)
    	
 
    	
12.03
    
	
(c)
    	
 
    	
12.03
    
	
 
    	
 
    	
 
    
	
Section 313
    	
 
    	
12.01
    
	
313(a)
    	
 
    	
9.06(a)
    
	
(b)(1)
    	
 
    	
N/A
    
	
(b)(2)
    	
 
    	
9.06(a)
    
	
(c)
    	
 
    	
9.06(a)
    
	
(d)
    	
 
    	
9.06(a)
    
	
 
    	
 
    	
 
    
	
Section 314
    	
 
    	
12.01
    
	
314(a)
    	
 
    	
6.02(a)
    
	
(b)
    	
 
    	
N/A
    
	
(c)(1)
    	
 
    	
12.04
    
	
(c)(2)
    	
 
    	
12.04
    
	
(c)(3)
    	
 
    	
N/A
    
	
(d)
    	
 
    	
N/A
    
	
(e)
    	
 
    	
12.04
    
	
(f)
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    
	
Section 315
    	
 
    	
12.01
    
	
315(a)
    	
 
    	
9.01(b)
    
	
(b)
    	
 
    	
9.05
    
	
(c)
    	
 
    	
9.01(a)
    
	
(d)(1)
    	
 
    	
9.01(d)
    


 

v











 

	
TIA Section
    	
 
    	
Indenture Section
    
	
 
    	
 
    	
 
    
	
(d)(2)
    	
 
    	
9.01(d)
    
	
(d)(3)
    	
 
    	
9.01(d)
    
	
(e)
    	
 
    	
8.11
    
	
 
    	
 
    	
 
    
	
Section 316
    	
 
    	
12.01
    
	
316(a)
    	
 
    	
2.09
    
	
316(a)(1)(A)
    	
 
    	
8.05
    
	
316(a)(1)(B)
    	
 
    	
8.04
    
	
316(a)(2)
    	
 
    	
N/A
    
	
(b)
    	
 
    	
8.07
    
	
(c)
    	
 
    	
12.05
    
	
 
    	
 
    	
 
    
	
Section 317
    	
 
    	
12.01
    
	
317(a)(1)
    	
 
    	
8.08
    
	
317(a)(2)
    	
 
    	
8.09
    
	
317(b)
    	
 
    	
2.04
    
	
 
    	
 
    	
 
    
	
Section 318(a)
    	
 
    	
12.01
    
	
318(c)
    	
 
    	
12.01
    


 




* This Cross-Reference Table shall not, for any purpose, be deemed a part of this Indenture.

** N.A.  means Not Applicable

 

vi









 

THIS INDENTURE dated as of January [·], 2013 is between Theravance, Inc., a corporation duly organized under the laws of the State of Delaware (the “Company”), and The Bank of New York Mellon Trust Company, N.A., a national banking association duly organized and existing under the laws of the United States of America, as Trustee (the “Trustee”).

 

In consideration of the purchase of the Securities (as defined herein) by the Holders thereof, both parties agree as follows for the benefit of the other and for the equal and ratable benefit of the Holders of the Company’s [·]% Convertible Subordinated Notes Due 2023.

 

ARTICLE 1
  DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

“Affiliate” means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person.  For the purposes of this definition, “control” when used with respect to any person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent” means any Registrar, Paying Agent or Conversion Agent.

 

“Applicable Procedures” means, with respect to any transfer or exchange of beneficial ownership interests in a Global Security, the rules and procedures of the Depositary, to the extent applicable to such transfer or exchange.

 

“Beneficial Ownership” means the definition such term is given in accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act.

 

“Board of Directors” means either the board of directors of the Company or any committee of the Board of Directors authorized to act for it with respect to this Indenture.

 

“Business Day” means any weekday that is not a day on which banking institutions in the City of New York are authorized or obligated to close.

 

“Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, but excluding any debt securities convertible into such equity.

 

“Cash” or “cash” means such coin or currency of the United States as at any time of payment is legal tender for the payment of public and private debts.

 

“Certificated Security” means a Security that is in substantially the form attached as Exhibit A but that does not include the legend or the schedule called for by footnote 1 thereof.

 











 

“Change of Control” means the occurrence of any of the following after the original issuance of the Securities: (i) the acquisition by any Person of Beneficial Ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of the Company’s Capital Stock entitling that Person to exercise 50% or more of the total voting power of all shares of the Company’s Capital Stock entitled to vote generally in elections of directors, other than any acquisition by the Company, any of its subsidiaries or any of its employee benefit plans; (ii) the consolidation or merger of the Company with or into any other Person, any merger of another Person into the Company, any reclassification or recapitalization, or any conveyance, transfer, sale, lease or other disposition of all or substantially all of the Company’s properties and assets to another Person other than to one or more of the Company’s wholly-owned subsidiaries, provided that this clause (ii) shall not apply to (A) any transaction (x) that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of the Company’s Capital Stock and (y) pursuant to which holders of the Company’s Capital Stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of the Company’s Capital Stock entitled to vote generally in elections of directors of the continuing or surviving Person immediately after the transaction; or (B) any merger solely for the purpose of changing the Company’s jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity; (iii) if, during any consecutive two-year period, individuals who at the beginning of that two-year period constituted the Company’s Board of Directors, together with any new directors whose election to the Company’s Board of Directors, or whose nomination for election by the Company’s stockholders, was approved by a vote of a majority 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 Company’s Board of Directors then in office; or (iv) the stockholders of the Company pass a resolution approving a plan of liquidation or dissolution.  Notwithstanding anything to the contrary set forth herein, it will not otherwise constitute a Change of Control if at least 90% of the consideration for the Common Stock (excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights) in the transaction or transactions constituting a Change of Control consists of common stock or American Depositary Shares representing shares of common stock, in each case which are traded or quoted on The New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors), or which will be so traded or quoted when issued or exchanged in connection with the Change of Control, and as a result of such transaction or transactions the Securities become convertible solely into such consideration; provided that, with respect to an entity organized under the laws of a jurisdiction outside the United States, such entity has a worldwide total market capitalization (calculated in U.S. dollars) of its equity securities of at least two times the market capitalization of the Company before giving effect to the consolidation or merger.

 

“Closing Price” means on any Trading Day, the reported last sale price per share (or if no last sale price is reported, the average of the bid and ask prices per share or, if more than one in either case, the average of the average bid and the average ask prices per share) on such date

 

2











 

reported by the NASDAQ Global Market or, if the Common Stock (or the applicable security) is not quoted on the NASDAQ Global Market, as reported by the principal national securities exchange on which the Common Stock (or such other security) is listed, or if no such prices are available, the Closing Price per share shall be the fair value of a share of Common Stock (or such other security) as reasonably determined by the Board of Directors (which determination shall be conclusive and shall be evidenced by an Officers’ Certificate delivered to the Trustee).

 

“Common Stock” means the common stock of the Company, par value $0.01, as it exists on the date of this Indenture and any shares of any class or classes of Capital Stock of the Company resulting from any reclassification or reclassifications thereof, or, in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, common equity interests, ordinary shares or depositary shares or other certificates representing common equity interests of such surviving corporation or its direct or indirect parent corporation, and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, however, that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable on conversion of Securities shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

 

“Company” means the party named as such in the first paragraph of this Indenture until a successor replaces it pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor.

 

“Conversion Price” per share of Common Stock as of any day means the result obtained by dividing (i) $1,000 by (ii) the then applicable Conversion Rate, rounded to the nearest cent.

 

“Conversion Rate” means the rate at which shares of Common Stock shall be delivered upon conversion, which rate shall be initially [·] shares of Common Stock for each $1,000 principal amount of Securities, as adjusted from time to time pursuant to the provisions of this Indenture.

 

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business in Los Angeles, California shall be principally administered, which office as of the date of this instrument is located at 400 South Hope Street, Suite 400, Los Angeles, California 90017, except that with respect to presentation of Notes for payment or for registration of transfer, conversion,  or exchange, such term shall mean the office or agency of the Trustee at which at any particular time its corporate agency business shall be conducted, which office at the date of this instrument is located at 101 Barclay Street, New York, New York 10286; Attention: Corporate Trust Division - Corporate Finance Unit, or, in the case of any of such offices or agency, such other address as the Trustee may designate from time to time by notice to the Holders and the Company.

 

3











 

“Default” means, when used with respect to the Securities, any event that is or, after notice or passage of time, or both, would be, an Event of Default.

 

“Designated Senior Indebtedness” means the Company’s obligations under any particular Senior Indebtedness in which the instrument creating or evidencing the same or the assumption or guarantee thereof (or related agreements or documents to which the Company is a party) expressly provides that such Indebtedness shall be “Designated Senior Indebtedness” for purposes of this Indenture (provided that such instrument, agreement or other document may place limitations and conditions on the right of such Senior Indebtedness to exercise the rights of Designated Senior Indebtedness).  If any payment made to any holder of any Designated Senior Indebtedness or its representative with respect to such Designated Senior Indebtedness is rescinded or must otherwise be returned by such holder or representative of such holder upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the reinstated Indebtedness of the Company arising as a result of such rescission or return shall constitute Designated Senior Indebtedness effective as of the date of such rescission or return.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.

 

“Final Maturity Date” means January 15, 2023.

 

“Fundamental Change” means the occurrence of a Change of Control or a Termination of Trading following the original issuance of the Securities.

 

“Fundamental Change Effective Date” means the date on which any Fundamental Change becomes effective.

 

“Fundamental Change Repurchase Price” of any Security, means 100% of the principal amount of the Security to be purchased plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change Repurchase Date.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) the statements and pronouncements of the Financial Accounting Standards Board, (iii) such other statements by such other entity as approved by a significant segment of the accounting profession and (iv) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in registration statements filed under the Securities Act and periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

 

“Global Security” means a Security in global form that is in substantially the form attached as Exhibit A and that includes the legend and schedule called for in footnote 1 thereof

 

4











 

and which is deposited with the Depositary or its custodian and registered in the name of the Depositary or its nominee.

 

“Holder” or “Holder of a Security” means the person in whose name a Security is registered on the Registrar’s books.

 

“Indebtedness” means, without duplication:

 

(i)    all of the Company’s indebtedness, obligations and other liabilities (contingent or otherwise) for borrowed money (including obligations in respect of overdrafts, foreign exchange contracts, currency exchange agreements, interest rate protection agreements, and any loans or advances from banks, whether or not evidenced by notes or similar instruments) or evidenced by credit or loan agreements, bonds, debentures, notes or similar instruments (whether or not the recourse of the lender is to the whole of the Company’s assets or to only a portion thereof), other than any trade accounts payable or other accrued current expense incurred in the ordinary course of business in connection with the obtaining of materials or services;

 

(ii)   all of the Company’s reimbursement obligations and other liabilities (contingent or otherwise) with respect to letters of credit, bank guarantees or bankers’ acceptances;

 

(iii)  all of the Company’s obligations and liabilities (contingent or otherwise)

 

(A)         in respect of leases required, in conformity with GAAP, to be accounted for as capitalized lease obligations on the Company’s balance sheet,

 

(B)         as lessee under other leases for facilities equipment (and related assets leased together therewith), whether or not capitalized, entered into or leased for financing purposes (as determined by the Company), or

 

(C)         under any lease or related document (including a purchase agreement) in connection with the lease of real property or improvements (or any personal property included as part of any such lease) that provides that the Company is contractually obligated to purchase or cause a third party to purchase the leased property and thereby guarantee a minimum residual value of the leased property to the lessor and all of the Company’s obligations under such lease or related document to purchase or to cause a third party to purchase such leased property (whether or not such lease transaction is characterized as an operating lease or a capitalized lease in accordance with GAAP);

 

(iv)  all of the Company’s obligations (contingent or otherwise) with respect to an interest rate, currency or other swap, cap, floor or collar agreement, hedge agreement, forward contract, or other similar instrument or foreign currency hedge, exchange, purchase or similar instrument or agreement;

 

5











 

(v)   all of the Company’s direct or indirect guarantees, agreements to be jointly liable or similar agreements in respect of, and obligations or liabilities (contingent or otherwise) to purchase or otherwise acquire or otherwise assure a creditor against loss in respect of, indebtedness, obligations or liabilities of another person of the kind described in clauses (i) through (iv);

 

(vi)  any indebtedness or other obligations described in clauses (i) through (v) secured by any mortgage, pledge, lien or other encumbrance existing on property which is owned or held by the Company, regardless of whether the indebtedness or other obligation secured thereby shall be assumed by the Company; and

 

(vii) any and all deferrals, renewals, extensions and refundings of, or amendments, modifications or supplements to, any indebtedness, obligation or liability of the kind described in clauses (i) through (vi).

 

“Indenture” means this Indenture as amended or supplemented from time to time pursuant to the terms of this Indenture, including the provisions of the TIA that are automatically deemed to be a part of this Indenture by operation of the TIA.

 

“Interest Payment Date” means January 15 and July 15 of each year, commencing July 15, 2013.

 

“Issue Date” of any Security means the date on which the Security was originally issued or deemed issued as set forth on the face of the Security.

 

“Last Reported Sale Price” on any date means the closing sale price per share of the Common Stock (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average asked prices) on that date as reported in composite transactions for the principal U.S.  national or regional securities exchange on which the Common Stock is listed for trading.  If the Common Stock is not listed for trading on a U.S.  national or regional securities exchange on the relevant date, the “Last Reported Sale Price” will be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization.  If the Common Stock is not so quoted, the “Last Reported Sale Price” will be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the President, any Senior Vice President, the Chief Financial Officer, the Controller, the Secretary, or any Assistant Controller or any Assistant Secretary of the Company designated by one of the former officers.

 

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers, and delivered to the Trustee; provided, however, that for purposes of Sections 4.11 and

 

6











 

6.03, “Officers’ Certificate” means a certificate signed by (a) the principal executive officer, principal financial officer or principal accounting officer of the Company and (b) one other Officer.

 

“Opinion of Counsel” means a written opinion from legal counsel.  The counsel may be an employee of or counsel to the Company.

 

“Person” or “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, any s group within the meaning of Section 13(d) of the Exchange Act or any other entity.

 

“Principal” or “principal” of a debt security, including the Securities, means the principal of the security plus, when appropriate, the premium, if any, on the security.

 

“Regular Record Date” means, with respect to each Interest Payment Date, the January 1 or July 1, as the case may be, next preceding such Interest Payment Date.

 

“Responsible Officer” means, when used with respect to the Trustee, any officer assigned to the Corporate Trust Division - Corporate Finance Unit (or any successor division or unit) of the Trustee located at the Corporate Trust Office of the Trustee, who shall have direct responsibility for the administration of this Indenture, and for the purposes of Section 9.01(d)(ii) and the second sentence of Section 9.05  shall also include any other officer of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” means the up to $250,000,000 aggregate principal amount ($287,500,000 aggregate principal amount if the Underwriters exercise their over-allotment option to purchase up to an additional $37,500,000 aggregate principal amount of notes in full) of [·]% Convertible Subordinated Notes due 2023, or any of them (each a “Security”), as amended or supplemented from time to time, that are issued under this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, as in effect from time to time.

 

“Securities Custodian” means the Trustee, as custodian with respect to the Securities in global form, or any successor thereto.

 

“Senior Indebtedness” means the principal of, premium, if any, interest (including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether or not a claim for postpetition interest is allowable as a claim in any such proceeding) and rent payable on or in connection with, and all fees, costs, expenses and other amounts accrued or due on or in connection with, Indebtedness of the Company, whether secured or unsecured, absolute or contingent, due or to become due, outstanding on the date of this

 

7











 

Indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Company, including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the foregoing, unless in the case of any particular Indebtedness the instrument creating or evidencing the same or the assumption or guarantee thereof expressly provides that such Indebtedness shall not be senior in right of payment to the Securities or expressly provides that such Indebtedness is on the same basis or junior to the Securities.  Senior Indebtedness does not include:

 

(i)            Indebtedness that expressly provides that such Indebtedness shall not be senior in right of payment to the Securities or expressly provides that such Indebtedness is on the same basis or junior in right of payment to the Securities;

 

(ii)           Indebtedness that is expressly subordinated to any Senior Indebtedness;

 

(iii)          Indebtedness subordinated by operation of law;

 

(iv)          trade payables and accrued expenses of the Company (including, without limitation, accrued compensation and accrued restructuring charges) or deferred purchase price for goods, service or materials purchased or provided in the ordinary course of business;

 

(v)           lease obligations other than those described in clause (iii) of the definition of “Indebtedness” above;

 

(vi)          any Indebtedness of the Company to or among any of its subsidiaries; and

 

(vii)         any obligation for federal, state, local or other taxes.

 

“Stock Price” means the price paid, or deemed to be paid, per share of the Common Stock in connection with a Fundamental Change as determined pursuant to Section 4.01(e).

 

“Subsidiary” means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (a) such Person; (b) such Person and one or more Subsidiaries of such Person; or (c) one or more Subsidiaries of such Person.

 

“Termination of Trading” means the termination (but not the temporary suspension) of trading of the Common Stock, which will be deemed to have occurred if the Common Stock or other common stock into which the Securities are convertible is not listed or quoted for trading on The New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors), and no American Depository Shares or similar instruments for such Common Stock or such other common stock into which the Securities are convertible are so listed or approved for listing in the United States.

 

8











 

“TIA” means the Trust Indenture Act of 1939, as amended, and the rules and regulations thereunder as in effect on the date of this Indenture, except to the extent that the Trust Indenture Act or any amendment thereto expressly provides for application of the Trust Indenture Act as in effect on another date.

 

“Trading Day” means any day on which the NASDAQ Global Market or, if the Common Stock is not quoted on the NASDAQ Global Market, the principal national securities exchange on which the Common Stock is listed is open for trading or, if the Common Stock is not so listed, admitted for trading or quoted, any Business Day.  A Trading Day only includes those days that have a scheduled closing time of 4:00 p.m.  (New York City time) or the then standard closing time for regular trading on the relevant exchange or trading system.

 

“Trustee” means the party named as such in the first paragraph of this Indenture until a successor replaces it in accordance with the provisions of this Indenture, and thereafter means the successor.

 

“Underwriters” means Merrill Lynch, Pierce, Fenner & Smith Incorporated and [·].

 

“Vice President” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

 

“Voting Stock” of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency within the control of such person to satisfy) to vote in the election of directors, managers or trustees thereof.

 

Section 1.02.  Other Definitions.

