Document:

Exhibit 4.1

 

A123 SYSTEMS, INC.

 

U.S. Bank National Association, as Trustee

 

 

INDENTURE

 

Dated as of April 6, 2011

 

 

SUBORDINATED DEBT SECURITIES

 

 

CROSS-REFERENCE TABLE*

 

	
Section of
   Trust Indenture Act of 1939, as amended
    	
 
    	
Section of 
   Indenture
    
	
310(a)
    	
 
    	
6.09
    
	
310(b)
    	
 
    	
6.08
    
	
 
    	
 
    	
6.10
    
	
310(c)
    	
 
    	
Inapplicable
    
	
311(a)
    	
 
    	
6.13
    
	
311(b)
    	
 
    	
6.13
    
	
311(c)
    	
 
    	
Inapplicable
    
	
312(a)
    	
 
    	
4.01
    
	
 
    	
 
    	
4.04
    
	
312(b)
    	
 
    	
4.04(c)
    
	
312(c)
    	
 
    	
4.04(c)
    
	
313(a)
    	
 
    	
4.03
    
	
313(b)
    	
 
    	
4.03
    
	
313(c)
    	
 
    	
4.03
    
	
313(d)
    	
 
    	
4.03
    
	
314(a)
    	
 
    	
4.02
    
	
314(b)
    	
 
    	
Inapplicable
    
	
314(c)
    	
 
    	
2.04
    
	
 
    	
 
    	
8.04
    
	
 
    	
 
    	
9.01(c)
    
	
 
    	
 
    	
10.01(b)
    
	
 
    	
 
    	
11.05
    
	
314(d)
    	
 
    	
Inapplicable
    
	
314(e)
    	
 
    	
11.05
    
	
314(f)
    	
 
    	
Inapplicable
    
	
315(a)
    	
 
    	
6.01
    
	
 
    	
 
    	
6.02
    
	
315(b)
    	
 
    	
5.11
    
	
315(c)
    	
 
    	
6.01
    
	
315(d)
    	
 
    	
6.01
    
	
 
    	
 
    	
6.02
    
	
315(e)
    	
 
    	
5.12
    
	
316(a)
    	
 
    	
5.09
    
	
 
    	
 
    	
5.10
    
	
 
    	
 
    	
7.04
    
	
316(b)
    	
 
    	
5.06
    
	
 
    	
 
    	
5.10
    
	
316(c)
    	
 
    	
7.02
    
	
317(a)
    	
 
    	
5.04
    
	
317(b)
    	
 
    	
3.04
    
	
318(a)
    	
 
    	
11.07
    

 

(1)  This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 1
    
	
DEFINITIONS
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 1.01
    	
 
    	
Certain Terms Defined
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    
	
SECURITIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 2.01
    	
 
    	
Forms Generally
    	
 
    	
6
    
	
Section 2.02
    	
 
    	
Form of Trustee’s   Certificate of Authentication
    	
 
    	
6
    
	
Section 2.03
    	
 
    	
Amount Unlimited; Issuable in Series
    	
 
    	
6
    
	
Section 2.04
    	
 
    	
Authentication and Delivery of   Securities
    	
 
    	
8
    
	
Section 2.05
    	
 
    	
Execution of Securities
    	
 
    	
9
    
	
Section 2.06
    	
 
    	
Certificate of Authentication
    	
 
    	
10
    
	
Section 2.07
    	
 
    	
Denomination and Date of   Securities; Payments of Interest
    	
 
    	
10
    
	
Section 2.08
    	
 
    	
Registration, Transfer and   Exchange
    	
 
    	
11
    
	
Section 2.09
    	
 
    	
Mutilated, Defaced, Destroyed,   Lost and Stolen Securities
    	
 
    	
12
    
	
Section 2.10
    	
 
    	
Cancellation of Securities;   Destruction Thereof
    	
 
    	
13
    
	
Section 2.11
    	
 
    	
Temporary Securities
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    
	
COVENANTS OF THE ISSUER
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 3.01
    	
 
    	
Payment of Principal and   Interest
    	
 
    	
14
    
	
Section 3.02
    	
 
    	
Offices for Payments, Etc.
    	
 
    	
14
    
	
Section 3.03
    	
 
    	
Appointment to Fill a Vacancy in   Office of Trustee
    	
 
    	
15
    
	
Section 3.04
    	
 
    	
Paying Agents
    	
 
    	
15
    
	
Section 3.05
    	
 
    	
Written Statement to Trustee
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    
	
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND   THE TRUSTEE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 4.01
    	
 
    	
Issuer to Furnish Trustee   Information as to Names and Addresses of Securityholders
    	
 
    	
16
    
	
Section 4.02
    	
 
    	
[Reserved]
    	
 
    	
16
    
	
Section 4.03
    	
 
    	
Reports by the Trustee
    	
 
    	
16
    
	
Section 4.04
    	
 
    	
Preservation of Information; Communication with   Securityholders
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    
	
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
    
	
ON EVENT OF DEFAULT
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 5.01
    	
 
    	
Event of Default Defined;   Acceleration of Maturity; Waiver of Default
    	
 
    	
17
    
	
Section 5.02
    	
 
    	
Collection of Debt by Trustee;   Trustee May Prove Debt
    	
 
    	
18
    
	
Section 5.03
    	
 
    	
Application of Proceeds
    	
 
    	
20
    
	
Section 5.04
    	
 
    	
Suits for Enforcement
    	
 
    	
21
    
	
Section 5.05
    	
 
    	
Restoration of Rights on   Abandonment of Proceedings
    	
 
    	
21
    
	
Section 5.06
    	
 
    	
Limitations on Suits by   Securityholders
    	
 
    	
21
    
	
Section 5.07
    	
 
    	
Unconditional Right of   Securityholders to Institute Certain Suits
    	
 
    	
22
    
	
Section 5.08
    	
 
    	
Powers and Remedies Cumulative;   Delay or Omission Not Waiver of Default
    	
 
    	
22
    
	
Section 5.09
    	
 
    	
Control by Holders of Securities
    	
 
    	
22
    

 

i

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 5.10
    	
 
    	
Waiver of Past Defaults
    	
 
    	
23
    
	
Section 5.11
    	
 
    	
Trustee to Give Notice of   Default
    	
 
    	
23
    
	
Section 5.12
    	
 
    	
Right of Court to Require Filing   of Undertaking to Pay Costs
    	
 
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    
	
CONCERNING THE TRUSTEE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 6.01
    	
 
    	
Duties and Responsibilities of   the Trustee; During Default; Prior to Default
    	
 
    	
24
    
	
Section 6.02
    	
 
    	
Certain Rights of the Trustee
    	
 
    	
24
    
	
Section 6.03
    	
 
    	
Trustee Not Responsible for   Recitals, Disposition of Securities or Application of Proceeds Thereof
    	
 
    	
26
    
	
Section 6.04
    	
 
    	
Trustee and Agents May Hold   Securities; Collections, Etc.
    	
 
    	
26
    
	
Section 6.05
    	
 
    	
Moneys Held by Trustee
    	
 
    	
26
    
	
Section 6.06
    	
 
    	
Compensation and Indemnification   of Trustee and Its Prior Claim
    	
 
    	
26
    
	
Section 6.07
    	
 
    	
Right of Trustee to Rely on   Officer’s Certificate, Etc.
    	
 
    	
27
    
	
Section 6.08
    	
 
    	
Disqualification; Conflicting   Interests
    	
 
    	
27
    
	
Section 6.09
    	
 
    	
Persons Eligible for Appointment   as Trustee
    	
 
    	
27
    
	
Section 6.10
    	
 
    	
Resignation and Removal;   Appointment of Successor Trustee
    	
 
    	
27
    
	
Section 6.11
    	
 
    	
Acceptance of Appointment by   Successor Trustee
    	
 
    	
28
    
	
Section 6.12
    	
 
    	
Merger, Conversion,   Consolidation or Succession to Business of Trustee
    	
 
    	
29
    
	
Section 6.13
    	
 
    	
Preferential Collection of Claims Against the Issuer
    	
 
    	
30
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7
    
	
CONCERNING THE SECURITYHOLDERS
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 7.01
    	
 
    	
Evidence of Action Taken by   Securityholders
    	
 
    	
30
    
	
Section 7.02
    	
 
    	
Proof of Execution of   Instruments and of Holding of Securities
    	
 
    	
30
    
	
Section 7.03
    	
 
    	
Holders to Be Treated as Owners
    	
 
    	
30
    
	
Section 7.04
    	
 
    	
Securities Owned by Issuer   Deemed Not Outstanding
    	
 
    	
30
    
	
Section 7.05
    	
 
    	
Right of Revocation of Action   Taken
    	
 
    	
31
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 8
    
	
SUPPLEMENTAL INDENTURES
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 8.01
    	
 
    	
Supplemental Indentures Without   Consent of Securityholders
    	
 
    	
31
    
	
Section 8.02
    	
 
    	
Supplemental Indentures With   Consent of Securityholders
    	
 
    	
32
    
	
Section 8.03
    	
 
    	
Effect of Supplemental Indenture
    	
 
    	
33
    
	
Section 8.04
    	
 
    	
Documents to Be Given to Trustee
    	
 
    	
34
    
	
Section 8.05
    	
 
    	
Notation on Securities in   Respect of Supplemental Indentures
    	
 
    	
34
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 9
    
	
CONSOLIDATION,   MERGER, SALE OR CONVEYANCE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 9.01
    	
 
    	
Issuer May Consolidate, Etc.,   on Certain Terms
    	
 
    	
34
    
	
Section 9.02
    	
 
    	
Successor Issuer Substituted
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 10
    
	
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;
    
	
UNCLAIMED MONEYS
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 10.01
    	
 
    	
Satisfaction and Discharge of Indenture; Defeasance
    	
 
    	
35
    
	
Section 10.02
    	
 
    	
Application by Trustee of Funds   Deposited for Payment of Securities
    	
 
    	
38
    
	
Section 10.03
    	
 
    	
Repayment of Moneys Held by   Paying Agent
    	
 
    	
38
    
	
Section 10.04
    	
 
    	
Return of Moneys Held by Trustee   and Paying Agent Unclaimed for Two Years
    	
 
    	
39
    
	
Section 10.05
    	
 
    	
Indemnity for U.S. Government   Obligations
    	
 
    	
39
    

 

ii

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    
	
ARTICLE 11
    
	
MISCELLANEOUS PROVISIONS
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 11.01
    	
 
    	
No Recourse
    	
 
    	
39
    
	
Section 11.02
    	
 
    	
Provisions of Indenture for the   Sole Benefit of Parties and Holders of Securities
    	
 
    	
39
    
	
Section 11.03
    	
 
    	
Successors and Assigns of Issuer   Bound by Indenture
    	
 
    	
40
    
	
Section 11.04
    	
 
    	
Notices and Demands on Issuer,   Trustee and Holders of Securities
    	
 
    	
40
    
	
Section 11.05
    	
 
    	
Officer’s Certificates and   Opinions of Counsel; Statements to Be Contained Therein
    	
 
    	
40
    
	
Section 11.06
    	
 
    	
Payments Due on Saturdays,   Sundays and Holidays
    	
 
    	
41
    
	
Section 11.07
    	
 
    	
Conflict of Any Provision of   Indenture With Trust Indenture Act
    	
 
    	
41
    
	
Section 11.08
    	
 
    	
New York Law to Govern
    	
 
    	
41
    
	
Section 11.09
    	
 
    	
Counterparts
    	
 
    	
42
    
	
Section 11.10
    	
 
    	
Effect of Headings
    	
 
    	
42
    
	
Section 11.11
    	
 
    	
Actions by Successor
    	
 
    	
42
    
	
Section 11.12
    	
 
    	
Severability
    	
 
    	
42
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 12
    
	
REDEMPTION OF SECURITIES AND SINKING FUNDS
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 12.01
    	
 
    	
Applicability of Article
    	
 
    	
42
    
	
Section 12.02
    	
 
    	
Notice of Redemption; Partial   Redemptions
    	
 
    	
42
    
	
Section 12.03
    	
 
    	
Payment of Securities Called for   Redemption
    	
 
    	
43
    
	
Section 12.04
    	
 
    	
Exclusion of Certain Securities   from Eligibility for Selection for Redemption
    	
 
    	
44
    
	
Section 12.05
    	
 
    	
Mandatory and Optional Sinking   Funds
    	
 
    	
44
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 13
    
	
SUBORDINATION OF SECURITIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Section 13.01
    	
 
    	
Agreement of Subordination
    	
 
    	
46
    
	
Section 13.02
    	
 
    	
Payments to Securityholders
    	
 
    	
46
    
	
Section 13.03
    	
 
    	
Subrogation of Securities
    	
 
    	
48
    
	
Section 13.04
    	
 
    	
Authorization by Securityholders
    	
 
    	
48
    
	
Section 13.05
    	
 
    	
Notice to Trustee
    	
 
    	
49
    
	
Section 13.06
    	
 
    	
Trustee’s Relation to Senior   Indebtedness
    	
 
    	
49
    
	
Section 13.07
    	
 
    	
No Impairment of Subordination
    	
 
    	
50
    
	
Section 13.08
    	
 
    	
Rights of Trustee
    	
 
    	
50
    

 

iii

 

THIS INDENTURE, dated as of April 6, 2011, is entered into by and between A123 Systems, Inc., a Delaware corporation (the “Issuer”), and U.S. Bank National Association, a national banking association (the “Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer may from time to time duly authorize the issue of its unsecured subordinated debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture;

 

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Securities; and

 

WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;

 

NOW, THEREFORE:

 

In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities as follows:

 

ARTICLE 1
 DEFINITIONS

 

Section 1.01                                                        Certain Terms Defined.

 

The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section.  All other terms used in this Indenture that are defined in the Trust Indenture Act or the definitions of which in the Securities Act are referred to in the Trust Indenture Act, including terms defined therein by reference to the Securities Act (except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture.  All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, and the term “generally accepted accounting principles” means such accounting principles as are generally accepted in the United States at the time of any computation.  The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.  The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.

 

“Board of Directors” means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its behalf.

 

“Board Resolution” means a copy of one or more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted by the Board of Directors and to be in full force and effect, and delivered to the Trustee.

 

1

 

“Business Day” means, with respect to any Security, any day other than (i) a Saturday, (ii) a Sunday or (iii) a day on which state or federally chartered banking institutions in New York, New York , or the city in which any amounts are payable, are not required to be open.

 

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date.

 

“Common Stock” means shares of common stock, par value $0.001 per share, of the Issuer as the same exists at the date of execution and delivery of this Indenture or as such stock may be reconstituted from time to time.

 

“Corporate Trust Office” means the office of the Trustee in the State of New Jersey at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located at 21 South Street, 3rd Floor, Morristown, New Jersey 07960, Attention: Rick Barnes.

 

“Debt” of any Person means any debt for money borrowed which is created, assumed, incurred or guaranteed in any manner by such Person or for which such Person is otherwise responsible or liable, and shall expressly include any such guaranty thereof by such Person.  For the purpose of computing the amount of the Debt of any Person there shall be excluded all Debt of such Person for the payment or redemption or satisfaction of which money or securities (or evidences of such Debt, if permitted under the terms of the instrument creating such Debt) in the necessary amount shall have been deposited in trust with the proper depositary, whether upon or prior to the maturity or the date fixed for redemption of such Debt; and, in any instance where Debt is so excluded, for the purpose of computing the assets of such Person there shall be excluded the money, securities or evidences of Debt deposited by such Person in trust for the purpose of paying or satisfying such Debt.

 

“Depositary” means, with respect to the Securities of any series issuable or issued in the form of one or more Global Securities, the Person designated as Depositary by the Issuer pursuant to Section 2.04 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities of any such series shall mean the Depositary with respect to the Global Securities of that series.

 

“Dollar” means the currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Event of Default” means any event or condition specified as such in Section 5.01.

 

“Foreign Currency” means a currency issued by the government of a country other than the United States.

 

“Global Security”, means a Security evidencing all or a part of a series of Securities, issued to the Depositary for such series in accordance with Section 2.04, and bearing the legend prescribed in Section 2.04.

 

2

 

“Holder”, “holder”, “holder of Securities”, “Securityholder” or other similar terms mean the Person in whose name such Security is registered in the Security register kept by the Issuer for that purpose in accordance with the terms hereof.

 

“Indenture” means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.

 

“interest”, unless the context otherwise requires, refers to interest, and when used with respect to non-interest bearing Securities, refers to interest payable after maturity, if any.

 

“Issuer” means A123 Systems, Inc., a Delaware corporation, and, subject to Article 9, its successors and assigns.

 

“Issuer Order” means a written statement, request or order of the Issuer signed in its name by the chairman of the Board of Directors, the president or any vice president of the Issuer.

 

“Notice of Default” shall have the meaning set forth in Section 5.01(c).

 

“Officer’s Certificate” means a certificate signed by the chairman of the Board of Directors, the president, any vice president, the treasurer, the secretary or any assistant secretary of the Issuer and delivered to the Trustee.  Each such certificate shall, except to the extent provided herein, include the statements provided for in Section 11.05.

 

“Opinion of Counsel” means an opinion in writing signed by the general corporate counsel or such other legal counsel who may be an employee of or counsel to the Issuer and who shall be reasonably satisfactory to the Trustee.  Each such opinion shall include the statements provided for in Section 11.05, if and to the extent required hereby.

 

“original issue date” of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.

 

“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01.

 

“Outstanding”, when used with reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except

 

(a)                                  Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

(b)                                 Securities, or portions thereof, for the payment or redemption of which cash or U.S. Government Obligations (as provided for in Section 10.01(a) and Section 10.01(b)) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent); provided, that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given

 

3

 

as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and

 

(c)                                  Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a Person in whose hands such Security is a legal, valid and binding obligation of the Issuer), Securities converted into Common Stock pursuant hereto and Securities not deemed outstanding pursuant to Section 12.02.

 

In determining whether the Holders of the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01.

 

“Person” means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“principal” whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if any”.

 

“Record Date” shall have the meaning set forth in Section 2.07.

 

“Responsible Officer”, when used with respect to the Trustee, means the chairman of the board of directors, any vice chairman of the board of directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president, the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer of the Trustee (i) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject or (ii) who has direct responsibility for the administration of this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Security” or “Securities” has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture.

 

“Security Registrar” shall have the meaning set forth in Section 4.01(b).

 

“Senior Indebtedness” of a Person means the principal of, premium, if any, interest on, and any other payment due pursuant to any of the following, whether outstanding at the date hereof or hereafter incurred or created:

 

(a)                                  all of the indebtedness of that Person for money borrowed;

 

4

 

(b)                                 all of the indebtedness of that Person evidenced by notes, debentures, bonds or other securities sold by that Person for money;

 

(c)                                  all of the lease obligations which are capitalized on the books of that Person in accordance with generally accepted accounting principles;

 

(d)                                 all indebtedness of others of the kinds described in either of the preceding clauses (a) or (b) above and all lease obligations of others of the kind described in the preceding clause (c) above that the Person, in any manner, assumes or guarantees or that the Person in effect guarantees through an agreement to purchase, whether that agreement is contingent or otherwise; and

 

(e)                                  all renewals, extensions or refundings of indebtedness of the kinds described in any of the preceding clauses (a), (b) and (d) and all renewals or extensions of leases of the kinds described in either of the preceding clauses (c) or (d) above;

 

unless, in the case of any particular indebtedness, lease, renewal, extension or refunding, the instrument or lease creating or evidencing it or the assumption or guarantee relating to it expressly provides that such indebtedness, lease, renewal, extension or refunding is not superior in right of payment to the Securities.

 

“Subsidiary” means a corporation of which stock having a majority of the voting power under ordinary circumstances is owned, directly or indirectly, by the Issuer or by one or more subsidiaries of the Issuer, or by the Issuer and one or more subsidiaries of the Issuer.

 

“Trust Indenture Act” (except as otherwise provided in Sections 8.01 and 8.02) means the Trust Indenture Act of 1939, as in force at the date as of which this Indenture was originally executed; provided, however, that in the event the Trust Indenture Act is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act as so amended.

 

“Trustee” means the Person identified as “Trustee” in the first paragraph hereof and, subject to the provisions of Article 6, shall also include any successor trustee.  “Trustee” shall also mean or include each Person who is then a trustee hereunder and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the trustee with respect to the Securities of such series.

 

“U.S. Government Obligation” means (a) a direct obligation of the United States of America, backed by its full faith and credit, or (b) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America.

 

“vice president”, when used with respect to the Issuer 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 of “vice president”.

 

“Yield to Maturity” means the yield to maturity on a series of securities, calculated at the time of issuance of such series, or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice.

 

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ARTICLE 2
 SECURITIES

 

Section 2.01                   Forms Generally.

 

The Securities of each series shall be substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to (rather than set forth in) a Board Resolution, an Officer’s Certificate detailing such establishment) or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities as evidenced by their execution of such Securities.

 

The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities as evidenced by their execution of such Securities.

 

Section 2.02                   Form of Trustee’s Certificate of Authentication.

 

The Trustee’s certificate of authentication on all Securities shall be in substantially the following form:

 

This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

 

	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Officer
    

 

Section 2.03                   Amount Unlimited; Issuable in Series.

 

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more series.  The terms of a series of Securities shall be established prior to the initial issuance thereof in or pursuant to one or more Board Resolutions, or, to the extent established pursuant to (rather than set forth in) a Board Resolution, in an Officer’s Certificate detailing such establishment and/or established in one or more indentures supplemental hereto.  The terms of such series reflected in such Board Resolution, Officer’s Certificate, or supplemental indenture may include the following or any additional or different terms:

 

(a)           the designation of the Securities of the series (which may be part of a series of Securities previously issued);

 

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(b)           the terms and conditions, if applicable, upon which conversion or exchange of the Securities into Common Stock will be effected, including the initial conversion or exchange price or rate and any adjustments thereto, the conversion or exchange period and other provisions in addition to or in lieu of those described herein;

 

(c)           any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.11, 8.05 or 12.03);

 

(d)           if other than Dollars, the Foreign Currency in which the Securities of that series are denominated;

 

(e)           any date on which the principal and interest of the Securities of the series is payable and the right, if any, to extend such date or dates;

 

(f)            the rate or rates at which the Securities of the series shall bear interest, if any, the Record Date or dates for the determination of holders to whom interest is payable, the date or dates from which such interest shall accrue and on which such interest shall be payable and/or the method by which such rate or rates or date or dates shall be determined, and the right, if any, to extend the interest payment periods and the duration of that extension;

 

(g)           the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.02);

 

(h)           the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, pursuant to any sinking fund or otherwise;

 

(i)            the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which and the period or periods within which and any terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;

 

(j)            if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;

 

(k)           if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof;

 

(l)            if other than the currency in which the Securities of that series are denominated, the currency in which payment of the principal of or interest on the Securities of such series shall be payable;

 

(m)          if the principal of or interest on the Securities of the series is to be payable, at the election of the Issuer or a Holder thereof, in a currency other than that in which the Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

 

(n)           if the amount of payments of principal of and interest on the Securities of the series may be determined with reference to an index based on a currency other than that in which the Securities of

 

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the series are denominated, or by reference to one or more currency exchange rates, securities or baskets of securities, commodity prices or indices, the manner in which such amounts shall be determined;

 

(o)           if Sections 10.01(b) or 10.01(c) are inapplicable to Securities of such series;

 

(p)           whether and under what circumstances the Issuer will pay additional amounts on the Securities of any series in respect of any tax, assessment or governmental charge withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such additional amounts;

 

(q)           if the Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;

 

(r)            any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;

 

(s)           any other events of default or covenants with respect to the Securities of such series in addition to or in lieu of those contained in this Indenture;

 

(t)            if the Securities of the series may be issued in exchange for surrendered Securities of another series, or for other securities of the Issuer, pursuant to the terms of such Securities or securities or of any agreement entered into by the Issuer, the ratio of the principal amount of the Securities of the series to be issued to the principal amount of the Securities or securities to be surrendered in exchange, and any other material terms of the exchange;

 

(u)           the extent to which payments on the Securities will be subordinated to the payment of Senior Indebtedness of the Issuer;

 

(v)           whether the Securities of the series will be guaranteed as to payment or performance; and

 

(w)          any other terms of the series.

