INDENTURE

 

TABLE OF CONTENTS

 

 

		PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 . Definitions		1
Section 1.02 . Other Definitions		7
Section 1.03 . Trust Indenture Act Provisions		8
Section 1.04 . Rules of Construction		9
ARTICLE 2
THE SECURITIES
Section 2.01 . Form and Dating		9
Section 2.02 . Execution and Authentication		11
Section 2.03 . Registrar, Paying Agent and Conversion Agent		12
Section 2.04 . Paying Agent to Hold Money in Trust		13
Section 2.05 . Holder Lists		13
Section 2.06 . Transfer and Exchange		13
Section 2.07 . Replacement Securities		14
Section 2.08 . Outstanding Securities		15
Section 2.09 . Treasury Securities		16
Section 2.10 . Temporary Securities		16
Section 2.11 . Cancellation		16
Section 2.12 . Additional Transfer Requirements		16
Section 2.13 . CUSIP Numbers		18
ARTICLE 3
PURCHASES OF SECURITIES UPON FUNDAMENTAL CHANGE
Section 3.01 . Purchase of Securities at Option of the Holder Upon Fundamental Change		18
Section 3.02 . Effect of Fundamental Change Purchase Notice		22
Section 3.03 . Deposit of Fundamental Change Purchase Price		23
Section 3.04 . Securities Purchased in Part		23
Section 3.05 . Compliance with Securities Laws Upon Purchase of Securities		24
ARTICLE 4
PAYMENT OF INTEREST AND MAKE WHOLE ADJUSTMENT EVENTS
Section 4.01 . Interest Payments		24
Section 4.02 . Increased Conversion Rate Applicable to Certain Securities Surrendered in Connection with Make Whole Adjustment Events		25
Section 4.03 . Adjustments Relating to Make Whole Adjustment Event		27

 

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ARTICLE 5
CONVERSION
Section 5.01 . Conversion Privilege		27
Section 5.02 . Conversion Procedure		29
Section 5.03 . Fractional Shares		31
Section 5.04 . Taxes on Conversion		31
Section 5.05 . Settlement Upon Conversion		31
Section 5.06 . Adjustment of Conversion Price		33
Section 5.07 . No Adjustment		40
Section 5.08 . Adjustment for Tax Purposes		41
Section 5.09 . Notice of Adjustment		41
Section 5.10 . Notice of Certain Transactions		42
Section 5.11 . Stockholder Rights Plans		42
Section 5.12 . Effect of Reclassification, Consolidation, Merger or Sale on Conversion Privilege		42
Section 5.13 . Trustee’s Disclaimer		44
Section 5.14 . Voluntary Reduction		45
Section 5.15 . Exchange in Lieu of Conversion		45
Section 5.16 . Compliance with NASDAQ Market Rule 4350		45
ARTICLE 6
SUBORDINATION
Section 6.01 . Agreement of Subordination		46
Section 6.02 . Payments to Holders		46
Section 6.03 . Subrogation of Securities		49
Section 6.04 . Authorization to Effect Subordination		50
Section 6.05 . Notice to Trustee		50
Section 6.06 . Trustee’s Relation to Senior Indebtedness		51
Section 6.07 . No Impairment of Subordination		51
Section 6.08 . Certain Conversions Deemed Payment		52
Section 6.09 . Article Applicable to Paying Agents		52
Section 6.10 . Senior Indebtedness Entitled to Rely		52
ARTICLE 7
COVENANTS
Section 7.01 . Payment of Securities		53
Section 7.02 . Reports		53
Section 7.03 . Compliance Certificates		53
Section 7.04 . Further Instruments and Acts		54
Section 7.05 . Maintenance of Corporate Existence		54
Section 7.06 . Stay, Extension and Usury Laws		54
Section 7.07 . Additional Interest Notice		54

 