 

	
Term
    	
 
    	
Defined in
   Section
    
	
“Agent Members”
    	
 
    	
2.01
    
	
“Bankruptcy Law”
    	
 
    	
8.01
    
	
“Business   Combination”
    	
 
    	
4.10
    
	
“Company Order”
    	
 
    	
2.02
    
	
“Conversion Agent”
    	
 
    	
2.03
    
	
“Conversion Date”
    	
 
    	
4.02
    
	
“Current Market   Price”
    	
 
    	
4.06
    
	
“DTC”
    	
 
    	
2.01
    
	
“Depositary”
    	
 
    	
2.01
    


 

9











 

	
Term
    	
 
    	
Defined in
   Section
    
	
“Distributed   Securities”
    	
 
    	
4.06
    
	
“Event of Default”
    	
 
    	
8.01
    
	
“Expiration Date”
    	
 
    	
4.06
    
	
“Expiration Time”
    	
 
    	
4.06
    
	
“Fundamental   Change Company Notice”
    	
 
    	
Section 3.02
    
	
“Fundamental   Change Repurchase Date”
    	
 
    	
Section 3.02
    
	
“Fundamental   Change Repurchase Notice”
    	
 
    	
Section 3.02
    
	
“Legal Holiday”
    	
 
    	
12.07
    
	
“Legend”
    	
 
    	
2.12
    
	
“Make Whole   Premium”
    	
 
    	
4.01
    
	
“Notice of   Default”
    	
 
    	
8.01
    
	
“Paying Agent”
    	
 
    	
2.03
    
	
“Payment Blockage   Notice”
    	
 
    	
5.02
    
	
“Primary   Registrar”
    	
 
    	
2.03
    
	
“Underwriting   Agreement”
    	
 
    	
2.01
    
	
“Purchased Shares”
    	
 
    	
4.06
    
	
“record date”
    	
 
    	
4.06
    
	
“Receiver”
    	
 
    	
8.01
    
	
“Registrar”
    	
 
    	
2.03
    
	
“Resale   Restriction Termination Date”
    	
 
    	
2.12
    
	
“Rights”
    	
 
    	
4.06
    
	
“Rights Plan”
    	
 
    	
4.06
    
	
“Spinoff   Securities”
    	
 
    	
4.06
    
	
“Spinoff Valuation   Period”
    	
 
    	
4.06
    
	
“tender offer”
    	
 
    	
4.06
    
	
“Triggering   Distribution”
    	
 
    	
4.06
    


 

10




 






 

Section 1.03.  Trust Indenture Act Provisions.

 

Whenever this Indenture refers to a provision of the TIA, that provision is incorporated by reference in and made a part of this Indenture.  This Indenture shall also include those provisions of the TIA required to be included herein by the provisions of the Trust Indenture Reform Act of 1990.  The following TIA terms used in this Indenture have the following meanings:

 

“indenture securities” means the Securities;

 

“indenture security holder” means a Holder of a Security;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Trustee; and

 

“obligor” on the indenture securities means the Company or any other obligor on the Securities.

 

All other terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute or defined by any SEC rule and not otherwise defined herein have the meanings assigned to them therein.

 

Section 1.04.  Rules of Construction.

 

(a)                       Unless the context otherwise requires:

 

(i)                       a term has the meaning assigned to it;

 

(ii)                    an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(iii)                 words in the singular include the plural, and words in the plural include the singular;

 

(iv)                provisions apply to successive events and transactions;

 

(v)                   the term “merger” includes a statutory share exchange and the term “merged” has a correlative meaning;

 

(vi)                the masculine gender includes the feminine and the neuter;

 

(vii)             references to agreements and other instruments include subsequent amendments thereto; and

 

(viii)          all “Article”, “Exhibit” and “Section” references are to Articles, Exhibits and Sections, respectively, of or to this Indenture unless otherwise specified herein, and

 

11











 

the terms “herein,” “hereof” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

ARTICLE 2
  THE SECURITIES

 

Section 2.01.  Form and Dating.

 

The Securities and the Trustee’s certificate of authentication shall be substantially in the respective forms set forth in Exhibit A which Exhibit is incorporated in and made part of this Indenture.  The Securities may have notations, legends or endorsements required by law, stock exchange or automated quotation system rule or regulation or usage.  The Company shall provide any such notations, legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its authentication.  The Securities are being offered and sold by the Company pursuant to an underwriting agreement dated January [·], 2013 (the “Underwriting Agreement”) between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the Underwriters.  The terms and provisions contained in the Securities shall constitute, and are hereby expressly made, a part of this Indenture, and the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Security conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(a)                       Global Securities.  All of the Securities shall be issued initially in the form of one or more Global Securities, which shall be deposited on behalf of the purchasers of the securities represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the depositary, The Depository Trust Company (“DTC”, and such depositary, or any successor thereto, being hereinafter referred to as the “Depositary”), and registered in the name of its nominee, Cede & Co.  (or any successor thereto), for the accounts of participants in the Depositary, duly executed by the Company and authenticated by the Trustee as hereinafter provided.

 

(b)                       Global Securities in General.  Each Global Security shall represent such of the outstanding Securities as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect replacements, exchanges, purchases or conversions of such Securities.  Any adjustment of the aggregate principal amount of a Global Security to reflect the amount of any increase or decrease in the amount of outstanding Securities represented thereby shall be made by the Trustee in accordance with instructions given by the Holder thereof as required by Section 2.12 and shall be made on the records of the Trustee and the Depositary.

 

12











 

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or under the Global Security, and the Depositary (including, for this purpose, its nominee) may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall (i) prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or (ii) impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Security.

 

None of the Trustee, the Paying Agent, the Conversion Agent or the Registrar shall have any responsibility or obligation to any beneficial owner in a Global Security, an Agent Member or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any Agent Member, with respect to any ownership interest in the Securities or with respect to the delivery to any Agent Member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Securities.  All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities and this Indenture shall be given or made only to or upon the order of the registered holders (which shall be the Depositary or its nominee in the case of the Global Security).  The rights of beneficial owners in the Global Security shall be exercised only through the Depositary subject to the Applicable Procedures.  The Trustee, the Paying Agent, the Conversion Agent and the Registrar shall be entitled to rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.  The Trustee, the Paying Agent, the Conversion Agent and the Registrar shall be entitled to deal with the Depositary, and any nominee thereof, that is the registered holder of any Global Security for all purposes of this Indenture relating to such Global Security (including the payment of principal, premium, if any, and interest and additional amounts, if any, and the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Security) as the sole holder of such Global Security and shall have no obligations to the beneficial owners thereof.  None of the Trustee, the Paying Agent, the Conversion Agent or the Registrar shall have any responsibility or liability for any acts or omissions of the Depositary with respect to such Global Security, for the records of any such depositary, including records in respect of beneficial ownership interests in respect of any such Global Security, for any transactions between the Depositary and any Agent Member or between or among the Depositary, any such Agent Member and/or any holder or owner of a beneficial interest in such Global Security, or for any transfers of beneficial interests in any such Global Security.

 

(c)                        Book Entry Provisions.  The Company shall execute and the Trustee shall, in accordance with this Section 2.01(c), authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of the Depositary or its nominee, (ii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instructions and (iii) shall bear legends substantially to the following effect:

 

13











 

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.  OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”

 

Section 2.02.  Execution and Authentication.

 

(a)                       The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited, pursuant to the Underwriting Agreement, to $250,000,000 aggregate principal amount ($287,500,000 aggregate principal amount if the Underwriters exercise their over-allotment option in full).

 

(b)                       An Officer shall sign the Securities for the Company by manual or facsimile signature.  Typographic and other minor errors or defects in any such facsimile signature shall not affect the validity or enforceability of any Security that has been authenticated and delivered by the Trustee.

 

(c)                        If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

 

(d)                       A Security shall not be valid until an authorized signatory of the Trustee by manual signature signs the certificate of authentication on the Security.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

 

(e)                        The Trustee shall authenticate and make available for delivery Securities for original issue in the aggregate principal amount of up to $250,000,000 aggregate principal amount ($287,500,000 aggregate principal amount if the Underwriters exercise their over-

 

14











 

allotment option in full by executing an over-allotment exercise notice and delivering such executed over-allotment exercise notice to the Trustee and the Company) upon receipt of a written order or orders of the Company signed by an Officer of the Company (a “Company Order”).  The Company Order shall specify the amount of Securities to be authenticated, shall provide that all such Securities will be represented by a Global Security and the date on which each original issue of Securities is to be authenticated.

 

(f)                         The Trustee shall act as the initial authenticating agent.  Thereafter, the Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  An authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent shall have the same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

(g)                        The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 principal amount and any integral multiple thereof.

 

Section 2.03  Registrar, Paying Agent and Conversion Agent.

 

(a)                       The Company shall maintain one or more offices or agencies where Securities may be presented for registration of transfer or for exchange (each, a “Registrar”), one or more offices or agencies where Securities may be presented for payment (each, a “Paying Agent”), one or more offices or agencies where Securities may be presented for conversion (each, a “Conversion Agent”) and one or more offices or agencies where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.  The Company will at all times maintain a Paying Agent, Conversion Agent, Registrar and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.  One of the Registrars (the “Primary Registrar”) shall keep a register of the Securities and of their transfer and exchange.  The Company shall provide written notice to the Trustee of any Registrar, Securities Agent, Conversion Agent or Paying Agent that is not also the Trustee.

 

(b)                       The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture, provided that the Agent may be an Affiliate of the Trustee.  The agreement shall implement the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture.  If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent, or agent for service of notices and demands in any place required by this Indenture, or fails to give the foregoing notice, the Trustee shall act as such.  The Company or any Affiliate of the Company may act as Paying Agent (except for the purposes of Section 6.01 and Article 10).

 

(c)                        The Company hereby initially designates the Trustee as Paying Agent, Registrar, Securities Custodian and Conversion Agent, and designates the Corporate Trust Office of the Trustee as an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture shall be served.

 

15











 

Section 2.04.  Paying Agent to Hold Money in Trust.

 

Prior to 12:00 p.m.  (noon), New York City time, on each due date of the payment of principal of, or interest on, any Securities, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal or interest so becoming due.  Subject to Section 8.02, a Paying Agent shall hold in trust for the benefit of Holders of Securities or the Trustee all money held by the Paying Agent for the payment of principal of, or interest on, the Securities, and shall notify the Trustee of any failure by the Company (or any other obligor on the Securities) to make any such payment.  If the Company or an Affiliate of the Company acts as Paying Agent, it shall, before 12:00 p.m.  (noon), New York City time, on each due date of the principal of, or interest on, any Securities, segregate the money and hold it as a separate trust fund.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee, and the Trustee may at any time during the continuance of any Default, upon written request to a Paying Agent, require such Paying Agent to pay forthwith to the Trustee all sums so held in trust by such Paying Agent.  Upon doing so, the Paying Agent (other than the Company) shall have no further liability for the money.

 

Section 2.05.  Lists of Holders of Securities.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of Securities.  If the Trustee is not the Primary Registrar, the Company shall furnish to the Trustee on or before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of Securities.

 

Section 2.06.  Transfer and Exchange.

 

(a)                       Subject to compliance with any applicable additional requirements contained in Section 2.12, when a Security is presented to a Registrar with a request to register a transfer thereof or to exchange such Security for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested; provided, however, that every Security presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by an assignment form and, if applicable, a transfer certificate each in the form included in Exhibit A, and completed in a manner satisfactory to the Registrar and duly executed by the Holder thereof or its attorney duly authorized in writing.  To permit registration of transfers and exchanges, upon surrender of any Security for registration of transfer or exchange at an office or agency maintained pursuant to Section 2.03, the Company shall execute and the Trustee shall authenticate Securities of a like aggregate principal amount at the Registrar’s request.  Any exchange or transfer shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto; provided that this sentence shall not apply to any exchange pursuant to Section 2.10, 2.12(a), 3.06, 4.02(e) or 11.05.

 

16











 

(b)                       Neither the Company, any Registrar nor the Trustee shall be required to exchange or register a transfer of any Securities or portions thereof in respect of which a Fundamental Change Repurchase Notice has been delivered and not withdrawn by the Holder thereof (except, in the case of the purchase of a Security in part, the portion thereof not to be purchased).

 

(c)                        All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.

 

(d)                       Any Registrar appointed pursuant to Section 2.03 shall provide to the Trustee such information as the Trustee may reasonably require in connection with the delivery by such Registrar of Securities upon transfer or exchange of Securities.

 

(e)                        Each Holder of a Security agrees to indemnify and hold harmless the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder’s Security in violation of any provision of this Indenture and/or applicable United States federal or state securities law.

 

(f)                         The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Agent Members or other beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Section 2.07.  Replacement Securities.

 

(a)                       If any mutilated Security is surrendered to the Company, a Registrar or the Trustee, and the Company, a Registrar and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Company, the applicable Registrar and the Trustee such security or indemnity as will be required by them to save each of them harmless, then, in the absence of notice to the Company, such Registrar or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute, and upon its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

 

(b)                       If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, or is about to be purchased by the Company pursuant to Article 3, or converted pursuant to Article 4, the Company in its discretion may, instead of issuing a new Security, pay, purchase or convert such Security, as the case may be.

 

17











 

(c)                        Upon the issuance of any new Securities under this Section 2.07, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the reasonable fees and expenses of the Trustee or the Registrar) in connection therewith.

 

(d)                       Every new Security issued pursuant to this Section 2.07 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

 

(e)                        The provisions of this Section 2.07 are (to the extent lawful) exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

Section 2.08.  Outstanding Securities.

 

(a)                       Securities outstanding at any time are all Securities authenticated by the Trustee, except for those canceled by it, those purchased pursuant to Article 3, those converted pursuant to Article 4, those delivered to the Trustee for cancellation or surrendered for transfer or exchange and those described in this Section 2.08 as not outstanding.

 

(b)                       If a Paying Agent (other than the Company or an Affiliate of the Company) holds in respect of the outstanding Securities on a Fundamental Change Repurchase Date or the Final Maturity Date money sufficient to pay the principal of (including premium, if any) and accrued interest on Securities (or portions thereof) payable on that date, then on and after such Fundamental Change Repurchase Date or Final Maturity Date, as the case may be, such Securities (or portions thereof, as the case may be) shall cease to be outstanding and cash interest on them shall cease to accrue.

 

(c)                        Subject to the restrictions contained in Section 2.09, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.

 

Section 2.09.  Treasury Securities.

 

In determining whether the Holders of the required principal amount of Securities have concurred in any notice, direction, waiver or consent, Securities owned by the Company or any other obligor on the Securities or by any Affiliate of the Company or of such other obligor shall be disregarded, except that, for purposes of determining whether the Trustee shall be protected in relying on any such notice, direction, waiver or consent, only Securities which a Responsible Officer of the Trustee with responsibility for this Indenture actually knows are so owned shall be so disregarded.  Securities so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Securities and that the pledgee is not the Company or any other obligor on the Securities or any Affiliate of the Company or of such other obligor.

 

18











 

Section 2.10.  Temporary Securities.

 

Until definitive Securities are ready for delivery, the Company may prepare and execute, and, upon receipt of a Company Order, the Trustee shall authenticate and deliver, temporary Securities.  Temporary Securities shall be substantially in the form of definitive securities but may have variations that the Company with the consent of the Trustee considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate and deliver definitive Securities in exchange for temporary Securities.

 

Section 2.11.  Cancellation.

 

The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee or its agent any Securities surrendered to them for transfer, exchange, purchase, payment or conversion.  The Trustee and no one else shall promptly cancel, in accordance with its standard procedures, all Securities surrendered for transfer, exchange, purchase, payment, conversion or cancellation and shall dispose of the cancelled Securities in accordance with its customary procedures or deliver the canceled Securities to the Company upon its request therefor.  All Securities which are purchased or otherwise acquired by the Company or any of its Subsidiaries prior to the Final Maturity Date pursuant to Article 3 shall be delivered to the Trustee for cancellation, and the Company may not hold or resell such Securities or issue any new Securities to replace any such Securities or any Securities that any Holder has converted pursuant to Article 4.

 

Section 2.12.  Additional Transfer and Exchange Requirements.

 

(a)                       A Global Security may not be transferred, in whole or in part, to any Person other than the Depositary or a nominee or any successor thereof, and no such transfer to any such other Person may be registered; provided that the foregoing shall not prohibit any transfer of a Security that is issued in exchange for a Global Security but is not itself a Global Security.  No transfer of a Security to any Person shall be effective under this Indenture or the Securities unless and until such Security has been registered in the name of such Person.  Notwithstanding any other provisions of this Indenture or the Securities, transfers of a Global Security, in whole or in part, shall be made only in accordance with this Section 2.12.

 

(b)                       The provisions of clauses (i), (ii), (iii) and (iv) below shall apply only to Global Securities:

 

(i)      Notwithstanding any other provisions of this Indenture or the Securities, a Global Security shall not be exchanged in whole or in part for a Security registered in the name of any Person other than the Depositary or one or more nominees thereof; provided that a Global Security may be exchanged for Certificated Securities registered in the names of any person designated by the Depositary in the event that (A) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or such Depositary has ceased to be a “clearing agency” registered under the Exchange Act, and a successor Depositary is not appointed by the Company

 

19











 

within 90 days, (B) the Company has provided the Depositary with written notice that it has decided to discontinue use of the system of book-entry transfer through the Depositary or any successor Depositary or (C) an Event of Default has occurred and is continuing and the owner of a beneficial interest in a Global Security requests that its Securities be exchanged for Certificated Securities.  Any Global Security exchanged pursuant to clauses (A) or (B) above shall be so exchanged in whole and not in part, and any Global Security exchanged pursuant to clause (C) above may be exchanged in whole or from time to time in part as directed by the Depositary.  Any Security issued in exchange for a Global Security or any portion thereof shall be a Global Security; provided that any such Security so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a Global Security.

 

(ii)     Securities issued in exchange for a Global Security or any portion thereof shall be issued in definitive, fully-registered book entry form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Security or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall designate and shall bear any applicable legend provided for herein.  Any Global Security to be exchanged in whole shall be surrendered by the Depositary to the Trustee, as Registrar.  With regard to any Global Security to be exchanged in part, either such Global Security shall be so surrendered for exchange or, if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Security, the principal amount thereof shall be reduced, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee.  Upon any such surrender or adjustment, the Trustee shall authenticate and deliver the Security issuable on such exchange to or upon the order of the Depositary or an authorized representative thereof; provided, however, that any Global Security surrendered for exchange shall be duly endorsed or accompanied by a written instrument of transfer in accordance with the proviso to the first paragraph of Section 2.06(a).