 

The Issuer may from time to time, without notice to or the consent of the holders of any series of Securities, create and issue further Securities of any such series ranking equally with the Securities of such series in all respects (or in all respects other than (1) the payment of interest accruing prior to the issue date of such further Securities or (2) the first payment of interest following the issue date of such further Securities).  Such further Securities may be consolidated and form a single series with the Securities of such series and have the same terms as to status, redemption or otherwise as the Securities of such series.

 

Section 2.04                   Authentication and Delivery of Securities.

 

The Issuer may deliver Securities of any series executed by the Issuer to the Trustee for authentication together with the applicable documents referred to below in this Section, and the Trustee shall thereupon authenticate and deliver such Securities to or upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order.  The maturity date, original issue date, interest rate and any other terms of the Securities of such series shall be determined by or pursuant to such Issuer Order and procedures.  If provided for in such procedures, such

 

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Issuer Order may authorize authentication and delivery pursuant to oral instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed in writing.  In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon:

 

(a)           an Issuer Order requesting such authentication and setting forth delivery instructions if the Securities are not to be delivered to the Issuer;

 

(b)           any Board Resolution, Officer’s Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and terms of the Securities were established;

 

(c)           an Officer’s Certificate setting forth the form or forms and terms of the Securities stating that the form or forms and terms of the Securities have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request; and

 

(d)           if requested by the Trustee, an Opinion of Counsel with respect to the validity of the Securities and covering such other matters as the Trustee may reasonably request.

 

The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders or would affect the Trustee’s own rights, duties or immunities under the Securities, this Indenture or otherwise.

 

The Issuer shall execute and the Trustee shall, in accordance with this Section with respect to the Securities of a series, authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the 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.”

 

Each Depositary designated pursuant to this Section must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation.

 

Section 2.05                   Execution of Securities.

 

The Securities shall be signed on behalf of the Issuer by the chairman of its Board of Directors, any vice chairman of its Board of Directors, its chief executive officer, its principal financial officer, its president, any vice president or its treasurer.  Such signatures may be the manual or facsimile signatures of the present or any future such officers.  Typographical and other minor errors or defects in any such

 

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reproduction of any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee.

 

In case any officer of the Issuer who shall have signed any of the Securities shall cease to be such officer before the Security so signed shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security nevertheless may be authenticated and delivered or disposed of as though the person who signed such Security had not ceased to be such officer of the Issuer; and any Security may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of such Security, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer.

 

Section 2.06                   Certificate of Authentication.

 

Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose.  The execution of such certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

 

Section 2.07                   Denomination and Date of Securities; Payments of Interest.

 

The Securities of each series shall be issuable in denominations established as contemplated by Section 2.03 or, if not so established, in denominations of $1,000 and any integral multiple thereof.  The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and authentication thereof.  Unless otherwise indicated in a Board Resolution, Officer’s Certificate or supplemental indenture for a particular series, interest will be calculated on the basis of a 360-day year of twelve 30-day months.

 

Each Security shall be dated the date of its authentication.  The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable on the dates, established as contemplated by Section 2.03.

 

The Person in whose name any Security of any series is registered at the close of business on any Record Date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer, exchange or conversion of such Security subsequent to the Record Date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series, in which case such defaulted interest shall be paid to the Persons in whose names Outstanding Securities for such series are registered at the close of business on a subsequent Record Date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Securities not less than 15 days preceding such subsequent Record Date.  The term “Record Date” as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as such in the terms of the Securities of such series established as contemplated by Section 2.03, or, if no such date is so established, if such interest payment date is the first day of a calendar month, the 15th day of the immediately preceding calendar month or, if such interest payment date is the 15th day of a calendar month, the first day of such calendar month, whether or not such Record Date is a Business Day.

 

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Section 2.08                   Registration, Transfer and Exchange.

 

The Issuer will keep at each office or agency to be maintained for the purpose as provided in Section 3.02 for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will provide for the registration of Securities of such series and the registration of transfer of Securities of such series.  Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time.  At all reasonable times such register or registers shall be open for inspection by the Trustee.

 

Upon due presentation for registration of transfer of any Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.02, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Security or Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for a like aggregate principal amount.

 

At the option of the Holder thereof, Securities of any series (except a Global Security) may be exchanged for a Security or Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02 and upon payment, if the Issuer shall so require, of the charges hereinafter provided.  Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.  All Securities surrendered upon any exchange or transfer provided for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the Trustee will deliver a certificate of disposition thereof to the Issuer.

 

All Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder or his or her attorney duly authorized in writing.

 

The Issuer may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Securities.  No service charge shall be made for any such transaction.

 

The Issuer shall not be required to exchange or register a transfer of (a) any Securities of any series for a period of 15 days immediately preceding the first mailing of notice of redemption of Securities of such series to be redeemed or (b) any Securities selected, called or being called for redemption, in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed.

 

Notwithstanding any other provision of this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.

 

If at any time the Depositary for the Securities of a series notifies the Issuer that it is unwilling or unable to continue as Depositary for the Securities of such series or if at any time the Depositary for the Securities of a series shall no longer be eligible under Section 2.04, the Issuer shall appoint a successor Depositary with respect to the Securities of such series.  If a successor Depositary for the Securities of

 

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such series is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the Issuer’s determination pursuant to Section 2.03 that the Securities of such series be represented by a Global Security shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing the Securities of such series, in exchange for such Global Security or Securities.

 

The Issuer may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by a Global Security or Securities.  In such event the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive registered form, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series, in exchange for such Global Security or Securities.

 

The Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for Securities of the same series in definitive registered form in accordance with the two preceding paragraphs or on such other terms as are acceptable to the Issuer and such Depositary.  Thereupon, the Issuer shall execute, and the Trustee shall authenticate and deliver, without service charge,

 

(1)           to the Person specified by such Depositary a new Security or Securities of the same series, of any authorized denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Global Security; and

 

(2)           to such Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities authenticated and delivered pursuant to clause (i) above.

 

Upon the exchange of a Global Security for Securities in definitive registered form, in authorized denominations, such Global Security shall be cancelled by the Trustee.  Securities in definitive registered form issued in exchange for a Global Security pursuant to this Section 2.08 shall be registered in such names and in such authorized denominations as the Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee.  The Trustee shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered.

 

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

 

Section 2.09                   Mutilated, Defaced, Destroyed, Lost and Stolen Securities.

 

In case any temporary or definitive Security shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer in its discretion may execute, and upon the written request of any officer of the Issuer, the Trustee shall authenticate and deliver a new Security of the same series, maturity date, interest rate and original issue date, bearing a number or other distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security, or in lieu of and substitution for the Security so destroyed, lost or stolen.  In every case the applicant for a substitute

 

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Security shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof and in the case of mutilation or defacement shall surrender the Security to the Trustee.

 

Upon the issuance of any substitute Security, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.  In case any Security which has matured or is about to mature or has been called for redemption in full, or is being surrendered for conversion in full, shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may, instead of issuing a substitute Security (with the Holder’s consent, in the case of convertible Securities), pay or authorize the payment of the same or convert, or authorize conversion of the same (without surrender thereof except in the case of a mutilated or defaced Security), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof.

 

Every substitute Security of any series issued pursuant to the provisions of this Section by virtue of the fact that any such Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities of such series duly authenticated and delivered hereunder.  All Securities shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment or conversion of mutilated, defaced or destroyed, lost or stolen Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

Section 2.10                   Cancellation of Securities; Destruction Thereof.

 

All Securities surrendered for exchange for Securities of the same series or for payment, redemption, registration of transfer, conversion or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee, shall be delivered to the Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture.  The Trustee shall dispose of cancelled Securities held by it and deliver a certificate of disposition to the Issuer.  If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Debt represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

 

Section 2.11                   Temporary Securities.

 

Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee).  Temporary Securities of any series shall be issuable in any authorized denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be

 

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appropriate for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution and authentication thereof.  Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate.  Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities.  Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.02 and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series an equal aggregate principal amount of definitive Securities of the same series having authorized denominations.  Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series, unless the benefits of the temporary Securities are limited pursuant to Section 2.03.

 

ARTICLE 3
 COVENANTS OF THE ISSUER

 

Section 3.01                   Payment of Principal and Interest.

 

The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any additional amounts payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the manner provided in such Securities and in this Indenture.  The interest on Securities (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only to or upon the written order of the Holders thereof and at the option of the Issuer may be paid by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses as they appear on the Security register of the Issuer.

 

Section 3.02                   Offices for Payments, Etc.

 

The Issuer will maintain (i) in New York City, an agency where the Securities of each series may be presented for payment, an agency where the Securities of each series may be presented for exchange and conversion, if applicable, as provided in this Indenture and an agency where the Securities of each series may be presented for registration of transfer as in this Indenture provided and (ii) such further agencies in such places as may be determined for the Securities of such series pursuant to Section 2.03.

 

The Issuer will maintain in New York City, an agency where notices and demands to or upon the Issuer in respect of the Securities of any series or this Indenture may be served.

 

The Issuer will give to the Trustee written notice of the location of each such agency and of any change of location thereof.  In case the Issuer shall fail to maintain any agency required by this Section to be located in New York City, or shall fail to give such notice of the location or of any change in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Trustee.

 

The Issuer may from time to time designate one or more additional agencies where the Securities of a series may be presented for payment, where the Securities of that series may be presented for exchange or conversion, if applicable, as provided in this Indenture and pursuant to Section 2.03 and where the Securities of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from time to time rescind any such designation, as the Issuer may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner

 

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relieve the Issuer of its obligation to maintain the agencies provided for in this Section.  The Issuer will give to the Trustee prompt written notice of any such designation or rescission thereof.

 

Section 3.03                   Appointment to Fill a Vacancy in Office of Trustee.

 

The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder.

 

Section 3.04                   Paying Agents.

 

Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section,

 

(a)           that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series or of the Trustee,

 

(b)           that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and

 

(c)           that at any time during the continuance of any such failure, upon the written request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust by such paying agent.

 

The Issuer will, on or prior to each due date of the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of any failure to take such action.

 

If the Issuer shall act as its own paying agent with respect to the Securities of any series, it will, on or before each due date of the principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series a sum sufficient to pay such principal or interest so becoming due.  The Issuer will promptly notify the Trustee of any failure to take such action.

 

Anything in this Section to the contrary notwithstanding, but subject to Section 10.01, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums to be held by the Trustee upon the trusts herein contained.

 

Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 10.03 and 10.04.

 

Section 3.05                   Written Statement to Trustee.

 

So long as any Securities are Outstanding hereunder, the Issuer will deliver to the Trustee, within 120 days after the end of each fiscal year of the Issuer ending after the date hereof, a written statement

 

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covering the previous fiscal year, signed by two of its officers entitled to deliver an Officer’s Certificate (which need not comply with Section 11.05), stating that in the course of the performance of their duties as officers of the Issuer they would normally have knowledge of any default by the Issuer in the performance or fulfillment of any covenant, agreement or condition contained in this Indenture, stating whether or not they have knowledge of any such default and, if so, specifying each such default of which the signers have knowledge and the nature thereof.

 

ARTICLE 4
 SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE

 

Section 4.01                                                        Issuer to Furnish Trustee Information as to Names and  Addresses of Securityholders.

 

The Issuer covenants and agrees that it will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the Holders of the Securities of each series pursuant to Section 312 of the Trust Indenture Act:

 

(a)                                  semiannually and not more than 15 days after each Record Date for the payment of interest on such Securities, as hereinabove specified, as of such Record Date and on dates to be determined pursuant to Section 2.03 for non-interest bearing Securities in each year, and

 

(b)                                 at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request as of a date not more than 15 days prior to the time such information is furnished, provided, that, if and so long as the Trustee shall be the Security registrar (the “Security Registrar”) for such series, such list shall not be required to be furnished.

 

Section 4.02                                                        [Reserved].

 

Section 4.03                                                        Reports by the Trustee.

 

Any Trustee’s report required under Section 313(a) of the Trust Indenture Act shall be transmitted as promptly as practicable after July 15 in each year beginning on July 15, 2011, so long as any Securities are Outstanding hereunder, and shall be dated as of a date convenient to the Trustee but no more than 60 nor less than 45 days prior thereto.  The Trustee shall comply with Sections 313(b), 313(c) and 313(d) of the Trust Indenture Act.

 

Section 4.04                                                        Preservation of Information; Communication with Securityholders.

 

(a)                                  The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to it as provided in Section 4.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity).

 

(b)                                 The Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.

 

(c)                                  Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities.  The Issuer, the Trustee, the Security Registrar and any other Person shall have the protection of Section 312(c) of the Trust Indenture Act.

 

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ARTICLE 5
 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
 ON EVENT OF DEFAULT

 

Section 5.01                                                        Event of Default Defined; Acceleration of Maturity; Waiver  of Default.

 

“Event of Default”, with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)                                  default in the payment of any installment of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such default for a period of 90 days (or such other period as may be established for the Securities of such series as contemplated by Section 2.03); or

 

(b)                                 default in the payment of all or any part of the principal on any of the Securities of such series as and when the same shall become due and payable either at maturity, upon redemption, by declaration or otherwise, (and, if established for the Securities of such series as contemplated by Section 2.03, the continuance of such default for a specified period); or

 

(c)                                  default in the performance, or breach, of any covenant or agreement of the Issuer in respect of the Securities of such series (other than a covenant or agreement in respect of the Securities of such series a default in the performance or breach of which is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of all series affected thereby, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(d)                                 a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for all or substantially all of its property and assets or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or

 

(e)                                  the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of its property and assets, or make any general assignment for the benefit of creditors; or

 

(f)                                    any other Event of Default provided for in such series of Securities.

 

If an Event of Default described in clauses (a), (b), (c) or (f) occurs and is continuing, then, and in each and every such case, unless the principal of all of the Securities of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class) by notice in writing to the Issuer (and also to the Trustee if given by Securityholders), may declare

 

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the entire principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.  If an Event of Default described in clauses (d) or (e) occurs and is continuing, then and in each and every such case, the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding and interest accrued thereon, if any, shall become immediately due and payable.

 

The foregoing provisions, however, are subject to the condition that if, at any time after the principal of the Securities of any series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of such series and the principal of any and all Securities of such series which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest specified in the Securities of such series to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of negligence or bad faith, and if any and all Events of Default under the Indenture with respect to such series, other than the non-payment of the principal of Securities of such series which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of such series then Outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to such series and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.

 

Unless otherwise indicated in the Board Resolution, Officer’s Certificate or supplemental indenture for a series of Original Issue Discount Securities, for all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.

 

Section 5.02                                                        Collection of Debt by Trustee; Trustee May Prove Debt.

 

The Issuer covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 90 days or (b) subject to any grace period established pursuant to Section 2.03 in case default shall be made in the payment of all or any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise, then, upon demand of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law,

 

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on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series); and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor trustee, their respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee except as a result of its negligence or bad faith.

 

In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer or other obligor upon such Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Securities, wherever situated, the moneys adjudged or decreed to be payable.

 

In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or its property, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of any Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:

 

(1)                                  to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor upon the Securities of any series, or to the creditors or property of the Issuer or such other obligor,

 

(2)                                  unless prohibited by applicable law and regulations, to vote on behalf of the Holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and

 

(3)                                  to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances

 

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made, by the Trustee and each predecessor trustee except as a result of negligence or bad faith and all other amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.

 

All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series, may be enforced by the Trustee without the possession of any of the Securities of such series or the production thereof on any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities in respect of which such action was taken.

 

In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Securities in respect to which such action was taken, and it shall not be necessary to make any Holders of such Securities parties to any such proceedings.

 

Section 5.03                                                        Application of Proceeds.

 

Any moneys collected by the Trustee pursuant to this Article in respect of any series shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:

 

FIRST:  To the payment of all amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06;

 

SECOND:  In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest, to the extent permitted by applicable law, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference;

 

THIRD:  In case the principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest, to the extent permitted by applicable law, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest or Yield to Maturity, without preference or priority of principal over interest or Yield to Maturity, or of

 

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interest or Yield to Maturity over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and

 

FOURTH:  To the payment of the remainder, if any, to the Issuer or any other Person lawfully entitled thereto.

 

Section 5.04                                                        Suits for Enforcement.

 

In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Section 5.05                                                        Restoration of Rights on Abandonment of Proceedings.

 

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case (subject to any determination in such proceeding) the Issuer and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders shall continue as though no such proceedings had been taken.

 

Section 5.06                                                        Limitations on Suits by Securityholders.

 

No Holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 5.09; it being understood and intended, and being expressly covenanted by the Holder of every Security with every other Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series.  For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

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Section 5.07                                                        Unconditional Right of Securityholders to Institute Certain  Suits.

 

Notwithstanding any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security to receive payment of the principal of and interest on such Security on or after the respective due dates expressed in such Security in accordance with the terms hereof and thereof, or to institute suit for the enforcement of any such payment on or after such respective dates, or for the enforcement of such conversion right, shall not be impaired or affected without the consent of such Holder, it being understood and intended, and being expressly covenanted by the Holder of every Security with every other Holder and the Trustee, that no one or more Holders of Securities of any series shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series.  For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Section 5.08                                                        Powers and Remedies Cumulative; Delay or Omission Not  Waiver of Default.

 

Except as provided in Section 5.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

No delay or omission of the Trustee or of any Holder of Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and, subject to Section 5.06, every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities.

 

Section 5.09                                                        Control by Holders of Securities.

 

The Holders of a majority in aggregate principal amount of the Securities of each series affected (with each series voting as a separate class) at the time Outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; provided, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided, further, that (subject to the provisions of Section 6.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 6.01) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.

 

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Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders.

 

Section 5.10                                                        Waiver of Past Defaults.

 

Prior to the declaration of the acceleration of the maturity of the Securities of any series as provided in Section 5.01, the Holders of a majority in aggregate principal amount of the Securities of such series at the time Outstanding, by notice to the Trustee, may on behalf of the Holders of all the Securities of such series waive any existing default in the performance of any of the covenants contained herein or established pursuant to Section 2.03 with respect to such series and its consequences, except a default in the payment of the principal of, or interest on, any of the Securities of that series as and when the same shall become due by the terms of such Securities.  In the case of any such waiver, the Issuer, the Trustee and the Holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

 

Section 5.11                                                        Trustee to Give Notice of Default.

 

The Trustee shall, within 90 days after the occurrence of a default with respect to the Securities of any series, give notice of all defaults with respect to that series known to the Trustee to all Holders of Securities of such series in the manner and to the extent provided in Section 4.03, unless in each case such defaults shall have been cured before the mailing or publication of such notice (the term “defaults” for the purpose of this Section being hereby defined to mean any event or condition which is, or with notice or lapse of time or both would become, an Event of Default); provided, that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking fund installment on such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series.

 

Section 5.12                                                        Right of Court to Require Filing of Undertaking to Pay  Costs.

 

All parties to this Indenture agree, and each Holder of any Security by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

 

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ARTICLE 6
 CONCERNING THE TRUSTEE

 

Section 6.01                                                        Duties and Responsibilities of the Trustee; During Default;  Prior to Default.

 

With respect to the Holders of any series of Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a particular series and after the curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

 

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct.

 

Section 6.02                                                        Certain Rights of the Trustee.

 

In furtherance of and subject to the Trust Indenture Act and subject to Section 6.01:

 

(a)                                  in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

 

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

 

(c)                                  the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders pursuant to Section 5.09 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

(d)                                 none of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers if there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it;

 

(e)                                  the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(f)                                    any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein

 

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specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer;

 

(g)                                 the Trustee may consult with counsel and reasonably require an Opinion of Counsel, including without limitation prior to taking any action hereunder, at the expense of the Company, and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

 

(h)                                 the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby;

 

(i)                                     the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture, and the permissive rights of the Trustee herein shall not be construed as duties;

 

(j)                                     prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then Outstanding; provided, that, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Issuer upon demand;

 

(k)                                  the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee;

 

(l)                                     with respect to any series of Securities, the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in principal amount of such Securities at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

(m)                               the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any Registrar;

 

(n)                                 if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless such Responsible Officer of the Trustee had actual knowledge of such event;

 

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(o)           in no event shall the Trustee be liable for any consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.  The Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Securities, unless either (1) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Issuer or by any Holder of the Securities; and

 

(p)           the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder.

 

Section 6.03                   Trustee Not Responsible for Recitals, Disposition of  Securities or Application of Proceeds Thereof.

 

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities.  The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof.

 

Section 6.04                   Trustee and Agents May Hold Securities; Collections, Etc.

 

The Trustee or any agent of the Issuer or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee or such agent.

 

Section 6.05                   Moneys Held by Trustee.

 

Subject to the provisions of Section 10.04 hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law.  Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder.

 

Section 6.06                   Compensation and Indemnification of Trustee and Its Prior  Claim.

 

The Issuer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as the Issuer and the Trustee may from time to time agree in writing and, except as otherwise expressly provided herein, the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith.  The Issuer also covenants to indemnify the Trustee and each predecessor trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder,

 

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including the costs and expenses of defending itself against or investigating any claim of liability in the premises.  The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor trustee and to pay or reimburse the Trustee and each predecessor trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture and resignation or removal of the Trustee.  Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities, and the Securities are hereby subordinated to such senior claim.

 

Section 6.07                   Right of Trustee to Rely on Officer’s Certificate, Etc.

 

Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof.

 

Section 6.08                   Disqualification; Conflicting Interests.

 

If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Issuer shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

 

Section 6.09                   Persons Eligible for Appointment as Trustee.

 

The Trustee for each series of Securities hereunder shall at all times be a corporation having a combined capital and surplus of at least $50,000,000 and shall be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act.  If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of a Federal, State or District of Columbia supervising or examining authority, then, for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

 

Section 6.10                   Resignation and Removal; Appointment of Successor  Trustee.

 

(a)           The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by mailing notice of such resignation to the Holders of then Outstanding Securities of each series affected at their addresses as they shall appear on the Security register.  Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees.  If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, on behalf of himself or herself and all others similarly situated, petition any such

 

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court for the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b)           In case at any time any of the following shall occur:

 

(1)           the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act with respect to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or

 

(2)           the Trustee shall cease to be eligible in accordance with the provisions of Section 310(a) of the Trust Indenture Act and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or

 

(3)           the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

 

then, in any such case, (A) the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, (B) subject to Section 315(e) of the Trust Indenture Act, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c)           The Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding may at any time remove the Trustee with respect to Securities of such series and, with the consent of the Issuer, appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section 7.01 of the action in that regard taken by the Securityholders.

 

(d)           Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 6.11.

 

Section 6.11                   Acceptance of Appointment by Successor Trustee.

 

Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject to Section 10.04, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor

 

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trustee all such rights, powers, duties and obligations.  Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers.  Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 6.06.

 

If a successor trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor trustee with respect to the Securities of any series as to which the predecessor trustee is not retiring shall continue to be vested in the predecessor trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures.

 

No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act and eligible under the provisions of Section 310(a) of the Trust Indenture Act.

 

Upon acceptance of appointment by any successor trustee as provided in this Section 6.11, the Issuer shall mail notice thereof to the Holders of Securities of each series affected, by mailing such notice to such Holders at their addresses as they shall appear on the Security register.  If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 6.10.  If the Issuer fails to mail such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer.

 

Section 6.12                   Merger, Conversion, Consolidation or Succession to  Business of Trustee.

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided, that such corporation shall be qualified under the provisions of Section 310(b) of the Trust Indenture Act and eligible under the provisions of Section 310(a) of the Trust Indenture Act, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

 

In case, at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities of any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, that the right to adopt the certificate of authentication of any predecessor trustee or to authenticate Securities of any series in the name of any predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation.