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ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.01 . Company May Consolidate, etc., only on Certain Terms		55
Section 8.02 . Successor Substituted		55
ARTICLE 9
DEFAULT AND REMEDIES
Section 9.01 . Events of Default		56
Section 9.02 . Acceleration		58
Section 9.03 . Other Remedies		59
Section 9.04 . Waiver of Defaults and Events of Default		59
Section 9.05 . Control by Majority		60
Section 9.06 . Limitations on Suits		60
Section 9.07 . Rights of Holders to Receive Payment and to Convert		60
Section 9.08 . Collection Suit by Trustee		61
Section 9.09 . Trustee May File Proofs of Claim		61
Section 9.10 . Priorities		61
Section 9.11 . Undertaking for Costs		62
ARTICLE 10
TRUSTEE
Section 10.01 . Duties of Trustee		62
Section 10.02 . Rights of Trustee		63
Section 10.03 . Individual Rights of Trustee		64
Section 10.04 . Trustee’s Disclaimer		64
Section 10.05 . Notice of Default or Events of Default		65
Section 10.06 . Reports by Trustee to Holders		65
Section 10.07 . Compensation and Indemnity		65
Section 10.08 . Replacement of Trustee		66
Section 10.09 . Successor Trustee by Merger, etc.		67
Section 10.10 . Eligibility; Disqualification		67
Section 10.11 . Preferential Collection of Claims Against Company		67
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.01 . Satisfaction and Discharge		67
Section 11.02 . Application of Trust Money		68
Section 11.03 . Repayment to Company		68
Section 11.04 . Reinstatement		69

 

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ARTICLE 12
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 12.01 . Without Consent of Holders		69
Section 12.02 . With Consent of Holders		70
Section 12.03 . Compliance with Trust Indenture Act		71
Section 12.04 . Revocation and Effect of Consents		71
Section 12.05 . Notation on or Exchange of Securities		71
Section 12.06 . Trustee to Sign Amendments, etc.		71
Section 12.07 . Effect of Supplemental Indentures		72
ARTICLE 13
MISCELLANEOUS
Section 13.01 . Trust Indenture Act Controls		72
Section 13.02 . Notices		72
Section 13.03 . Communications by Holders with Other Holders		73
Section 13.04 . Certificate and Opinion as to Conditions Precedent		73
Section 13.05 . Record Date for Vote or Consent of Holders		74
Section 13.06 . Rules by Trustee, Paying Agent, Registrar and Conversion Agent		74
Section 13.07 . Payment Day or Record Date Not A Business Day		74
Section 13.08 . Governing Law		74
Section 13.09 . No Adverse Interpretation of Other Agreements		74
Section 13.10 . No Recourse against Others		75
Section 13.11 . Successors		75
Section 13.12 . Multiple Counterparts		75
Section 13.13 . Separability		75
Section 13.14 . Table of Contents, Headings, etc.		75
Section 13.15 . Submission to Jurisdiction		75
Exhibit A		A-1

 

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CROSS-REFERENCE TABLE

 

TIA SECTION				INDENTURE SECTION
Section		310(a)(1)		10.10
		(a)(2)		10.10
		(a)(3)		N.A.**
		(a)(4)		N.A.
		(a)(5)		10.10
		(b)		10.08; 10.10
		(c)		N.A.
Section		311(a)		10.11
		(b)		10.11
		(c)		N.A.
Section		312(a)		2.05
		(b)		13.03
		(c)		13.03
Section		313(a)		10.06
		(b)(1)		N.A.
		(b)(2)		10.06
		(c)		10.06; 13.02
		(d)		10.06
Section		314(a)		7.02; 7.04; 13.02
		(b)		N.A.
		(c)(1)		13.04(a)
		(c)(2)		13.04(a)
		(c)(3)		N.A.
		(d)		N.A.
		(e)		13.04(b)
		(f)		N.A.
Section		315(a)		10.01(b)
		(b)		10.05; 13.02
		(c)		10.01(a)
		(d)		10.01(c)
		(e)		9.11
Section		316(a)(last sentence)		2.09
		(a)(1)(A)		9.05
		(a)(1)(B)		9.04
		(a)(2)		N.A.
		(b)		9.07
		(c)		13.05
Section		317(a)(1)		9.08
		(a)(2)		9.09
		(b)		2.04

 

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

**                                   N.A. means Not Applicable.

 

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THIS INDENTURE dated as of May 27, 2009 is between Cephalon, Inc., a corporation duly organized under the laws of the State of Delaware (the “ Company ”), and U.S. Bank National Association, a national banking association organized and existing under the laws of the United States, as Trustee (the “ Trustee ”).