 

(iii)    Subject to the provisions of clause (v) below, the registered Holder may grant proxies and otherwise authorize any Person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

 

(iv)    In the event of the occurrence of any of the events specified in clause (i) above, the Company will promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form, without interest coupons.

 

(v)     Neither Agent Members nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Security registered in the name of the Depositary or any nominee thereof, or under any such Global Security, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and holder of such Global Security for all purposes whatsoever.

 

20









 

Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a holder of any Security.

 

(c)           In the event that Certificated Securities are issued in exchange for beneficial interests in Global Securities and, thereafter, the events or conditions specified in Section 2.12(b)(i) which required such exchange shall cease to exist, the Company shall deliver notice to the Trustee and to the Holders stating that Holders may exchange Certificated Securities for interests in Global Securities by complying with the procedures set forth in this Indenture and briefly describing such procedures and the events or circumstances requiring that such notice be given.  Thereafter, if Certificated Securities are presented by a Holder to a Registrar with a request:

 

(i)    to register the transfer of such Certificated Securities to a person who will take delivery thereof in the form of a beneficial interest in a Global Security; or

 

(ii)   to exchange such Certificated Securities for an equal principal amount of beneficial interests in a Global Security, which beneficial interests will be owned by the Holder transferring such Certificated Securities,

 

the Registrar shall register the transfer or make the exchange as requested by canceling such Certificated Securities and causing, or directing the Custodian to cause, the aggregate principal amount of the applicable Global Security to be increased accordingly and, if no such Global Security is then outstanding, the Company shall issue and the Trustee, upon receipt of a Company Order, shall authenticate and deliver a new Global Security; provided, however, that the Certificated Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in accordance with the proviso to the first paragraph of Section 2.06(a).

 

Section 2.13.  CUSIP Numbers.

 

The Company in issuing the Securities may use one or more “CUSIP”, “ISIN” or other similar numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in any notice of purchase as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a purchase and that reliance may be placed only on the other identification numbers printed on the Securities, and any such purchase shall not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” or other similar numbers.

 

21











 

ARTICLE 3

NO REDEMPTION; REPURCHASE UPON A FUNDAMENTAL CHANGE

 

Section 3.01.  No Optional Redemption.

 

The Company shall not have the option to redeem the Securities prior to the Final Maturity Date.  No sinking fund is provided for the Securities.

 

Section 3.02.  Repurchase of Securities at Option of the Holder upon a Fundamental Change.

 

(a)           If a Fundamental Change occurs prior to the Final Maturity Date, each Holder of a Security shall have the right, at the option of the Holder, to require the Company to repurchase for cash all or any portion of the Securities of such Holder equal to $1,000 principal amount (or an integral multiple thereof) at the Fundamental Change Repurchase Price, on the date that is not less than 30 days nor more than 45 days after the date of the Fundamental Change Company Notice pursuant to subsection 3.02(b) (the “Fundamental Change Repurchase Date”); provided that, if the Fundamental Change Repurchase Date is after the Regular Record Date for an interest payment and on or prior to the corresponding Interest Payment Date, the Company shall pay, on the corresponding Interest Payment date, accrued and unpaid interest, if any, to the Holder as of the close of business on the Regular Record date, and not to the Holder submitting the Securities for repurchase.

 

(b)           At least twenty (20) days prior to the anticipated effective date of a Fundamental Change, if practicable, but in any case as promptly as practicable, the Company shall mail a written notice of the Fundamental Change and of the resulting repurchase right to the Trustee, Paying Agent and to each Holder (and to beneficial owners as required by applicable law) (the “Fundamental Change Company Notice”).  The Fundamental Change Company Notice shall include the form of a Fundamental Change Repurchase Notice to be completed by the Holder and shall state:

 

(i)            the events causing such Fundamental Change;

 

(ii)           the date (or expected date) of such Fundamental Change;

 

(iii)          the last date by which the Fundamental Change Repurchase Notice must be delivered to elect the repurchase option pursuant to this Section 3.02;

 

(iv)          the Fundamental Change Repurchase Date;

 

(v)           the Fundamental Change Repurchase Price;

 

(vi)          the Holder’s right to require the Company to purchase the Securities;

 

(vii)         the name and address of each Paying Agent and Conversion Agent;

 

22











 

(viii)        the then effective Conversion Rate and any adjustments to the Conversion Rate resulting from such Fundamental Change;

 

(ix)          the procedures that the Holder must follow to exercise conversion rights under Article 4 and that Securities as to which a Fundamental Change Repurchase Notice has been given may be converted into Common Stock pursuant to Article 4 of this Indenture only to the extent that the Fundamental Change Repurchase Notice has been withdrawn in accordance with the terms of this Indenture;

 

(x)           the procedures that the Holder must follow to exercise rights under this Section 3.01;

 

(xi)          the procedures for withdrawing a Fundamental Change Repurchase Notice;

 

(xii)         that, unless the Company fails to pay such Fundamental Change Repurchase Price, Securities covered by any Fundamental Change Repurchase Notice will cease to be outstanding and interest will cease to accrue on and after the Fundamental Change Repurchase Date; and

 

(xiii)        the CUSIP number of the Securities.

 

At the Company’s request, the Trustee shall give such Fundamental Change Company Notice in the Company’s name and at the Company’s expense; provided, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company.  If any of the Securities is in the form of a Global Security, then the Company shall modify such notice to the extent necessary to accord with the Applicable Procedures relating to the purchase of Global Securities.

 

(c)           A Holder may exercise its rights specified in Section 3.02(a) upon delivery of a written notice (which shall be in substantially the form attached as Exhibit A under the heading “Fundamental Change Repurchase Notice” and which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary’s Applicable Procedures) of the exercise of such rights (a “Fundamental Change Repurchase Notice”) to the Company or any Paying Agent at any time prior to the close of business on the Business Day next preceding the Fundamental Change Repurchase Date, subject to extension to comply with applicable law.

 

(i)    The Fundamental Change Repurchase Notice shall state:  (A) the certificate number (if such Security is held other than in global form) of the Security which the Holder will deliver to be purchased (or, if the Security is held in global form, any other items required to comply with the Applicable Procedures), (B) the portion of the principal amount of the Security which the Holder will deliver to be purchased, in integral multiples of $1,000, and (C) that such Security shall be purchased as of the 

 

23











 

Fundamental Change Repurchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture.

 

(ii)   The delivery of a Security for which a Fundamental Change Repurchase Notice has been timely delivered to any Paying Agent and not validly withdrawn prior to, on or after the Fundamental Change Repurchase Date (together with all necessary endorsements) at the office of such Paying Agent shall be a condition to the receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

(iii)  The Company shall only be obliged to purchase, pursuant to this Section 3.02, a portion of a Security if the principal amount of such portion is $1,000 or an integral multiple of $1,000 (provisions of this Indenture that apply to the purchase of all of a Security also apply to the purchase of such portion of such Security).

 

(iv)  Notwithstanding anything herein to the contrary, any Holder delivering to a Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 3.02(c) shall have the right to withdraw such Fundamental Change Repurchase Notice in whole or in a portion thereof that is a principal amount of $1,000 or in an integral multiple thereof at any time prior to the close of business on the Business Day prior to the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.03.

 

(v)   A Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written withdrawal thereof.

 

(vi)  Anything herein to the contrary notwithstanding, in the case of Global Securities, any Fundamental Change Repurchase Notice may be delivered or withdrawn and such Securities may be surrendered or delivered for purchase in accordance with the Applicable Procedures as in effect from time to time.

 

Section 3.03.  Effect of Fundamental Change Repurchase Notice.

 

(a)           Upon receipt by any Paying Agent of a properly completed Fundamental Change Repurchase Notice from a Holder, the Holder of the Security in respect of which such Fundamental Change Repurchase Notice was given shall (unless such Fundamental Change Repurchase Notice is withdrawn as specified in Section 3.03(b)) thereafter be entitled to receive the Fundamental Change Repurchase Price with respect to such Security, subject to the occurrence of the Fundamental Change Effective Date and an absence of an Event of Default, or a continuation thereof (other than a Default in the payment of the Fundamental Change Repurchase Price).  Such Fundamental Change Repurchase Price shall be paid to such Holder promptly following the later of (i) the Fundamental Change Repurchase Date (provided that the conditions in Section 3.02 have been satisfied) and (ii) the time of delivery of such Security to a Paying Agent by the Holder thereof in the manner required by Section 3.02(c).  Securities in respect of which a Fundamental Change Repurchase Notice has been given by the Holder thereof may not be converted into shares of Common Stock pursuant to Article 4 on or after the date of 

 

24











 

the delivery of such Fundamental Change Repurchase Notice unless such Fundamental Change Repurchase Notice has first been validly withdrawn in accordance with Section 3.03(b) with respect to the Securities to be converted.

 

(b)           A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice (which may be delivered by mail, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of Global Securities, may be delivered by other means in accordance with the Applicable Procedures) of withdrawal delivered by the Holder to a Paying Agent at any time prior to the close of business on the Business Day immediately prior to the Fundamental Change Repurchase Date, specifying (i) the principal amount of the Security or portion thereof (which must be a principal amount of $1,000 or an integral multiple of $1,000 in excess thereof) with respect to which such notice of withdrawal is being submitted, (ii) if certificated Securities have been issued, the certificate number of the Security being withdrawn in whole or in withdrawable part (or if the Securities are not certificated, such written notice must comply with the Applicable Procedures) and (iii) the portion of the principal amount of the Security that will remain subject to the Fundamental Change Repurchase Notice, which portion must be a principal amount of $1,000 or an integral multiple thereof.

 

Section 3.04.  Deposit of Fundamental Change Repurchase Price.

 

(a)           On or before 12:00 p.m.  (noon) New York City time on the Business Day following the applicable Fundamental Change Repurchase Date, the Company shall deposit with the Trustee or with a Paying Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an amount of money (in immediately available funds if deposited on or after such Fundamental Change Repurchase Date), sufficient to pay the aggregate Fundamental Change Repurchase Price of all the Securities or portions thereof that are to be purchased as of such Fundamental Change Repurchase Date.

 

(b)           If a Paying Agent or the Trustee holds, in accordance with the terms hereof, money sufficient to pay the Fundamental Change Repurchase Price of any Security for which a Fundamental Change Repurchase Notice has been tendered and not withdrawn in accordance with this Indenture then, on the Business Day following the applicable Fundamental Change Repurchase Date, such Security will cease to be outstanding, whether or not the Security is delivered to the Paying Agent or the Trustee, and interest and, shall cease to accrue, and the rights of the Holder in respect of the Security shall terminate (other than the right to receive the Fundamental Change Repurchase Price as aforesaid).  The Company shall publicly announce the principal amount of Securities repurchased on or as soon as practicable after the Fundamental Change Repurchase Date.

 

(c)           The Paying Agent will promptly return to the respective Holders thereof any Securities with respect to which a Fundamental Change Repurchase Notice has been withdrawn in compliance with this Indenture.

 

25











 

(d)           If a Fundamental Change Repurchase Date falls after a Regular Record Date and on or before the related Interest Payment Date, then interest on the Securities payable on such Interest Payment Date will be payable to the Holders in whose names the Securities are registered at the close of business on such Regular Record Date.

 

Section 3.05.  Repayment to the Company.

 

To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.04 exceeds the aggregate Fundamental Change Repurchase Price of the Securities or portions thereof that the Company is obligated to purchase, then promptly after the Fundamental Change Repurchase Date the Trustee or a Paying Agent, as the case may be, shall return any such excess cash to the Company.

 

Section 3.06.  Securities Purchased in Part.

 

Any Security that is to be purchased only in part shall be surrendered at the office of a Paying Agent, and promptly after the Fundamental Change Repurchase Date, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of such authorized denomination or denominations as may be requested by such Holder (which must be equal to $1,000 principal amount or any integral thereof), in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered that is not purchased.

 

Section 3.07.  Compliance with Securities Laws upon Purchase of Securities.

 

In connection with any offer to purchase of Securities under Section 3.02, the Company shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor to either such Rule), and any other tender offer rules, if applicable, under the Exchange Act, (b) file the related Schedule TO (or any successor or similar schedule, form or report) if required under the Exchange Act, and (c) otherwise comply with all federal and state securities laws in connection with such offer to purchase or purchase of Securities, all so as to permit the rights of the Holders and obligations of the Company under Section 3.02 through 3.05 to be exercised in the time and in the manner specified therein.  To the extent that compliance with any such laws, rules and regulations would result in a conflict with any of the terms hereof, this Indenture is hereby modified to the extent required for the Company to comply with such laws, rules and regulations.

 

Section 3.08.  Purchase of Securities in Open Market.

 

The Company may, to the extent permitted by applicable law, at any time, repurchase Securities in the open market, by tender at any price or by negotiated transactions.  The Company shall surrender any Security purchased by the Company pursuant to this Article 3 to the Trustee for cancellation and any such Security may not be reissued or resold by the Company and will be canceled promptly in accordance with Section 2.11.

 

26











 

ARTICLE 4

CONVERSION

 

Section 4.01.  Conversion Privilege and Conversion Rate.

 

(a)           Subject to and upon compliance with the provisions of this Article 4, at the option of the Holder thereof, any Security or portion thereof that is an integral multiple of $1,000 principal amount may be converted into fully paid and non-assessable shares (calculated as to each conversion to the nearest 1/10,000th of a share) of Common Stock prior to the close of business on the second Business Day immediately preceding the Final Maturity Date or such earlier date set forth in this Article 4, unless purchased by the Company at the Holder’s option, at the Conversion Rate in effect at such time, determined as hereinafter provided.  When a Holder receives Common Stock upon conversion, such Holder will also receive the associated preferred stock purchase right under the Company’s rights agreement adopted in 2004 (as amended to date) related to its series A junior participating preferred stock, unless, prior to conversion, the rights have expired, terminated or been exchanged.

 

(b)           Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of a Security.

 

(c)           A Holder of Securities is not entitled to any rights of a holder of Common Stock until such Holder has converted its Securities into Common Stock, and only to the extent such Securities are deemed to have been converted into Common Stock pursuant to this Article 4.

 

(d)           The Conversion Rate shall be adjusted in certain instances as provided in Section 4.01(e) and Section 4.06.

 

(e)           If there shall have occurred an event specified in clauses (i) or (ii) of the definition of Change of Control, the Company shall pay a “Make Whole Premium” to the Holders of the Securities whose conversion notice is received by the conversion agent on or subsequent to the date ten Trading Days before the date the Company announces as the anticipated Fundamental Change Effective Date but before the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date or ten Trading Days after the actual effective date of the Fundamental Change, if later, by increasing the Conversion Rate for such Securities.  The number of additional shares of Common Stock per $1,000 principal amount of Securities constituting the Make Whole Premium shall be determined by the Company by reference to the table below, based on the Fundamental Change Effective Date and the Stock Price of such Fundamental Change; provided that if the Stock Price or Fundamental Change Effective Date are not set forth on the table: (i) if the actual Stock Price on the Fundamental Change Effective Date is between two Stock Prices on the table or the actual Fundamental Change Effective Date is between two Fundamental Change Effective Dates on the table, the Make Whole Premium will be determined by a straight-line interpolation between the Make Whole Premiums set forth for the two Stock Prices and the two Fundamental Change Effective Dates on the table based on a 365-day year, as applicable, (ii) if the Stock Price on the Fundamental Change Effective Date exceeds $[·] per share, subject to adjustment as set forth 

 

27











 

herein, no Make Whole Premium will be paid, and (iii) if the Stock Price on the Fundamental Change Effective Date is less than $[·] per share, subject to adjustment as set forth herein, no Make Whole Premium will be paid.  If Holders of the Common Stock receive only cash in the Fundamental Change, the Stock Price shall be the cash amount paid per share of the Common Stock in connection with the Fundamental Change.  Otherwise, the Stock Price shall be equal to the average Closing Prices of the Common Stock for each of the ten Trading Days immediately preceding, but not including, the applicable Fundamental Change Effective Date.

 

	
Stock Price
   on Effective
   Date
    	
 
    	
Make Whole Premium Upon Fundamental Change (Increase in Applicable Conversion Rate)
    	
 
    
	
 
    	
1/[·]/2013
    	
 
    	
1/15/2014
    	
 
    	
1/15/2015
    	
 
    	
1/15/2016
    	
 
    	
1/15/2017
    	
 
    	
1/15/2018
    	
 
    	
1/15/2019
    	
 
    	
1/15/2020
    	
 
    	
1/15/2021
    	
 
    	
1/15/2022
    	
 
    	
1/15/2023
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
$
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    


 

The Stock Prices set forth in the first column of the table above will be adjusted as of any date on which the Conversion Rate of the Securities is adjusted.  The adjusted Stock Prices will equal the Stock Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted.  The number of additional shares set forth in the table above will be adjusted in the same manner as the Conversion Rate as set forth in Section 4.06 hereof, other than as a result of an adjustment of the Conversion Rate by adding the Make Whole Premium as described above.

 

Notwithstanding the foregoing paragraph, in no event will the total number of shares of Common Stock issuable upon conversion of a Security exceed [·] per $1,000 principal amount, subject to adjustment in the same manner as the Conversion Rate as set forth in clauses (i) through (vi) of Section 4.06(a) hereof.

 

The additional shares issuable pursuant to this Section 4.01(e) shall be delivered upon the later of (i) the settlement date for the conversion and (ii) promptly following the Fundamental Change Effective Date.

 

(f)            By delivering the number of shares of Common Stock issuable on conversion to the Trustee, or to the Conversion Agent, if the Conversion Agent is other than the Trustee, the Company will be deemed to have satisfied its obligation to pay the principal amount of the Securities so converted and its obligation to pay accrued and unpaid interest attributable to the period from the most recent Interest Payment Date through the Conversion Date (which amount will be deemed paid in full rather than cancelled, extinguished or forfeited).

 

(g)           The Trustee may conclusively rely on the Company’s calculations of the Make Whole Premium.

 

28











 

Section 4.02.  Conversion Procedure.