 

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Section 6.13                   Preferential Collection of Claims Against the Issuer.

 

The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act.  A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

 

ARTICLE 7
 CONCERNING THE SECURITYHOLDERS

 

Section 7.01                   Evidence of Action Taken by Securityholders.

 

Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee.  Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article.

 

Section 7.02                   Proof of Execution of Instruments and of Holding of  Securities.

 

Subject to Sections 6.01 and 6.02, the execution of any instrument by a Holder or his agent or proxy may be proved in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee.  The holding of Securities shall be proved by the Security register or by a certificate of the registrar thereof.  The Issuer may set a record date for purposes of determining the identity of Holders of any series entitled to vote or consent to any action referred to in Section 7.01, which record date may be set at any time or from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, only Holders of such series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent.  Notice of such record date may be given before or after any request for any action referred to in Section 7.01 is made by the Issuer.

 

Section 7.03                   Holders to Be Treated as Owners.

 

The Issuer, the Trustee and any agent of the Issuer or of the Trustee may deem and treat the Person in whose name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of, and, subject to the provisions of this Indenture, interest on, such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary.  All such payments so made to any such Person, or upon his or her order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable.

 

Section 7.04                   Securities Owned by Issuer Deemed Not Outstanding.

 

In determining whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture,

 

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Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities which the Trustee knows are so owned shall be so disregarded.  Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities.  In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice.

 

Section 7.05                   Right of Revocation of Action Taken.

 

At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action so far as concerns such Security.  Except as aforesaid, any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon any such Security.  Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action.

 

ARTICLE 8
 SUPPLEMENTAL INDENTURES

 

Section 8.01                   Supplemental Indentures Without Consent of  Securityholders.

 

The Issuer, when authorized by a resolution of its Board of Directors, and the Trustee may from time to time and at any time, without the consent of any of the Securityholders, enter into an indenture or indentures supplemental hereto in form satisfactory to the Trustee for one or more of the following purposes:

 

(a)           to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;

 

(b)           to evidence the succession of another corporation or business entity to the Issuer, or successive successions, and the assumption by the successor corporation or business entity of the covenants, agreements and obligations of the Issuer pursuant to Article 9;

 

(c)           to add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions as its Board of Directors shall consider to be for the protection of the Holders of Securities, and to make the occurrence, or the occurrence and continuance, of a default in any such additional

 

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covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, that solely in respect of any such additional covenant, restriction, condition or provision, such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default;

 

(d)           to cure any ambiguity, defect or inconsistency, or to conform this Indenture or any supplemental indenture to the description of the Securities set forth in any prospectus or prospectus supplement related to such series of Securities;

 

(e)           to provide for or add guarantors for the Securities of one or more series;

 

(f)            to establish the form or terms of Securities of any series as permitted by Sections 2.01 and 2.03;

 

(g)           to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 6.11;

 

(h)           to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms, purposes of issue, authentication and delivery of any series of Securities, as herein set forth;

 

(i)            to make any change to the Securities of any series so long as no Securities of such series are Outstanding; and

 

(j)            to make any other change that does not adversely affect the interests of the Holders of the Securities in any material respect.

 

The Trustee shall join with the Issuer in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 8.02.

 

Section 8.02                   Supplemental Indentures With Consent of Securityholders.

 

With the consent (evidenced as provided in Article 7) of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of one or more series affected by such supplemental indenture (voting as separate series), the Issuer, when authorized by a resolution of the Board of Directors, and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in

 

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any manner the rights of the Holders of the Securities of each such consenting series; provided, that no such supplemental indenture shall, without the consent of the Holder of each Security so affected, (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof, or make the principal thereof (including any amount in respect of original issue discount) or interest thereon payable in any currency other than that provided in the Securities or in accordance with the terms thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 5.01 or the amount thereof provable in bankruptcy pursuant to Section 5.02, or waive a default in the payment of principal of any Security or interest thereon or change a provision related to the waiver of past defaults or changes or impair the right of any Securityholder to institute suit for the payment or conversion thereof or, if the Securities provide therefor, any right of repayment at the option of the Securityholder, or (b) modify any of the provisions of this Section except to increase any required percentage or to provide that certain other provisions cannot be modified or waived without the consent of the Holder of each Security so affected, or (c) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture or the consent of Holders of which is required for any modification, amendment or waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture.

 

A supplemental indenture which changes or eliminates any covenant, Event of Default or other provision of this Indenture (1) that has been expressly included solely for the benefit of one or more particular series of Securities, if any, or (2) which modifies the rights of Holders of Securities of one or more series with respect to any covenant, Event of Default or provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series with respect to which such covenant, Event of Default or other provision has not be modified.

 

Upon the request of the Issuer, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

 

Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give a notice thereof to the Holders of then Outstanding Securities of each series affected thereby, by mailing a notice thereof by first-class mail to such Holders at their addresses as they shall appear on the Security register, and in each case such notice shall set forth in general terms the substance of such supplemental indenture.  Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

Section 8.03                   Effect of Supplemental Indenture.

 

Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall thereafter be determined,

 

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exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 8.04                   Documents to Be Given to Trustee.

 

The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with the applicable provisions of this Indenture and is permitted or authorized by the Indenture and, with respect to Section 8.01(i), does not adversely affect the interest of the Holders in any material respect; provided that an Opinion of Counsel is not required at the time of initial issuance of the Securities on the date of this Indenture.

 

Section 8.05                   Notation on Securities in Respect of Supplemental  Indentures.

 

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken by Securityholders.  If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding.

 

ARTICLE 9
 CONSOLIDATION, MERGER, SALE OR CONVEYANCE

 

Section 9.01                   Issuer May Consolidate, Etc., on Certain Terms.

 

The Issuer shall not consolidate with or merge into any other Person (in a transaction in which the Issuer is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless (a) the Person formed by such consolidation or into which the Issuer is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Issuer substantially as an entirety (i) shall be a corporation, limited liability company, partnership or trust, (ii) shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and (iii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Issuer to be performed, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person formed by such consolidation or into which the Issuer shall have been merged or by the Person which shall have acquired the Issuer’s assets; (b) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Issuer or any Subsidiary as a result of such transaction as having been incurred by the Issuer or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and (c) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

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The conditions of (a)(ii) above shall not apply in the case of a corporation or entity not organized under the laws of the United States of America, any State thereof or the District of Columbia which shall agree (i) to subject itself to the jurisdiction of the United States district court for the Southern District of New York and (ii) to indemnify and hold harmless the holders of all Securities against (A) any tax, assessment or governmental charge imposed on such holders by a jurisdiction other than the United States or any political subdivision or taxing authority thereof or therein with respect to, and withheld on the making of, any payment of principal or interest on such Securities and which would not have been so imposed and withheld had such consolidation, merger, sale or conveyance not been made and (B) any tax, assessment or governmental charge imposed on or relating to, and any costs or expenses involved in, such consolidation, merger, sale or conveyance.

 

The restrictions in this Section 9.01 shall not apply to (i) the merger or consolidation of the Issuer with one of its affiliates, if the Board of Directors determines in good faith that the purpose of such transaction is principally to change the Issuer’s State of incorporation or convert the Issuer’s form of organization to another form, or (ii) the merger of the Issuer with or into a single direct or indirect wholly owned Subsidiary.

 

Nothing contained in this Article shall apply to, limit or impose any requirements upon the consolidation or merger of any Person into the Issuer where the Issuer is the survivor of such transaction, or the acquisition by the Issuer, by purchase or otherwise, of all or any part of the property of any other Person (whether or not affiliated with the Issuer).

 

Section 9.02                   Successor Issuer Substituted.

 

Upon any consolidation of the Issuer with, or merger of the Issuer into, any other Person or any conveyance, transfer or lease of the properties and assets of the Issuer substantially as an entirety in accordance with Section 9.01, the successor Person formed by such consolidation or into which the Issuer 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 Issuer under this Indenture with the same effect as if such successor Person had been named as the Issuer herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

In case of any such consolidation, merger, sale, lease or conveyance, such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

 

ARTICLE 10
 SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;
 UNCLAIMED MONEYS

 

Section 10.01                 Satisfaction and Discharge of Indenture; Defeasance.

 

(a)           If at any time

 

(1)           the Issuer shall have paid or caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder (other than Securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09) as and when the same shall have become due and payable, or

 

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(2)                                  the Issuer shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated (other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09) or

 

(3)                                  in the case of any series of Securities the exact amount (including the currency of payment) of principal of and interest due on which on the dates referred to in clause (B) below can be determined at the time of making the deposit referred to in such clause,

 

(A)                              all the Securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and

 

(B)                                the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Issuer in accordance with Section 10.04) or, in the case of any series of Securities the payments on which may only be made in Dollars, cash and U.S. Government Obligations maturing as to principal and interest in such amounts and at such times as will insure the availability of cash sufficient to pay on any subsequent interest payment date all interest due on such interest payment date on the Securities of such series and to pay at maturity or upon redemption all Securities of such series (in each case other than any Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09) not theretofore delivered to the Trustee for cancellation, including principal and interest due or to become due to such date of maturity, as the case may be,

 

and if, in any such case (i), (ii) or (iii), the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer, including amounts due the Trustee pursuant to Section 6.06, with respect to Securities of such series, then this Indenture shall cease to be of further effect with respect to Securities of such series (except as to (1) rights of registration of transfer, conversion and exchange of Securities of such series and the Issuer’s right of optional redemption, (2) substitution of mutilated, defaced, destroyed, lost or stolen Securities, (3) rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the Holders to receive, solely from the trust fund described in Section 10.01(a)(iii)(B), sinking fund payments, if any, (4) the rights (including the Trustee’s rights under Sections 6.06 and 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations under Sections 10.02 and 10.04 and (5) the obligations of the Issuer under Section 3.02), and the Trustee, on demand of the Issuer accompanied by an Officer’s Certificate and an Opinion of Counsel which complies with Section 11.05 and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture with respect to such series.  The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series (including the reasonable and documented fees and expenses of one outside counsel).

 

(b)                                 The following subsection shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate or indenture supplemental hereto provided pursuant to Section 2.03.  In addition to the right to discharge of the Indenture pursuant to subsection (a) above, the Issuer, at its option and at any time, by written notice by an officer entitled to deliver an Officer’s Certificate delivered to the Trustee, may elect to have all of its obligations discharged with all Outstanding Securities of a series (“Legal Defeasance”), such discharge to be effective on the date that

 

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the conditions set forth in clauses (i) through (iii), (iv) and (vi) of Section 10.01(d) are satisfied, and thereafter the Issuer shall be deemed to have paid and discharged the entire Debt on all the Securities of such a series, and satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned and this Indenture shall cease to be of further effect with respect to Securities of such series (except as to (1) rights of registration of transfer, conversion and exchange of Securities of such series, (2) substitution of apparently mutilated, defaced, destroyed, lost or stolen Securities, (3) rights of Holders of Securities to receive, solely from the trust fund described in Section 10.01(d)(i), payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the Holders to receive, solely from the trust fund described in Section 10.01(d)(i), sinking fund payments, if any, (4) the rights (including the Trustee’s rights under Sections 6.06 and 10.05) and immunities of the Trustee hereunder and the Trustee’s obligations with respect to the Securities of such series under Sections 10.02 and 10.04 and (5) the obligations of the Issuer under Section 3.02).  The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series (including the reasonable and documented fees and expenses of one outside counsel).

 

(c)                                  The following subsection shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate or indenture supplemental hereto provided pursuant to Section 2.03.  In addition to the right to discharge of the Indenture pursuant to subsection (a) and to Legal Defeasance pursuant to subsection (b), above, the Issuer, at its option and at any time, by written notice executed by an officer delivered to the Trustee, may elect to have its obligations under any covenant contained in this Indenture or in the Board Resolution or supplemental indenture relating to such series pursuant to Section 2.03 discharged with respect to all Outstanding Securities of a series, this Indenture and any indentures supplemental to this Indenture with respect to such series (“Covenant Defeasance”), such discharge to be effective on the date the conditions set forth in clauses (i) through (iii) and (v) through (vi) of Section 10.01(d) are satisfied, and such Securities shall thereafter be deemed to be not “Outstanding” for the purposes of any direction, waiver, consent or declaration of Securityholders (and the consequences of any thereof) in connection with such covenants, but shall continue to be “Outstanding” for all other purposes under this Indenture.  For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Securities of a series, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute an Event of Default under Section 5.01(c) or otherwise, but except as specified in this Section 10.01(c), the remainder of the Issuer’s obligations under the Securities of such series, this Indenture, and any indentures supplemental to this Indenture with respect to such series shall be unaffected thereby.

 

(d)                                 The following shall be the conditions to the application of Legal Defeasance under subsection (b) or Covenant Defeasance under subsection (c) to the Securities of the applicable series:

 

(1)                                  the Issuer irrevocably deposits or causes to be deposited in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, cash or U.S. Government Obligations that will generate cash sufficient to pay principal of and interest on the Outstanding Securities of such series to maturity or redemption, as the case may be, as certified to that effect in an Officer’s Certificate, and to pay all other amounts payable by it hereunder, provided that (A) the trustee of the irrevocable trust, if any, shall have been irrevocably instructed to pay such funds or the proceeds of such U.S. Government Obligations to the Trustee and (B) the Trustee shall have been irrevocably instructed to apply such funds or the

 

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proceeds of such U.S. Government Obligations to (x) the principal and interest on all Securities of such series on the date that such principal or interest is due and payable and (y) any mandatory sinking fund payments on the day on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series, and the Issuer shall also pay or cause to be paid all other amounts payable hereunder with respect to such series;

 

(2)                                  the Issuer delivers to the Trustee an Officer’s Certificate stating that all conditions precedent specified herein relating to Legal Defeasance or Covenant Defeasance, as the case may be, have been complied with, and an Opinion of Counsel to the same effect;

 

(3)                                  [Reserved];

 

(4)                                  in the event of an election for Legal Defeasance under subsection (b), the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would be the case if such deposit, defeasance and discharge were not to occur;

 

(5)                                  in the event of an election for Covenant Defeasance under subsection (c), the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur; and

 

(6)                                  notwithstanding any other provisions of this subsection (d), such defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be imposed on the Issuer pursuant to Section 2.03.

 

After such irrevocable deposit made pursuant to this Section 10.01(d) and satisfaction of the other conditions set forth in this subsection (d), the Trustee upon request shall execute proper instruments acknowledging the discharge of the Issuer’s obligations pursuant to this Section 10.01.

 

Section 10.02                                                  Application by Trustee of Funds Deposited for Payment of  Securities.

 

Subject to Section 10.04, all moneys deposited with the Trustee (or other trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law.

 

Section 10.03                                                  Repayment of Moneys Held by Paying Agent.

 

In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to

 

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such series of Securities shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys.

 

Section 10.04                                                  Return of Moneys Held by Trustee and Paying Agent  Unclaimed for Two Years.

 

Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the principal of, interest on or additional amounts in respect of any Security of any series and not applied but remaining unclaimed for two years after the date upon which such principal, interest or additional amount shall have become due and payable, shall be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities of such series shall thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease.

 

Section 10.05                                                  Indemnity for U.S. Government Obligations.

 

The Issuer shall pay and indemnify the Trustee and hold it harmless against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 10.01 or the principal or interest received in respect of such obligations.

 

ARTICLE 11
 MISCELLANEOUS PROVISIONS

 

Section 11.01                                                  No Recourse.

 

No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Issuer or of any predecessor or successor corporation, either directly or through the Issuer or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Issuer or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

 

Section 11.02                                                  Provisions of Indenture for the Sole Benefit of Parties and  Holders of Securities.

 

Nothing in this Indenture or in the Securities, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and the Holders of the Securities any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors and of the Holders of the Securities.

 

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Section 11.03                                                  Successors and Assigns of Issuer Bound by Indenture.

 

All the covenants, stipulations, promises and agreements contained in this Indenture by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.

 

Section 11.04                                                  Notices and Demands on Issuer, Trustee and Holders of  Securities.

 

Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to A123 Systems, Inc., 200 West Street, Waltham, MA 02451, Attn: General Counsel.  Any notice, direction, request or demand by the Issuer or any Holder of Securities to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made at 21 South Street, 3rd Floor, Morristown, New Jersey 07960, Attn: Rick Barnes.

 

Where this Indenture provides for notice to Holders of Securities, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his or her last address as it appears in the Security register.  In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice of any event to Holders of Securities when said notice is required to be given pursuant to any provision of this Indenture or of the Securities, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.

 

In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.

 

Neither the failure to give notice, nor any defect in any notice so given, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders of Securities given as provided above.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

Section 11.05                                                  Officer’s Certificates and Opinions of Counsel; Statements  to Be Contained Therein.

 

Upon any application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture (excluding, for the avoidance of doubt, the initial issuance of Securities hereunder), (i) the Issuer shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and (ii) the Trustee shall be entitled to request an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with or otherwise reasonably satisfactory to the Trustee, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

 

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Each certificate provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based, (c) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

 

Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.  Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.

 

Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his or her certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.

 

Any certificate or opinion of any independent firm of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent.

 

Section 11.06                                                  Payments Due on Saturdays, Sundays and Holidays.

 

If the date of maturity of interest on or principal of the Securities of any series or the date fixed for redemption or repayment of any such Security, or the last day on which a Holder has the right to convert any Security, shall not be a Business Day, then payment of interest or principal, or any conversion, need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption or on such last day for conversion, and no interest shall accrue for the period after such date.

 

Section 11.07                                                  Conflict of Any Provision of Indenture With Trust  Indenture Act.

 

If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act, such incorporated provision shall control.

 

Section 11.08                                                  New York Law to Govern.

 

This Indenture and each Security, shall be deemed to be a contract under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of such State.

 

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Section 11.09                                                  Counterparts.

 

This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

 

Section 11.10                                                  Effect of Headings.

 

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 11.11                                                  Actions by Successor.

 

Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board of directors or its equivalent, committee or officer of the Issuer shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Issuer.

 

Section 11.12                                                  Severability.

 

In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

ARTICLE 12
 REDEMPTION OF SECURITIES AND SINKING FUNDS

 

Section 12.01                                                  Applicability of Article.

 

The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series, except as otherwise specified, as contemplated by Section 2.03 for Securities of such series.

 

Section 12.02                                                  Notice of Redemption; Partial Redemptions.

 

Notice of redemption to the Holders of Securities of any series to be redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of Securities of such series at their last addresses as they shall appear upon the Security register.  Any notice which is given in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice.  Failure to give notice or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series.

 

The notice of redemption to each such Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price,

 

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the place or places of payment, that payment will be made upon presentation and surrender of such Securities, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue and shall also specify, if applicable, the conversion price then in effect and the date on which the right to convert such Securities or the portions thereof to be redeemed will expire.  In case any Security of a series is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

 

The notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer.

 

On or before the redemption date specified in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.04) an amount of money sufficient to redeem on the redemption date all the Securities of such series so called for redemption (other than those Securities theretofore surrendered for conversion into Common Stock in accordance with their terms) at the appropriate redemption price, together with accrued interest to the date fixed for redemption.  If any Security called for redemption is converted pursuant hereto and in accordance with the terms thereof, any money deposited with the Trustee or any paying agent or so segregated and held in trust for the redemption of such Security shall be paid to the Issuer upon the Issuer’s request, or, if then held by the Issuer, shall be discharged from such trust.  The Issuer will deliver to the Trustee at least 10 days prior to the date the notice required to be delivered to the Holders is to be sent (unless a shorter time period shall be acceptable to the Trustee) an Officer’s Certificate (which need not comply with Section 11.05) stating the aggregate principal amount of Securities to be redeemed.  In case of a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officer’s Certificate stating that such restriction has been complied with.

 

If less than all the Securities of a series are to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such series to be redeemed in whole or in part.  Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof.  The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed.  For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.  If any Security selected for partial redemption is surrendered for conversion after such selection, the converted portion of such Security shall be deemed (so far as may be possible) to be the portion selected for redemption.

 

Section 12.03                                                  Payment of Securities Called for Redemption.

 

If notice of redemption has been given as above provided, the Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in the payment of such Securities at the redemption

 

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price, together with interest accrued to said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue, and such Securities shall cease from and after the date fixed for redemption to be convertible into Common Stock (to the extent otherwise convertible in accordance with their terms), if applicable, and cease to be entitled to any benefit or security under this Indenture, and except as provided in the paragraph below, the Holders thereof shall have no right in respect of such Securities except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption.  On presentation and surrender of such Securities at a place of payment specified in said notice, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided, that payment of interest becoming due on or prior to the date fixed for redemption shall be payable to the Holders of such Securities registered as such on the relevant Record Date subject to the terms and provisions of Sections 2.03 and 2.07 hereof.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by such Security and, if applicable, such Security shall remain convertible into Common Stock until the principal of such Security shall have been paid or duly provided for.

 

Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented.

 

Section 12.04                                                  Exclusion of Certain Securities from Eligibility for  Selection for Redemption.

 

If certificated, Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in an Officer’s Certificate delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.

 

Section 12.05                                                  Mandatory and Optional Sinking Funds.

 

The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of the Securities of any series is herein referred to as an “optional sinking fund payment”.  The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”.

 

In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10 and, if applicable, receive credit for Securities (not previously so credited) converted into Common Stock and so delivered to the Trustee for cancellation, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through any

 

44

 

optional redemption provision contained in the terms of such series.  Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities.

 

On or before the 60th day next preceding each sinking fund payment date for any series, the Issuer will deliver to the Trustee an Officer’s Certificate (which need not contain the statements required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such series and the basis for such credit, (b) stating that none of the Securities of such series for which credit will be taken has theretofore been so credited, (c) stating that no defaults in the payment of interest or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date.  Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officer’s Certificate (or reasonably promptly thereafter if acceptable to the Trustee).  Such Officer’s Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date.  Failure of the Issuer, on or before any such 60th day, to deliver such Officer’s Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof.

 

If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or a lesser sum in Dollars or in any Foreign Currency if the Issuer shall so request) with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption.  If such amount shall be $50,000 (or the equivalent thereof in any Foreign Currency) or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 (or the equivalent thereof in any Foreign Currency) is available, which delay in accordance with this paragraph shall not be a default or breach of the obligation to make such payment.  The Trustee shall select, in the manner provided in Section 12.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to which such cash may be applied, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected.  The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the Trustee in writing), shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 12.02 (and with the effect provided in Section 12.03) for the redemption of Securities of such series in part at the option of the Issuer.  The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section.  Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series, shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity.  The Issuer’s obligation to make a mandatory or optional sinking

 

45

 

fund payment shall automatically be reduced by an amount equal to the sinking fund redemption price allocable to any Securities or portions thereof called for redemption pursuant to the preceding paragraph on any sinking fund payment date and converted into Common Stock in accordance with the terms of such Securities; provided  that, if the Trustee is not the conversion agent for the Securities, the Issuer or such conversion agent shall give the Trustee written notice on or prior to the date fixed for redemption of the principal amount of Securities or portions thereof so converted.

 

On or before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on such sinking fund payment date.

 

The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Event of Default except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption.  Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article 5 and held for the payment of all such Securities.  In case such Event of Default shall have been waived as provided in Section 5.10, or the default cured on or before the 60th day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on such sinking fund payment date in accordance with this Section to the redemption of such Securities.

 

ARTICLE 13
 SUBORDINATION OF SECURITIES

 

Section 13.01                 Agreement of Subordination.

 

The Issuer 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 13; and each Securityholder, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

 

The payment of the principal of, premium, if any, and interest on all Securities 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 of all Senior Indebtedness of the Issuer, whether outstanding at the date of this Indenture or thereafter incurred.

 

The provisions of this Article 13 define the subordination of the Securities, as obligations of the Issuer, with respect to Senior Indebtedness of the Issuer.

 

No provision of this Article 13 shall prevent the occurrence of any default or Event of Default hereunder.