 

In consideration of the premises and the acquisition of the Securities by the Holders thereof, both parties agree as follows for the benefit of the other and for the equal and ratable benefit of the registered Holders of the Securities.

 

ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01 .  Definitions.

 

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

 

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

 

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

 

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

 

“ Business Day ” means any day other than a (x) Saturday, (y) Sunday or (z) day on which state or federally chartered banking institutions in New York, New York are not required to be open.

 

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

 

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

 

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“ Certificated Security ” means a Security that is in substantially the form attached hereto as Exhibit A and that does not include the information or the schedule called for by footnotes 1 and 2 thereof.

 

“ Closing Sale Price ” of the Common Stock means, as of any date of determination, the closing per share sale price (or, if no such closing sale price is reported on such day, the average of the bid and asked prices or, if more than one in either case, the average of the average bid and the average asked prices) at 4:00 p.m., New York time, on such date as reported in composite transactions for the principal U.S. 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.

 

“ Common Stock ” means the common stock of the Company, $0.01 par value, as it exists on the date of this Indenture and any shares of any class or classes of capital stock of the Company resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, however , that, if at any time there shall be more than one such resulting class, the shares of each such class then so issuable on conversion of Securities shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

 

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

 

“ Conversion Rate ” means, as of any date, an amount equal to $1,000 divided by the then applicable Conversion Price on such date.  As of the date hereof and subject to adjustment pursuant to Section 5.06, the Conversion Rate with respect to the Securities is 14.4928 shares of Common Stock for each $1,000 principal amount of Securities.

 

“ Conversion Value ” of a Security means, as of any date of determination, the product of the last reported bid price of the Common Stock on that date multiplied by the Conversion Rate of that Security on that date.

 

“ Corporate Trust Office ” means the office of the Trustee at which at any time the trust created by this Indenture shall be administered, which office at the date of the execution of this Indenture is located at 225 Asylum Street, 23rd Floor, Hartford, CT  06103, Attention:  Corporate Trust Services (Cephalon, Inc. 2.50% Convertible Senior Subordinated Notes due May 1, 2014), or at any other time at such other address as the Trustee may designate from time to time by notice to the Company.

 

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

 

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

 

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

 

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

 

“ Final Maturity Date ” means May 1, 2014.

 

“ GAAP ” means generally accepted accounting principles in the United States of America as in effect as of the date of this Indenture, including those set forth in (1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (2) the statements and pronouncements of the Financial Accounting Standards Board, (3) such other statements by such other entity as approved by a significant segment of the accounting profession and (4) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in registration statements filed under the Securities Act and periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and other official written statements from the accounting staff of the SEC expressing the views of the SEC therein.

 

“ Global Security ” means a permanent Global Security that is in substantially the form attached hereto as Exhibit A and that includes the information and schedule called for by footnotes 1, 2 and 3 thereof and which is deposited with the Depositary or its custodian and registered in the name of the Depositary or its nominee.