 

(a)           To convert a Security, a Holder must (i) complete and manually sign the conversion notice on the back of the Security and deliver such notice to a Conversion Agent, (ii) surrender the Security to a Conversion Agent, (iii) furnish appropriate endorsements and transfer documents if required by a Registrar or a Conversion Agent, and (iv) pay all transfer or similar taxes, if required pursuant to Section 4.04.  The date on which the Holder satisfies all of those requirements is the “Conversion Date.” Upon the conversion of a Security, the Company will deliver the shares of Common Stock (and cash in lieu of fractional shares), to the Trustee (or to the Conversion Agent, if the Conversion Agent is other than the Trustee), as applicable, no later than three (3) Business Days after the Conversion Date.  Anything herein to the contrary notwithstanding, in the case of Global Securities, conversion notices may be delivered and such Securities may be surrendered for conversion in accordance with the Applicable Procedures as in effect from time to time.

 

(b)           The person in whose name the shares of Common Stock are issuable upon conversion shall be deemed to be a holder of record of such Common Stock on the Conversion Date; provided, however, that no surrender of a Security on any Conversion Date when the stock transfer books of the Company shall be closed shall be effective to constitute the person or persons entitled to receive the shares of Common Stock upon conversion as the record holder or holders of such shares of Common Stock on such date, but such surrender shall be effective to constitute the person or persons entitled to receive such shares of Common Stock as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open; provided further that such conversion shall be at the Conversion Rate in effect on the Conversion Date as if the stock transfer books of the Company had not been closed.  Upon conversion of a Security, such person shall no longer be a Holder of such Security.  Except as set forth in this Indenture, no payment or adjustment will be made for dividends or distributions declared or made on shares of Common Stock issued upon conversion of a Security prior to the issuance of such shares.

 

(c)           If a holder surrenders a Security for conversion during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, then, despite the conversion, the Company shall, on the Interest Payment Date, pay the semiannual interest payable on such Security to the Person who was the Holder at the close of business on the Regular Record Date.  Such Security, upon surrender to the Company for conversion, must be accompanied by funds equal to the amount of interest payable on the Security so converted, provided that no such payment need be made (i) in connection with any conversion following the Regular Record Date immediately preceding the final Interest Payment Date, (ii) if the Company had specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the Business Day following the corresponding Interest Payment Date, or (iii)  to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Security.

 

(d)           Subject to Section 4.02(c), nothing in this Section shall affect the right of a Holder in whose name any Security is registered at the close of business on a Regular Record Date to 

 

29











 

receive the interest payable on such Security on the related Interest Payment Date in accordance with the terms of this Indenture and the Securities.  If a Holder converts more than one Security at the same time, the number of shares of Common Stock issuable upon the conversion, if any, (and the amount of any cash in lieu of fractional shares pursuant to Section 4.03) shall be based on the aggregate principal amount of all Securities so converted.

 

(e)           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, without service charge, a new Security or Securities of authorized denominations in an aggregate principal amount equal to, and in exchange for, the unconverted portion of the principal amount of such Security.  A Security may be converted in part, but only if the principal amount of such part is an integral multiple of $1,000 and the principal amount of such Security to remain outstanding after such conversion is equal to $1,000 or any integral multiple of $1,000 in excess thereof.

 

Section 4.03.  Fractional Shares.

 

The Company will not issue fractional shares of Common Stock 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 that shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted hereby) so surrendered.  In lieu of any fractional share, the Company will pay an amount in cash for the current market value of the fractional share.  The current market value of a fractional share shall be determined (calculated to the nearest 1/100th of a share) by multiplying the average of the Closing Price of the Common Stock on the Trading Day immediately preceding the Conversion Date by such fractional share and rounding the product to the nearest whole cent.

 

Section 4.04.  Taxes on Conversion.

 

If a Holder converts a Security, the Holder shall pay any transfer, stamp or similar taxes or duties related to the issue or delivery of shares of Common Stock upon such conversion.  The Holder shall also pay any such tax with respect to cash received in lieu of fractional shares.  In addition, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name.  The Conversion Agent may refuse to deliver the certificate representing the Common Stock being issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the Holder’s name.  Nothing herein shall preclude any tax withholding required by law or regulation.

 

Section 4.05.  Company to Provide Stock.

 

(a)           The Company shall, prior to issuance of any Securities hereunder, and from time to time as may be necessary, reserve, out of its authorized but unissued Common Stock, a sufficient

 

30









 

number of shares of Common Stock to permit the conversion of all outstanding Securities into shares of Common Stock.

 

(b)        All shares of Common Stock delivered upon conversion of the Securities shall be newly issued shares, shall be duly authorized, validly issued, fully paid and nonassessable and shall be free from preemptive or similar rights and free of any lien or adverse claim as the result of any action by the Company.

 

(c)        The Company will endeavor promptly to comply with all federal and state securities laws regulating the offer and delivery of shares of Common Stock upon conversion of Securities.

 

Section 4.06.  Adjustment of Conversion Rate.

 

(a)        The Conversion Rate shall be adjusted from time to time by the Company as follows:

 

(i)            If the Company exclusively issues shares of Common Stock as a dividend or distribution on outstanding Common Stock, or if the Company effects a share split or share combination, the Conversion Rate in effect immediately prior to the close of business on the record date (as defined below) for the determination of shareholders entitled to receive such dividend or other distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as applicable, shall be adjusted based on the following formula:

 



 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the record date of such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as applicable;

 

CR1 = the Conversion Rate in effect immediately after the close of business on such record date or immediately after the open of business on such effective date, as applicable;

 

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on such record date or immediately prior to the open of business on such effective date, as applicable; and

 

OS1 = the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.

 

Such adjustment under this clause (i) shall be made successively whenever any such dividend or distribution is made and shall become effective immediately after the

 

31











 

close of business on such record date for such dividend or distribution, or immediately after the open of business on the effective date for such share split or share combination, as applicable.  For the purpose of this clause (i), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company.  The Company will not pay any dividend or make any distribution on Common Stock held in the treasury of the Company.  If any dividend or distribution of the type described in this clause (i) is declared but not so paid or made, the Conversion Rate shall again be adjusted, effective as of the date our Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

(ii)           If the Company shall issue to all or substantially all holders of its outstanding Common Stock any rights or warrants entitling them (for a period of not more than 45 calendar days after the announcement date of such issuance) to subscribe for or purchase shares of Common Stock (or securities convertible into Common Stock) at a price per share (or having a conversion price per share) less than the Current Market Price per share of Common Stock (as determined in accordance with clause (viii) of this Section 4.06(a)) on the date of announcement of such issuance, the Conversion Rate in effect immediately prior to the close of business on the record date for the determination of shareholders entitled to receive such rights or warrants shall be adjusted based on the following formula:

 



 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the record date for such issuance;

 

CR1 = the Conversion Rate in effect immediately after the close of business on such record date;

 

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on such record date;

 

X = the total number of shares of Common Stock issuable pursuant to such rights or warrants (or into which such convertible securities are convertible); and

 

Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants (or the aggregate conversion price of such convertible securities), divided by the Current Market Price per share of Common Stock on the date of announcement of the issuance of such rights or warrants.

 

Such adjustment under this clause (ii) shall be made successively whenever any such rights or warrants are issued, and shall become effective immediately after the close

 

32











 

of business on the record date for such issuance.  To the extent that shares of Common Stock (or securities convertible into Common Stock) are not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock (or securities convertible into Common Stock) actually delivered.  If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if the record date for the determination of shareholders entitled to receive such rights or warrants had not been fixed.  For the purposes of this clause (ii) in determining whether any rights or warrants entitle the shareholders to subscribe for or purchase shares of Common Stock at a price less than the Current Market Price per share of Common Stock on the announcement date of the issuance of such rights or warrants and in determining the aggregate offering price of the total number of shares of Common Stock so offered, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

 

(iii)          If the Company shall make a dividend or other distribution to all or substantially all holders of its Common Stock of Capital Stock, other than Common Stock, evidences of indebtedness, other assets or property of the Company or rights, options or warrant to acquire its Capital Stock or other securities (excluding (x) dividends, distributions or issuances for which an adjustment was made pursuant to clause (i) or (ii) of this Section 4.06(a), (y) dividends or distributions in connection with a reclassification, consolidation, merger, combination, sale or conveyance resulting in a change in the conversion consideration pursuant to Section 4.10, or pursuant to any Rights Plan or (z) any dividend or distribution paid exclusively in cash for which an adjustment was made pursuant to Section 4.06(a)(v)) (the “Distributed Securities”), then in each such case (unless the Company distributes such Distributed Securities for distribution to the Holders of Securities on such dividend or distribution date as if each Holder had converted such Security into Common Stock immediately prior to the record date with respect to such distribution), the Conversion Rate in effect immediately prior to the close of business on the record date fixed for the determination of shareholders entitled to receive such dividend or distribution shall be adjusted based on the following formula:

 



 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the record date for such distribution;

 

CR1 = the Conversion Rate in effect immediately after the close of business on such record date;

 

33











 

SP0 = the Current Market Price per share of Common Stock on the record date for such distribution; and

 

FMV = the fair market value (as determined in good faith by the Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) of the shares of capital stock, evidences of indebtedness, assets, property, rights, options or warrants distributed with respect to each outstanding share of Common Stock as of the close of business on the record date for such distribution.

 

Such adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the close of business on the record date for the determination of shareholders entitled to receive such distribution.  In the event that such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

If “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of a Security shall have the right to receive upon conversion the amount of Distributed Securities so distributed that such Holder would have received had such Holder converted each Security on such record date.  If the Board of Directors determines “FMV” (as defined above) for purposes of this Section 4.06(a)(iii) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing “SP0” (as defined above).

 

Notwithstanding the foregoing, if the securities distributed by the Company to all holders of its Common Stock consist of Capital Stock of, or similar equity interests in, a Subsidiary or other business unit of the Company that are, or when issued will be, listed or admitted for trading on a U.S. national securities exchange (the “Spinoff Securities”), the Conversion Rate shall be adjusted based on the following formula, unless the Company makes an equivalent distribution to the Holders of the Securities:

 



 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the record date for the spin-off;

 

CR1 = the Conversion Rate in effect immediately after the close of business on the record date for the spin-off;

 

FMV0 = the average of the Closing Prices of the capital stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common

 

34











 

Stock over the ten consecutive Trading Day period commencing on and including the Trading Day on which ex-dividend trading commences for such distribution (the “Spinoff Valuation Period”);

 

MP0 = the average of the Closing Prices of Common Stock over the Spinoff Valuation Period.

 

Such adjustment shall become effective immediately prior to the opening of business on the tenth Trading Day after the date on which ex-dividend trading commences; provided, however, that in respect of any conversion after the close of business on the record date for such distribution but prior to the open of business on the Trading Day next succeeding the last Trading Day of the Spinoff Valuation Period, references in the preceding paragraph with respect to ten Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed between the date on which ex-dividend trading commences for such distribution and the conversion date in determining the Conversion Rate; provided further, that the Company may in lieu of the foregoing adjustment elect to make adequate provision so that each Holder of Securities shall have the right to receive upon conversion thereof the amount of such Spinoff Securities that such Holder of Securities would have received if such Securities had been converted on the record date with respect to such distribution.

 

(iv)          With respect to any rights or warrants (the “Rights”) that may be issued or distributed pursuant to any rights plan of the Company currently in effect or that the Company implements after the date of this Indenture (a “Rights Plan”), or if the Company’s current Rights Plan is still in effect, in lieu of any adjustment required by any other provision of this Section 4.06 upon conversion of the Securities into Common Stock, to the extent that such Rights Plan is in effect upon such conversion, the Holders of Securities will receive, with respect to the shares of Common Stock issued upon conversion, the Rights described therein (whether or not the Rights have separated from the Common Stock at the time of conversion), subject to the limitations set forth in and in accordance with any such Rights Plan; provided that in the case of the Company’s current Rights Plan or a future Rights Plan to the extent applicable, if, at the time of conversion, the Rights have separated from the shares of Common Stock in accordance with the provisions of the Rights Plan so that Holders would not be entitled to receive any rights in respect of the shares of Common Stock issuable upon conversion of the Securities as a result of the timing of the Conversion Date, the Conversion Rate will be adjusted as if the Company distributed to all holders of Common Stock Distributed Securities constituting such rights as provided in the first paragraph of clause (iii) of this Section 4.06(a), subject to appropriate readjustment in the event of the expiration, termination, repurchase or redemption of the Rights.  Any distribution of rights or warrants pursuant to a Rights Plan complying with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants pursuant to this Section 4.06(a).  Other than as specified in this clause (iv) of this Section 4.06(a), there will not be any adjustment to the Conversion Rate as the result of the issuance of any Rights, the distribution of separate certificates representing such Rights, the exercise or redemption

 

35











 

of such Rights in accordance with any Rights Plan or the termination or invalidation of any Rights.

 

(v)           If the Company shall, by dividend or otherwise, at any time distribute (a “Triggering Distribution”) to all holders of its Common Stock a payment consisting exclusively of cash (excluding any dividend or distribution in connection with the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary) the Conversion Rate shall be adjusted based on the following formula:

 



 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the record date for such Triggering Distribution;

 

CR1 = the Conversion Rate in effect immediately after the close of business on the record date for such Triggering Distribution;

 

SP0 = the average of the Last Reported Sale Price of Common Stock over the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the ex-dividend date for such Triggering Distribution; and

 

C = the amount in cash per share of the Triggering Distribution.

 

Such adjustment under this clause (v) shall become effective immediately after the close of business on the record date for such Triggering Distribution.  Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder of a Security shall have the right to receive upon conversion the amount of cash so distributed that such Holder would have received if such holder owned a number of shares of Common Stock equal to the Conversion Rate on the record date for such dividend or distribution.  In the event that such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such divided or distribution had not been declared.

 

(vi)          If any tender offer made by the Company or any of its Subsidiaries for all or any portion of Common Stock shall expire, then, if the tender offer shall require the payment to shareholders of consideration per share of Common Stock having a fair market value (determined as provided below) that exceeds the Closing Price per share of Common Stock on the Trading Day next succeeding the last date (the “Expiration Date”) tenders could have been made pursuant to such tender offer (as it may be amended) (the last time at which such tenders could have been made on the Expiration Date is hereinafter sometimes called the “Expiration Time”), the Conversion Rate shall be adjusted based on the following formula:

 

36











 



 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Expiration Date;

 

CR1 = the Conversion Rate in effect immediately after the close of business on the Expiration Date;

 

AC = the fair market value of the aggregate of all cash and any other consideration (as determined in good faith by the Board of Directors, whose determination shall be conclusive evidence of such fair market value and which shall be evidenced by an Officers’ Certificate delivered to the Trustee) paid or payable to shareholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the “Purchased Shares”);

 

OS0 = the number of shares of Common Stock outstanding immediately prior to the Expiration Time (prior to giving effect to the purchase of the Purchased Shares but excluding any shares held in the treasury of the Company);

 

OS1 = the number of shares of Common Stock outstanding (after giving effect to the purchase of the Purchased Shares and excluding any shares held in the treasury of the Company) immediately after the Expiration Time; and

 

SP1 = the average of the Closing Prices of Common Stock over the ten consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date.

 

Such increase will be calculated at the close of business on the tenth Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date but will become effective at the close of business on the Expiration Date; provided that in respect of any conversion within the ten Trading Days immediately following, and including, the Trading Day next succeeding the Expiration Date, references in the preceding paragraph with respect to ten Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Expiration Date and the conversion date in determining the Conversion Rate.  In the event that the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which would have been in effect based upon the number of shares actually purchased, if any.  If the application of this clause (vi) of Section 4.06(a) to any

 

37











 

tender offer would result in a decrease in the Conversion Rate, no adjustment shall be made for such tender offer under this clause (vi).

 

(vii)         For purposes of this Section 4.06, the term “tender offer” shall mean and include both tender offers and exchange offers, all references to “purchases” of shares in tender offers (and all similar references) shall mean and include both the purchase of shares in tender offers and the acquisition of shares pursuant to exchange offers, and all references to “tendered shares” (and all similar references) shall mean and include shares tendered in both tender offers and exchange offers.

 

(viii)        For purposes of any computation under this Section 4.06, “Current Market Price” shall mean the average of the daily Closing Prices per share of Common Stock for each of the ten consecutive Trading Days ending on and immediately preceding the date in question; provided, however, that if:

 

(A)            the “ex” date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Rate pursuant to Section 4.06(a) (i), (ii), (iii), (iv), (v) or (vi) occurs during such ten consecutive Trading Days, the Closing Price for each Trading Day prior to the “ex” date for such other event shall be adjusted by dividing such Closing Price by the same fraction by which the Conversion Rate is so required to be adjusted as a result of such other event;

 

(B)            the “ex” date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Rate pursuant to Section 4.06(a) (i), (ii), (iii), (iv), (v) or (vi) occurs on or after the “ex” date for the issuance or distribution requiring such computation and prior to the day in question, the Closing Price for each Trading Day on and after the “ex” date for such other event shall be adjusted by dividing such Closing Price by the reciprocal of the fraction by which the Conversion Rate is so required to be adjusted as a result of such other event; and

 

(C)            the “ex” date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to the immediately preceding clause (A) or (B) of this Section 4.06(a)(viii) , 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 (as determined in good faith by the Board of Directors in a manner consistent with any determination of such value for purposes of Section 4.06(a)(iii) or (vi), whose determination shall be conclusive and set forth 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.

 

38











 

For purposes of any computation under Section 4.06(a), if the “ex” date for any event (other than the tender offer that is the subject of the adjustment pursuant to Section 4.06(a)(vi)) that requires an adjustment to the Conversion Rate pursuant to Section 4.06(a)(i), (ii), (iii), (iv) or (v) occurs on the date of the Expiration Time for the tender or exchange offer requiring such computation or on the Trading Day next following the Expiration Time, the Closing Price for each Trading Day on and after the “ex” date for such other event shall be adjusted by dividing such Closing Price by the reciprocal of the fraction by which the Conversion Rate is so required to be adjusted as a result of such other event.  For purposes of this Section 4.06(a)(viii) the term “ex” date, when used:

 

(A)        with respect to any issuance, dividend or distribution, means the first date on which the Common Stock trades regular way on the applicable exchange or in the applicable market without the right to receive the issuance, dividend or distribution in question from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market,

 

(B)        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

 

(C)        with respect to any tender 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 of such offer.

 

Notwithstanding the foregoing, whenever successive adjustments to the Conversion Rate are called for pursuant to this Section 4.06, such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of this Section 4.06 and to avoid unjust or inequitable results as determined in good faith by the Board of Directors and evidenced by an Officers’ Certificate delivered to the Trustee.