 

Section 13.02                 Payments to Securityholders.

 

In the event and during the continuation of any default in the payment of principal, premium, interest or any other payment due on any Senior Indebtedness of the Issuer continuing beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Indebtedness of the Issuer,

 

46

 

then, unless and until such default shall have been cured or waived or shall have ceased to exist, no payment shall be made by the Issuer with respect to the principal of, or premium, if any, or interest on the Securities, except sinking fund obligations satisfied by credit of acquired Securities under Section 12.05 prior to the happening of such default and payments made pursuant to Article 10 hereof from monies deposited with the Trustee pursuant thereto prior to the happening of such default.

 

Upon any payment by the Issuer, or distribution of assets of the Issuer 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 Issuer, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due or to become due upon all Senior Indebtedness of the Issuer shall first be paid in full, or payment thereof provided for in money in accordance with its terms, before any payment is made on account of the principal (and premium, if any) or interest on the Securities (except payments made pursuant to Article 10 hereof from monies deposited with the Trustee pursuant thereto prior to the happening of such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization any payment by the Issuer, or distribution of assets of the Issuer 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 provisions of this Article 13, shall (except as aforesaid) be paid by the Issuer 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 holders of Senior Indebtedness of the Issuer (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness of the Issuer held by such holders, as calculated by the Issuer) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness of the Issuer may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Indebtedness of the Issuer in full, in money or money’s worth, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of the Issuer, before any payment or distribution is made to the holders of the Securities or to the Trustee.

 

In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Issuer of any kind or character, whether in cash, property or securities, prohibited by the foregoing, shall be received by the Trustee or the holders of the Securities before all Senior Indebtedness of the Issuer is paid in full, or provision is made for such payment in money in accordance with its terms, 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 of the Issuer or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness of the Issuer may have been issued, as their respective interests may appear, as calculated by the Issuer, for application to the payment of all Senior Indebtedness of the Issuer remaining unpaid to the extent necessary to pay all Senior Indebtedness of the Issuer in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness.

 

For purposes of this Article 13, the words, “cash, property or securities” shall not be deemed to include shares of stock of the Issuer as reorganized or readjusted, or securities of the Issuer 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 13 with respect to the Securities to the payment of all Senior Indebtedness of the Issuer which may at the time be outstanding; provided that (i) the Senior Indebtedness of the Issuer is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Indebtedness of the Issuer (other than leases) and of leases which are assumed are not, without the consent of such holders, altered by such reorganization or readjustment.

 

47

 

The consolidation of the Issuer with, or the merger of the Issuer into, another corporation or the liquidation or dissolution of the Issuer 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 9 hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 13.02 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article 9 hereof.  Nothing in this Section 13.02 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06.

 

Section 13.03                 Subrogation of Securities.

 

Subject to the payment in full of all Senior Indebtedness of the Issuer, the rights of the holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness of the Issuer to receive payments or distributions of cash, property or securities of the Issuer applicable to the Senior Indebtedness of the Issuer until the principal of (and premium, if any) and interest on the Securities shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of the Issuer 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 13 to or for the benefit of the holders of Senior Indebtedness of the Issuer by holders of the Securities or the Trustee, shall, as between the Issuer, its creditors other than holders of Senior Indebtedness of the Issuer, and the holders of the Securities, be deemed to be a payment by the Issuer to or on account of the Senior Indebtedness of the Issuer.  It is understood that the provisions of this Article 13 are and are intended solely for the purpose of defining the relative rights of the holders of the Securities, on the one hand, and the holders of the Senior Indebtedness of the Issuer, on the other hand.

 

Nothing contained in this Article 13 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as between the Issuer, its creditors other than the holders of its Senior Indebtedness, and the holders of the Securities, the obligation of the Issuer, 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 Issuer other than the holders of its Senior Indebtedness, nor 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 13 of the holders of Senior Indebtedness of the Issuer in respect of cash, property or securities of the Issuer received upon the exercise of any such remedy.

 

Upon any payment or distribution of assets of the Issuer referred to in this Article 13, the Trustee, subject to the provisions of Section 6.01, 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 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 Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 13.

 

Section 13.04                 Authorization by Securityholders.

 

Each holder of a Security by its acceptance thereof authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article 13 appoints the Trustee its attorney-in-fact for any and all such purposes.

 

48

 

Section 13.05                 Notice to Trustee.

 

The Issuer shall give promptly written notice to a Responsible Officer of the Trustee of any fact known to the Issuer 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 13.  Notwithstanding the provisions of this Article 13 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 13, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office of the Trustee from the Issuer or a holder or holders of Senior Indebtedness of the Issuer or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist; provided that if on a date not fewer than three Business Days 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 interest on any Security) the Trustee shall not have received, with respect to such monies, the notice provided for in this Section 13.05, 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 to the contrary hereinbefore set forth, nothing shall prevent any payment by the Issuer or the Trustee to the Securityholders of monies in connection with a redemption of Securities if (i) notice of such redemption has been given pursuant to Article 12 hereof prior to the receipt by the Trustee of written notice as aforesaid, and (ii) such notice of redemption is given not earlier than 60 days before the redemption date.

 

The Trustee conclusively shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness of the Issuer (or a trustee on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness of the Issuer 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 of the Issuer to participate in any payment or distribution pursuant to this Article 13, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness of the Issuer 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 13, 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 13.06                 Trustee’s Relation to Senior Indebtedness.

 

The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 13 in respect of any Senior Indebtedness of the Issuer at any time held by it, to the same extent as any other holder of Senior Indebtedness of the Issuer and nothing elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder.

 

With respect to the holders of Senior Indebtedness of the Issuer, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 13, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Issuer 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 of the Issuer and the Trustee shall not be liable to any holder of Senior Indebtedness of the Issuer if it shall pay over or deliver to holders of Securities, the Issuer or any other Person money or assets to which any holder of Senior Indebtedness of the Issuer shall be entitled by virtue of this Article 13 or otherwise.

 

49

 

Section 13.07                 No Impairment of Subordination.

 

No right of any present or future holder of any Senior Indebtedness of the Issuer 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 Issuer or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Issuer 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 13.08                 Rights of Trustee.

 

Notwithstanding anything herein to the contrary, nothing in this Article 13 shall apply to claims of or payments to, the Trustee pursuant to Section 6.06 or Section 10.05.

 

[Signature pages follow]

 

50

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of.

 

 

	
 
    	
A123   SYSTEMS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   David P. Vieau
    
	
 
    	
Name:
    	
David   P. Vieau
    
	
 
    	
Title:
    	
President   and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
   Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Rick Barnes
    
	
 
    	
Name:
    	
Rick   Barnes
    
	
 
    	
Title:
    	
Vice   PresidentExhibit 4.2

 

A123 SYSTEMS, INC.

 

and

 

U.S. BANK NATIONAL ASSOCIATION

 

Trustee

 

FIRST SUPPLEMENTAL INDENTURE

 

Dated as of April 6, 2011

 

To the Indenture dated as

 

of

 

April 6, 2011

3.75% CONVERTIBLE SUBORDINATED NOTES DUE 2016

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1 DEFINITIONS AND   OTHER PROVISIONS OF GENERAL APPLICATION
    	
 
    	
2
    
	
Section 1.01
    	
 
    	
Scope of Supplemental Indenture
    	
 
    	
2
    
	
Section 1.02
    	
 
    	
Certain Terms Defined
    	
 
    	
2
    
	
Section 1.03
    	
 
    	
References to Interest
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2 SECURITIES
    	
 
    	
10
    
	
Section 2.01
    	
 
    	
Titles and Terms; Payments
    	
 
    	
10
    
	
Section 2.02
    	
 
    	
Book-Entry Provisions for Global Notes
    	
 
    	
13
    
	
Section 2.03
    	
 
    	
Reporting Requirements
    	
 
    	
14
    
	
Section 2.04
    	
 
    	
Repurchase and Cancellation
    	
 
    	
14
    
	
Section 2.05
    	
 
    	
Satisfaction and Discharge
    	
 
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3 FUNDAMENTAL CHANGES   AND REPURCHASES THEREON
    	
 
    	
15
    
	
Section 3.01
    	
 
    	
Repurchase at Option of Holders upon a   Fundamental Change
    	
 
    	
15
    
	
Section 3.02
    	
 
    	
Effect of Fundamental Change Repurchase   Notice
    	
 
    	
17
    
	
Section 3.03
    	
 
    	
Withdrawal of Repurchase Exercise Notice
    	
 
    	
18
    
	
Section 3.05
    	
 
    	
Notes Repurchased in Whole or in Part
    	
 
    	
18
    
	
Section 3.06
    	
 
    	
Covenant to Comply with Applicable Laws   upon Repurchase of Notes
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4 CONVERSION
    	
 
    	
19
    
	
Section 4.01
    	
 
    	
Conversion Privilege
    	
 
    	
19
    
	
Section 4.02
    	
 
    	
Conversion Procedure; Settlement upon   Conversion
    	
 
    	
19
    
	
Section 4.03
    	
 
    	
Adjustment to Shares Delivered upon   Conversion upon a Make Whole Adjustment Event
    	
 
    	
21
    
	
Section 4.04
    	
 
    	
Adjustment of Conversion Rate
    	
 
    	
23
    
	
Section 4.05
    	
 
    	
Reservation of Shares; Shares to Be Fully   Paid; Listing of Common Stock
    	
 
    	
32
    
	
Section 4.06
    	
 
    	
Effect of Recapitalizations,   Reclassifications and Changes of the Common Stock
    	
 
    	
32
    
	
Section 4.07
    	
 
    	
Certain Covenants
    	
 
    	
33
    
	
Section 4.08
    	
 
    	
Responsibility of Trustee
    	
 
    	
33
    
	
Section 4.09
    	
 
    	
[Reserved]
    	
 
    	
34
    
	
Section 4.10
    	
 
    	
Stockholder Rights Plans
    	
 
    	
34
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5 REMEDIES
    	
 
    	
34
    
	
Section 5.01
    	
 
    	
Events of Default
    	
 
    	
34
    
	
Section 5.02
    	
 
    	
Acceleration; Rescission and Annulment
    	
 
    	
36
    
	
Section 5.03
    	
 
    	
Additional Interest
    	
 
    	
37
    
	
Section 5.04
    	
 
    	
Proceedings by Holders
    	
 
    	
37
    
	
Section 5.05
    	
 
    	
Proceedings by Trustee
    	
 
    	
38
    
	
Section 5.06
    	
 
    	
Remedies Cumulative and Continuing
    	
 
    	
38
    
	
Section 5.07
    	
 
    	
Waiver; Unconditional Right of Holders to   Receive Amounts Due upon Conversion
    	
 
    	
39
    

 

i

 

	
Section 5.08
    	
 
    	
Notice of Defaults
    	
 
    	
39
    
	
Section 5.09
    	
 
    	
Compliance Certificate; Statements as to   Defaults
    	
 
    	
39
    
	
Section 5.10
    	
 
    	
Application of Proceeds
    	
 
    	
40
    
	
Section 5.11
    	
 
    	
Suits for Enforcement
    	
 
    	
41
    
	
Section 5.12
    	
 
    	
Restoration of Rights on Abandonment of Proceedings
    	
 
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6 SUPPLEMENTAL   INDENTURE
    	
 
    	
41
    
	
Section 6.01
    	
 
    	
Supplemental Indentures Without Consent   of Holders
    	
 
    	
41
    
	
Section 6.02
    	
 
    	
Supplemental Indentures With Consent of   Holders
    	
 
    	
42
    
	
Section 6.03
    	
 
    	
Effect of Supplemental Indenture
    	
 
    	
43
    
	
Section 6.04
    	
 
    	
Notation on Notes
    	
 
    	
43
    
	
Section 6.05
    	
 
    	
Evidence of Compliance of Supplemental   Indenture to Be Furnished
    	
 
    	
43
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7 SUCCESSOR COMPANY
    	
44
    
	
Section 7.01
    	
 
    	
Consolidation, Merger and Sale of Assets
    	
 
    	
44
    
	
Section 7.02
    	
 
    	
Successor Corporation to Be Substituted
    	
 
    	
44
    
	
Section 7.03
    	
 
    	
Opinion of Counsel to Be Given Trustee
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 8 MISCELLANEOUS   PROVISIONS
    	
 
    	
45
    
	
Section 8.01
    	
 
    	
Conflict With Any Provision of Indenture   With Trust Indenture Act of 1939
    	
 
    	
45
    
	
Section 8.02
    	
 
    	
New York Law to Govern
    	
 
    	
45
    
	
Section 8.03
    	
 
    	
Address for Notices
    	
 
    	
45
    
	
Section 8.04
    	
 
    	
No Security Interest Created
    	
 
    	
46
    
	
Section 8.05
    	
 
    	
Benefits of Indenture
    	
 
    	
46
    
	
Section 8.06
    	
 
    	
Calculations
    	
 
    	
46
    
	
Section 8.07
    	
 
    	
Legal Holidays
    	
 
    	
47
    
	
Section 8.08
    	
 
    	
Counterparts
    	
 
    	
47
    
	
Section 8.09
    	
 
    	
Effects of Headings
    	
 
    	
47
    
	
Section 8.10
    	
 
    	
Severability
    	
 
    	
47
    
	
Section 8.11
    	
 
    	
Ratification of Original Indenture
    	
 
    	
47
    
	
Section 8.12
    	
 
    	
The Trustee
    	
 
    	
47
    
	
Section 8.13
    	
 
    	
Set-Off of Withholding Taxes
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 9 SUBORDINATION
    	
 
    	
48
    
	
Section 9.01
    	
 
    	
Agreement to Subordinate
    	
 
    	
48
    
	
Section 9.02
    	
 
    	
Liquidation; Dissolution; Bankruptcy
    	
 
    	
48
    
	
Section 9.03
    	
 
    	
Default on Designated Senior Indebtedness
    	
 
    	
48
    
	
Section 9.04
    	
 
    	
Acceleration of Notes
    	
 
    	
49
    
	
Section 9.05
    	
 
    	
When Distribution Must Be Paid Over
    	
 
    	
50
    
	
Section 9.06
    	
 
    	
Notice by Issuer
    	
 
    	
50
    
	
Section 9.07
    	
 
    	
Subrogation
    	
 
    	
50
    
	
Section 9.08
    	
 
    	
Relative Rights
    	
 
    	
50
    
	
Section 9.09
    	
 
    	
Subordination May Not Be Impaired by   the Issuer
    	
 
    	
51
    
	
Section 9.10
    	
 
    	
Rights of Trustee and Paying Agent
    	
 
    	
51
    
	
Section 9.11
    	
 
    	
Authorization to Effect Subordination;   Filing Proof of Claim
    	
 
    	
51
    
	
Section 9.12
    	
 
    	
Reliance and Amendments
    	
 
    	
52
    
	
Section 9.13
    	
 
    	
No Waiver of Subordination Provisions
    	
 
    	
52
    

 

ii

 

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of April 6, 2011, is entered by and between A123 Systems, Inc., a Delaware corporation (the “Issuer”), and U.S. Bank National Association, a national banking association (the “Trustee”), under the Indenture, dated as of April 6, 2011, between the Issuer and the Trustee (as amended or supplemented from time to time in accordance with the terms thereof, the “Original Indenture”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer executed and delivered the Original Indenture to the Trustee to provide, among other things, for the issuance, from time to time, of its unsecured subordinated debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Security” or “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of the Original Indenture;

 

WHEREAS, Section 8.01(f) of the Original Indenture provides for the Issuer and the Trustee to enter into supplemental indentures to the Original Indenture to establish the form and terms of Securities of any series as contemplated by Section 2.01 and Section 2.03 of the Original Indenture;

 

WHEREAS, the Issuer has duly authorized the execution and delivery of this Supplemental Indenture to provide, among other things, for the authentication, delivery and administration of the Securities;

 

WHEREAS, pursuant to the terms of the Original Indenture, the Issuer desires to establish a new series of Securities to be known as its “3.75% Convertible Subordinated Notes due 2016” (the “Notes” or “Notes”), the form and substance of such Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Supplemental Indenture;

 

WHEREAS, the Form of the Note, the certificate of authentication to be borne by each Note and the Form of Notice of Conversion, Form of Repurchase Exercise Notice and Form of Assignment and Transfer contemplated under the terms of the Notes are to be substantially in the forms hereinafter provided; and

 

WHEREAS, all things necessary to make this Supplemental Indenture a valid indenture and agreement according to its terms have been done and all things necessary to make the Notes, when executed by the Issuer and authenticated and delivered by the Trustee, the valid obligations of the Issuer have been performed, and the execution and delivery of this Supplemental Indenture have been duly authorized in all respects;

 

NOW, THEREFORE:

 

In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities as follows:

 

 

ARTICLE 1

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.01           Scope of Supplemental Indenture.  The changes, modifications and supplements to the Original Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and shall only govern the terms of, the Notes, which may be issued from time to time, and shall not apply to any other Securities that may be issued under the Original Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements.  The provisions of this Supplemental Indenture shall supersede any corresponding or inconsistent provisions in the Original Indenture.  Without limiting the foregoing, Articles 5, 6, 7 and 9 of this Supplemental Indenture shall apply to the Notes in lieu of Articles 5, 8, 9 and 13 of the Original Indenture, respectively.

 

Section 1.02           Certain Terms Defined.  The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all purposes of this Indenture shall have the respective meanings specified in this Section.  All words, terms and phrases defined in the Original Indenture (but not otherwise defined herein) shall have the same meanings as in the Original Indenture.  All other terms used in this Supplemental Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities Act are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities Act (except as herein otherwise expressly provided or unless the context otherwise clearly requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture.  All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, and the term “generally accepted accounting principles” means such accounting principles as are generally accepted in the United States at the time of any computation.  The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.  The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.

 

“Additional Interest” means all amounts, if any, payable pursuant to Section 5.03.

 

“Additional Notes” has the meaning specified in Section 2.01.

 

“Additional Shares” has the meaning specified in Section 4.03(a).

 

“Agent Members” has the meaning specified in Section 2.02.

 

“Announcement Date” means the date on which the Issuer publicly announces a distribution.

 

“Averaging Period” has the meaning specified in Section 4.04(e).

 

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“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

 

A “Change in Control” shall be deemed to have occurred if any of the following occurs after the time the Notes are originally issued:

 

(i)            any “person” or “group” (each as defined below), other than the Issuer, its Subsidiaries and the employee benefit plans of the Issuer and its Subsidiaries, files a Schedule 13D or Schedule TO, or any successor schedule, or any other schedule, form or report, including, in each case, any amendment thereto, under the Exchange Act disclosing, or the Issuer otherwise becomes aware, that such person or group has become the direct or indirect “beneficial owner” (as defined below) of shares of the Issuer’s Voting Stock representing 50% or more of the total voting power of all outstanding classes of the Issuer’s Voting Stock, unless such beneficial ownership arises as a result of a revocable proxy delivered in response to a public proxy or consent solicitation made pursuant to the applicable rules and regulations under the Exchange Act; provided that no person shall be deemed to be the beneficial owner of any securities tendered pursuant to a tender or exchange offer made by or on behalf of such person until such tendered securities are accepted for purchase or exchange under such offer;

 

(ii)           consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets or (B) any share exchange, consolidation or merger of the Issuer pursuant to which the Common Stock will be converted into cash, securities or other property, or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Issuer and its Subsidiaries, taken as a whole, to any Person other than one of the Issuer’s Subsidiaries; provided, however, that a transaction where the holders of all classes of the Issuer’s Voting Stock immediately prior to such transaction that is a share exchange, consolidation or merger own, directly or indirectly, more than 50% of all classes of Voting Stock of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction shall not be a Change in Control pursuant to this clause (b); or

 

(iii)          the holders of the Capital Stock of the Issuer approve any plan or proposal for the liquidation or dissolution of the Issuer (whether or not otherwise in compliance with this Indenture).

 

Notwithstanding the foregoing, there shall not be deemed to have occurred a “Change in Control,”  if at least 90% of the consideration received or to be received by the common stockholders of the Issuer, excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights, in connection with such transaction consists of shares of common stock traded on the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or any of their respective successors), or will be so traded

 

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immediately following such transaction, and, as a result of such transaction, the Notes become convertible into or exchangeable for such consideration.

 

For purposes of the definition of “Change in Control” above, (i) “person” and “group” have the meanings given to them for purposes of Sections 13(d) and 14(d) of the Exchange Act or any successor provisions thereto, and the term “group” includes any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act or any successor provision thereto; (ii) a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the Exchange Act, as in effect on the date hereof and (iii) “beneficial ownership” has a meaning correlative to that of beneficial owner.

 

“Class of Designated Senior Indebtedness” means any Designated Senior Indebtedness the principal amount of which is $20.0 million or more that has been designated as a separate class from any other Designated Senior Indebtedness, and, with respect to Designated Senior Indebtedness that has not been designated as a separate class, shall mean all such Designated Senior Indebtedness the principal amount of which, in the aggregate, is $20.0 million or more, acting as a single class.

 

“Clause A Distribution” has the meaning specified in Section 4.04(c).

 

“Clause B Distribution” has the meaning specified in Section 4.04(c).

 

“Clause C Distribution” has the meaning specified in Section 4.04(c).

 

“close of business” means 5:00 p.m. (New York City time).

 

“Closing Sales Price” of the Common Stock on any date means the closing per share sale price (or, if no closing sales 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 ask prices) on such date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded or, if the Common Stock is not listed on a U.S. national or regional securities exchange, as reported by Pink OTC Markets Inc. or a similar organization.  If the Common Stock is not so quoted, the “Closing Sales Price” shall 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 Issuer for this purpose.  The Closing Sales Price will be determined without reference to after-hours or extended market trading.

 

“Common Stock” means shares of common stock, par value $0.001 per share, of the Issuer at the date of this Supplemental Indenture, or such other Reference Property into which the Company’s common stock is changed pursuant to Section 4.06(a).

 

“Conversion Agent” means the Trustee or such other office or agency designated by the Issuer where Notes may be presented for conversion.  The Trustee shall initially be the Conversion Agent.

 

“Conversion Date” has the meaning specified in Section 4.02(c).

 

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“Conversion Obligation” has the meaning specified in Section 4.01.

 

“Conversion Price” means, as of any date, $1,000 divided by the Conversion Rate as of such date.

 

“Conversion Rate” has the meaning specified in Section 4.01.

 

“Custodian” means the Trustee, as custodian for The Depositary Trust Company, with respect to the Global Notes, or any successor thereto.

 

“Default” means any event that is, or after notice of passage of time, or both, would be, an Event of Default.

 

“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Fundamental Change Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for.

 

“Depositary” means initially the Depositary Trust Company until a successor Depositary shall have become such pursuant to the applicable provisions of the Indenture, and thereafter “Depositary” shall mean such successor Depositary.

 

“Designated Senior Indebtedness” means any Senior Indebtedness in which the instrument creating or evidencing the Indebtedness, or any related agreements or documents to which the Issuer is a party, expressly provides that such Indebtedness is “designated senior indebtedness” for purposes of the Indenture (provided that the instrument, agreement or other document may place limitations and conditions on the right of the Senior Indebtedness to exercise the rights of Designated Senior Indebtedness).

 

“Distributed Property” has the meaning specified in Section 4.04(c).

 

“Effective Date” has the meaning specified in Section 4.03(b).

 

“Event of Default” means any event or condition specified as such in Section 5.01.

 

“Ex-Dividend Date,” with respect to any dividend, distribution or other transaction, means the first date on which shares of the Common Stock trade regular way on the relevant exchange or in the relevant market from which the sale price was obtained without the right to receive such dividend or distribution, from the Issuer 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.

 

“Expiration Date” has the meaning specified in Section 4.04(e).

 

“Expiration Time” has the meaning specified in Section 4.04(e).

 

“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached hereto as Attachment 3 to the Form of the Note attached hereto as Exhibit A.