 

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

 

“ Indebtedness ” means, with respect to any Person, without duplication, (a) all indebtedness, obligations and other liabilities (contingent or otherwise) of such Person (i) for borrowed money (including obligations of such Person in respect of overdrafts, foreign exchange

 

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contracts, currency exchange agreements, interest rate protection agreements and any loans or advances from banks, whether or not evidenced by notes or similar instruments) or (ii) 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 such Person 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 reimbursement obligations and other liabilities (contingent or otherwise) of such Person with respect to letters of credit, bank guarantees or bankers’ acceptances, (c) all obligations and liabilities (contingent or otherwise) of such Person (i) in respect of leases of such Person required, in conformity with GAAP, to be accounted for as capitalized lease obligations on the balance sheet of such Person (as determined by such Person, or the Company in the case of any Subsidiary of the Company), or (ii) under any lease or related document (including a purchase agreement, conditional sale or other title 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 such Person 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 to the lessor (whether or not such lease transaction is characterized as an operating lease or a capitalized lease in accordance with GAAP), (d) all obligations (contingent or otherwise) of such Person with respect to any interest rate or other swap, cap, floor or collar agreement, hedge agreement, forward contract or other similar instrument or agreement or foreign currency hedge, exchange, purchase or similar instrument or agreement; (e) all direct or indirect guaranties, agreements to be jointly liable or similar agreements by such Person in respect of, and obligations or liabilities of such Person to purchase or otherwise acquire or otherwise assure a creditor against loss in respect of, indebtedness, obligations or liabilities of another Person of the kind described in clauses (a) through (d), and (f) any and all deferrals, renewals, extensions, refinancings and refundings of, or amendments, modifications or supplements to, any indebtedness, obligation or liability of the kind described in clauses (a) through (e).

 

“ Indenture ” means this Indenture as amended or supplemented from time to time pursuant to the terms of this Indenture.

 

“ interest, ” in respect of the Securities, unless the context otherwise requires, refers to interest payable on the Securities, including any additional interest that may become payable pursuant to Section 9.02(b).

 

“ Issue Date ” means May 27, 2009.

 

“ Market Disruption Event ” means (1) a failure by the primary exchange or quotation system on which the Common Stock trades or is quoted to open for trading during its regular trading session or (2) the occurrence or existence for more than one half hour period in the aggregate on any Scheduled Trading Day for the Common Stock of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by The NASDAQ Global Select Market or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock, and such suspension or limitation occurs or exists at any time before 1:00 p.m., New York City time, on such day.

 

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“ Officer ” means the Chairman or any Co-Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Controller, the Secretary or any Assistant Controller or Assistant Secretary of the Company.

 

“ Officers’ Certificate ” means a certificate signed by two Officers; provided, however , that, for purposes of Section 5.11 and 7.03, “ Officers’ Certificate ” means a certificate signed by the principal executive officer, principal financial officer or principal accounting officer of the Company and by one other Officer.

 

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

 

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

 

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

 

 “ Representative ” means the (a) indenture trustee or other trustee, agent or representative for any Senior Indebtedness or (b) with respect to any Senior Indebtedness that does not have any such trustee, agent or other representative, (i) in the case of such Senior Indebtedness issued pursuant to an agreement providing for voting arrangements as among the holders or owners of such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting with the consent of the required persons necessary to bind such holders or owners of such Senior Indebtedness and (ii) in the case of all other such Senior Indebtedness, the holder or owner of such Senior Indebtedness.

 

“ Scheduled Trading Day ” means any day that is scheduled to be a Trading Day.

 

“ SEC ” means the Securities and Exchange Commission.

 

“ Securities ” means the 2.50% Convertible Senior Subordinated Notes due May 1, 2014, or any of them (each, a “ Security ”).

 

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

 

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

 

“ Senior Indebtedness ” means the principal of, and premium, if any, 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 any such proceeding) and rent payable on or in connection with, and all fees, costs, expenses and other amounts accrued or due

 