 

(b)        In any case in which this Section 4.06 shall require that an adjustment be made following a record date or Expiration Date, as the case may be, established for the purposes specified in this Section 4.06, the Company may elect to defer (but only until three Business Days following the filing by the Company with the Trustee of the certificate described in Section 4.08) issuing to the Holder of any Security converted after such record date or Expiration Date the shares of Common Stock and other Capital Stock of the Company issuable upon such conversion over and above the shares of Common Stock and other Capital Stock of the Company (or other cash, property or securities, as applicable) issuable upon such conversion only on the basis of the Conversion Rate prior to adjustment; and, in lieu of any cash, property or securities the issuance of which is so deferred, the Company shall issue or cause its transfer agents to issue due bills or other appropriate evidence prepared by the Company of the right to receive such cash, property or securities.  If any distribution in respect of which an adjustment to the Conversion Rate is required to be made as of the record date or Expiration Date therefore is not thereafter

 

39











 

made or paid by the Company for any reason, the Conversion Rate shall be readjusted to the Conversion Rate which would then be in effect if such record date had not been fixed or such record date or Expiration Date had not occurred.

 

(c)        For purposes of this Section 4.06, “record date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, security or other property (whether or not such date is fixed by the Board of Directors or by statute, contract or otherwise).

 

(d)        If one or more events occur requiring an adjustment be made to the Conversion Rate for a particular period, adjustments to the Conversion Rate shall be determined by the Company’s Board of Directors to reflect the combined impact of such Conversion Rate adjustment events, as set out in this Section 4.06, during such period.

 

Section 4.07.  No Adjustment.

 

(a)        No adjustment in the Conversion Rate shall be required if Holders may, by virtue of their ownership of the Securities, participate in the transactions set forth in Section 4.06 above (to the same extent as if the Securities had been converted into Common Stock immediately prior to such transactions) without converting the Securities held by such Holders.

 

(b)        No adjustment in the Conversion Rate shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Rate as last adjusted; provided, however, that any adjustments which would be required to be made but for this Section 4.07(b) shall be carried forward and taken into account in any subsequent adjustment, and such carried forward adjustments shall be made, regardless of whether the aggregate adjustment is less than 1%, on the conversion date for any Securities or on the Fundamental Change Effective Date, unless such adjustment has already been made.  All calculations under this Article 4 shall be made to the nearest cent or to the nearest one-ten thousandth of a share, as the case may be, with one half cent and 0.00005 of a share, respectively, being rounded upward.

 

(c)        No adjustment in the Conversion Rate shall be required for (i) issuances of Common Stock pursuant to any present or future Company plan for reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in Common Stock under any plan, (ii) the issuance of Common Stock or options or rights to purchase shares of Common Stock pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company, (iii) the issuance of Common Stock pursuant to any option, warrant or right, or exercisable, exchangeable or convertible security not described in clause (ii) of this Section 4.07(c) outstanding as of the Issue Date, (iv) accrued or unpaid interest or, (v) for a change to a par value of the Common Stock.

 

40









 

(d)        To the extent that the Securities become convertible into the right to receive cash, no adjustment need be made thereafter as to the cash.

 

Section 4.08.  Notice of Adjustment.

 

Whenever the Conversion Rate or conversion privilege is required to be adjusted pursuant to this Indenture, the Company shall promptly mail to Holders a notice of the adjustment and file with the Trustee an Officers’ Certificate briefly stating the facts requiring the adjustment and the manner of computing it.  Failure to mail such notice or any defect therein shall not affect the validity of any such adjustment.  Unless and until the Trustee shall receive an Officers’ Certificate setting forth an adjustment of the Conversion Rate, the Trustee may assume without inquiry that the Conversion Rate has not been adjusted and that the last Conversion Rate of which it has knowledge remains in effect.

 

Section 4.09.  Notice of Certain Transactions.

 

In the event that there is a dissolution or liquidation of the Company, the Company shall mail to Holders and file with the Trustee a notice stating the proposed effective date.  The Company shall mail such notice at least ten days before such proposed effective date.  Failure to mail such notice or any defect therein shall not affect the validity of any transaction referred to in this Section 4.09.

 

Section 4.10.  Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale.

 

If any of following events occur (each, a “Business Combination”):

 

(i)    any recapitalization, reclassification or change of the Common Stock, other than changes resulting from a subdivision or a combination,

 

(ii)   a consolidation, merger or combination involving the Company,

 

(iii)  a sale, conveyance or lease to another corporation of all or substantially all of the property and assets of the Company, other than to one or more of the Company’s subsidiaries, or

 

(iv)  any statutory share exchange,

 

in each case as a result of which holders of Common Stock are entitled to receive stock, other securities, other property or assets (including cash or any combination thereof) with respect to or in exchange for Common Stock, the Company or the successor or purchasing corporation, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the TIA as in force at the date of execution of such supplemental indenture if such supplemental indenture is then required to so comply) providing that the Holders of the Securities then outstanding will be entitled thereafter to convert such Securities into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) which they would have owned or been entitled to receive upon such Business

 

41











 

Combination had such Securities been converted into Common Stock immediately prior to such Business Combination, except that such Holders will not receive the Make Whole Premium if such Holder does not convert its Securities “in connection with” the relevant Fundamental Change.  A conversion of the Securities by a Holder will be deemed for these purposes to be “in connection with” a Fundamental Change if the notice of such conversion is provided in compliance with Section 4.02(a) to the Conversion Agent on or subsequent to the date ten Trading Days prior to the date announced by the Company as the anticipated Fundamental Change Effective Date but before the close of business on the Business Day immediately preceding the related Fundamental Change Repurchase Date.  In the event holders of Common Stock have the opportunity to elect the form of consideration to be received in such Business Combination, the Securities will be convertible into the weighted average of the kind and amount of consideration received by the holders of the Common Stock that affirmatively make such an election.  The Company may not become a party to any such transaction unless its terms are consistent with this Section 4.10.  Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 4.  If, in the case of any such Business Combination, the stock or other securities and assets receivable thereupon by a holder of shares of Common Stock includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the case may be, in such Business Combination, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the Holders of the Securities as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent practicable the provisions providing for the Repurchase Rights set forth in Article 3 hereof.  Notwithstanding anything contained in this Section, and for the avoidance of doubt, this Section shall not affect the right of a Holder to convert its Securities into shares of Common Stock prior to the effective date of the Business Combination.

 

Section 4.11.  Trustee’s Disclaimer.

 

(a)        The Trustee shall have no duty to determine when an adjustment under this Article 4 should be made, how it should be made or what such adjustment should be, but may accept as conclusive evidence of that fact or the correctness of any such adjustment, and shall be protected in relying upon, an Officers’ Certificate and/or an Opinion of Counsel, including the Officers’ Certificate with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 4.08.  The Trustee makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities, and the Trustee shall not be responsible for the Company’s failure to comply with any provisions of this Article 4.

 

(b)        The Trustee shall not be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture executed pursuant to Section 4.10, but may accept as conclusive evidence of the correctness thereof, and shall be fully protected in relying upon the Officers’ Certificate and Opinion of Counsel, with respect thereto which the Company is obligated to file with the Trustee pursuant to Section 12.04.

 

42











 

Section 4.12.  Voluntary Increase.

 

The Company from time to time may increase the Conversion Rate, to the extent permitted by law and subject to applicable rules of the NASDAQ Stock Market, by any amount for any period of time if the period is at least 20 days if the Board of Directors determines that such increase is in the Company’s best interest, and the Company provides 15 days prior written notice to any increase in the Conversion Rate to the Trustee and Holders.  The Company may also make such an increase to the Conversion Rate as the Board of Directors deems advisable to avoid or diminish U.S.  federal income tax to holders of shares of Common Stock (or rights to purchase shares of Common Stock) in connection with a dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for U.S. federal income tax purposes.

 

ARTICLE 5
  SUBORDINATION

 

Section 5.01.  Agreement of Subordination.

 

The Company covenants and agrees, and each Holder of Securities issued hereunder by its acceptance thereof likewise covenants and agrees, that all Securities shall be issued subject to the provisions of this Article 5; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions.

 

The payment of the principal of, premium, if any, and interest on, all Securities (including, but not limited to, the Fundamental Change Repurchase Price with respect to the Securities subject to purchase in accordance with Article 3 as provided in this Indenture) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full in cash, or other payment satisfactory to the holders of Senior Indebtedness, of all Senior Indebtedness, whether outstanding at the date of this Indenture or thereafter incurred.

 

No provision of this Article 5 shall prevent the occurrence of any default or Event of Default hereunder.

 

Section 5.02.  Payments to Holders.

 

The Company shall not make any payment with respect to the principal of, or premium, if any, or interest on the Securities (including, but not limited to, the Fundamental Change Repurchase Price with respect to the Securities subject to purchase in accordance with Article 3 as provided in this Indenture), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 5.05, and shall not purchase or otherwise acquire for value any Securities if:

 

(a)        a default in the payment of principal, premium, interest, rent or other obligations due on any Senior Indebtedness occurs and is continuing (or, in the case of Senior Indebtedness for which there is a period of grace, in the event of such a default that continues beyond the

 

43











 

period of grace, if any, specified in the instrument or lease evidencing such Senior Indebtedness), unless and until such default shall have been cured or waived or shall have ceased to exist and notice thereof has been given to the Trustee; or

 

(b)        a default, other than a payment default, on Designated Senior Indebtedness occurs and is continuing that then permits holders of such Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of the default (a “Payment Blockage Notice”) from the Company or a holder of Designated Senior Indebtedness or a representative of such holder.

 

The Company may and shall resume payments on and distributions in respect of the Securities upon:

 

(i)    in the case of a payment default of Senior Indebtedness, upon the date on which such default is cured or waived or otherwise ceases to exist; and

 

(ii)   in the case of a non-payment default on Designated Senior Indebtedness referred to in clause (b) above, the earlier of (A) 179 days after the date on which a Payment Blockage Notice is received, and (B) the date on which the non-payment default is cured or waived or otherwise ceases to exist, unless this Article 5 otherwise prohibits the payment or distribution at the time of such payment or distribution.

 

Subject to the provisions of Section 5.05, no subsequent Payment Blockage pursuant to this Section 5.02 may be commenced unless (i) at least 365 days shall have elapsed since the Company’s receipt of the immediately prior Payment Blockage Notice and (ii) all scheduled payments of principal, premium or interest on the Securities that have come due have been paid in full in cash.  No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee (unless such default was waived, cured or otherwise ceased to exist and thereafter subsequently reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage Notice.

 

Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or liquidation or reorganization of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership or similar proceedings, all amounts due or to become due upon all Senior Indebtedness shall first be paid in full in cash, or other payment satisfactory to the holders of Senior Indebtedness (except payments made pursuant to Article 10 from monies deposited with the Trustee pursuant thereto prior to commencement of proceedings for such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization of the Company or bankruptcy, insolvency, receivership or other similar proceeding, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled, except for the provision of this Article 5, shall (except as aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this Indenture if received by them or it, directly to the

 

44











 

holders of Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, or as otherwise required by law or a court order) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Indebtedness in full in cash, or other payment satisfactory to the holders of Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness, before any payment or distribution is made to the Holders of the Securities or to the Trustee.

 

In the event of the acceleration of the Securities because of an Event of Default, no payment or distribution shall be made to the Trustee or any Holder of Securities in respect of the principal of, premium, if any, or interest on the Securities (including, but not limited to, the Fundamental Change Repurchase Price with respect to the Securities subject to purchase in accordance with Article 3 as provided in this Indenture), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 5.05, until all Senior Indebtedness has been paid in full in cash or other payment satisfactory to the holders of Senior Indebtedness or such acceleration is rescinded in accordance with the terms of this Indenture.  If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness of such acceleration.

 

In the event that, notwithstanding the foregoing provisions, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (including, without limitation, by way of setoff or otherwise), prohibited by the foregoing, shall be received by the Trustee or the Holders of the Securities before all Senior Indebtedness is paid in full, in cash or other payment satisfactory to the holders of Senior Indebtedness, or provision is made for such payment thereof in accordance with its terms in cash or other payment satisfactory to the holders of Senior Indebtedness, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full, in cash or other payment satisfactory to the holders of Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness.

 

Nothing in this Section 5.02 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 9.07.  This Section 5.02 shall be subject to the further provisions of Section 5.05.

 

For purposes of this Article 5, the words, “cash, property or securities” shall not be deemed to include shares of stock 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, the payment of which is subordinated at least to the extent provided in this Article 5 with respect to the Securities to the payment of all Senior Indebtedness which may at the time be outstanding;

 

45











 

provided that (i) the Senior Indebtedness is assumed by the new corporation, if any, resulting from any reorganization or readjustment, and (ii) the rights of the holders of Senior Indebtedness (other than leases which are not assumed by the Company or the new corporation, as the case may be) are not, without the consent of such Holders, altered by such reorganization or readjustment.  The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article 7 shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 5.02 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article 7.

 

Section 5.03.  Subrogation of Securities.

 

Subject to the payment in full, in cash or other payment satisfactory to the holders of Senior Indebtedness, of all Senior Indebtedness, the rights of 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 5 (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 Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Indebtedness until the principal, premium, if any, and interest on the Securities shall be paid in full in cash or other payment satisfactory to the holders of Senior Indebtedness.  For the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article 5, and no payment pursuant to the provisions of this Article 5, to or for the benefit of the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment by the Company to or on account of the Senior Indebtedness.  No payments or distributions of cash, property or securities to or for the benefit of the Holders of the Securities, pursuant to the subrogation provisions of this Article 5, which would otherwise have been paid to the holders of Senior Indebtedness shall be deemed to be a payment by the Company to or for the account of the Securities.  It is understood that the provisions of this Article 5 are and are intended solely for the purposes of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Indebtedness, on the other hand.

 

Nothing contained in this Article 5 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the 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 is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company other than the holders of the Senior Indebtedness, nor

 

46











 

shall anything herein or therein 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 5 of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy.

 

Upon any payment or distribution of assets of the Company referred to in this Article 5, the Trustee, subject to the provisions of Section 9.01, and the Holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon and all other facts pertinent thereto or to this Article 5.

 

Section 5.04.  Authorization to Effect Subordination.

 

Each Holder of a Security by the Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 5 and appoints the Trustee to act as the Holder’s attorney-in-fact for any and all such purposes.  If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 5.03 hereof at least 30 days before the expiration of the time to file such claim, the holders of any Senior Indebtedness or their representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Securities.

 

Section 5.05.  Notice to Trustee.

 

The Company shall give prompt written notice in the form of an Officers’ Certificate to a Responsible Officer of the Trustee and to any Paying Agent of (a) all Senior Indebtedness incurred by the Company, including the names of representatives of such holders (if actually known by the Company) of holders of Senior Indebtedness and (b) any fact known to the Company which would prohibit the making of any payment of monies to or by the Trustee or any Paying Agent in respect of the Securities pursuant to the provisions of this Article 5.  Notwithstanding the provisions of this Article 5 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 of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article 5, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office from the Company (in the form of an Officers’ Certificate) or a holder or holders of Senior Indebtedness (or a representative of such holder or holders) or from any trustee thereof; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 9.01, shall be entitled in all respects to assume that no such facts exist; provided that if on a date not fewer than one Business Day prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitation, the payment of the principal of, or premium, if any, or

 

47











 

interest on any Security) the Trustee shall not have received, with respect to such monies, the notice provided for in this Section 5.05, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date.  Notwithstanding anything in this Article 5 to the contrary, nothing shall prevent any payment by the Trustee to the Holders of monies deposited with it pursuant to Article 10, and any such payment shall not be subject to the provisions of Article 5.

 

The Trustee, subject to the provisions of Section 9.01, shall be entitled to rely on the delivery to it of a written notice by a representative of such a holder of Senior Indebtedness or a person representing himself to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to establish that such notice has been given by a representative of a holder of Senior Indebtedness or a trustee on behalf of any such holder or holders.  In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article 5, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 5, and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

 

Section 5.06.  Trustee’s Relation to Senior Indebtedness.

 

The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 5 in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in Section 9.11 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder.

 

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 5, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee.  The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and, subject to the provisions of Section 9.01, the Trustee shall not be liable to any holder of Senior Indebtedness if it shall, mistakenly or otherwise, pay over or deliver to Holders of Securities, the Company or any other person money or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this Article 5 or otherwise.

 

Section 5.07.  No Impairment of Subordination.

 

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

 

48











 

any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with.

 

Section 5.08.  Certain Conversions Deemed Payment.

 

For the purposes of this Article 5 only, (a)  the issuance and delivery of junior securities upon conversion of Securities in accordance with Article 4 shall not be deemed to constitute a payment or distribution on account of the principal of (or premium, if any) or interest on Securities or on account of the purchase or other acquisition of Securities, and (b)  the payment, issuance or delivery of cash (except in satisfaction of fractional shares pursuant to Section 4.03), 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 5.08, the term “junior securities” means (i) shares of any Capital Stock of any class of the Company, or (ii) 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 5 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, the right, which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article 4.

 

Section 5.09.  Article Applicable to Paying Agents.

 

If 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 (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 the first paragraph of Section 5.05 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

 

Section 5.10.  Senior Indebtedness Entitled to Rely.

 

The holders of Senior Indebtedness (including, without limitation, Designated Senior Indebtedness) shall have the right to rely upon this Article 5, and no amendment or modification of the provisions contained herein shall diminish the rights of such holders unless such holders shall have agreed in writing thereto.

 

Section 5.11.  Reliance on Judicial Order or Certificate of Liquidating Agent.

 

Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.01, and the Holders of the Securities shall be entitled to conclusively rely upon any order or decree entered by any court of competent

 

49











 

jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, Securities Custodian, receiver, 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 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 5.12.  Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee’s Rights.

 

The Trustee or any authenticating agent 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 or any authenticating agent of any of its rights as such holder.

 

Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 9.07.

 

ARTICLE 6
  COVENANTS

 

Section 6.01.  Payment of Securities.

 

(a)        The Company shall promptly make all payments in respect of the Securities on the dates and in the manner provided in the Securities and this Indenture.  A payment of principal or interest shall be considered paid on the date it is due if the Paying Agent (other than the Company) holds by 12:00 p.m.  (noon), New York City time, on that date money, deposited by or on behalf of the Company sufficient to make the payment.  Subject to Section 4.02, accrued and unpaid interest on any Security that 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 is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Company maintained for such purpose.  Principal, Fundamental Change Repurchase Price, and interest, if payable, shall be considered paid on the applicable date due if on such date (or, in the case of Fundamental Change Repurchase Price, on the Business Day following the applicable Fundamental Change Repurchase Date) the Trustee or the Paying Agent holds, in accordance with this Indenture, money sufficient to pay all such amounts then due.  The Company shall, to the fullest extent permitted by law, pay interest in immediately available funds on overdue principal amount and interest at the annual rate borne by the Securities compounded semiannually, which interest shall accrue from the date such overdue amount was originally due to the date payment of such amount, including interest thereon, has been made or duly provided for.  All such interest shall be payable on demand.