 

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“Form of the Note” means the “Form of the Note” attached hereto as Exhibit A.

 

“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of the Note attached hereto as Exhibit A.

 

“Form of Repurchase Exercise Notice” means the “Form of Repurchase Exercise Notice” attached as Attachment 2 to the Form of the Note attached hereto as Exhibit B.

 

“Fundamental Change” means the occurrence prior to the Stated Maturity of either a Change in Control or a Termination of Trading.

 

“Fundamental Change Repurchase Date” has the meaning specified in Section 3.01(a).

 

“Fundamental Change Repurchase Price” has the meaning specified in Section 3.01(a).

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of this Supplemental Indenture.

 

“Global Note” means any Note that is a Global Security.

 

“Holder” means a Person in whose name a Note is registered.

 

“Indebtedness” means (a) all of the Issuer’s indebtedness, obligations and other liabilities, contingent or otherwise,

 

(1)  for borrowed money, including overdrafts and any loans or advances from banks, whether or not evidenced by notes or similar instruments, or

 

(2)  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 assets of the Issuer or to only a portion thereof, other than any account payable or other accrued current liability or obligation incurred in the ordinary course of business in connection with the obtaining of materials or services;

 

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

 

(c)   all of the Issuer’s obligations and liabilities, contingent or otherwise, in respect of leases required to be accounted for as capitalized lease obligations on the Issuer’s balance sheet in conformity with GAAP;

 

(d)   all of the Issuer’s obligations and other liabilities, contingent or otherwise, under any lease or related document, including a purchase agreement, conditional sale or other title

 

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retention agreement, in connection with the lease of real property or improvements thereon (or any personal property included as part of any such lease) which provides that the Issuer is contractually obligated to purchase or cause a third party to purchase the leased property or pay an agreed upon residual value of the leased property, including the Issuer’s obligations under such lease or related document to purchase or cause a third party to purchase such leased property or pay an agreed upon residual value of the leased property to the lessor;

 

(e)  the deferred and unpaid balance of the purchase price of any property, except any such balance that constitutes an accrued expense or trade or service payable incurred in the ordinary course of business;

 

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

 

(g)  all of the Issuer’s direct or indirect guaranties or similar agreements by us in respect of, and all of the Issuer’s obligations or liabilities to purchase or otherwise acquire or otherwise assure a creditor against loss in respect of, indebtedness, obligations or liabilities of another Person of the kinds described in clauses (a) through (f); and

 

(h)  any and all deferrals, renewals, extensions, refinancings and refundings of, or amendments, modifications or supplements to, any indebtedness, obligation or liability of the kinds described in clauses (a) through (g).

 

“Indenture” means the Original Indenture, as originally executed and as supplemented from time to time by one or more indentures supplemental thereto, including this Supplemental Indenture, entered into pursuant to the applicable provisions of the Indenture, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Original Indenture, this Supplemental Indenture and any other such supplemental indenture, respectively.

 

“Interest Payment Date” means, with respect to the payment of interest on the Notes, each April 15 and October 15 of each year.

 

“Issuer” means A123 Systems, Inc., a Delaware corporation, and, subject to Article 7, its successors and assigns.

 

“Issuer Order” means a written statement, request or order of the Issuer signed in its name by the chairman of the Board of Directors, the president or any vice president of the Issuer.

 

“Make Whole Adjustment Event” means the occurrence prior to the Stated Maturity of either (i) any transaction or event that constitutes a Change in Control (determined after giving effect to any exceptions to or exclusions from such definition, other than the proviso in clause (b) of the definition thereof) or (ii) any Termination of Trading.

 

“Make Whole Adjustment Event Period” has the meaning specified in Section 4.03(a).

 

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“Nonpayment Default” has the meaning specified in Section 9.03(a).

 

“Non-U.S. Holder” means a Holder that is not treated as a United States person for U.S. federal income tax purposes as defined under Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended from time to time.

 

“Note” or “Notes” has the meaning specified in the fourth paragraph of the recitals of this Supplemental Identure.

 

“Note Register” means the register or registers the Issuer will keep with respect to the Notes pursuant to Section 2.08 of the Original Indenture.

 

“Notes Registrar” has the meaning specified in Section 2.01.

 

“Notice of Conversion” has the meaning specified in Section 4.02(b).

 

“Officer” means, with respect to the Issuer, the president, the chief executive officer, the treasurer, the secretary, any executive or senior vice president or any vice president.

 

“open of business” means 9:00 a.m. (New York City time).

 

“Outstanding”, with respect to the Notes, has the meaning specified in the Original Indenture with respect to Securities “outstanding,” as modified by Section 2.04 and Section 3.04 of this Supplemental Indenture.

 

“Payment Blockage Notice” shall have the meaning specified in Section 9.03(a).

 

“Payment Default” has the meaning specified in Section 9.03(a).

 

“Paying Agent” shall initially be the Trustee, and shall be the Person authorized by the Issuer to pay the principal amount of, interest on, or Fundamental Change Repurchase Price of, any Notes on behalf of the Issuer.

 

“Physical Notes” means certificated Notes that are not in global form and are registered in the name of the Holder and issued in denominations of $1,000 principal amount and multiples thereof.

 

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other security) have the right to receive any cash, securities or other property or in which Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of Common Stock (or other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

 

“Reference Property” has the meaning specified in Section 4.06(a).

 

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“Regular Record Date” means, with respect to the payment of interest on the Notes, the April 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on April 15 and the October 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on October 15.

 

“Representative” means the indenture trustee or other trustee, agent or representative for any Senior Indebtedness; provided that, if no Representative has been appointed under the instrument governing any series of Senior Indebtedness, any holder or group of holders of such series of Senior Indebtedness certifying that it holds a percentage of such series of Senior Indebtedness sufficient to cause the acceleration thereof will be deemed a Representative.

 

“Repurchase Exercise Notice” has the meaning specified in Section 3.01(b).

 

“Repurchase Right Notice” has the meaning specified in Section 3.01(c).

 

“Senior Indebtedness” of a Person means the principal of, interest, including any interest accruing after the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowed as a claim in the proceeding, and rent payable on or in connection with, premium on and all fees, costs, expenses and other amounts accrued or due on or in connection with, indebtedness of the Issuer, whether secured or unsecured, absolute or contingent, due or to become due, outstanding on the date of the Supplemental Indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Issuer, including all deferrals, renewals, extensions or refunding of, or amendments, modifications or supplements to the foregoing.  However, “Senior Indebtedness” does not include:

 

(a)   Indebtedness that expressly provides that such Indebtedness shall not be senior in right of payment to the Notes or expressly provides that such Indebtedness is equal in rank or junior to the Notes;

 

(b)   Any Indebtedness to any Subsidiaries, other than Indebtedness to Subsidiaries arising by reason of guarantees by the Issuer of the Indebtedness of such Subsidiary to a Person that is not a subsidiary of the Issuer;

 

(c)   Indebtedness for accrued expenses or trade or service payables incurred in the ordinary course of business;

 

(d)   Any liability for federal, state, local or other taxes owing or owed by the Issuer.

 

“Significant Subsidiary” means a Subsidiary of the Issuer that meets the definition of “significant subsidiary” in Article 1, Rule 1-02 of Regulation S-X under the Exchange Act.

 

“Spin-Off” has the meaning specified in Section 4.04(c).

 

“Stated Maturity” means, with respect to any Note and the payment of the principal amount thereof, April 15, 2016.

 

“Stock Price” has the meaning specified in Section 4.03(b).

 

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“Termination of Trading” means the Common Stock (or other common stock underlying the Notes) ceases to be listed on any of the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or any of their respective successors).

 

“Trading Day” means a day on which (i) trading in the Common Stock generally occurs on The Nasdaq Global Select Market or, if the Common Stock is not listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange or trading system on which the Common Stock is then listed or quoted and (ii) a Closing Sales Price for the Common Stock is available on such securities exchange or trading system; provided that if the Common Stock is not so listed or quoted, “Trading Day” means a Business Day.

 

“Trigger Event” has the meaning specified in Section 4.04(c).

 

“Trustee” has the meaning specified in the first paragraph of the Supplemental Indenture.

 

“Underwriters” means Deutsche Bank Securities Inc. and Goldman, Sachs & Co. as managers of those underwriters set forth on Schedule II of the Underwriting Agreement.

 

“Underwriting Agreement” means that certain Underwriting Agreement, dated as of March 31, 2011, by and among the Issuer and the Underwriters.

 

“Valuation Period” has the meaning specified in Section 4.04(c).

 

“vice president”, when used with respect to the Issuer 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 of “vice president”.

 

“Voting Stock” of any Person means any class or classes of Capital Stock of, or other interests in, such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the board of directors, managers or trustees of such Person.

 

Section 1.03           References to Interest.  Any reference to interest on, or in respect of, any Note in the Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to Section 5.03.  Any express mention of the payment of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

 

ARTICLE 2

 

SECURITIES

 

Section 2.01           Titles and Terms; Payments.  There is hereby established a Series of Securities designated the “3.75% Convertible Subordinated Notes due 2016” initially limited in aggregate principal amount to $125,000,000 (as increased by an amount equal to the aggregate principal amount of any Additional Notes purchased by the Underwriters pursuant to the exercise of their option to purchase Additional Notes as set forth in the Underwriting Agreement), which

 

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amount shall be as set forth in the Issuer Order for the authentication and delivery of the Notes pursuant to Section 2.04 of the Original Indenture.  The Notes will only be issued in denominations of $1,000 and in integral multiples of $1,000.

 

The principal amount of Notes then Outstanding shall be payable at the Stated Maturity.  Interest on the Notes shall accrue at a rate of 3.75% per annum, from the issue date or from the most recent date on which interest has been paid or duly provided for, until the principal therefor is paid or made available for payment.  Interest shall be payable semi-annually in arrears on each Interest Payment Date, beginning on October 15, 2011, to the Person in whose name a Note is registered on the Note Register at the close of business on the Regular Record Date immediately preceding the applicable Interest Payment Date.  Interest will be computed on the basis of a 360-day year composed of twelve 30-day months.  The Notes will not have the benefit of Section 12.05 of the Original Indenture.

 

Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at the rate borne by the Notes plus one percent, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Issuer, at its election in each case, as provided in clause (i) or (ii) below:

 

(i) The Issuer may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner.  The Issuer shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Amounts as in this clause provided.  Thereupon the Issuer shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Issuer shall promptly notify the Trustee of such special record date and the Trustee, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Amounts and the special record date therefor to be mailed, first-class postage prepaid, to each Holder at its address as it appears in the Note Register, not less than 10 days prior to such special record date.  Notice of the proposed payment of such Defaulted Amounts and the special record date therefor having been so mailed, such Defaulted Amounts shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (ii) of this Section 2.01.

 

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(ii)  The Issuer may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

The Issuer may, without the consent of the Holders and notwithstanding any other provision of this Section 2.01, reopen this Indenture and issue Additional Notes hereunder (“Additional Notes”) with the same terms and with the same CUSIP number as the Notes initially issued hereunder in an unlimited aggregate principal amount; provided that such Additional Notes must be fungible with the Notes initially issued hereunder for federal income tax purposes.  Any Additional Notes shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes issued hereunder.  Prior to the issuance of any such Additional Notes, the Issuer shall deliver to the Trustee an Issuer Order, an Officers’ Certificate and an Opinion of Counsel, such Officers’ Certificate and Opinion of Counsel to cover such matters, in addition to those required by Section 11.05 of the Original Indenture, as the Trustee shall reasonably request.

 

The Form of the Note shall be substantially as set forth in Exhibit A and the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of Assignment and Transfer shall be substantially as set forth in Attachments 1, 2 and 3, respectively to Exhibit A, each of which is incorporated into and shall be deemed a part of this Supplemental Indenture, and in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may consistent herewith, be determined to be necessary or appropriate by the Officers of the Issuer executing such Notes, as evidenced by their execution of the Notes.

 

The Issuer shall pay the principal of and interest on any Global Note in immediately available funds to the Depository or its nominee, as the case may be, as the registered Holder of such Global Note. The Issuer shall pay the principal of and interest on any Physical Notes at the office of the Trustee, or at the Issuer’s option, by check mailed to the Holder’s registered address, unless a Holder timely requests to have such amounts paid by wire transfer in accordance with the final three sentences of this paragraph, in which case the Issuer shall instead pay such principal of and interest on any Physical Notes by wire transfer in accordance with the transfer instructions provided in such request. The Issuer has initially designated the Trustee as its Paying Agent in respect of the Notes and its Notes Registrar in respect of the Notes (the “Notes Registrar”) and its agency in New York City as a place where Notes may be presented for payment, registration of transfer, exchange repurchase or conversion. The Issuer may, however, change the Paying Agent or the Notes Registrar or the Conversion Agent for the Notes without prior notice to the Holders thereof, and the Issuer or one of its wholly owned Subsidiaries may act as the Paying Agent or the Notes Registrar for the Notes. The Issuer reserves the right to vary or terminate the appointment of the Notes Registrar, Paying Agent or Conversion Agent, appoint additional Paying Agents or Conversion Agents or approve any change in the office through which any Notes Registrar or any Paying Agent or Conversion

 

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Agent acts. Payments on any Physical Notes having a principal amount of at least $1,000,000 shall be payable, if the Holder of such Physical Notes so requests in accordance with the two immediately succeeding sentences, by wire transfer of immediately available funds to an account specified by the Holder. To request payment by wire transfer, the Holder must give appropriate transfer instructions to the Trustee or other Paying Agent (if not the Trustee) at least 15 Business Days before the requested wire payment is due and, in the case of any interest payments, the instructions must be given by the Person who is shown on the Trustee’s records as the Holder of the Physical Note on the applicable Regular Record Date. All applications for payment by wire transfer shall remain in effect unless and until new instructions are given in the manner described in the immediately preceding sentence.

 

A Holder may transfer or exchange Notes at the office of the Notes Registrar in accordance with Section 2.08 of the Original Indenture.  The Issuer is not required to transfer or exchange any Note surrendered for conversion pursuant to Section 4.01.

 

Section 2.02           Book-Entry Provisions for Global Notes.  (a) The Notes initially shall be issued in the form of one or more Global Notes without interest coupons (i) registered in the name of Cede & Co., as nominee of the Depository and (ii) delivered to the Custodian.

 

Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Supplemental Indenture or the Original Indenture with respect to any Global Note held on their behalf by the Depository, or the Custodian, or under the Global Note, and Cede & Co., or such other Person designated by the Depository as its nominee, may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of any Holder.

 

(b) Transfers of Global Notes shall be limited to transfers in whole, but not in part, to the Depository, its successors or their respective nominees. Notwithstanding anything to the contrary in Section 2.08 of the Original Indenture, interests of beneficial owners in a Global Note may be transferred or exchanged, in whole or in part, for Physical Notes, only if:

 

(i) the Depository notifies the Issuer at any time that the Depository is unwilling or unable to continue as Depository for the Global Notes and a successor Depository is not appointed within 90 days;

 

(ii) the Depository ceases to be registered as a clearing agency under the Exchange Act and a successor Depository is not appointed within 90 days; or

 

(iii) an Event of Default with respect to the Notes has occurred and is continuing and such beneficial owner requests that its Notes be issued as Physical Notes,

 

in each case in accordance with the rules and procedures of the Depository. Other than as set forth in this Section 2.02(b), the Notes shall remain in global form as Global Notes.

 

13

 

(c) In connection with any transfer or exchange of a portion of the beneficial interest in the Global Note to beneficial owners pursuant to Section 2.08 of the Original Indenture, as modified by this Section 2.02, the Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Issuer shall execute, and the Trustee shall authenticate and deliver, one or more Physical Notes of like tenor and amount in accordance with Section 2.08 of the Original Indenture, as modified by this Section 2.02.

 

(d) In connection with the transfer of the entire Global Note to beneficial owners pursuant to Section 2.08 of the Original Indenture, as modified by this Section 2.02, the Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depository in exchange for its beneficial interest in the Global Note, an equal aggregate principal amount of Physical Notes of authorized denominations and the same tenor.

 

(e) The Holder of Global Notes may grant proxies and otherwise authorize any Person, including Agent Members and persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Supplemental Indenture, Original Indenture or the Notes.

 

Section 2.03           Reporting Requirements.  The Issuer shall file with the Trustee within 15 days after the same are required to be filed with the Commission, copies of any documents or reports that the Issuer is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any extension provided by Rule 12b-25 under the Exchange Act).  Any such document or report that the Issuer files with the Commission via the Commission’s EDGAR system (or any successor thereto) shall be deemed to be filed with the Trustee for purposes of this Section 2.03 at the time such documents are filed via the EDGAR system (or such successor).

 

Section 2.04           Repurchase and Cancellation.  The Issuer may, to the extent permitted by law, and directly or indirectly (regardless of whether such Notes are surrendered to the Issuer), repurchase Notes in the open market or otherwise, whether by the Issuer, its Subsidiaries, affiliates, agents or dealers or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives.  The Issuer shall cause any Notes so repurchased by it or its Subsidiaries (other than Notes repurchased pursuant to cash-settled swaps or other derivatives) to be surrendered to the Trustee for cancellation in accordance with Section 2.10 of the Original Indenture, and they will no longer be considered to be Outstanding under the Indenture upon the repurchase.

 

Section 2.05           Satisfaction and Discharge.   This Indenture shall upon request of the Issuer contained in an Officers’ Certificate cease to be of further effect, and the Trustee, at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (i) all Notes theretofore authenticated and delivered (other than Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09 of the Original Indenture) have been delivered to the Notes Registrar for

 

14

 

cancellation; or (ii) the Issuer has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Stated Maturity, on any Fundamental Change Repurchase Date, upon conversion or otherwise, cash and/or shares of Common Stock, if any (solely to satisfy the Issuer’s Conversion Obligation, if applicable), sufficient to pay all of the Outstanding Notes or satisfy the Issuer’s Conversion Obligation, as the case may be, and to pay all other sums due and payable under this Indenture by the Issuer; and (iii) the Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.  Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer to the Trustee under Section 6.06 and Section 10.05 of the Original Indenture shall survive.  Further, Section 10.01(b) of the Original Indenture regarding defeasance shall not apply to the Notes.

 

ARTICLE 3

 

FUNDAMENTAL CHANGES AND REPURCHASES THEREON

 

Section 3.01                                Repurchase at Option of Holders upon a Fundamental Change.

 

(a)                                  If a Fundamental Change occurs at any time, each Holder shall have the right, at such Holder’s option, to require the Issuer to repurchase for cash all of such Holder’s Notes, or any portion thereof in integral multiples of $1,000, on the date (the “Fundamental Change Repurchase Date”) specified by the Issuer that is not less than 20 nor more than 35 Business Days following the occurrence of such Fundamental Change at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”); provided that if the Fundamental Change Repurchase Date falls after a Regular Record Date and on or prior to the Interest Payment Date to which such Regular Record Date relates, the full amount of accrued and unpaid interest to such Interest Payment Date shall be paid by the Issuer to Holders of the Notes as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes subject to repurchase pursuant to this Article 3 and will not include any accrued and unpaid interest.

 

(b)                             Repurchase of a Note under this Section 3.01 shall be made, at the option of the Holder thereof, upon:

 

(i)  delivery to the Paying Agent by a Holder of a duly completed notice (the “Repurchase Exercise Notice”) in the form set forth in Attachment 2 to the Form of the Note attached hereto as Exhibit A, if the Note is a Physical Note, or in compliance with the Depositary’s procedures for surrendering interests in global notes, if the Note is a Global Note, in each case during the period beginning on, and including, the date the Issuer mails to the Trustee and each Holder the Repurchase Right Notice pursuant to subsection (c) below and ending at the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date; and

 

15

 

(ii)  delivery of the Note, if the Note is a Physical Note, to the Paying Agent at any time after delivery of the Repurchase Exercise Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Paying Agent, or book-entry transfer of the Note, if the Note is a Global Note, in compliance with the procedures of the Depositary, in each case such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

The Repurchase Exercise Notice in respect of any Note to be repurchased shall specify:

 

(i)  in the case of a Physical Note, the certificate numbers of the Note to be repurchased;

 

(ii)  the portion of the principal amount of Note to be repurchased, which must be $1,000 or an integral multiple thereof; and

 

(iii)  that the Note is to be repurchased by the Issuer pursuant to the applicable provisions of the Notes and this Indenture;

 

provided, however, that if such Note is a Global Note, the Repurchase Exercise Notice must comply with applicable Depositary procedures.

 

Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Repurchase Exercise Notice contemplated by this Section 3.01 shall have the right to withdraw, in whole or in part, such Repurchase Exercise Notice at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date in accordance with the procedures set forth in Section 3.03.

 

The Paying Agent shall promptly notify the Issuer of the receipt by it of any Repurchase Exercise Notice or written notice of withdrawal thereof.

 

(c)  The Issuer shall provide to the Trustee and to each Holder a notice of any Fundamental Change (the “Repurchase Right Notice”) promptly, and in any event no later than five Business Days following the occurrence of such Fundamental Change.  Such notice shall be by first class mail or, in the case of Global Notes, in accordance with the applicable procedures of the Depositary.  Each Repurchase Right Notice shall specify:

 

(i)  the events causing the Fundamental Change;

 

(ii)  the effective date of the Fundamental Change, and whether the Fundamental Change is a Make Whole Adjustment Event and, if so, the Effective Date of the Make Whole Adjustment Event;

 

(iii)  that Holders have the right to convert their Notes, and the procedures that Holders must follow to convert their Notes;

 

(iv)  that Holders have the right to cause the Issuer to repurchase their Notes at the Fundamental Change Repurchase Price on the Fundamental Change Repurchase Date;

 

16

 

(v)  the last date on which a Holder may exercise the repurchase right pursuant to this Article 3;

 

(vi)  the Fundamental Change Repurchase Price;

 

(vii)  the Fundamental Change Repurchase Date;

 

(viii) the Conversion Rate and any adjustments to the Conversion Rate;

 

(ix)  the procedures that Holders must follow to exercise their repurchase option upon the Fundamental Change;

 

(x)  the name and address of the Paying Agent and the Conversion Agent; and

 

(xi) if applicable, that any Note with respect to which a Repurchase Exercise Notice has been delivered by a Holder may be converted only if the Holder withdraws the Repurchase Exercise Notice in accordance with the terms of this Indenture, and the procedures for withdrawing a Repurchase Exercise Notice.

 

No failure of the Issuer to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 3.01.

 

At the Issuer’s request, the Trustee shall give such notice in the Issuer’s name and at the Issuer’s expense; provided, however, that, in all cases, the text of such Issuer Notice shall be prepared by the Issuer and the Trustee shall have no liability for the content thereof.

 

Notwithstanding the foregoing, no Notes may be repurchased by the Issuer on any date at the option of the Holders upon a Fundamental Change if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Issuer in the payment of the Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Issuer in the payment of the Fundamental Change Repurchase Price with respect to such Notes), and any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Repurchase Exercise Notice with respect thereto shall be deemed to have been withdrawn.

 

Section 3.02                                Effect of Fundamental Change Repurchase Notice.  Upon receipt by the Paying Agent of a Fundamental Change Repurchase Notice specified in Section 3.01, the Holder of the Notes in respect of which such Fundamental Change Repurchase Notice was given shall (unless such Fundamental Change Repurchase Notice is withdrawn in accordance with Section 3.03) thereafter be entitled to receive solely the Fundamental Change Repurchase Price in cash with respect to such Note.  Such Fundamental Change Repurchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent on the later of (x) the applicable Fundamental Change Repurchase Date (provided the conditions in Section 3.01 have been

 

17

 

satisfied) and (y) the time of delivery or book-entry transfer of such Note to the Paying Agent by the Holder thereof in the manner required by Section 3.01.