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on or in connection with, Indebtedness of the Company, whether secured or unsecured, absolute or contingent, due or to become due, outstanding on the date of this Indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Company (including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to, the foregoing), unless in the case of any particular Indebtedness the instrument creating or evidencing the same or the assumption or guarantee thereof expressly provides that such Indebtedness shall not be senior in right of payment to the Securities or expressly provides that such Indebtedness is “pari passu” or “junior” to the Securities.  Notwithstanding the foregoing, the term Senior Indebtedness shall not include (i) any Indebtedness of the Company to any Subsidiary of the Company (other than Indebtedness of the Company to such Subsidiary arising by reason of guarantees by the Company of Indebtedness of such Subsidiary to a Person that is not a Subsidiary of the Company) or (ii) Indebtedness for trade payables or the deferred purchase price of assets or services incurred in the ordinary course of business.  If any payment made to any holder of any Senior Indebtedness or its Representative with respect to such Senior Indebtedness is rescinded or must otherwise be returned by such holder or Representative upon the insolvency, bankruptcy or reorganization of the Company or otherwise, the reinstated Indebtedness of the Company arising as a result of such rescission or return shall constitute Senior Indebtedness effective as of the date of such rescission or return.

 

“ Significant Subsidiary ” means, in respect of any Person, a Subsidiary of such Person that would constitute a “significant subsidiary” as such term is defined under Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act.

 

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

 

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

 

“ Trading Day ” means any day during which (i) there is no Market Disruption Event and (ii) The NASDAQ Global Select Market, or if the Common Stock is not listed on The NASDAQ Global Select Market, the principal other U.S. national or regional securities exchange on which the Common Stock is then listed is open for trading or, if the Common Stock is not so listed, any Business Day.  A “Trading Day” only includes those days that have a scheduled closing time of 4:00 p.m., New York City time, or the then standard closing time for regular trading on the relevant exchange or trading system.

 

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“ Trading Price ” means, on any date of determination with respect to any Security, the average of the secondary bid quotations per Security obtained by the Conversion Agent for $5,000,000 principal amount of Securities at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that, if at least three such bids cannot reasonably be obtained, but two such bids can reasonably be obtained, then the average of these two bids shall be used; provided, further , that, if at least two such bids cannot reasonably be obtained, but one such bid can reasonably be obtained, this one bid shall be used.  If the Conversion Agent cannot reasonably obtain at least one bid for $5,000,000 principal amount of the Securities from an independent nationally recognized securities dealer, then the Trading Price of such Securities on such determination date will be deemed to be less than 98% of the Closing Sale Price of the Common Stock on such Date multiplied by the then current Conversion Rate.

 

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

 

“ Trust Officer ” means, with respect to the Trustee, any officer assigned to the Corporate Trust Office and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

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

 

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

 

Section 1.02 .  Other Definitions.

 

Term		Defined in Section
“Additional Shares”		4.02(a)
“Agent Members”		2.01(b)
“Bankruptcy Law”		9.01
“Change in Control”		3.01(a)
“Closing Sale Price Condition”		5.01(a)
“Company Order”		2.02
“Conversion Agent”		2.03
“Conversion Date”		5.02
“Conversion Notice”		5.02
“Conversion Obligation”		5.02
“Conversion Period”		5.05(a)
“Conversion Price”		5.06

 

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“Custodian”		9.01
“Daily Conversion Value”		5.05(a)
“Daily Settlement Amount”		5.05(a)
“Daily VWAP”		5.05(a)
“DTC”		2.01(a)
“Depositary”		2.01(a)
“Designated Institution”		5.15
“Effective Date”		4.02(a)
“Event of Default”		9.01
“Expiration Date”		5.06(e)
“Expiration Time”		5.06(e)
“Fundamental Change”		3.01(a)
“Fundamental Change Purchase Date”		3.01(a)
“Fundamental Change Purchase Notice”		3.01(c)
“Fundamental Change Purchase Price”		3.01(a)
“Legal Holiday”		13.07
“Instrument”		9.01(g)
“Interest Payment Date”		4.01(a)
“Make Whole Adjustment Event”		4.02(a)
“Make Whole Adjustment Event Period”		4.02(a)
“Merger Event”		5.12
“Paying Agent”		2.03
“Payment Blockage Notice”		6.02
“Primary Registrar”		2.03
“Principal Portion”		5.05(a)
“Reference Property”		5.12(a)
“Registrar”		2.03
“Record Date”		4.01(a)
“Senior Subordinated Indebtedness”		6.01
“Spin-Off”		5.06(c)
“Stock Price”		4.02(a)
“Subordinated Indebtedness”		6.01
“Termination of Trading”		3.01(a)
“Unissued Shares”		3.01(a)
“Valuation Period”		5.06(c)
“Weighted Average Consideration”		5.12(c)

 

Section 1.03 .  Trust Indenture Act Provisions.