 

50









 

(b)        Payment of the principal of and interest, if any, on the Securities shall be made at the office or agency of the Company maintained for that purpose (which shall initially be at the address set forth in Section 2.03(c)) in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address appears in the Register; provided further that a Holder with an aggregate principal amount in excess of $2,000,000 will be paid by wire transfer in immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Trustee at least ten Business Days prior to the payment date.  Any wire transfer instructions received by the Trustee will remain in effect until revoked by the Holder.  Notwithstanding the foregoing, so long as this Security is registered in the name of a Depositary or its nominee, all payments hereon shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee.

 

Section 6.02.  SEC and Other Reports.

 

(a)        The Company shall deliver to the Trustee all reports and other information and documents which it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act (including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q), within 15 days after it files them with the SEC; provided that any such reports, information and documents filed with the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR) system or any such successor system shall be deemed to be filed with the Trustee.  In the event that the Company is no longer subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall continue to provide the Trustee with reports containing substantially the same information as would be required to be filed with the SEC had the Company continued to have been subject to such reporting requirements.  In such event, such reports will be provided at the times the Company would have been required to provide reports had it continued to be subject to such reporting requirements.  The Company also shall comply with the provisions of TIA Section 314(a).

 

(b)        Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute actual or constructive knowledge or notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

Section 6.03.  Compliance Certificates.

 

The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company (beginning with the fiscal year ending December 31, 2013), an Officers’ Certificate as to the signer’s knowledge of the Company’s compliance with all conditions and covenants on its part contained in this Indenture and stating whether or not the signer knows of any Default or Event of Default.  If such signer knows of such a Default or Event of Default, the Officers’ Certificate shall describe the Default or Event of Default and the efforts to remedy the

 

51











 

same.  For the purposes of this Section 6.03, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture.

 

Section 6.04.  Further Instruments and Acts.

 

The Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

 

Section 6.05.  Maintenance of Corporate Existence.

 

Subject to Article 7, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

Section 6.06.  Stay, Extension and Usury Laws.

 

The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or accrued but unpaid interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 6.07.  Maintenance of Office or Agency.

 

The Company will maintain an office or agency of the Trustee, Registrar and Paying Agent where securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or purchase and where notices and demands to or upon the company in respect of the Securities and this Indenture may be served.  The Corporate Trust Office shall initially be one such office or agency for all of the aforesaid purposes.  The Company shall give prompt written notice to the Trustee of the location, and of any change in the location, of any such office or agency (other than a change in the location of the office of the Trustee).  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 12.02.

 

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.

 

52











 

ARTICLE 7
  CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER OR LEASE

 

Section 7.01.  Company May Consolidate, Etc., Only on Certain Terms.

 

The Company may not consolidate with or merge into any Person (unless the Company is the surviving corporation) or convey, transfer or lease the property and assets, substantially as an entirety, of the Company to another Person, other than to one or more of the Company’s wholly-owned subsidiaries, unless:

 

(a)        the Person (if other than the Company) formed by such consolidation or into which the Company is merged, or the Person which acquires by conveyance, transfer or lease all or substantially all of the properties and assets of the Company, shall (i) be a corporation, limited liability company, partnership, trust or other business entity organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and (ii) such Person (if other than the Company) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the obligations of the Company under the Securities and this Indenture and the performance or observance of every covenant and provision of this Indenture and the Securities required on the part of the Company to be performed or observed and the conversion rights shall be provided for in accordance with Article 4, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person (if other than the Company) formed by such consolidation or into which the Company shall have been merged or by the Person which shall have acquired the Company’s assets;

 

(b)        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 occurred and be continuing; and

 

(c)        if the Company will not be the resulting or surviving corporation, the Company shall have, at or prior to the effective date of such consolidation, merger or transfer, delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Section 7.01 and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture complies with this Article, and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Section 7.02.  Successor Substituted.

 

Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease substantially as an entirety, of the properties and assets of the Company and its Subsidiaries, taken as a whole, in accordance with Section 7.01, 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

 

53











 

if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, and except for obligations the predecessor Person may have under a supplemental indenture, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE 8
  DEFAULT AND REMEDIES

 

Section 8.01.  Events of Default.

 

(a)        An “Event of Default” shall occur if:

 

(i)            the Company shall fail to pay when due the Principal or any Fundamental Change Repurchase Price of any Security, when the same becomes due and payable, whether or not such payment is prohibited by the subordination provisions hereunder; or

 

(ii)           the Company shall fail to pay an installment of interest, on any of the Securities, which failure continues for 30 days after the date when due whether or not such payment is prohibited by the subordination provisions hereunder; or

 

(iii)          the Company shall fail to deliver when due all shares of Common Stock, including any Make-Whole Premium, if any, and any cash deliverable upon conversion of the Securities, which failure continues for ten days; or

 

(iv)          the Company shall fail to perform or observe (or obtain a waiver with respect to) any other term, covenant or agreement contained in the Securities or this Indenture for a period of 75 days after receipt by the Company of a Notice of Default specifying such failure; or

 

(v)           the Company shall fail to pay any principal by the end of any applicable grace period or resulting in acceleration of other Indebtedness of the Company for borrowed money where the aggregate principal amount with respect to which the default or acceleration has occurred exceeds $15 million, provided that if any such default is cured, waived, rescinded or annulled, then the Event of Default by reason thereof would be deemed not to have occurred;

 

(vi)          the Company pursuant to or within the meaning of any Bankruptcy Law:

 

(A)            commences as a debtor a voluntary case or proceeding; or

 

(B)            consents to the entry of an order for relief against it in an involuntary case or proceeding or the commencement of any case against it;

 

(C)            consents to the appointment of a Receiver of it or for all or substantially all of its property; or

 

54











 

(D)            makes a general assignment for the benefit of its creditors;

 

(E)            files a petition in bankruptcy or answer or consent seeking reorganization or relief; or

 

(F)             consents to the filing of such a petition or the appointment of or taking possession by a Receiver; or

 

(vii)         a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)            grants relief against the Company in an involuntary case or proceeding or adjudicates the Company insolvent or bankrupt;

 

(B)            appoints a Receiver of the Company or for all or substantially all of the property of the Company; or

 

(C)            orders the winding up or liquidation of the Company;

 

and in each case the order or decree remains unstayed and in effect for 60 consecutive days.

 

The term “Bankruptcy Law” means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of debtors.  The term “Receiver” means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

 

(b)        Notwithstanding Section 8.01(a), no Event of Default under clause (iv) of Section 8.01(a) shall occur until the Trustee notifies the Company in writing upon the written direction of the Holders of at least 25% in aggregate principal amount of the Securities then outstanding, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding notify the Company and the Trustee in writing, of the Default (a “Notice of Default”), and the Company does not cure the Default within the time specified in clause (iv) of Section 8.01(a) after receipt of such notice.  A notice given pursuant to this Section 8.01 shall be given by registered or certified mail, must specify the Default, demand that it be remedied and state that the notice is a Notice of Default.  When any Default under this Section 8.01 is cured, it ceases.

 

(c)        The Company will deliver to the Trustee, within five Business Days after becoming aware of the occurrence of a Default or Event of Default, written notice thereof.

 

The Trustee shall not be charged with knowledge of any Event of Default unless written notice thereof shall have been given to a Responsible Officer with responsibility for this Indenture at the Corporate Trust Office of the Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder or unless a Responsible Officer with responsibility for this Indenture acquires actual knowledge of such Event of Default in the course of performing other duties pursuant to this Indenture.

 

55











 

Section 8.02.  Acceleration.

 

If an Event of Default (other than an Event of Default specified in clause (vi) or (vii) of Section 8.01(a)) occurs and is continuing with respect to the Company, the Trustee may, by notice to the Company, and shall upon the written direction of the Holders of at least 25% in aggregate principal amount of the Securities then outstanding, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may, by notice to the Company and the Trustee, declare the principal amount and accrued and unpaid interest, if any, through the date of declaration on all the Securities to be immediately due and payable; provided, however, that so long as any Designated Senior Indebtedness is outstanding, such acceleration of the Securities shall not be effective until the earlier of (x) an acceleration of such Designated Senior Indebtedness or (y) five (5) Business Days after receipt by the Trustee of written notice, or receipt by the Company of written notice from the Trustee, of such acceleration of the Securities.  Upon such a declaration, such principal amount and such accrued and unpaid interest, if any, shall be due and payable immediately.  If an Event of Default specified in Section 8.01(a)(vi) or (vii) occurs in respect of the Company and is continuing, the principal amount and accrued but unpaid interest, if any, on all the Securities shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders of Securities.  The Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may rescind an acceleration and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the Securities which have become due solely by such declaration of acceleration, have been cured or waived; (b) to the extent the payment of such interest is lawful, interest (calculated at the rate per annum borne by the Securities) on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; (c) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (d) all payments due to the Trustee and any predecessor Trustee under Section 9.07 have been made.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

Notwithstanding the acceleration provision above, to the extent elected by the Company, the sole remedy for an Event of Default relating to the failure to comply with the reporting obligations in the indenture with respect to SEC filings that are described above under Section 6.02(a), and for any failure to comply with the requirements of Section 314(a)(1) of the Trust Indenture Act, will for the first 180 days after the occurrence of such an Event of Default consist exclusively of the right to receive special interest on the Securities at a rate equal to 0.25% per annum of the principal amount of the Securities outstanding for each day during the first 90 days after the occurrence of such Event of Default, and 0.50% per annum of the principal amount of the Securities outstanding from the 91st day until the 180th day following the occurrence of such an Event of Default.  This special interest will be paid semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date following the date on which the special interest began to accrue on any Securities.  The special interest will accrue on all outstanding Securities from and including the date on which an Event of Default relating to a failure to comply with the reporting obligations hereunder first occurs to but not including the 180th day (or earlier, if the Event of Default relating to the reporting obligations is cured or waived prior to such 180th day), whereupon such special interest will cease to accrue and, if the

 

56











 

Event of Default relating to reporting obligations has not been cured or waived prior to such 180th day, the Securities will be subject to acceleration as provided above.  In the event the Company does not elect to pay special interest upon an Event of Default in accordance with this paragraph, the Securities will be subject to acceleration as provided above.

 

Section 8.03.  Other Remedies.

 

(a)        If an Event of Default occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy by proceeding at law or in equity to collect payment of the principal amount and accrued and unpaid interest, if any, on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

 

(b)        The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by applicable law.

 

Section 8.04.  Waiver of Defaults and Events of Default.

 

Subject to Sections 8.02, 8.07 and 11.02, the Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may waive an existing Default or Event of Default and its consequences, except an uncured Default or Event of Default in the payment of the principal of, premium, if any, or any accrued but unpaid interest on any Security, an uncured failure by the Company to convert any Securities into Common Stock or any Default or Event of Default in respect of any provision of this Indenture or the Securities which, under Section 11.02, cannot be modified or amended without the consent of the Holder of each Security affected.  When a Default or Event of Default is waived, it is cured and ceases to exist.

 

Section 8.05.  Control by Majority.

 

The Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of another Holder or the Trustee, or that may involve the Trustee in personal liability unless the Trustee is offered security or indemnity satisfactory to it; provided, however, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

57











 

Section 8.06.  Limitations on Suits.

 

(a)        A Holder may not pursue any remedy with respect to this Indenture or the Securities (except actions for payment of overdue principal, premium, if any, or interest or for the conversion of the Securities pursuant to Article 4) unless:

 

(i)            the Holder gives to the Trustee written notice of a continuing Event of Default;

 

(ii)           the Holders of at least 25% in aggregate principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy;

 

(iii)          such Holder or Holders offer to the Trustee security or indemnity acceptable to the Trustee against any loss, liability or expense;

 

(iv)          the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(v)           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 aggregate principal amount of the Securities then outstanding.

 

(b)        No Holder of a Security shall have any right under any provision of this Indenture or the Securities to affect, disturb, or prejudice the rights of another Holder of a Security or to obtain a preference or priority over another Holder of a Security.

 

Section 8.07.  Rights of Holders to Receive Payment and to Convert.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of the principal amount, Fundamental Change Repurchase Price, or Make-Whole Premium and interest, if any in respect of the Securities held by such Holder, on or after the respective due dates expressed in the Securities and this Indenture, (whether upon repurchase or otherwise), and to convert such Security in accordance with Article 4, and to bring suit for the enforcement of any such payment on or after such respective due dates or for the right to convert in accordance with Article 4, is, subject to compliance with the provisions of Section 8.06, absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

 

Section 8.08.  Collection Suit by Trustee.

 

If an Event of Default described in clause (i) or (ii) of Section 8.01(a) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or another obligor on the Securities for the whole amount owing with respect to the Securities and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

58











 

Section 8.09.  Trustee May File Proofs of Claim.

 

The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor on the Securities), its creditors or its property and shall be entitled and empowered to collect and receive any money or other property payable or deliverable on any such claims and to distribute the same, and any Receiver in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 9.07, and to the extent that such payment of the reasonable compensation, expenses, disbursements and advances in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other property which the Holders may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to, or, on behalf of any Holder, to authorize, accept or adopt any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 8.10.  Priorities.

 

(a)        If the Trustee collects any money pursuant to this Article 8 or, after an Event of Default, any money or any other property distributable in respect of the Company’s obligations under this Indenture, it shall pay out the money in the following order:

 

(i)            First, to the Trustee (including any predecessor trustee) for amounts due under Section 9.07;

 

(ii)           Second, to the Holders of Senior Indebtedness to the extent required by Article 5;

 

(iii)          Third, to Holders for amounts due and unpaid on the Securities for the principal amount and interest, as applicable, ratably, without preference or priority of any kind, according to such respective amounts due and payable on the Holders’ Securities; and

 

(iv)          Fourth, the balance, if any, to the Company.

 

(b)        The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 8.10.

 

59











 

Section 8.11.  Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses (whether incurred before trial, at trial, on appeal or in any bankruptcy or arbitration or other administrative proceeding), against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 8.11 does not apply to a suit made by the Trustee, a suit by a Holder pursuant to Section 8.07, or a suit by Holders of more than 10% in aggregate principal amount of the Securities then outstanding.  This Section 8.11 shall be in lieu of Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this Indenture, as permitted by the TIA.

 

ARTICLE 9
  TRUSTEE

 

Section 9.01.  Obligations of Trustee.

 

(a)        If an Event of Default of which a Responsible Officer of the Trustee shall have actual knowledge has occurred and is continuing, the Trustee may (and shall upon the written direction of the Holders of at least 25% in aggregate principal amount of the Securities then outstanding and being furnished with indemnity acceptable to it) exercise such of the rights and powers vested in it by this Indenture.  If an Event of Default of which a Responsible Officer of the Trustee shall have actual knowledge has occurred and is continuing, the Trustee shall use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

 

(b)        Except during the continuance of an Event of Default of which a Responsible Officer of the Trustee shall have actual knowledge, the Trustee need perform only those duties as are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

 

This Section 9.01(b) shall be in lieu of Section 315(a) of the TIA and such Section 315(a) is hereby expressly excluded from this Indenture, as permitted by the TIA.

 

(c)        In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.  The Trustee, however, shall examine any certificates and opinions which by any provision hereof are specifically required to be delivered to the Trustee to determine whether or not they conform on their face to the requirements of this Indenture, but need not confirm or investigate the accuracy of mathematical calculations or other facts, statements, opinions or calculations stated therein

 

60









 

(d)                       The Trustee may not be relieved from liability for its own gross negligent action, its own gross negligent failure to act, or its own willful misconduct, except that:

 

(i)                                     this paragraph does not limit the effect of Section 9.01(b), Section 9.01(c) or Section 9.01(e);

 

(ii)                                  the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and

 

(iii)                               the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with this Indenture or a direction received by it pursuant to Section 8.05.

 

This Section 9.01(d) shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections are hereby expressly excluded from this Indenture as permitted by the TIA.

 

(e)                        No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers unless the Trustee shall have received adequate security or indemnity in its opinion against potential risks, costs and liabilities incurred by it relating thereto.

 

(f)                         Every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b), (c), (d) and (e) of this Section 9.01.

 

(g)                        The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(h)                       The Trustee shall not be liable for any delays occurring as a result of force majeure.

 

Section 9.02.  Rights of Trustee.

 

(a)                       Subject to Section 9.01:

 

(i)                                     The Trustee may rely conclusively and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, 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.  The Trustee need not investigate any fact or matter stated in the document.

 

(ii)                                  Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel, which shall conform to Section 12.04(b).  The 

 

61











 

Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel.

 

(iii)                               The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or custodians, and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed by the Trustee with due care.

 

(iv)                              The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers.

 

(v)                                 The Trustee may consult with counsel of its selection, and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any such action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

(vi)                              The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

(vii)                           The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company, and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

 

(viii)                        The Trustee shall not be deemed to have notice or knowledge of any Default or Event of Default, or Fundamental Change unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default, Event of Default or Fundamental Change is received by a Responsible Officer of the Trustee at the Corporate Trust Office, and such notice references the Securities and this Indenture.  In the absence of receipt of such notice or actual knowledge, the Trustee may conclusively assume that there is no Default, Event of Default, or Fundamental Change.

 

(ix)                              The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including, without 

 

62











 

limitation as Paying Agent, Registrar and Conversion Agent, and to each agent, custodian and other Person employed to act hereunder.

 

(x)                                 In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

Section 9.03.  Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of the Company with the same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.  However, the Trustee is subject to Sections 9.10 and 9.11.

 

Section 9.04.  Trustee’s Disclaimer.

 

The Trustee makes no representation as to the validity, sufficiency or adequacy of this Indenture or the Securities.  Neither the Trustee nor any authenticating agent shall be accountable for the Company’s use of the proceeds from the Securities and neither the Trustee nor any authenticating agent shall be responsible for any statement in the Securities or the Indenture other than the Trustee’s certificate of authentication.  The Trustee shall not be responsible for making any calculation with respect to any matter under this Indenture.  The Trustee shall have no duty to monitor or investigate the Company’s compliance with or the breach of, or cause to be performed or observed, any representation, warranty or covenant made in this Indenture.