 

Section 3.03                                Withdrawal of Repurchase Exercise Notice.  (a)  A Repurchase Exercise Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent at any time prior to the close of business on the Business Day immediately preceding the relevant Fundamental Change Repurchase Date, specifying:

 

(i)                                     the principal amount of the Note with respect to which such notice of withdrawal is being submitted,

 

(ii)                                  if such Note is a Physical Note, the certificate number of the Note in respect of which such notice of withdrawal is being submitted, and

 

(iii)                               the principal amount, if any, of such Note that remains subject to the original Repurchase Exercise Notice, which portion must be an integral multiple of $1,000;

 

provided, however, that if such Note is a Global Note, the notice must comply with applicable procedures of the Depositary.

 

Section 3.04                                Notes Repurchased in Whole or in Part.  Any Note that is to be repurchased, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with, if the Issuer or the Trustee so requires in the case of Physical Notes, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Issuer shall execute and the Trustee shall authenticate and deliver to the Holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Note so surrendered that is not repurchased.

 

Section 3.05                                Covenant to Comply with Applicable Laws upon Repurchase of Notes.  In connection with any repurchase offer pursuant to Section 3.01, the Issuer shall, if required:

 

(a)                                  comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act, to the extent such rules are applicable;

 

(b)                                 file a Schedule TO or any successor or similar schedule, if required, under the Exchange Act; and

 

(c)                                  otherwise comply with all federal and state securities laws in connection with any offer by the Issuer to repurchase the Notes upon a Fundamental Change;

 

in each case, so as to permit the rights and obligations under this Article 3 to be exercised in the time and in the manner specified in this Article 3.

 

18

 

ARTICLE 4

 

CONVERSION

 

Section 4.01                                Conversion Privilege.  Subject to and upon compliance with the provisions of this Article 4, each Holder of a Note shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Note at an initial conversion rate of 138.8889 shares of Common Stock (subject to adjustment as provided in Section 4.03 and Section 4.04, the “Conversion Rate”) per $1,000 principal amount of Notes (the “Conversion Obligation”) at any time prior to the close of business on the third Business Day immediately preceding the Stated Maturity.

 

Section 4.02                                Conversion Procedure; Settlement upon Conversion.

 

(a)                                  Upon conversion of a Note, the Issuer shall deliver to the converting Holder in full satisfaction of its Conversion Obligation a number of shares of Common Stock equal to (1) the aggregate principal amount of such Note, divided by $1,000, multiplied by (2) the Conversion Rate in effect on the relevant Conversion Date, together with a cash payment, if applicable, in lieu of any fractional share of Common Stock in accordance with subsection (j) of this Section 4.02, on the third Business Day immediately following the relevant Conversion Date.

 

(b)                                 Subject to Section 4.02(e), in order to exercise the right to convert a Note or a beneficial interest in a Global Note, the Holder or beneficial owner thereof, as the case may be, shall (i) in the case of a Global Note, comply with the applicable conversion procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 4.02(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of such Note to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Note, duly endorsed to the Issuer or in blank, at the office of the Conversion Agent, (3) if required by the Conversion Agent, furnish appropriate endorsements and transfer documents and (4) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 4.02(h).  The Trustee (and if different, the Conversion Agent) shall notify the Issuer of any conversion pursuant to this Article 4 on the Conversion Date for such conversion.  No Notice of Conversion with respect to any Note may be delivered by the Holder thereof if such Holder has also delivered a Repurchase Exercise Notice to the Paying Agent in respect of such Note and not validly withdrawn such Repurchase Exercise Notice in accordance with Section 3.01(b).

 

If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes shall be computed on the basis of

 

19

 

the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.

 

(c)                                  The conversion of a Note shall be deemed to have been effected immediately prior to the close of business on the Business Day (the “Conversion Date”) that the Holder has complied with the requirements set forth in subsection (b) above.  The Issuer shall issue or cause to be issued, and deliver to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the full number of shares of Common Stock to which such Holder shall be entitled in satisfaction of the Issuer’s Conversion Obligation.

 

(d)                                 In case any Note shall be surrendered for partial conversion, the Issuer shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by the converting Holder but, if required by the Issuer or Trustee, with payment of a sum sufficient to cover any transfer tax or similar governmental charge required by law or that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such conversion being different from the name of the Holder of the old Notes surrendered for such conversion.

 

(e)                                  If a Holder submits its Note for conversion, the Issuer shall pay any documentary, stamp or similar issue or transfer tax due on the issuance of the shares of Common Stock upon conversion, unless such tax is due because such Holder requests such shares to be issued in a name other than such Holder’s name, in which case such Holder shall pay such tax.  The Conversion Agent may refuse to deliver the certificates representing shares of Common Stock being issued in a name other than the converting Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax that is due from such Holder in accordance with the immediately preceding sentence.

 

(f)                                    Except as provided in Section 4.04, no adjustment shall be made for dividends on any shares issued upon the conversion of any Note as provided in this Article 4.

 

(g)                                 Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby.  The Issuer shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.

 

(h)                                 Upon conversion of a Note, the converting Holder shall not receive any additional cash payment for accrued and unpaid interest, if any, except as set forth below.  The Issuer’s settlement of its Conversion Obligation pursuant to Section 4.02(a) upon conversion of a Note shall be deemed to satisfy its obligation to pay the principal amount of such Note and accrued and unpaid interest, if any, to, but not including, the Conversion Date. Accordingly, accrued and unpaid interest, if any, to, but not including, the Conversion Date shall be deemed to be paid in full upon settlement of the Issuer’s Conversion Obligation pursuant to Section 4.02(a) rather than canceled, extinguished or forfeited.  The Holder of a Note as of the close of business on any Regular Record Date shall receive the interest payable on the corresponding Interest Payment

 

20

 

Date notwithstanding the conversion of such Note at any time after the close of business on such Regular Record Date.  A Note surrendered for conversion by a Holder after the close of business on any Regular Record Date but prior to the open of business on the next Interest Payment Date must be accompanied by payment of an amount equal to the amount of interest that will be payable on such Note; provided that no such payment shall be required (1) if the Issuer has specified a Fundamental Change Repurchase Date that is after such Regular Record Date and on or prior to the corresponding Interest Payment Date; (2) with respect to any Note surrendered for conversion following the Regular Record Date immediately preceding the Stated Maturity; or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note.

 

(i)                                     The Person in whose name the certificate or certificates for any shares of Common Stock issuable upon conversion are registered shall be treated as the holder of record of such shares as of the close of business on the relevant Conversion Date.  Upon conversion of a Note, the Person who surrendered such Note for conversion shall no longer be the Holder thereof.

 

(j)                                     The Issuer shall not issue any fractional share of Common Stock upon conversion and shall instead pay cash in lieu of any fractional share of Common Stock that would otherwise be issuable upon conversion based on the Closing Sales Price of the Common Stock on the relevant Conversion Date.

 

Section 4.03                                Adjustment to Shares Delivered upon Conversion upon a Make Whole Adjustment Event.

 

(a)                                  If a Holder elects to convert its Notes at any time from, and including, the Effective Date of a Make Whole Adjustment Event to, and including, the Business Day immediately preceding the related Fundamental Change Repurchase Date or, if such Make Whole Adjustment Event does not also constitute a Fundamental Change, the 35th Business Day immediately following the Effective Date of such Make Whole Adjustment Event (such period, the “Make Whole Adjustment Event Period”), the Conversion Rate shall be increased by an additional number of shares of Common Stock (the “Additional Shares”), as described below.  The Issuer shall notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee) promptly following the Effective Date of any Make Whole Adjustment Event, and in any event, no later than five business days after such Effective Date, and will indicate in such notice the last day of the Make Whole Adjustment Period.

 

(b)                                 The number of Additional Shares by which the Conversion Rate shall be increased for conversions during the Make Whole Adjustment Event Period shall be determined by reference to the table in Section 4.03(d) below, based on the date on which the Make Whole Adjustment Event occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid (or deemed to be paid) per share of the Common Stock in the Make Whole Adjustment Event.  If the holders of the Common Stock receive only cash in a Make Whole Adjustment Event described in clause (b) of the definition of Change in Control, the Stock Price shall be the cash amount paid per share.  Otherwise, the Stock Price shall be the average of the Closing Sales Prices of the Common Stock over the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make Whole

 

21

 

Adjustment Event.  The Board of Directors shall make appropriate adjustments to the Stock Price, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of such event occurs, at any time during such ten consecutive Trading Day period.

 

(c)                                  The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted.  The adjusted Stock Prices shall equal the Stock Prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such 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 below shall be adjusted in the same manner and at the same time as the Conversion Rate as set forth in Section 4.04.

 

(d)                                 The following table sets forth the number of Additional Shares to be received per $1,000 principal amount of Notes pursuant to this Section 4.03 for each Stock Price and Effective Date set forth below:

 

	
 
    	
 
    	
Stock Price
    	
 
    
	
Effective Date
    	
 
    	
$6.00
    	
 
    	
$7.00
    	
 
    	
$8.00
    	
 
    	
$9.00
    	
 
    	
$10.00
    	
 
    	
$11.00
    	
 
    	
$12.00
    	
 
    	
$14.00
    	
 
    	
$16.00
    	
 
    	
$18.00
    	
 
    	
$20.00
    	
 
    
	
April 6, 2011
    	
 
    	
27.7777
    	
 
    	
23.9832
    	
 
    	
17.0563
    	
 
    	
12.2884
    	
 
    	
8.9090
    	
 
    	
6.4620
    	
 
    	
4.6624
    	
 
    	
2.3195
    	
 
    	
0.9973
    	
 
    	
0.2750
    	
 
    	
0.0000
    	
 
    
	
April 15 2012
    	
 
    	
27.7777
    	
 
    	
24.3852
    	
 
    	
17.0303
    	
 
    	
12.0530
    	
 
    	
8.5887
    	
 
    	
6.1250
    	
 
    	
4.3438
    	
 
    	
2.0763
    	
 
    	
0.8387
    	
 
    	
0.1924
    	
 
    	
0.0000
    	
 
    
	
April 15, 2013
    	
 
    	
27.7777
    	
 
    	
24.0362
    	
 
    	
16.2897
    	
 
    	
11.1899
    	
 
    	
7.7386
    	
 
    	
5.3540
    	
 
    	
3.6759
    	
 
    	
1.6225
    	
 
    	
0.5600
    	
 
    	
0.0623
    	
 
    	
0.0000
    	
 
    
	
April 15, 2014
    	
 
    	
27.7777
    	
 
    	
22.4488
    	
 
    	
14.3904
    	
 
    	
9.3326
    	
 
    	
6.0873
    	
 
    	
3.9610
    	
 
    	
2.5458
    	
 
    	
0.9355
    	
 
    	
0.1925
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
April 15, 2015
    	
 
    	
27.7777
    	
 
    	
18.1166
    	
 
    	
10.0874
    	
 
    	
5.6288
    	
 
    	
3.1444
    	
 
    	
1.7401
    	
 
    	
0.9268
    	
 
    	
0.1489
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
April 15, 2016
    	
 
    	
27.7777
    	
 
    	
3.9682
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    

 

The exact Stock Prices and Effective Dates may not be set forth in the table above, in which case:

 

(i)  if the Stock Price is between two Stock Prices in the table above or the Effective Date is between two Effective Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates based on a 365-day year, as applicable;

 

(ii)  if the Stock Price is greater than $20.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (c) above), no increase shall be made to the Conversion Rate; and

 

(iii)  if the Stock Price is less than $6.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (c) above), no increase shall be made to the Conversion Rate.

 

22

 

Notwithstanding the foregoing, in no event shall the total number of shares of Common Stock issuable upon conversion exceed 166.6666 per $1,000 principal amount of Notes, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 4.04.

 

Nothing in this Section 4.03 shall prevent an adjustment to the Conversion Rate pursuant to Section 4.04 in respect of a Make Whole Adjustment Event.

 

Section 4.04                                Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from time to time by the Issuer if any of the following events occurs, except that the Issuer shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of a share split or share combination), at the same time and upon the same terms as holders of the Common Stock and solely as a result of holding the Notes, in any of the transactions described in this Section 4.04, without having to convert their Notes, as if they held a number of shares of Common Stock, for each $1,000 principal amount of their Notes, equal to the Conversion Rate.

 

(a)                                  If the Issuer issues solely shares of Common Stock as a dividend or distribution on all or substantially all shares of its Common Stock, or if the Issuer subdivides or combines its Common Stock, 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 dividend or distribution, or immediately prior to the   open of business on the effective date of such subdivision or combination of   Common Stock, as the case may be;
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
CR1
    	
 
    	
=
    	
 
    	
the Conversion   Rate in effect immediately after the close of business on the Record Date for   such dividend or distribution, or immediately after the open of business on   the effective date of such subdivision or combination of Common Stock, as the   case may be;
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
OS0
    	
 
    	
=
    	
 
    	
the number   of shares of Common Stock outstanding immediately prior to the close of   business on the Record Date for such dividend or distribution, or immediately   prior to the open of business on the effective date of such subdivision or   combination, as the case may be; and
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
OS1
    	
 
    	
=
    	
 
    	
the number   of shares of Common Stock outstanding immediately after such dividend or   distribution, or immediately after the effective date of such subdivision or   combination of Common Stock, as the case may be, and after giving effect to   such issuance, subdivision or combination.
    

 

Any adjustment made under this Section 4.04(a) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the

 

23

 

open of business on the effective date of such subdivision or combination of Common Stock.  If any dividend or distribution of the type described in this Section 4.04(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the 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.

 

(b)                                 If the Issuer distributes to all or substantially all holders of its Common Stock any rights, options or warrants entitling them, for a period of not more than 60 days after the date of such distribution, to subscribe for or purchase shares of the Common Stock, at a price per share that is less than the average of the Closing Sales Prices of the Common Stock over the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Announcement Date of such distribution, the Conversion Rate shall be increased 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 the   Record Date for such distribution;
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
OS0
    	
 
    	
=
    	
 
    	
the number   of shares of Common Stock outstanding immediately prior to the close of   business on the Record Date for such distribution;
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
X
    	
 
    	
=
    	
 
    	
the total   number of shares of Common Stock issuable pursuant to such rights, options or   warrants; and
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Y
    	
 
    	
=
    	
 
    	
the number   of shares of Common Stock equal to the aggregate price payable to exercise   such rights, options or warrants, divided by the average of the Closing Sales   Price of the Common Stock over the ten consecutive Trading Day period ending   on, and including, the Trading Day immediately preceding the Announcement   Date of such distribution.
    

 

Any increase made under this Section 4.04(b) shall be made successively whenever any such rights, options or warrants are distributed and shall become effective immediately after the close of business on the Record Date for such distribution.  To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.  If such rights, options or warrants are not so distributed, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if the Record Date for such issuance had not occurred.

 

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For purposes of this Section 4.04(b), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase Common Stock at a price per share that is less than the average of the Closing Sales Prices of the Common Stock over the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Announcement Date of such distribution, and in determining the aggregate price payable to exercise such rights, options or warrants, there shall be taken into account any consideration received by the Issuer for such rights, options or warrants and any amount payable on exercise thereof, with the value of such consideration if other than cash to be determined by the Board of Directors.

 

(c)                                  If the Issuer distributes shares of its Capital Stock, evidences of its indebtedness or other of its assets or property or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding (i) dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 4.04(a) or Section 4.04(b), (ii) dividends or distributions paid exclusively in cash as to which the provisions of Section 4.04(d) apply, and (iii) Spin-Offs as to which the provisions set forth below in this Section 4.04(c) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property of the Issuer or rights, options or warrants to acquire Capital Stock or other securities of the Issuer, the “Distributed Property”), then the Conversion Rate shall be increased 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 the   Record Date for such distribution;
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SP0
    	
 
    	
=
    	
 
    	
the average   of the Closing Sales Prices of the Common Stock over the ten consecutive   Trading Day period ending on, and including, the Trading Day immediately   preceding the Ex-Dividend Date for such distribution; and
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
FMV
    	
 
    	
=
    	
 
    	
the fair   market value (as determined by the Board of Directors) of the Distributed   Property with respect to each outstanding share of the Common Stock as of the   close of business on the Ex-Dividend Date for such distribution.
    

 

Any increase made under the above portion of this Section 4.04(c) shall become effective immediately after the close of business on the Record Date for such distribution.  If such distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared.  Notwithstanding the foregoing, if “SP0” minus “FMV” (in each case, as defined above) is less than $1.00, in lieu of

 

25

 

the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock, the amount and kind of Distributed Property that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Record Date for the distribution.  If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes of this Section 4.04(c) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.

 

With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Issuer, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

CR0                                                   =                      the Conversion Rate in effect immediately prior to the close of business on the Effective Date of the Spin-Off;

 

CR1                                                   =                      the Conversion Rate in effect immediately after the close of business on the Effective Date of the Spin-Off;

 

FMV0                                        =                      the average of the closing sales prices of the Capital Stock or similar equity interests distributed to holders of the Common Stock applicable to one share of the Common Stock over the first ten consecutive Trading Day period immediately following, and including, the Effective Date of the Spin-Off (such period, the “Valuation Period”); and

 

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

 

The increase to the Conversion Rate under the preceding calculation will occur at the open of business on the date after the Trading Day of the Valuation Period, but will be given effect immediately after the close of business on the Effective Date for the Spin-Off.  Because the adjustment to the Conversion Rate at the end of the Valuation Period will be made with retroactive effect, the Issuer will delay the settlement of the Notes where the Conversion Date occurs during the Valuation Period.  In such event the Issuer will deliver any shares of Common Stock and cash in lieu of fractional shares (based on the adjusted Conversion Rate) on the third Business Day immediately following the last day of the Valuation Period.

 

26

 

For the purposes of this Section 4.04(c) (and subject in all respects to Section 4.10), rights, options or warrants distributed by the Issuer to all holders of its Common Stock entitling them to subscribe for or purchase shares of the Issuer’s Capital Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (a “Trigger Event”):  (1) are deemed to be transferred with such shares of Common Stock; (2) are not exercisable; and (3) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 4.04(c), (and no adjustment to the Conversion Rate under this Section 4.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 4.04(c).  If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Supplemental Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Record Date of such deemed distribution (in which case the original rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders).  In addition, in the event of any distribution or deemed distribution of rights, options or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 4.04(c) was made, (1) in the case of any such rights, options or warrants which shall all have been redeemed or purchased without exercise by any Holders thereof, upon such final redemption or repurchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by holders of Common Stock with respect to such rights, options or warrants (assuming each such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

 

For purposes of this Section 4.04(c) and subsections (a) and (b) of this Section 4.04, any dividend or distribution to which this Section 4.04(c) applies which also includes one or both of:

 

·  a dividend or distribution of shares of Common Stock to which Section 4.04(a) applies (the “Clause A Distribution”);

 

·  a dividend or distribution of rights, options or warrants to which Section 4.04(b) applies (the “Clause B Distribution”),

 

then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 4.04(c) applies (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 4.04(c) with respect thereto shall then be made, and (2) the Clause A Distribution and

 

27

 

Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 4.04(a) and Section 4.04(b) with respect thereto shall then be made, except that, if determined by the Issuer, (I) the “Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the close of business on the Record Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such subdivision or combination, as the case may be” within the meaning of Section 4.04(a) or “outstanding immediately prior to the close of business on the Record Date for such distribution” within the meaning of Section 4.04(b).

 

For purposes of the above calculation, (i) the “closing sales price” of any Capital Stock or similar equity interest shall be calculated in a manner analogous to that used to calculate the Closing Sales Price of the Common Stock, (ii) whether a day is a “Trading Day” for the applicable Capital Stock or similar equity interest shall be determined in a manner analogous to that used to determine whether a day is a Trading Day for the Common Stock, and (iii) whether a day is a Trading Day to be included in a Valuation Period will be determined based on whether a day is a Trading Day for both the Common Stock and such Capital Stock or similar equity interest.

 

(d)         If the Issuer makes or pays any cash dividend or distribution to all or substantially all holders of the outstanding Common Stock (other than distributions to which Section 4.04(e) applies or in connection with the liquidation or winding up of the Issuer), the Conversion Rate shall be increased 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 dividend or distribution;

 

CR1                                                   =                      the Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution;

 

SP0                                                     =                      the average of the Closing Sales Prices of the Common Stock over the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

 

C                                                                =                      the amount in cash per share the Issuer pays or distributes to holders of its Common Stock.

 

Any increase pursuant to this Section 4.04(d) shall become effective immediately after the close of business on the Record Date for such dividend or distribution.  If any dividend or distribution to which this Section 4.04(d) applies is declared but not so paid or made, the

 

28

 

Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to make or pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.  Notwithstanding the foregoing, if “SP0” minus “C” (in each case, as defined above) is less than $1.00, in lieu of the foregoing increase to the Conversion Rate, each Holder of a Note shall receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash 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 cash dividend or distribution.

 

(e)          If the Issuer or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock and the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Closing Sales Prices of the Common Stock over the ten consecutive Trading Day period (the “Averaging Period”) commencing on, and including, the Trading Day immediately after the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Date”), the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

CR0                                                   =                      the Conversion Rate in effect immediately prior to the open of business on the Trading Day immediately after the Expiration Date;

 

CR1                                                   =                      the Conversion Rate in effect immediately after the open of business on the Trading Day immediately after the Expiration Date;

 

AC                                                      =                      the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender offer or exchange offer;

 

OS0                                                   =                      the number of shares of Common Stock outstanding immediately prior to the time (the “Expiration Time”) such tender or exchange offer expires (prior to giving effect to the purchase or exchange of all shares of Common Stock accepted for purchase or exchange in such tender offer or exchange offer);

 

OS1                                                   =                      the number of shares of Common Stock outstanding immediately after the Expiration Time (after giving effect to the purchase or exchange of all shares of Common Stock accepted for purchase or exchange in such tender offer or exchange offer); and

 

SP1                                                     =                      the average of the Closing Sales Prices of the Common Stock over the Averaging Period.

 

29

 

The adjustment to the Conversion Rate under this Section 4.04(e) will occur at the open of business on the day following the last day of the Averaging Period, but will be given effect immediately after the open of business on the Trading Day immediately following the Expiration Date.  Because the adjustment to the Conversion Rate will be made at the end of the Averaging Period with retroactive effect, the Issuer will delay the settlement of any Notes where the Conversion Date occurs during the Averaging Period.  In such event, the Issuer will deliver shares of Common Stock and cash in lieu of fractional shares (based on the adjusted Conversion Rate as described above) on the third Business Day immediately following the last Trading Day of the Averaging Period.  If the Issuer or one of its Subsidiaries, is obligated to purchase Common Stock pursuant to any such tender or exchange offer, but the Issuer or such Subsidiary is, permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the Conversion Rate shall be immediately decreased to the Conversion Rate that would be in effect if such tender or exchange offer had not been made.

 

(f)                                    Except as stated herein, the Issuer shall not adjust the Conversion Rate for the issuance of shares of its Common Stock or any securities convertible into or exchangeable for shares of its Common Stock or the right to purchase shares of its Common Stock or such convertible or exchangeable securities.

 

(g)                                 In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 4.04 and Section 4.03, and to the extent permitted by applicable law and applicable listing rules of The Nasdaq Global Select Market, the Issuer from time to time may (but is not required to) increase the Conversion Rate by any amount for a period of at least 20 Business Days so long as such increase is irrevocable during such period and the Board of Directors determines that such increase would be in the Issuer’s best interest or to avoid or diminish any income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.  Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Issuer shall mail to the Holder of each Note at its last address appearing on the Note Register a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

 

(h)                                 The Issuer will not be required to adjust the Conversion Rate for any transaction or event other than those transactions and events described under clauses (a) through (e) of this Section 4.04 and Section 4.03.  Without limiting the foregoing, the Conversion Rate shall not be adjusted:

 

(i)                                     upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Issuer’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

 

(ii)                                  upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Issuer or any of the Issuer’s Subsidiaries;

 

30

 

(iii)                               upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes are first issued;

 

(iv)                              for accrued and unpaid interest, if any;

 

(v)                                 solely for a change in the par value of the Common Stock;

 

(vi)                              upon the repurchase of any shares of Common Stock pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the nature described in Section 4.04(e)

 

(vii)                           for the sale or issuance of new shares of Common Stock or securities convertible into or exercisable for shares of Common Stock for cash, including at a price per share less than the fair market value thereof or otherwise (except as described in clause 4.04(c) above) or in an acquisition (except as described in Section 4.03); or

 

(viii)                        for a third-party tender or exchange offer.