 

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

 

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“indenture securities” means the Securities;

 

“indenture security holder” means a Holder;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Trustee; and “obligor” on the indenture securities means the Company or any other obligor on the Securities.

 

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

 

Section 1.04 .  Rules of Construction.

 

Unless the context otherwise requires:

 

(A)          a term has the meaning assigned to it herein;

 

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

 

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

 

(D)          provisions apply to successive events and transactions;

 

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

 

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

 

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

 

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

 

ARTICLE 2
THE SECURITIES

 

Section 2.01 .  Form and Dating.

 

The Securities and the corresponding Trustee’s certificate of authentication shall be substantially in the respective forms set forth in Exhibit A , which Exhibit is incorporated in and made part of this Indenture.  The Securities may have notations, legends or endorsements

 

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required by law, stock exchange rule or usage.  The Company shall provide any such notations, legends or endorsements to the Trustee in writing.  The Securities shall be dated the date of their authentication.

 

(a)   Global Securities .  Each Security shall be issued initially in the form of one or more Global Securities, which shall be deposited on behalf of the acquirers of the Securities represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the depositary, The Depository Trust Company (“ DTC ”) (such depositary, or any successor thereto, being hereinafter referred to as the “ Depositary ”), and registered in the name of its nominee, Cede & Co., duly executed by the Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Securities Custodian as hereinafter provided, subject in each case to compliance with the Applicable Procedures.

 

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

 

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

 

(c)   Book-Entry Provisions .  The Company shall execute and the Trustee shall, in accordance with this Section 2.01(c) and Section 2.02, authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of Cede & Co. or as otherwise instructed by the Depositary, (ii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instructions and (iii) shall bear legends substantially to the following effect:

 

“THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.

 

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UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO CEPHALON, INC. (THE “ COMPANY ”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.”

 

Section 2.02 .  Execution and Authentication.

 

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

 

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

 

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

 

The Trustee shall authenticate and make available for delivery Securities for original issue in the aggregate principal amount of up to $500,000,000 upon receipt of a written order or orders of the Company signed by two Officers of the Company (a “ Company Order ”); provided that additional Securities may be issued in an unlimited aggregate principal amount so long as such Securities are part of the same issue, within the meaning of Treasury Regulations Sections 1.1275-1(f) and 1.1275-2(k)(2), as the Securities initially issued hereunder, and would be fungible with the Securities issued on the Issue Date for purposes of the Securities Act, the Exchange Act and other applicable U.S. securities laws.  If any additional Securities are issued, the Securities issued on the Issue Date and such additional Securities shall be treated as a single class for all purposes under this Indenture and shall vote together as one class on all matters with

 

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respect to the Securities.  Each Company Order shall specify the amount of Securities to be authenticated and the date on which each original issue of Securities is to be authenticated.

 

The Trustee shall authenticate the Securities issued on the Issue Date.  Thereafter, the Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  An authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent shall have the same rights as the Trustee to deal with the Company or an Affiliate of the Company.

 

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

 

If any successor that has replaced the Company in accordance with Article 8 has executed an indenture supplemental hereto with the Trustee pursuant to Section 5.12, any of the Securities authenticated or delivered prior to such transaction may, from time to time, at the request of such successor, be exchanged for other Securities executed in the name of the such successor with such changes in phraseology and form as may be appropriate, but otherwise identical to the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon receipt of a Company Order of such successor, shall authenticate and deliver Securities as specified in such order for the purpose of such exchange.  If Securities shall at any time be authenticated and delivered in any new name of such successor pursuant to this provision of Section 2.02 in exchange or substitution for or upon registration of transfer of any Securities, such successor, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities then outstanding for Securities authenticated and delivered in such new name.