 

Section 9.05.  Notice of Default or Events of Default.

 

If a Default or an Event of Default occurs and is continuing and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Holder of a Security notice of all uncured Defaults or Events of Default known to it within 90 days after it occurs or, if later, within 15 days after it becomes known to the Trustee.  However, the Trustee may withhold the notice if and for so long as a committee of its Responsible Officers in good faith determines that withholding notice is in the interests of Holders of Securities, except in the case of a Default or an Event of Default in payment of the principal of, or premium, if any, or interest on any Security when due or in the payment of any purchase obligation, or the Company’s failure to convert Securities when obligated to convert them.  This Section 9.05 is in lieu of section 315(b) of the TIA and such provision is expressly excluded from this Indenture as permitted by the TIA.

 

Section 9.06.  Reports by Trustee to Holders.

 

(a)                       If a report is required by TIA Section 313, within 60 days after each May 15, beginning with the May 15 following the date of this Indenture, the Trustee shall mail to each Holder of Securities a brief report dated as of such May 15 that complies with TIA Section 

 

63











 

313(a).  If required by TIA Section 313, the Trustee also shall comply with TIA Sections 313(b)(2), (c) and (d).

 

(b)                       A copy of each report at the time of its mailing to Holders of Securities shall be mailed to the Company and, to the extent required by the TIA, filed with the SEC, and each stock exchange, if any, on which the Securities are listed.  The Company shall notify the Trustee whenever the Securities become listed on any stock exchange or listed or admitted to trading on any quotation system and any changes in the stock exchanges or quotation systems on which the Securities are listed or admitted to trading and of any delisting thereof.

 

Section 9.07.  Compensation and Indemnity.

 

(a)                       The Company shall pay to the Trustee from time to time such compensation (as agreed to from time to time by the Company and the Trustee in writing) for its services (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust).  The Company shall reimburse the Trustee upon request for all reasonable disbursements, expenses and advances incurred or made by it.  Such expenses may include the reasonable compensation, disbursements and expenses of the Trustee’s agents, counsel and Persons not regularly in its employ.

 

(b)                       The Company shall indemnify and hold harmless the Trustee or any predecessor Trustee (which for purposes of this Section 9.07 shall include its officers, directors, employees and agents) for, and hold it harmless against, any and all loss, liability, claim, damage or expense including taxes (other than franchise taxes and taxes based upon, measured by or determined by the income of the Trustee), incurred by it in connection with the acceptance or administration of its duties under this Indenture or any action or failure to act as authorized or within the discretion or rights or powers conferred upon the Trustee hereunder including the reasonable costs and expenses of the Trustee and its counsel in defending (including reasonable legal fees and expenses whether incurred before trial, at trial, on appeal or in any bankruptcy or arbitration or other administrative proceeding) itself against any claim (whether asserted by the Company, or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly of any claim asserted against the Trustee of which it has received written notice for which it may seek indemnity.  The Company need not pay for any settlement effected without its prior written consent, which shall not be unreasonably withheld.

 

(c)                        The Company need not reimburse the Trustee for any expense or indemnify it against any loss or liability determined to have been caused by its own gross negligence, willful misconduct or bad faith.

 

(d)                       To secure the Company’s payment obligations in this Section 9.07, the Trustee shall have a senior claim to which the Securities are hereby made subordinate on all money or property held or collected by the Trustee.  The obligations of the Company under this Section 9.07 shall survive the satisfaction and discharge of this Indenture, the termination for any reason of this Indenture or the resignation or removal of the Trustee.

 

64











 

(e)                        When the Trustee incurs expenses or renders services after an Event of Default specified in clause (vi) or (vii) of Section 8.01(a) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)                         “Trustee” for purposes of this Section shall include any predecessor Trustee; provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.

 

Section 9.08.  Replacement of Trustee.

 

(a)                       The Trustee may resign by so notifying the Company.  The Holders of a majority in aggregate principal amount of the Securities then outstanding may remove the Trustee by so notifying the Trustee and the Company and may, with the Company’s written consent, appoint a successor Trustee.  The Company may remove the Trustee at any time, so long as no Default or Event of Default has occurred and is continuing, and appoint a Successor Trustee in accordance with this Section 9.08.

 

(b)                       If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee.  The resignation or removal of a Trustee shall not be effective until a successor Trustee shall have delivered the written acceptance of its appointment as described below.

 

(c)                        If a successor Trustee does not take office within 45 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of 10% in principal amount of the Securities then outstanding may petition any court of competent jurisdiction at the expense of the Company for the appointment of a successor Trustee at the expense of the Company.

 

(d)                       If the Trustee fails to comply with Section 9.10, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(e)                        A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Promptly thereafter, the retiring Trustee shall (upon payment of its charges hereunder and subject to its lien provided for in Section 9.07(d)) transfer all property held by it as Trustee to the successor Trustee and be released from its obligations (exclusive of any liabilities that the retiring Trustee may have incurred while acting as Trustee) hereunder, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  A successor Trustee shall mail notice of its succession to each Holder.

 

(f)                         A retiring Trustee shall not be liable for the acts or omissions of any successor Trustee after its succession.

 

65











 

(g)                        Notwithstanding replacement of the Trustee pursuant to this Section 9.08, the Company’s obligations under Section 9.07 shall continue for the benefit of the retiring Trustee.

 

(h)                       At any time there shall be only one Trustee with respect to the Securities.

 

Section 9.09.  Successor Trustee by Merger, Etc.

 

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business (including the administration of this Indenture) to, another Person, the resulting, surviving or transferee Person, without any further act, shall be the successor Trustee; provided such transferee Person shall qualify and be eligible under Section 9.10.  Such successor Trustee shall promptly mail notice of its succession to the Company and each Holder.

 

Section 9.10.  Eligibility; Disqualification.

 

The Trustee shall always satisfy the requirements of paragraphs (1), (2) and (5) of TIA Section 310(a).  The Trustee (or its parent holding company) shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.  If at any time the Trustee shall cease to satisfy any such requirements, it shall resign immediately in the manner and with the effect specified in this Article 9.  The Trustee shall be subject to the provisions of TIA Section 310(b).  Nothing herein shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA Section 310(b).

 

Section 9.11.  Preferential Collection of Claims Against Company.

 

The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

 

ARTICLE 10
  SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 10.01.  Satisfaction and Discharge of Indenture.

 

(a)                       This Indenture shall cease to be of further force and effect (except as to any surviving rights of conversion, registration of transfer or exchange of Securities herein expressly provided for and except as further provided below), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when either:

 

(i)                                     all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07 and (B) Securities for whose payment money has 

 

66











 

theretofore been deposited in trust and thereafter repaid to the Company as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

 

(ii)                                  all such Securities not theretofore delivered to the Trustee for cancellation

 

have become due and payable; provided in the case of this clause (ii), that

 

(1)                       the Company has deposited with the Trustee or a Paying Agent (other than the Company or any of its Affiliates) as trust funds in trust for the purpose of and in an amount sufficient to pay and discharge all indebtedness related to such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Final Maturity Date, as the case may be;

 

(2)                       the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

 

(3)                       the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein relating to the satisfaction and discharge of this Indenture have been complied with.

 

(b)                       Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company with respect to the conversion privilege and the Conversion Rate of the Securities pursuant to Article 4, the obligations of the Company to the Trustee under Section 9.07 and, if money shall have been deposited with the Trustee pursuant to clause (ii) of Section 10.01(a), the provisions of Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 6.01 and 12.05, Article 4, and this Article 10, shall survive such satisfaction and discharge until the Securities have been paid in full.

 

Section 10.02.  Application of Trust Money.

 

Subject to the provisions of Section 10.03, the Trustee or a Paying Agent shall hold in trust, for the benefit of the Holders, all money deposited with it pursuant to Section 10.01 and shall apply the deposited money in accordance with this Indenture and the Securities to the payment of the principal of and interest on the Securities.

 

Section 10.03.  Repayment to Company.

 

(a)                       The Trustee and each Paying Agent shall promptly pay to the Company upon request any excess money (i) deposited with them pursuant to Section 10.01 and (ii) held by them at any time.

 

(b)                       The Trustee and each Paying Agent shall, subject to applicable abandonment property laws, pay to the Company upon request any money held by them for the payment of 

 

67











 

principal or interest that remains unclaimed for two years after a right to such money has matured; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment, may at the expense of the Company cause to be mailed to each Holder entitled to such money notice that such money remains unclaimed and that after a date specified therein, which shall be at least 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be repaid to the Company.  After payment to the Company, Holders entitled to money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person.

 

Section 10.04.  Reinstatement.

 

If the Trustee or any Paying Agent is unable to apply any money in accordance with Section 10.02 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 10.01 until such time as the Trustee or such Paying Agent is permitted to apply all such money in accordance with Section 10.02; provided, however, that if the Company has made any payment of the principal of or interest on any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive any such payment from the money held by the Trustee or such Paying Agent.

 

ARTICLE 11
  AMENDMENTS; SUPPLEMENTS AND WAIVERS

 

Section 11.01.  Without Consent of Holders.

 

(a)                       The Company and the Trustee may amend or supplement this Indenture or the Securities without notice to or consent of any Holder of a Security for the purpose of:

 

(i)                                     evidencing a successor to the Company and the assumption by that successor of the Company’s obligations under this Indenture and the Securities;

 

(ii)                                  adding to the Company’s covenants for the benefit of the Holders or surrendering any right or power conferred upon the Company;

 

(iii)                               securing the Company’s obligations in respect of the Securities;

 

(iv)                              evidencing and providing for the acceptance of the appointment of a successor trustee in accordance with Article 9;

 

(v)                                 complying with the requirements of the SEC in order to maintain the qualification of this Indenture under the TIA, as contemplated by this Indenture or otherwise;

 

68











 

(vi)                              to conform the provisions of this Indenture to the “Description of the Notes” section contained in the final prospectus of the Company dated January [·], 2013;

 

(vii)                           curing any ambiguity, omission, inconsistency or correcting or supplementing any defective provision contained in this Indenture; or

 

(viii)                        making any other changes to the Indenture that do not adversely affect the rights of the Holders in any material respect.

 

(b)                       After an amendment, supplement or waiver under this Section 11.01 becomes effective, the Company shall promptly mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver

 

Section 11.02.  With Consent of Holders.

 

(a)                       The Company and the Trustee may amend or supplement this Indenture or the Securities with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding.  However, subject to Section 11.04, without the written consent of each Holder affected, an amendment, supplement or waiver may not:

 

(i)                                     alter the manner of calculation or rate of accrual of interest on any Security or change the time of payment of any installment of interest on, any Security;

 

(ii)                                  make any of the Securities payable in money or securities other than that stated in the Securities;

 

(iii)                               change the stated maturity of any Security;

 

(iv)                              reduce the principal amount or Fundamental Change Repurchase Price (as applicable) with respect to any of the Securities;

 

(v)                                 make any change that adversely affects the rights of Holders to require the Company to purchase Securities at the option of Holders;

 

(vi)                              impair the right to institute suit for the enforcement of any payment on or with respect to any Security or with respect to the conversion of any Security;

 

(vii)                           change the currency of payment of principal of, or interest on, the Securities;

 

(viii)                        except as otherwise permitted or contemplated by Section 4.10, adversely affect the conversion rights (including any Make-Whole Premium) of the Securities; or

 

69











 

(ix)                              change the percentage in aggregate principal amount of Securities outstanding necessary to modify or amend this Indenture or to waive any past Default.

 

(b)                       Without limiting the provisions of Section 11.02(a) hereof, the Holders of a majority in aggregate principal amount of the Securities then outstanding may, on behalf of all the Holders of all Securities, (i) waive compliance by the Company with the restrictive provisions of this Indenture, and (ii) waive any past Default or Event of Default under this Indenture and its consequences, except an uncured failure to pay when due the principal amount, accrued and unpaid interest or Fundamental Change Repurchase Price, or in the obligation to deliver Common Stock, if any and as applicable, or in respect of any provision which under this Indenture cannot be modified or amended without the consent of the Holder of each outstanding Security affected.

 

(c)                        After an amendment, supplement or waiver under this Section 11.02 becomes effective, the Company shall promptly mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

 

Section 11.03.  Compliance with Trust Indenture Act.

 

Every amendment to or supplement of this Indenture or the Securities shall comply with the TIA as in effect at the date of such amendment or supplement.

 

Section 11.04.  Revocation and Effect of Consents.

 

(a)                       Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent Holder may revoke the consent as to its Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective.

 

(b)                       After an amendment, supplement or waiver becomes effective, it shall bind every Holder of a Security.

 

Section 11.05.  Notation on or Exchange of Securities.

 

If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.

 

70









 

Section 11.06.  Trustee to Sign Amendments, Etc.

 

The Trustee shall sign any amendment or supplemental indenture authorized pursuant to this Article 11 if the amendment or supplemental indenture does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, in its sole discretion, but need not sign it.  In signing or refusing to sign such amendment or supplemental indenture, the Trustee shall be provided with and, subject to Section 9.01, shall be fully protected in relying upon, an Opinion of Counsel and an Officers’ Certificate stating that such amendment or supplemental indenture is authorized or permitted by this Indenture.  The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it.

 

Section 11.07.  Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture under this Article 11, 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.

 

ARTICLE 12
  MISCELLANEOUS

 

Section 12.01.  Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through operation of Section 318(c) thereof, such imposed duties shall control.

 

Section 12.02.  Notices.

 

Any demand, authorization notice, request, consent or communication shall be given in writing and delivered in person or mailed by first-class mail, postage prepaid, addressed as follows or transmitted by facsimile transmission (confirmed by delivery in person or mail by first-class mail, postage prepaid, or by guaranteed overnight courier) to the following facsimile numbers:

 

If to the Company, to:

 

Theravance, Inc.

901 Gateway Boulevard

South San Francisco, CA 94080

Attn:  General Counsel

Fax:  650-808-6095

 

71











 

with a copy (which copy shall be delivered as an accommodation and shall not be required to be delivered in satisfaction of any requirement hereof) to:

 

Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP

1200 Seaport Boulevard

Redwood City, CA 94063

Attn:  David Young

Fax:  877-881-6005

 

and

 

Shearman & Sterling LLP

Four Embarcadero Center, Suite 3800

San Francisco, CA 94111

Attn:  John Wilson

Fax:  415-616-1415

 

if to the Trustee, to:

 

The Bank of New York Mellon Trust Company, N.A.

400 South Hope Street

Suite 400

Los Angeles, CA 90017

Attn: Corporate Trust Department — Corporate Finance Unit

Fax: 213-630-6298

 

Such notices or communications shall be effective when received.

 

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.  Notice to or from the Trustee shall not be via electronic mail.  Notices to the Trustee via facsimile shall promptly be followed by the original written notice.

 

Any notice or communication mailed to a Holder of a Security shall be mailed by first-class mail or delivered by an overnight delivery service to it at its address shown on the register kept by the Primary Registrar.

 

The Trustee agrees to accept and act upon facsimile transmission of written instructions and/or directions pursuant to this Indenture given by the Company, provided, however that: (i) the Company, subsequent to such facsimile transmission of written instructions and/or directions, shall provide the originally executed instructions and/or directions to the Trustee in a timely manner and (ii) such originally executed instructions and/or directions shall be signed by an “Officer” of the Company

 

Failure to mail a notice or communication to a Holder of a Security or any defect in it shall not affect its sufficiency with respect to other Holders of Securities.  If a notice or

 

72











 

communication to a Holder of a Security is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

If the Company mails any notice to a Holder of a Security, it shall mail a copy to the Trustee and each of the Registrar, Paying Agent and Conversion Agent.

 

The Trustee shall have the right, but shall not be required, to rely upon and comply with notices, instructions, directions or other communications sent by e-mail, facsimile and other similar unsecured electronic methods; provided, however, that the Trustee shall have received or have on file an incumbency certificate listing persons designated to give such instructions or directions on behalf of the Company and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced by a duly executed addendum to such incumbency certificate whenever a person is to be added or deleted from the listing.  The Trustee shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by the Company as a result of such reliance upon or compliance with such notices, instructions, directions or other communications.  The Company agrees to assume all risks arising out of the use of such electronic methods to submit notices, instructions, directions or other communications to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.  The Company shall use all reasonable endeavors to ensure that any such notices, instructions, directions or other communications transmitted to the Trustee pursuant to this Indenture are complete and correct.

 

Section 12.03.  Communications by Holders with Other Holders.

 

Holders of Securities may communicate pursuant to TIA Section 312(b) with other Holders of Securities with respect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar and any other person shall have the protection of TIA Section 312(c).

 

Section 12.04.  Certificate and Opinion as to Conditions Precedent.

 

(a)        Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee at the request of the Trustee:

 

(i)            an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent (including any covenants, compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(ii)           an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent (including any covenants, compliance with which constitutes a condition precedent) have been complied with.

 

73











 

(b)        Each Officers’ Certificate and Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(i)            a statement that the person making such certificate or opinion has read such covenant or condition;

 

(ii)           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;

 

(iii)          a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iv)          a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with;

 

provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.

 

Section 12.05.  Record Date for Vote or Consent of Holders of Securities.

 

The Company (or, in the event deposits have been made pursuant to Section 10.01, the Trustee) may set a record date for purposes of determining the identity of Holders entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall not be more than 30 days prior to the date of the commencement of solicitation of such action.  Notwithstanding the provisions of Section 11.04, if a record date is fixed, those persons who were Holders of Securities at the close of business on such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date.

 

Section 12.06.  Rules by Trustee, Paying Agent, Registrar and Conversion Agent.

 

The Trustee may make reasonable rules (not inconsistent with the terms of this Indenture) for action by or at a meeting of Holders.  Any Registrar, Paying Agent or Conversion Agent may make reasonable rules for its functions.

 

Section 12.07.  Legal Holidays.

 

A “Legal Holiday” is a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York or Los Angeles, California are authorized or obligated to close.  If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.  If a Regular Record Date is a Legal Holiday, the record date shall not be affected.

 

74











 

Section 12.08.  Governing Law.  

 

This Indenture and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Section 12.09.  No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary of the Company.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 12.10.  No Recourse Against Others.

 

All liability described in paragraph 17 of the Securities of any director, officer, employee or shareholder, as such, of the Company hereby is waived and released by each of the Holders.

 

Section 12.11.  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, now in effect or hereafter enacted and made effective, in any jurisdiction.

 

Section 12.12.  Successors.