 

(i)                                     All calculations and other determinations under this Article 4 shall be made by the Issuer and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.  Notwithstanding anything in this Section 4.04 to the contrary, the Issuer shall not be required to adjust the Conversion Rate unless such adjustment would result in a change of at least 1% of the Conversion Rate; provided that the Issuer shall carry forward any adjustments that are less than 1% of the Conversion Rate and make such carried forward adjustments, regardless of whether the aggregate adjustment is greater than 1%, upon any conversion of Notes.

 

(j)                                     Whenever the Conversion Rate is adjusted as herein provided, the Issuer shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officers’ Certificate setting forth the Conversion Rate after such adjustment, the calculation of the adjusted Conversion Rate and a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate, the Issuer shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to each Holder at its last address appearing on the Note Register of this Indenture.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

(k)                                  For purposes of this Section 4.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Issuer so long as the Issuer does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Issuer, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

 

31

 

(l)                                     The Issuer shall not take any action that would result in adjustment of the Conversion Rate pursuant to the provisions of this Indenture, in such a manner as to result in the reduction of the Conversion Price to less than the par value, if any, per share of the Common Stock.

 

Section 4.05                                Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock.  The Issuer shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion (assuming that at the time of computation of such number of shares, all such Notes would be converted by a single Holder).

 

The Issuer covenants that all shares of Common Stock that may be issued upon conversion of Notes shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien or charge (other than those created by the Holder).

 

Upon conversion of Notes, if the Common Stock is then listed or quoted on any national securities exchange or over-the-counter or other domestic market, the Issuer shall list or cause to have quoted on such exchange or other market any shares of Common Stock to be issued upon conversion.

 

Section 4.06                                Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.

 

(a)                                  In the event of: (i) any reclassification, recapitalization or change of the Common Stock (other than changes resulting from a subdivision or combination), (ii) any consolidation, merger or binding share exchange involving the Issuer, or (iii) any sale, assignment, conveyance, transfer, lease or other disposition to another Person of the Issuer’s property and assets as an entirety or substantially as an entirety, in each case, in which holders of the Common Stock are entitled to receive cash, securities or other property for their shares of Common Stock (any such event, a “Merger Event”), then, at and after the effective time of such Merger Event, Holders of Notes shall be entitled to convert each $1,000 principal amount of their Notes into the kind and amount of cash, securities or other property that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property”) upon the occurrence of such Merger Event and, prior to or at the effective time of such Merger Event, the Issuer or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture hereto permitted under Section 6.01 providing for such change in the right to convert each $1,000 principal amount of Notes.

 

If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of shareholder election), then the Reference Property into which the Notes will be convertible shall be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election.  The Issuer shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made.

 

32

 

Such supplemental indenture described in the second immediately preceding paragraph shall provide for adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article 4.  If, in the case of any Merger Event, the Reference Property includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a Person other than the successor or purchasing corporation, as the case may be, in such Merger Event, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent required by the Board of Directors and practicable the provisions providing for the repurchase rights set forth in Section 3.01.

 

(b)                                 In the event the Issuer shall execute a supplemental indenture pursuant to subsection (a) of this Section 4.06, the Issuer shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or other property that will comprise the Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all relevant conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders.  The Issuer shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at its address appearing on the Note Register provided for in this Indenture, within 20 days after execution thereof.  Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

 

(c)                                  The Issuer shall not become a party to any Merger Event unless its terms are consistent with this Section 4.06.  None of the foregoing provisions shall affect the right of a Holder of Notes to convert its Notes into shares of Common Stock as set forth in Section 4.01 and Section 4.02 prior to the effective date of such Merger Event.

 

The above provisions of this Section shall similarly apply to successive Merger Events.

 

Section 4.07                                Certain Covenants.

 

(a)                                  The Issuer covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid and non-assessable by the Issuer and free from all taxes, liens and charges with respect to the issue thereof.

 

(b)                                 The Issuer covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, the Issuer will, to the extent then permitted by the rules and interpretations of the Commission, secure such registration or approval, as the case may be.

 

(c)                                  The Issuer further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system the Issuer will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.

 

Section 4.08                                Responsibility of Trustee.  The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility or have any liability to any Holder to

 

33

 

determine the Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same.  The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Issuer to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Issuer contained in this Article.  Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 4.06 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any event referred to in such Section 4.06 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 6.01 of the Original Indenture, may accept an Opinion of Counsel (without any independent investigation) as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Issuer shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

 

Section 4.09                                [Reserved].

 

Section 4.10                                Stockholder Rights Plans.  To the extent that the Issuer has a rights plan in effect upon conversion of the Notes, the converting Holder shall receive, in addition to the Common Stock received in connection with such conversion, the appropriate number of rights, if any, and the certificates representing the Common Stock received in connection with such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. Notwithstanding the foregoing, if prior to such conversion, the rights have separated from the Common Stock in accordance with the provisions of the applicable stockholder rights plan so that the Holders would not be entitled to receive any rights in respect of Common Stock issuable upon conversion of the Notes, the Conversion Rate shall be adjusted at the time of separation as if the Issuer distributed shares of Capital Stock of the Issuer, evidences of its indebtedness, other assets or property of the Issuer or rights, options or warrants to acquire its Capital Stock or other securities to all or substantially all holders of Common Stock as provided in Section 4.04(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

ARTICLE 5

 

REMEDIES

 

Section 5.01                                Events of Default.  Each of the following events shall be an “Event of Default” wherever used herein with respect to the Notes, and, except to the extent set forth in this Section 5.01, the Notes shall not have the benefit of any “Event of Default” specified in

 

34

 

Section 5.01 of the Original Indenture, which shall not apply with respect to the Notes, and this Section 5.01 supersedes the entirety thereof:

 

(a)                                  failure by the Issuer to pay the principal of any Note when due;

 

(b)                                 failure by the Issuer to deliver the shares of Common Stock due upon conversion of any Note (including any Additional Shares) when due, if such failure continues for a period of three Business Days;

 

(c)                                  failure by the Issuer to pay any interest on any Note when due if such failure continues for 30 days;

 

(d)                                 failure by the Issuer to pay the Fundamental Change Repurchase Price of any Note when due;

 

(e)                                  failure by the Issuer to timely provide the Repurchase Right Notice pursuant to Section 3.01(c) or failure by the Issuer to timely provide notice of the anticipated or actual Effective Date of a Make Whole Adjustment Event pursuant to Section 4.03, if such failure continues for three days;

 

(f)                                    failure by the Issuer to comply with its obligations under Section 7.01;

 

(g)                                 default by the Issuer or any Subsidiary of the Issuer with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $25 million in the aggregate of the Issuer and/or of any such Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon acceleration or otherwise, in each case, after any applicable grace period and without such indebtedness having been discharged or the acceleration of such indebtedness having been cured, rescinded, waived or annulled within 30 days after written notice to the Issuer by the Trustee or the Holders of at least 25% in aggregate principal amount of Outstanding Notes;

 

(h)                                 final judgment for the payment of $25 million or more (excluding any amounts covered by insurance) rendered against the Issuer or any Subsidiary of the Issuer, which judgment is not discharged or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished;

 

(i)                                     failure by the Issuer for 60 days after written notice from the Trustee or the Holders of at least 25% of the principal amount of the Notes then Outstanding has been received to comply with any of its other agreements contained in the Notes or this Indenture;

 

(j)                                     the Issuer or any Significant Subsidiary or any group of Subsidiaries of the Issuer that in the aggregate would constitute a Significant Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Issuer or such Significant Subsidiary or such group of Subsidiaries or its debts under any bankruptcy,

 

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insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Issuer or any such Significant Subsidiary or such group of Subsidiaries or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

 

(k)           an involuntary case or other proceeding shall be commenced against the Issuer or any Significant Subsidiary or any group of Subsidiaries of the Issuer that in the aggregate would constitute a Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the Issuer or such Significant Subsidiary or such group of Subsidiaries or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Issuer or such Significant Subsidiary or such group of Subsidiaries or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 30 consecutive days.

 

Section 5.02           Acceleration; Rescission and Annulment.  In case one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 5.01(j) or Section 5.01(k) with respect to the Issuer), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then Outstanding determined in accordance with Section 7.04 of the Original Indenture, by notice in writing to the Issuer (and to the Trustee if given by Holders), may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, subject to Section 9.04, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything in this Indenture or in the Notes contained to the contrary notwithstanding, but subject to the following paragraph.  If an Event of Default specified in Section 5.01(j) or Section 5.01(k) with respect to the Issuer occurs and is continuing, the principal of, and accrued and unpaid interest on, all Notes shall be automatically and immediately due and payable, subject to Section 9.04.

 

If, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest to the extent that payment of such interest is enforceable under applicable law, and on such principal at the rate borne by the Notes plus one percent at such time) and amounts due to the Trustee pursuant to Section 6.06 of the Original Indenture, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of Default under this Indenture, other than the nonpayment of the principal of and accrued and unpaid interest, if any, on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section

 

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5.07, then and in every such case (except as provided in the immediately succeeding sentence) the Holders of a majority of the aggregate principal amount of the Notes then Outstanding, by written notice to the Issuer and to the Trustee, may rescind and annul such declaration and its consequences, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon.  Notwithstanding anything to the contrary herein, no such rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to deliver the consideration due upon conversion of the Notes.

 

Section 5.03           Additional Interest.  Notwithstanding anything in this Indenture or in the Notes to the contrary, if the Issuer so elects, the sole remedy hereunder and under the Notes for an Event of Default relating to the Issuer’s failure to comply with its obligations as set forth in Section 3.04 shall, for the first 270 days after the occurrence of such Event of Default, consist exclusively of the right to receive Additional Interest on the Notes at an annual rate equal to 0.50% of the principal amount of the Notes, which shall accrue from the date that such Event of Default occurs to, but not including, the 271st day thereafter (or, if applicable, the earlier date on which such Event of Default is cured or waived). If the Issuer elects to pay Additional Interest in accordance with this Section 5.03, such Additional Interest shall be payable in the same manner and on the same dates as the stated interest payable on the Notes.  On the 271st day after an Event of Default relating to the Issuer’s failure to comply with its obligations as set forth in Section 3.04, if such Event of Default has not been cured or waived, the Notes shall be subject to acceleration as provided in Section 5.02. The provisions set forth in this Section 5.03 shall not affect any other Default or Event of Default or impair any right consequent thereon.

 

In order to elect to pay Additional Interest as the sole remedy during the first 270 days after the occurrence of an Event of Default relating to the Issuer’s failure to comply with its obligations as set forth in Section 3.04, in accordance with the immediately preceding paragraph, the Issuer must notify all Holders of the Notes, the Trustee and the Paying Agent of such election on or prior to the close of business on the fifth Business Day after the date on which such Event of Default would otherwise occur.  Upon the Issuer’s failure to timely give such notice or pay Additional Interest in accordance with this Section 5.03, the Notes shall be immediately subject to acceleration as provided in Section 5.02.

 

Section 5.04           Proceedings by Holders.  Except to enforce the right to receive payment of principal (including, if applicable, the Fundamental Change Repurchase Price) of, or interest on, any Note on or after the applicable due date, or the right to convert a Note in accordance herewith (including, without limitation, the right to receive delivery of the consideration due upon conversion), the Holder of such Note shall not have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver or a trustee, or for any other remedy hereunder, unless:

 

(a)           such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;

 

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(b)           Holders of at least 25% of the aggregate principal amount of the Notes then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder;

 

(c)           such Holders shall have offered to the Trustee such security or indemnity reasonably satisfactory to it against any loss, liability or expense to be incurred therein or thereby;

 

(d)           the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding; and

 

(e)           no direction that is inconsistent with such written request shall have been given to the Trustee by the Holders of a majority of the principal amount of the Notes Outstanding within such 60-day period pursuant to Section 5.07,

 

(f)            it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders (except as otherwise provided herein).  For the protection and enforcement of this Section 5.04 each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Holder to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest on and (z) the consideration due upon conversion of, such Note, on the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates against the Issuer shall not be impaired or affected without the consent of such Holder.

 

Section 5.05           Proceedings by Trustee.  In case of an Event of Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Section 5.06           Remedies Cumulative and Continuing.  Except as provided in the last paragraph of Section 2.09 of the Original Indenture, all powers and remedies given by this Article 5 to the Trustee or to the Holders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no

 

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delay or omission of the Trustee or of any Holder of any of the Notes to exercise any right or power accruing upon any Default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Default or Event of Default or any acquiescence therein; and, subject to the provisions of Section 5.04, every power and remedy given by this Article 5 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders.

 

Section 5.07           Waiver; Unconditional Right of Holders to Receive Amounts Due upon Conversion.  Subject to the Trustee’s right to demand reasonable indemnity or security in accordance with Section 6.02 of the Original Indenture, the Holders of a majority of the aggregate principal amount of the Notes at the time Outstanding determined in accordance with Section 7.04 of the Original Indenture shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to Notes; provided, however, that (a) such direction shall not be in conflict with any applicable rule of law or with this Indenture, (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction, and (c) the Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.  The Holders of not less than a majority of the aggregate principal amount of the Notes at the time Outstanding determined in accordance with Section 7.04 of the Original Indenture may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder to (i) pay the principal (including any Fundamental Change Repurchase Price) of, or accrued and unpaid interest on, the Notes when due, (ii) deliver the shares of Common Stock owing upon conversion of any Note (including Additional Shares, if any) as provided in Section 4.02 or (iii) comply with any of the provisions hereof that under Article 6 may not be modified without the consent of the Holder of each Outstanding Note affected.  Upon any such waiver the Issuer, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.  Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 5.07, said Default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

 

Section 5.08           Notice of Defaults.  The Trustee shall, within 90 days after the occurrence of a Default or an Event of Default of which a Responsible Officer has actual knowledge, mail to all Holders as the names and addresses of such Holders appear upon the Note Register, notice of all Defaults or Events of Default known to a Responsible Officer, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, any of the Notes or a Default in the delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as a committee of Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders.

 

Section 5.09           Compliance Certificate; Statements as to Defaults.  The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer (beginning

 

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with the fiscal year ending on December 31, 2011) an Officers’ Certificate stating whether or not the signers thereof have knowledge of any failure by the Issuer to comply with any of the terms, provisions and conditions of this Indenture or any other Default or Event of Default and, if so, specifying each such failure, Default or Event of Default and the nature thereof.

 

In addition, the Issuer shall deliver to the Trustee, as soon as possible, and in any event within 30 days after the occurrence of any Event of Default or Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the action that the Issuer is taking or proposes to take with respect thereto.

 

However, the Trustee need not mail the Officer’s Certificate if the Default or Event of Default (a) has been cured or waived or (b) is not in the payment or delivery of any amounts due with respect to any Notes and the Trustee in good faith determines that withholding the Officer’s Certificate is in the best interests of the Holders.

 

Section 5.10           Application of Proceeds.  Any moneys collected by the Trustee pursuant to this Article 5 in respect of the Notes shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Notes in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Notes in reduced principal amounts in exchange for the presented Notes if only partially paid, or upon surrender thereof if fully paid:

 

FIRST:  To the payment of all amounts due to the Trustee or any predecessor trustee pursuant to Section 6.06 of the Original Indenture;

 

SECOND:  In case the principal of the Notes in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Notes in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest, to the extent permitted by applicable law, at the rate of interest specified in Section 2.01, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference;

 

THIRD:  In case the principal of the Notes in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Notes for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest, to the extent permitted by applicable law, at the specified in Section 2.01; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Notes, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any Note, ratably to the aggregate of such principal and accrued and unpaid interest; and

 

FOURTH:  To the payment of the remainder, if any, to the Issuer or any other Person lawfully entitled thereto.

 

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Section 5.11           Suits for Enforcement.  In case an Event of Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Section 5.12           Restoration of Rights on Abandonment of Proceedings.   In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case (subject to any determination in such proceeding) the Issuer and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Note Holders shall continue as though no such proceedings had been taken.

 

ARTICLE 6

 

SUPPLEMENTAL INDENTURE

 

Section 6.01           Supplemental Indentures Without Consent of Holders.  The Issuer and the Trustee, at the Issuer’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto without notice to, or the consent of, the Holders of the Notes for one or more of the following purposes:

 

(a)           to cure any ambiguity, defect or inconsistency without adversely affecting the rights of any Holder;

 

(b)           to provide for the assumption by a Successor Company of the obligations of the Issuer under this Indenture pursuant to Article 7;

 

(c)           to add guarantees with respect to the Notes;

 

(d)           to secure the Notes;

 

(e)           to add to the covenants for the benefit of the Holders or surrender any right or power conferred upon the Issuer;

 

(f)            to comply with any requirement of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act; or

 

(g)           to make any change that does not adversely affect the rights of any Holder;

 

(h)           to comply with the requirements of the Commission in connection with any qualification of this Indenture under the Trust Indenture Act of 1939; and

 

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(i)            to conform the provisions in this Indenture to the description thereof in the “Description of the Notes” section of the preliminary prospectus supplement dated March 28, 2011, as supplemented by the free writing prospectus dated March 31, 2011, relating to the offering and sale of the Notes.

 

Upon the written request of the Issuer, the Trustee is hereby authorized to join with the Issuer in the execution of such supplemental indenture and to make any further appropriate agreements and stipulations therein contained, unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

Any supplemental indenture authorized by the provisions of this Article 7 may be executed by the Issuer and the Trustee without the consent of the Holders of any of the Notes at the time Outstanding, notwithstanding any of the provisions of Section 6.02.

 

Section 6.02           Supplemental Indentures With Consent of Holders.  With the consent (evidenced as provided in Article 7 of the Original Indenture) of the Holders of a majority of the aggregate principal amount of the Notes then Outstanding (determined in accordance with Article 7 of the Original Indenture and including, without limitation, consents obtained in connection with a repurchase of, or tender offer or exchange offer for, Notes), the Issuer and the Trustee, at the Issuer’s Expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the Holders.  In addition, the Holders of a majority of the aggregate principal amount of the Notes then Outstanding (determined in accordance with Article 7 of the Original Indenture and including, without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes) may waive compliance by the Issuer in any instance with any provision hereof without notice to the other Holders.  Notwithstanding the immediately preceding two sentences, without the consent of the Holder of each Outstanding Note affected thereby, no such supplemental indenture or waiver may be made if such supplemental indenture or waiver would:

 

(a)           extend the maturity of the principal of, or the stated time for payment of interest on, any Note;

 

(b)           reduce the principal amount of, or the rate of interest on, any Note;

 

(c)           reduce the amount of principal payable upon acceleration of the maturity of the Notes;

 

(d)           change the currency of payment of principal of or interest on the Notes or change the place of payment of any Note;

 

(e)           impair the right of any Holder to receive payment of principal of and interest on such Holder’s Note on or after the due dates therefor or to institute suit for the enforcement of any payment on, or with respect to, the Notes;

 

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(f)            modify the provisions of Section 3.01 in a manner adverse to Holders of the Notes;

 

(g)           adversely affect the right of Holders to convert their Notes;

 

(h)           change the ranking of the Notes; or

 

(i)            modify the provisions of this Article 6 or the waiver provisions in Section 5.07, except to increase the percentage required for modification, amendment or waiver or to provide for consent of the Holder of each Outstanding Note affected.

 

Upon the written request of the Issuer, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 6.05, the Trustee shall join with the Issuer in the execution of such supplemental indenture and to make any further appropriate agreements and stipulations therein contained, unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

The consent of the holders is not necessary under this Section 6.02 to approve the particular form of any proposed supplemental indenture.  It shall be sufficient if the requisite number of Holders approve the substance thereof.  After any such supplemental indenture becomes effective, the Issuer shall mail to the Holders a notice briefly describing such supplemental indenture. However, the failure to give such notice to all the Holders, or any defect in the notice, shall not impair or affect the validity of the supplemental indenture.

 

Section 6.03           Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions of this Article 6, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 6.04           Notation on Notes.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 6 may, at the Issuer’s expense, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Issuer’s expense, be prepared and executed by the Issuer, authenticated by the Trustee and delivered in exchange for the Notes then Outstanding, upon surrender of such Notes then Outstanding.

 

Section 6.05           Evidence of Compliance of Supplemental Indenture to Be Furnished.  In addition to the documents required by Section 11.05 of the Original Indenture, the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any

 

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supplemental indenture executed pursuant hereto complies with the requirements of this Article 6 and is permitted or authorized by the Indenture.

 

ARTICLE 7

 

SUCCESSOR COMPANY

 

Section 7.01           Consolidation, Merger and Sale of Assets.  The Issuer shall not consolidate with, enter into a binding share exchange with, or merge with or into another Person or sell, assign, convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any successor Person, unless:

 

(a)           the resulting, surviving or transferee Person (the “Successor Company”), if not the Issuer, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Issuer) expressly assumes by supplemental indenture all of the obligations of the Issuer under the Notes and this Indenture;

 

(b)           to the extent that the Successor Person is not the issuer of any part of the Reference Property, such issuer of the Reference Property guarantees the Notes or otherwise provides adequate assurance that the immediate resale of any Reference Property received upon conversion by holders of convertible notes who are not affiliates of the Issuer or the surviving or transferee Person will not require registration under the Securities Act;

 

(c)           immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture; and

 

(d)           the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel pursuant to Section 7.03.

 

For purposes of this Section 7.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer to another Person, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Issuer to another Person.

 

Section 7.02           Successor Corporation to Be Substituted.  In case of any such consolidation, binding share exchange, merger, sale, assignment, conveyance, transfer, lease or other disposition and upon the assumption by the Successor Company (if not the Issuer), by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all of the Notes, the due and punctual delivery of any consideration due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Issuer, such Successor Company (if not the Issuer) shall succeed to and be substituted for the Issuer, with the same effect as if it had been named herein as the party of the first part, except in the case of a lease of all or substantially all of the Issuer’s properties and assets.  Such Successor Company thereupon may cause to be signed, and may

 

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issue either in its own name or in the name of the Issuer any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuer and delivered to the Trustee; and, upon the order of such Successor Company instead of the Issuer and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the Officers of the Issuer to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof.  In the event of any such consolidation, merger, sale, conveyance or transfer (but not in the case of a lease), upon compliance with this Article 7 the Person named as the “Issuer” in the first paragraph of this Indenture (or any successor that shall thereafter have become such in the manner prescribed in this Article 7) may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture and the Notes, subject to the assumption by the Successor Company of all of the Issuer’s obligations hereunder including, without limitation, those to the Trustee.

 

In case of any such consolidation, merger, sale, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

 

Section 7.03           Opinion of Counsel to Be Given Trustee.  No consolidation, merger, sale, conveyance, transfer or lease shall be effective unless the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Article 7.

 

ARTICLE 8

 

MISCELLANEOUS PROVISIONS

 

Section 8.01           Conflict With Any Provision of Indenture With Trust Indenture Act of 1939.  If and to the extent that any provision of this First Supplemental Indenture limits, qualifies or conflicts with another provision included in this Indenture by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such incorporated provision shall control.

 

Section 8.02           New York Law to Govern.  This First Supplemental Indenture and the Notes, shall be deemed to be a contract under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of such State.

 

Section 8.03           Address for Notices.  Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders on the Issuer shall be deemed to have been sufficiently given or made, for all purposes if given or served by being deposited postage prepaid by registered or certified mail in a post office letter

 

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box addressed (until another address is filed by the Issuer with the Trustee) to A123 Systems, Inc., 200 West Street, Waltham, MA 02451, Attention: General Counsel, with a copy to Latham & Watkins LLP, 200 Clarendon Street, 20th Floor, Boston, MA 02116, Attention: John H. Chory, Esq.  Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to the Corporate Trust Office.