 

All agreements of the Company in this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this Indenture shall bind its successor.

 

Section 12.13.  Multiple Counterparts.

 

The parties may sign multiple counterparts of this Indenture.  Each signed counterpart shall be deemed an original, but all of them together represent the same agreement.

 

Section 12.14.  Separability.

 

If any provisions in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 12.15.  Table of Contents, Headings, Etc.

 

The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

75











 

Section 12.16.  Waiver of Jury Trial.

 

EACH OF THE COMPANY AND THE TRUSTEE, AND EACH HOLDER OF A NOTE BY ITS ACCEPTANCE THEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

Section 12.17.  Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

[SIGNATURE PAGE FOLLOWS]

 

76











 

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the date and year first above written.

 

	
 
    	
THERAVANCE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE BANK OF NEW   YORK
   MELLON TRUST COMPANY, N.A.,
   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    


 

[SIGNATURE PAGE TO INDENTURE]

 

S-1











 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.  OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(1)

 




(1)  This paragraph should be included if the Security is a Global Security.

 

A-1











 

THERAVANCE, INC.

[·]% Convertible Subordinated Notes due 2023

 

	
No. 1
    	
 
    	
CUSIP: [·]
    


 

Theravance, Inc., a Delaware corporation, promises to pay to Cede & Co.  or registered assigns the principal amount of                                              ($          ) on January 15, 2023.

 

This Security shall bear interest as specified on the other side of this Security.  This Security is convertible as specified on the other side of this Security.

 

Additional provisions of this Security are set forth on the other side of this Security.

 

Dated: January      , 2013

 

[SIGNATURE PAGE FOLLOWS]

 

A-2











 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
 
    	
THERAVANCE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated: January       , 2013
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Trustee’s Certificate of Authentication:
    	
 
    	
 
    
	
This is one of the Securities referred to in
    	
 
    	
 
    
	
the within-mentioned Indenture.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
THE BANK OF NEW YORK MELLON
    	
 
    	
 
    
	
TRUST COMPANY, N.A., as Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    	
 
    	
 
    


 

A-3









 

[FORM OF REVERSE SIDE OF SECURITY]

 

THERAVANCE, INC.

[·]% CONVERTIBLE SUBORDINATED NOTES DUE 2023

 

1.                                      INTEREST

 

Theravance, Inc., a Delaware corporation (the “Company”, which term shall include any successor corporation under the Indenture hereinafter referred to), promises to pay interest on the principal amount of this Security at the rate of [·]% per annum.  The Company shall pay interest semiannually on January 15 and July 15 of each year (each an “Interest Payment Date”), commencing July 15, 2013.  Each payment of interest will include interest accrued for the period commencing on and including the immediately preceding Interest Payment Date, provided that the first interest payment on July 15, 2013, will include interest from January [·], 2013 through the day before the relevant Interest Payment Date (or purchase date, as the case may be).  Cash interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.  Any payment of principal or interest required to be made on a day that is not a Business Day shall be made on the next succeeding Business Day.

 

2.                                      METHOD OF PAYMENT

 

The Company shall pay interest on this Security (except defaulted interest) to the person who is the Holder of this Security at the close of business on January 1 or July 1, as the case may be, (each, a “Regular Record Date”) next preceding the related Interest Payment Date.  The Holder must surrender this Security to a Paying Agent to collect payment of principal.  The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts.  The Company may pay principal and interest in respect of any Certificated Security by check or wire payable in such money; provided, however, that a Holder with an aggregate principal amount in excess of $2,000,000 will be paid by wire transfer in immediately available funds at the election of such Holder if such Holder has provided wire transfer instructions to the Trustee at least ten Business Days prior to the Payment Date.  The Company may mail an interest check to the Holder’s registered address.  Notwithstanding the foregoing, so long as this Security is registered in the name of a Depositary or its nominee, all payments hereon shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee.

 

Any wire transfer instructions received by the Trustee will remain in effect until revoked by the Holder.

 

3.                                      PAYING AGENT, REGISTRAR AND CONVERSION AGENT

 

Initially, The Bank of New York Mellon Trust Company, N.A. (the “Trustee”, which term shall include any successor trustee under the Indenture hereinafter referred to) will act as Paying Agent, Registrar and Conversion Agent.  The Company may change any Paying Agent, Registrar or Conversion Agent without notice to the Holder.  The Company or any of its

 

A-4











 

Subsidiaries may, subject to certain limitations set forth in the Indenture, act as Paying Agent or Registrar.

 

4.                                      INDENTURE, LIMITATIONS

 

This Security is one of a duly authorized issue of Securities of the Company designated as its [·]% Convertible Subordinated Notes Due 2023 (the “Securities”), issued under an Indenture dated as of January [·], 2013 (together with any supplemental indentures thereto, the “Indenture”), between the Company and the Trustee.  The terms of this Security include those stated in the Indenture and those required by or made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended, as in effect on the date of the Indenture.  This Security is subject to all such terms, and the Holder of this security is referred to the Indenture and said Act for a statement of them.  Capitalized terms not defined herein have the meaning ascribed to such terms in the Indenture.

 

The Securities are unsecured, subordinated obligations of the Company limited to $250,000,000 aggregate principal amount ($287,500,000 aggregate principal amount if the Underwriters exercise their over-allotment option in full, except as provided for in the Indenture).  The Indenture does not limit other debt of the Company, secured or unsecured.

 

5.                                      NO REDEMPTION

 

The Company may not redeem the Securities prior to the Final Maturity Date and no sinking fund is provided for the Securities.

 

6.                                      PURCHASE OF SECURITIES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

 

If a Fundamental Change occurs prior to the Final Maturity Date, at the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase for cash, subject to certain exceptions described in the Indenture all or any part specified by the Holder (so long as the principal amount of such part is $1,000 or an integral multiple of $1,000) of the Securities held by such Holder on a date specified by the Company that is not less than 30 nor more than 45 days after the date of the Fundamental Change Company Notice, at a purchase price equal to 100% of the principal amount thereof together with accrued and unpaid interest, if any, to, but excluding, the Fundamental Change Repurchase Date.  The Holder shall have the right to withdraw any Fundamental Change Repurchase Notice (in whole or in a portion thereof that is $1,000 or an integral multiple of $1,000) at any time prior to the close of business on the Business Day next preceding the Fundamental Change Repurchase Date by delivering a written notice of withdrawal to the Paying Agent in accordance with the terms of the Indenture.

 

A-5











 

7.                                      CONVERSION

 

Subject to and upon compliance with the provisions of the Indenture, a Holder may surrender for conversion any Security that is $1,000 principal amount or integral multiples thereof.

 

8.                                      SUBORDINATION

 

To the extent provided in the Indenture, the Securities are subordinated to Senior Indebtedness, as defined in the Indenture, of the Company.  To the extent provided in the Indenture, Senior Indebtedness must be paid in full before the Securities may be paid.  The Company agrees, and each Security holder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose.

 

9.                                      DENOMINATIONS, TRANSFER, EXCHANGE

 

The Securities are in registered form, without coupons, in denominations of $1,000 principal amount and integral multiples of $1,000 principal amount.  A Holder may register the transfer of or exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes or other governmental charges that may be imposed in relation thereto by law or permitted by the Indenture.

 

10.                               PERSONS DEEMED OWNERS

 

The Holder of a Security may be treated as the owner of it for all purposes.

 

11.                               UNCLAIMED MONEY

 

If money for the payment of principal or interest remains unclaimed for two years, the Trustee and any Paying Agent will pay the money back to the Company at its written request, subject to applicable unclaimed property law and the provisions of the Indenture.  After that, Holders entitled to money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person.

 

12.                               AMENDMENT, SUPPLEMENT AND WAIVER

 

Subject to certain exceptions, the Indenture or the Securities may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding, and an existing Default or Event of Default and its consequence or compliance with any provision of the Indenture or the Securities may be waived in a particular instance with the consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding.  Without the consent of or notice to any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities as provided in the Indenture.

 

A-6











 

13.                               SUCCESSOR ENTITY

 

When a successor corporation assumes all the obligations of its predecessor under the Securities and the Indenture in accordance with the terms and conditions of the Indenture, the predecessor corporation (except in certain circumstances specified in the Indenture) shall be released from those obligations.

 

14.                               DEFAULTS AND REMEDIES

 

Under the Indenture, an Event of Default shall occur if:

 

(1)                                 the Company shall fail to pay when due the Principal or any Fundamental Change Repurchase Price of any Security, when the same becomes due and payable, whether or not such payment is prohibited by the subordination provisions under the Indenture; or

 

(2)                                 the Company shall fail to pay an installment of interest, on any of the Securities, which failure continues for 30 days after the date when due, whether or not such payment is prohibited by the subordination provisions under the Indenture; or

 

(3)                                 the Company shall fail to deliver when due all shares of Common Stock, including any Make-Whole Premium, if any, and any cash deliverable upon conversion of the Securities, which failure continues for ten days; or

 

(4)                                 the Company shall fail to perform or observe (or obtain a waiver with respect to) any other term, covenant or agreement contained in the Securities or the Indenture for a period of 75 days after receipt by the Company of a Notice of Default specifying such failure; or

 

(5)                                 the Company shall fail to pay any principal by the end of any applicable grace period or resulting in acceleration of other Indebtedness of the Company for borrowed money where the aggregate principal amount with respect to which the default or acceleration has occurred exceeds $15 million, provided that if any such default is cured, waived, rescinded or annulled, then the Event of Default by reason thereof would be deemed not to have occurred; or

 

(6)                                 the Company pursuant to or within the meaning of any Bankruptcy Law:

 

(A)                               commences as a debtor a voluntary case or proceeding; or

 

(B)                               consents to the entry of an order for relief against it in an involuntary case or proceeding or the commencement of any case against it;

 

(C)                               consents to the appointment of a Receiver of it or for all or substantially all of its property; or

 

(D)                               makes a general assignment for the benefit of its creditors;

 

A-7











 

(E)                                files a petition in bankruptcy or answer or consent seeking reorganization or relief; or

 

(F)                                 consents to the filing of such a petition or the appointment of or taking possession by a Receiver; or

 

(7)                                 a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)                               grants relief against the Company in an involuntary case or proceeding or adjudicates the Company insolvent or bankrupt;

 

(B)                               appoints a Receiver of the Company or for all or substantially all of the property of the Company; or

 

(C)                               orders the winding up or liquidation of the Company;

 

and in each case the order or decree remains unstayed and in effect for 60 consecutive days.  The term “Bankruptcy Law” means Title 11 of the United States Code (or any successor thereto) or any similar federal or state law for the relief of debtors.  The term “Receiver” means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

 

Notwithstanding the above, no Event of Default under clauses (4) or (5) above shall occur until the Trustee notifies the Company in writing upon the written direction of the Holders of at least 25% in aggregate principal amount of the Securities then outstanding, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding notify the Company and the Trustee in writing, of the Default (a “Notice of Default”), and the Company does not cure the Default within the time specified in clause (4) or (5), as applicable, after receipt of such notice.

 

If an Event of Default (other than an Event of Default specified in clause (6) or (7) above) occurs and is continuing with respect to the Company, the Trustee may, by notice to the Company, and shall upon the written direction of the Holders of at least 25% in aggregate principal amount of the Securities then outstanding, or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding may, by notice to the Company and the Trustee, declare the principal amount and accrued and unpaid interest, if any, through the date of declaration on all the Securities to be immediately due and payable; provided, however, that so long as any Designated Senior Indebtedness is outstanding, such acceleration of the Securities shall not be effective until the earlier of (x) an acceleration of such Designated Senior Indebtedness or (y) five (5) Business Days after receipt by the Trustee of written notice, or receipt by the Company of written notice from the Trustee, of such acceleration of the Securities.  Upon such a declaration, such principal amount and such accrued and unpaid interest, if any, shall be due and payable immediately.  If an Event of Default specified in clauses (6) or (7) occurs in respect of the Company and is continuing, the principal amount and accrued but unpaid

 

A-8











 

interest, if any, on all the Securities shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders of Securities.  The Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may rescind an acceleration and its consequences if (a) all existing Events of Default, other than the nonpayment of the principal of the Securities which have become due solely by such declaration of acceleration, have been cured or waived; (b) to the extent the payment of such interest is lawful, interest (calculated at the rate per annum borne by the Securities) on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; (c) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (d) all payments due to the Trustee and any predecessor Trustee under the Indenture have been made.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.

 

Notwithstanding the acceleration provision above, to the extent elected by the Company, the sole remedy for an Event of Default relating to the failure to comply with the reporting obligations in the indenture with respect to SEC filings that are described under Section 5.02(a) of the Indenture, and for any failure to comply with the requirements of Section 314(a)(1) of the Trust Indenture Act, will for the first 180 days after the occurrence of such an Event of Default consist exclusively of the right to receive special interest on the Securities at a rate equal to 0.25% per annum of the principal amount of the Securities outstanding for each day during the first 90 days after the occurrence of such Event of Default, and 0.50% per annum of the principal amount of the Securities outstanding from the 91st day until the 180th day following the occurrence of such an Event of Default. This special interest will be paid semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date following the date on which the special interest began to accrue on any Securities.  The special interest will accrue on all outstanding Securities from and including the date on which an Event of Default relating to a failure to comply with the reporting obligations hereunder first occurs to but not including the 180th day (or earlier, if the Event of Default relating to the reporting obligations is cured or waived prior to such 180th day), such special interest will cease to accrue and, if the Event of Default relating to reporting obligations has not been cured or waived prior to such 180th day, the Securities will be subject to acceleration as provided above.  In the event the Company does not elect to pay special interest upon an Event of Default in accordance with this paragraph, the Securities will be subject to acceleration as provided above.  Holders may not enforce the Indenture or the Securities except as provided in the Indenture.  The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice of any continuing Default (except a Default in payment of principal or interest) if and so long as it determines that withholding notice is in their interests.  The Company is required to file periodic certificates with the Trustee as to the Company’s compliance with the Indenture and knowledge or status of any Default.

 

A-9











 

15.                               TRUSTEE DEALINGS WITH THE COMPANY

 

The Bank of New York Mellon Trust Company, N.A., the initial Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or an Affiliate of the Company, and may otherwise deal with the Company or an Affiliate of the Company, as if it were not the Trustee.

 

16.                               NO RECOURSE AGAINST OTHERS

 

A director, officer, employee or shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture nor for any claim based on, in respect of or by reason of such obligations or their creation.  The Holder of this Security by accepting this Security waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of this Security.

 

17.                               AUTHENTICATION

 

This Security shall not be valid until the Trustee or an authenticating agent manually signs the certificate of authentication on the other side of this Security.

 

18.                               ABBREVIATIONS AND DEFINITIONS

 

Customary abbreviations may be used in the name of the Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).

 

All terms defined in the Indenture and used in this Security but not specifically defined herein are defined in the Indenture and are used herein as so defined.

 

19.                               INDENTURE TO CONTROL; GOVERNING LAW

 

In the case of any conflict between the provisions of this Security and the Indenture, the provisions of the Indenture shall control.  This Security and the Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

 

The Company will furnish to any Holder, upon written request and without charge, a copy of the Indenture.  Requests may be made to:  Theravance, Inc., 901 Gateway Boulevard, South San Francisco, California 94080, Attention:  General Counsel (Fax:  650-808-6095).

 

A-10











 

ASSIGNMENT FORM

 

	
To assign this   Security, fill in the form below:
    	
 
    
	
 
    	
 
    
	
I or we assign and   transfer this Security to
    	
 
    
			


 

	
 
    	
(Insert assignee’s   soc. sec. or tax I.D. no.):
    	
 
    


 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Print or type   assignee’s name, address and zip code)
    
	
 
    	
 
    	
 
    
	
and irrevocably   appoint
    	
 
    	
 
    
					


 

agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him or her.

 

	
 
    	
 
    	
Your Signature
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Sign exactly as   your name appears on the other side of this Security)
    
	
 
    	
 
    	
 
    
	
*Signature   guaranteed by:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
					


 




*                                         The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

A-11











 

CONVERSION NOTICE

 

To convert this Security into Common Stock of the Company, check the box: o

 

To convert only part of this Security, state the principal amount to be converted (must be $1,000 or a integral multiple of $1,000): $                      .

 

If you want the stock certificate made out in another person’s name, fill in the form below:

 

	
 
    	
(Insert assignee’s   soc. sec. or tax I.D. no.):
    	
 
    


 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Print or type   assignee’s name, address and zip code)
    
	
 
    	
 
    	
 
    
	
and irrevocably   appoint
    	
 
    	
 
    
					


 

agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him or her.

 

	
 
    	
 
    	
Your Signature
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Sign exactly as   your name appears on the other side of this Security)
    
	
 
    	
 
    	
 
    
	
*Signature guaranteed   by:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
					


 




*                                         The signature must be guaranteed by an institution which is a member of one of the following recognized signature guaranty programs: (i) the Securities Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

A-12











 

FUNDAMENTAL CHANGE REPURCHASE NOTICE

 

To: Theravance, Inc.

 

The undersigned registered owner of this Security hereby irrevocably acknowledges receipt of a notice from Theravance, Inc.  (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to purchase the entire principal amount of this Security, or the portion thereof (which is $1,000 or an integral multiple thereof) below designated, in accordance with the terms of the Security and the Indenture referred to in the Security at the Fundamental Change Repurchase Price, together with accrued and unpaid interest, to, but excluding, such date, to the registered Holder hereof.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
Signature (s)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature(s) must   be guaranteed by a qualified guarantor institution with membership in an approved   signature guarantee program pursuant to Rule 17Ad-15 under the   Securities Exchange Act of 1934.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature Guaranty
    


 

Principal amount to be redeemed (in an

integral multiple of $1,000, if less than all): $                    

 

NOTICE: The signature to the foregoing Election must correspond to the Name as written upon the face of this Security in every particular, without any alteration or change whatsoever.

 

A-13











 

SCHEDULE OF EXCHANGES OF SECURITIES(1)

 

The following exchanges, purchases or conversions of a part of this Global Security have been made:

 

	
Principal Amount of this
   Global Note Following
   Such Decrease Date of
   Exchange (or Increase)
    	
 
    	
Authorized Signatory
   of Securities
   Custodian
    	
 
    	
Amount of Decrease in
   Principal Amount of this Global
   Note
    	
 
    	
Amount of increase
   in Principal
   Amount of this
   Global Note
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    


 




(1)                                 This schedule should be included only if the Security is a Global Security.

 

A-14