 

The Trustee, by notice to the Issuer, may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a Holder shall be mailed to it by first class mail, postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given to it if so mailed, or delivered electronically, within the time prescribed.  Whenever a notice is required to be given by the Issuer, such notice may be given by the Trustee on the Issuer’s behalf, and the Issuer shall make any notice it is required to give to Holders available on its website.

 

Failure to mail or otherwise deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed or delivered in the manner provided above, it is duly given, whether or not the addressee receives it.

 

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail or electronic delivery, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Section 8.04           No Security Interest Created.  Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

 

Section 8.05           Benefits of Indenture.  Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Notes Registrar and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 8.06           Calculations.  Except as otherwise provided herein, the Issuer shall be responsible for making all calculations called for under this Indenture and the Notes.  These calculations include, but are not limited to, determinations of the Closing Sales Prices of the Common Stock, adjustments to the Conversion Rate, accrued interest payable on the Notes, the number of Additional Shares (if any) and the Conversion Rate and Conversion Price.  The Issuer shall make all of these calculations in good faith and, absent manifest error, the Issuer’s calculations shall be final and binding on Holders of Notes.  The Issuer shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and

 

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Conversion Agent is entitled to rely conclusively upon the accuracy of the Issuer’s calculations without independent verification.  The Trustee shall forward the Issuer’s calculations to any Holder of Notes upon the request of that Holder at the sole cost and expense of the Issuer.

 

Section 8.07           Legal Holidays.  In any case where any Interest Payment Date, the Stated Maturity or any Fundamental Change Repurchase Date of a Note falls on a day that is not a Business Day, the required payment shall be made on the next succeeding Business Day, with the same force and effect as if taken on the originally scheduled date, and no interest on such payment shall accrue in respect of the delay.

 

Section 8.08           Counterparts.  This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

 

Section 8.09           Effects of Headings.  The Article and Section headings and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 8.10           Severability.  In case any one or more of the provisions contained in this Supplemental Indenture or in the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture or of such Notes, but this Supplemental Indenture and such Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

Section 8.11           Ratification of Original Indenture.  The Original Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Original Indenture in the manner and to the extent herein and therein provided.  For the avoidance of doubt, each of the Issuer and each Holder of the Notes, by its acceptance of such Notes, acknowledges and agrees that all of the rights, privileges, protections, immunities and benefits afforded to the Trustee under the Original Indenture are deemed incorporated herein, and shall be enforceable by the Trustee hereunder, in each of its capacities hereunder as if set forth herein in full.

 

Section 8.12           The Trustee.  The recitals in this Supplemental Indenture are made by the Issuer only and not the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Notes and of this Supplemental Indenture as fully and with like effect as set forth in full herein.

 

Section 8.13           Set-Off of Withholding Taxes. If the Issuer is required by applicable law to pay, and pays, withholding tax on behalf of a Non-U.S. Holder as a result of an adjustment to the Conversion Rate, the Issuer may, at its option, set off or cause to be set off such withholding tax against any payments of cash or shares of Common Stock on the Securities (or, if such withholding tax has not previously been fully set off against such cash or shares, against any payments on the shares of Common Stock). For purposes of such a set-off, each share of Common Stock shall be deemed to have a value equal to the Closing Sales Price of the Common Stock on the Conversion Date applicable to such Note.

 

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ARTICLE 9

 

SUBORDINATION

 

Section 9.01           Agreement to Subordinate.  The Issuer agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article 9, to the prior payment in full in cash or other payment satisfactory to the holders of all Senior Indebtedness (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Indebtedness.

 

Section 9.02           Liquidation; Dissolution; Bankruptcy.

 

(a)           Upon any distribution to creditors of the Issuer in a liquidation or dissolution of the Issuer or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Issuer or its property, in an assignment for the benefit of creditors or any marshaling of the Issuer’s assets and liabilities:

 

(i)            holders of Senior Indebtedness will be entitled to receive payment in full in cash of all obligations due in respect of such Senior Indebtedness (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Indebtedness) before the Holders of Notes will be entitled to receive any payment with respect to the Notes; and

 

(ii)           until all obligations with respect to Senior Indebtedness (as provided in clause (i) above) are paid in full, any distribution to which Holders would be entitled but for this Article 9 will be made to holders of Senior Indebtedness, as their interests may appear.

 

(b)           To the extent any payment of Senior Indebtedness is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, reorganization, insolvency, receivership or similar proceeding, the Senior Indebtedness or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred and the provisions of this Article 9 will be applied accordingly.

 

Section 9.03           Default on Designated Senior Indebtedness.

 

(a)           The Issuer may not make, directly or indirectly through any Subsidiary or other Person, any payment or distribution to the Trustee or any Holder in respect of Obligations with respect to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property until all principal and other obligations with respect to the Senior Indebtedness have been paid in full (except (i) if the Issuer repurchases the Notes in the open market (ii) in the event of a satisfaction and discharge of the Indenture, payments by the Trustee of monies held in trust by it to be applied to payment to holders of the Notes or (iii) payments of cash in lieu of fractional shares upon conversion pursuant to Section 4.02(j)) if:

 

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(1)   a default in the payment (a “Payment Default”) of any Senior Indebtedness occurs and is continuing beyond any applicable grace period set forth in the agreement, senior indenture or other document governing such Senior Indebtedness and the Trustee receives a notice of such default from the Issuer or any Representative of such holders of Senior Indebtedness;

 

(2)  any other default (a “Nonpayment Default”) occurs and is continuing on any series of Designated Senior Indebtedness that permits holders of that Class of Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of such default that also states that such series of Designated Senior Indebtedness may be accelerated (a “Payment Blockage Notice”) from the Issuer or any Representative of such holders of Designated Senior Indebtedness. The Trustee shall promptly deliver a copy of any Payment Blockage Notice received by it to the Issuer and the Issuer shall promptly deliver such copy to all holders of Designated Senior Indebtedness. If the holders of a majority in principal amount of all Designated Senior Indebtedness outstanding at the time such Payment Blockage Notice is delivered to the Issuer shall, within 10 days of their receipt thereof, deliver to the Issuer and the Trustee a notice rescinding such Payment Blockage Notice, such Payment Blockage Notice shall be deemed not to have been delivered for all purposes of the Indenture.

 

No new Payment Blockage Notice may be delivered by a Class of Designated Senior Indebtedness in respect of a Nonpayment Default unless and until 90 days have elapsed during which no payment blockage was in effect with respect to that Class of Designated Senior Indebtedness and in no event shall more than two Payment Blockage Notices from any single Class of Designated Senior Indebtedness become effective during any 360 day period.

 

(b)           The Issuer may and will resume payments on and distributions in respect of the Notes and may acquire them upon the earlier of:

 

(i)            in the case of a Payment Default, upon the date upon which such default is cured or waived or ceases to exist, and

 

(ii)           in the case of a Nonpayment Default, upon the earlier of the date on which such Nonpayment Default is cured or waived or ceases to exist or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Indebtedness has been accelerated (in which event the foregoing subclause (i) shall apply),

 

if this Article 9 otherwise permits such payment, distribution or acquisition at the time of such payment, distribution or acquisition.

 

Section 9.04           Acceleration of Notes.  If payment of the Notes is accelerated because of an Event of Default, the Issuer may not make, directly or indirectly through any Subsidiary or other Person, any payment or distribution to the Trustee or any Holder in respect of obligations with respect to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property until all principal and other Obligations with respect to the Senior Indebtedness have

 

49

 

been paid in full or such acceleration is rescinded in accordance with the terms of this Supplemental Indenture. The Issuer will promptly notify holders of Senior Indebtedness of any such acceleration.

 

Section 9.05           When Distribution Must Be Paid Over.  In the event that the Trustee or any Holder of the Notes receives any payment or distribution of the Issuer’s assets with respect to the Notes at a time when the payment is prohibited by Section 9.03 or Section 9.04, such payment will be held by the Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Indebtedness as their interests may appear or their Representative, if any, under the agreement, indenture or other document (if any) pursuant to which Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all obligations with respect to Senior Indebtedness remaining unpaid to the extent necessary to pay such obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

 

With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform only those obligations on the part of the Trustee as are specifically set forth in this Article 9, and no implied covenants or obligations with respect to the holders of Senior Indebtedness will be read into this Supplemental Indenture against the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness, and will not be liable to any such holders if the Trustee pays over or distributes to or on behalf of Holders or the Issuer or any other Person money or assets to which any holders of Senior Indebtedness are then entitled by virtue of this Article 9, except if such payment is made as a result of the willful misconduct or negligence of the Trustee.

 

Section 9.06           Notice by Issuer.  The Issuer will promptly notify the Trustee and the Paying Agent of any facts known to the Issuer that would cause a payment of any Obligations with respect to the Notes to violate this Article 9, but failure to give such notice will not affect the subordination of the Notes to the Senior Indebtedness as provided in this Article 9.

 

Section 9.07           Subrogation.  After all Senior Indebtedness is paid in full and until the Notes are paid in full, Holders of Notes will be subrogated (equally and ratably with all other Indebtedness pari passu with the Notes) to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Holders of Notes have been applied to the payment of Senior Indebtedness. A distribution made under this Article 9 to holders of Senior Indebtedness that otherwise would have been made to Holders of Notes is not, as between the Issuer and Holders, a payment by the Issuer on the Notes.

 

Section 9.08           Relative Rights.  This Article 9 defines the relative rights of Holders of Notes and holders of Senior Indebtedness. Nothing in this Supplemental Indenture will:

 

(a)           impair, as between the Issuer and Holders of Notes, the obligation of the Issuer, which is absolute and unconditional, to pay principal of, and interest, if any, on, the Fundamental Change Repurchase Price of, and to pay or deliver any amount due upon conversion of, the Notes in accordance with their terms;

 

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(b)           affect the relative rights of Holders of Notes and creditors of the Issuer other than their rights in relation to holders of Senior Indebtedness; or

 

(c)           prevent the Trustee or any Holder of Notes from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Indebtedness to receive distributions and payments otherwise payable to Holders of Notes.

 

If the Issuer fails because of this Article 9 to pay principal of, or interest, if any, on, the Fundamental Change Repurchase Price of, or to pay or deliver any amount due upon conversion of, the Notes in accordance with their terms, the failure is still a Default or Event of Default.

 

Section 9.09           Subordination May Not Be Impaired by the Issuer.  No right of any holder of Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Notes may be impaired by any act or failure to act by the Issuer or any Holder or by the failure of the Issuer or any Holder to comply with this Supplemental Indenture.

 

Section 9.10           Rights of Trustee and Paying Agent.  Notwithstanding the provisions of this Article 9 or any other provision of the Indenture, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee has received at its Corporate Trust Office at least three Business Days prior to the date of such payment written notice of facts that would cause the payment of any obligations with respect to the Notes to violate this Article 9, except for any acceleration of the Notes prior to making any such payment or distribution which is actually known by a Responsible Officer of the Trustee prior to making any such payment or distribution. The notice may only be given by the Issuer or a Representative, for any Senior Indebtedness. For the avoidance of doubt, no such notice shall constitute a Payment Blockage Notice unless delivered in accordance with Section 9.03(a)(2). Notwithstanding anything herein to the contrary, nothing in this Article 9 will impair the claims of, or payments to, the Trustee under or pursuant to Section 6.06 or Section 10.05 of the Original Indenture.

 

The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. Any Notes Registrar, any Paying Agent, any Conversion Agent, and their successors hereunder may do the same with like rights.

 

Section 9.11           Authorization to Effect Subordination; Filing Proof of Claim.  Each Holder of Notes, by the Holder’s acceptance thereof, authorizes and directs the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 9, and appoints the Trustee to act as such 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 5.02 of the Original Indenture at least 30 days before the expiration of the time to file such claim the Issuer or a Representative, is hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes.

 

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Section 9.12           Reliance and Amendments.

 

(a)           Each Holder of Notes by its acceptance thereof acknowledges and agrees that the subordination provisions set forth in this Article 9 are, and are intended to be, an inducement and a consideration for each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness, and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold or in continuing to hold such Senior Indebtedness.

 

(b)           The provisions of this Article 9 may not be amended or modified without the written consent of the holders of all Senior Indebtedness.  The Trustee may rely on written confirmation from the Representative that such written consent constitutes the holders of all Senior Indebtedness.  In addition, any amendment to, or waiver of, the provisions of this Article 9 that adversely affects the rights of the Holders of the Notes will require the consent of the Holders of a majority in aggregate principal amount of Notes then Outstanding.  The Trustee may rely on an Opinion of Counsel as to the determination of whether such rights are adversely affected.

 

Section 9.13           No Waiver of Subordination Provisions.  Without in any way limiting the generality of Section 9.09, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Holders and without impairing or releasing the subordination provided in this Article 9 or the obligations hereunder of the Holders to the holders of Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Issuer and any other Person.

 

[Signature pages follow]

 

52

 

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of April 6, 2011.

 

 

	
 
    	
A123   SYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   David P. Vieau
    
	
 
    	
 
    	
Name:
    	
David   P. Vieau
    
	
 
    	
 
    	
Title:
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S.   BANK NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Rick Barnes
    
	
 
    	
 
    	
Name:
    	
Rick   Barnes
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

 

[Form of Convertible Subordinated Note]

 

FACE OF NOTE

 

[Include following legend if a Global Note:

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE REGISTERED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

A-1

 

A123 SYSTEMS, INC.
 3.75% Convertible Subordinated Notes due 2016

 

	
No. [   ]
    	
 
    	
CUSIP   No.:  03739T AA6
    
	
 
    	
 
    	
ISIN:   US03739TAA60
    
	
 
    	
 
    	
Initially   [$   ]
    

 

A123 Systems, Inc., a Delaware corporation (“Issuer”, which term includes any successor corporation), for value received promises to pay to [If the Note is a Global Note — Cede & Co.][If the Note is not a Global Note —                     ] or registered assigns, the principal sum as set forth in the Schedule of Exchange of Notes attached hereto on April 15, 2016 (the “Stated Maturity”) and to pay interest thereon from                           or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually in arrears on April 15 and October 15 in each year, commencing                            (each, an “Interest Payment Date”) at the rate of 3.75% per annum, until the principal hereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at the rate of 1% per annum on any overdue principal and on any overdue installment of interest.  Additional Interest will be payable as set forth in Section 5.03 of the within-mentioned Supplemental Indenture (as defined below), and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to Section 5.03 and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture (as defined below), be paid to the Holder in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the record date for such interest, which shall be the April 1 or October 1  (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each, a “Regular Record Date”).  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

Reference is made to the further provisions set forth on the reverse of this Note contained herein, which will for all purposes have the same effect as if set forth at this place.

 

A-2

 

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its duly authorized officer under its corporate seal.

 

 

	
 
    	
 
    	
A123   SYSTEMS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    

 

 

This is one of the Notes of the series designated herein and referred to in the within-mentioned Indenture.

 

Dated:  [   ]

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION, as 
   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

A-3

 

REVERSE OF NOTE

 

A123 SYSTEMS, INC.

3.75% Convertible Subordinated Notes due 2016

 

1.  Indenture

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 3.75% Convertible Subordinated Notes due 2016 (hereinafter called the “Notes”) of the Issuer, which series is initially limited in aggregate principal amount to $125,000,000 (as increased by an amount equal to the aggregate principal amount of any Additional Notes purchased by the Underwriters pursuant to the exercise of their option to purchase Additional Notes as set forth in the Underwriting Agreement), all of such Notes issued and to be issued under an Indenture dated as of April 6, 2011 (the “Original Indenture”) between the Issuer and U.S. Bank National Association, as trustee (the “Trustee”) and as supplemented by the First Supplemental Indenture dated as of April 6, 2011 (herein called the “Supplemental Indenture” and the Original Indenture, as supplemented by the Supplemental Indenture, the “Indenture”).  Capitalized terms herein are used as defined in the Indenture unless otherwise indicated.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect on the date of the Indenture.  The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms.  The provisions of the Supplemental Indenture shall supersede any corresponding or inconsistent provisions in the Original Indenture.  To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control.

 

The Notes are general unsecured subordinated obligations of the Issuer.  The Issuer may, subject to the provisions of the Indenture and applicable law, issue additional Notes of any series under the Indenture.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay or deliver, as the case may be, the principal (including the Fundamental Change Repurchase Price, if applicable) of and accrued and unpaid interest on this Note and the consideration due upon conversion on the respective due dates therefor.

 

2.  Method of Payment.

 

The Issuer shall pay interest on the Notes (except defaulted interest) to the persons who are the registered Holders at the close of business on the Regular Record Date immediately preceding the Interest Payment Date notwithstanding any transfer or exchange of such Note subsequent to such Regular Record Date and prior to such Interest Payment Date. Holders must surrender Notes to the Paying Agent to collect principal payments. The Issuer shall 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.

 

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3.  Paying Agent and Notes Registrar

 

Initially, the Trustee will act as Paying Agent, Conversion Agent and Notes Registrar.  The Issuer may change any Paying Agent, Conversion Agent and Notes Registrar without notice to the Holders.

 

4.  Denominations; Transfer; Exchange.

 

The Notes are in registered form, without coupons, in denominations of $1,000 and integral multiples of $1,000. A Holder shall register the transfer of or exchange Notes in accordance with the Indenture. Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Issuer or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith under the Indenture or as required by law.

 

5.  Persons Deemed Owners.

 

The registered Holder of a Note shall be treated as the owner of it for all purposes.

 

6.  Unclaimed Funds.

 

If funds for the payment of principal or interest remain unclaimed for two years, the Trustee and the Paying Agent will repay the funds to the Issuer. After that, all liability of the Trustee and such Paying Agent with respect to such funds shall cease.

 

7.  No Defeasance.

 

The provisions of the Original Indenture for defeasance at any time of (a) the entire indebtedness of the Issuer on this Note and (b) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth therein, do not apply to this Note.

 

8.  Event of Default.

 

In case an Event of Default, as defined in the Indenture, other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer, shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% of the aggregate principal amount of Notes then Outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.  If an Event 

 

A-5

 

of Default occurs relating to certain events of bankruptcy, insolvency or reorganization of the Issuer, the principal of, and interest on, all Notes will automatically become due and payable, subject to Section 9.04 of the Supplemental Indenture.

 

9.  Supplemental Indentures and Waivers.

 

The Indenture contains provisions permitting the Issuer and the Trustee in certain circumstances, without the consent of the Holders of the Notes, and in certain other circumstances, with the consent of the Holders of a majority of the aggregate principal amount of the Notes at the time Outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Notes as described therein.  It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority of the aggregate principal amount of the Notes at the time Outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences, or compliance with certain provisions of the Indenture.

 

10.  Fundamental Change.

 

Subject to the terms and conditions of the Indenture, the Issuer will make all payments in respect of the Fundamental Change Repurchase Price on the Fundamental Change Repurchase Date and the principal amount on the Stated Maturity, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note.  The Issuer will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

 

11.  Subordination.

 

Reference is made to the Indenture, including, without limitation, provisions subordinating the payment of principal of and premium, if any, and interest on the Notes to the prior payment in full of all Senior Indebtedness as defined in the Indenture.  Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

A-6

 

12.  Conversion

 

Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, prior to the close of business on the third Business Day immediately preceding the Stated Maturity, to convert any Notes or portion thereof that is $1,000 or an integral multiple thereof, into shares of Common Stock at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.

 

13.  No Redemption

 

The Notes are not subject to redemption through the operation of any sinking fund or otherwise.

 

14.  Trustee Dealings with Issuer.

 

The Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer as if it were not the Trustee.

 

15.  No Recourse Against Others.

 

No stockholder, director, officer, employee or incorporator, past, present or future as such, of the Issuer or any predecessor or successor corporation thereof shall have any liability for any obligation under the Notes or the Indenture, as amended by the Supplement or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Holder of a Note by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

 

16.  Authentication.

 

This Note shall not be valid until the Trustee manually signs the certificate of authentication on this Note.

 

17.  Abbreviations and Defined Terms.

 

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

 

A-7

 

18.  CUSIP Numbers.

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.

 

19.  Governing Law.

 

The laws of the State of New York shall govern the Indenture and this Note, and for all purposes this Note shall be governed by and construed in accordance with the laws of such State.

 

A-8

 

 

ATTACHMENT 1

 

[FORM OF NOTICE OF CONVERSION]

 

To:  [                  ]

 

The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1,000 principal amount or an integral multiple thereof) below designated, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and directs that any shares of Common Stock issuable upon such conversion, together with any cash for any fractional share, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below.  If any shares of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or transfer taxes, if any, in accordance with the terms of the Indenture.  Any amount required to be paid to the undersigned on account of interest accompanies this Note.

 

 

	
 
    	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	

    
	
 
    	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature Guarantee
    	
 
    	
 
    

 

	
Signature(s) must   be guaranteed by an eligible Guarantor Institution (banks, stock brokers,   savings and loan associations and credit unions) with membership in an   approved signature guarantee medallion program pursuant to Securities and   Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be   issued, or Notes are to be delivered, other than to and in the name of the   registered Holder.

 

Fill in for registration   of shares if to be issued, and Notes if to be delivered, other than to and in   the name of the registered Holder:
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    
	
(Name)
    	
 
    	
 
    

 

A-9

 

	
 
    	
 
    	
 
    
	
(Street Address)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(City, State and   Zip Code)
    	
 
    	
 
    
	
Please print name   and address
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Principal amount   to be converted (if less than all):   $            ,000
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
NOTICE: The above   signature(s) of the Holder(s) hereof must correspond with the name   as written upon the face of the Note in every particular without alteration   or enlargement or any change whatever.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Social Security or   Other Taxpayer
    
	
 
    	
 
    	
Identification   Number
    

 

A-10

 

ATTACHMENT 2

 

[FORM OF REPURCHASE EXERCISE NOTICE]

 

To: [                  ]

 

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from A123 Systems, Inc. (the “Issuer”) as to the occurrence of a Fundamental Change with respect to the Issuer and specifying the Fundamental Change Repurchase Date and requests and instructs the Issuer to pay to the registered Holder hereof in accordance with Article 3 of the Supplemental Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Repurchase Date.

 

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Social Security or   Other Taxpayer
    
	
 
    	
 
    	
 
    	
Identification   Number
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Principal amount   to be repaid (if less than all):   $            ,000
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
NOTICE: The above   signature(s) of the Holder(s) hereof must correspond with the name   as written upon the face of the Note in every particular without alteration   or enlargement or any change whatever.
    

 

A-11

 

ATTACHMENT 3

 

[FORM OF ASSIGNMENT AND TRANSFER]

 

I or we assign and transfer this Note to

 

	
 
    
	
(Print or type name, address and zip code of   assignee or transferee)
    
	
 
    
	
 
    
	
(Insert Social Security or other identifying   number of assignee or transferee)
    

 

and irrevocably appoint                                                                                              agent to transfer this Note on the books of the Issuer.  The agent may substitute another to act for him.

 

	
Dated:
    	
 
    	
 
    	
Signed:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
 
    	
 
    	
 
    
	
Guarantee:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Signature(s) must   be guaranteed by an eligible Guarantor Institution (banks, stock brokers,   savings and loan associations and credit unions) with membership in an   approved signature guarantee medallion program pursuant to Securities and   Exchange Commission Rule 17Ad-15 if Notes are to be delivered, other   than to and in the name of the registered holder.
    

 

NOTICE:  The signature on the Note must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

 

A-12

 

[FORM OF SCHEDULE OF EXCHANGES OF NOTES]

 

The following increases or decreases in this Global Note have been made:

 

	
Date of exchange,
   repurchase or
   conversion
    	
 
    	
Amount of
   decrease in
   principal amount
   of this Global Note
    	
 
    	
Amount of
   increase in
   principal amount
   of this Global Note
    	
 
    	
Principal amount
   of this Global Note
   following such
   decrease or
   increase
    	
 
    	
Signature of
   authorized
   signatory of
   Trustee or
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

 

A-13

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