 

Section 2.03 .  Registrar, Paying Agent and Conversion Agent.

 

The Company shall maintain one or more offices or agencies where Securities may be presented for registration of transfer or for exchange (each, a “ Registrar ”), one or more offices or agencies where Securities may be presented for payment (each, a “ Paying Agent ”), one or more offices or agencies where Securities may be presented for conversion (each, a “ Conversion Agent ”) and one or more offices or agencies where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.  The Company will at all times maintain a Paying Agent, Conversion Agent, Registrar and an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served in the Borough of Manhattan, The City of New York.  One of the Registrars (the “ Primary Registrar ”) shall keep a register of the Securities and of their transfer and exchange.

 

The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture.  The agreement shall implement the provisions of this Indenture that relate to such Agent (including any applicable terms of the TIA).  The Company shall notify the Trustee of the name and address of any Agent not a party to this Indenture.  If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or agent for service of notices and demands in any place required by this Indenture, or fails to give the foregoing notice, the Trustee

 

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shall act as such.  The Company or any Affiliate of the Company may act as Paying Agent (except for the purposes of Section 7.01 and Article 11); provided, that upon any proceeding under any Bankruptcy Law with respect to the Company or any such Affiliate, if the Company or such Affiliate is then acting as Paying Agent, the Trustee shall replace the Company or such Affiliate, as applicable, as Paying Agent.

 

The Company hereby initially designates the Trustee as Paying Agent, Registrar, Custodian and Conversion Agent, and each of the Corporate Trust Office of the Trustee and the office or agency of the Trustee in the Borough of Manhattan, The City of New York (which shall initially be U.S. Bank Trust National Association, an Affiliate of the Trustee), to be such office or agency of the Company for each of the aforesaid purposes.

 

Section 2.04 .  Paying Agent to Hold Money in Trust.

 

Prior to 11:00 a.m., New York City time, on each due date of the principal of or interest, if any, on, any Securities, the Company shall deposit with a Paying Agent a sum sufficient to pay such principal or interest, if any, so becoming due.  Subject to Section 6.02, a Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, and interest, if any, on, the Securities and shall notify the Trustee of any default by the Company (or any other obligor on the Securities) in making any such payment.  If the Company or an Affiliate of the Company acts as Paying Agent, it shall, before 11:00 a.m., New York City time, on each due date of the principal of, or interest, if any, on, any Securities, segregate the money and hold it as a separate trust fund.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee, and the Trustee may at any time during the continuance of any default, upon written request to a Paying Agent, require such Paying Agent to pay forthwith to the Trustee all sums so held in trust by such Paying Agent.  Upon doing so, the Paying Agent (other than the Company) shall have no further liability for the money.

 

Section 2.05 .  Holder Lists.

 

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

 

Section 2.06 .  Transfer and Exchange.

 

(a)                         Subject to compliance with any applicable additional requirements contained in Section 2.12 when a Security is presented to a Registrar with a request to register a transfer thereof or to exchange such Security for an equal principal amount of Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if the requirements for such transactions specified in this Indenture and in the related certificate are met; provided, however , that every Security presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by an assignment

 

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form and, if applicable, a transfer certificate, each in the form included in Exhibit A , and in form satisfactory to the Registrar duly executed by the Holder thereof or its attorney duly authorized in writing.  To permit registration of transfers and exchanges, upon surrender of any Security for transfer or exchange at an office or agency maintained pursuant to Section 2.03, the Company shall execute and the Trustee shall authenticate Securities of a like aggregate principal amount at the Registrar’s request.  Any exchange or transfer shall be without charge, except that the Company or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto; provided that this sentence shall not apply to any exchange pursuant to Section 2.10, 3.04, 5.02 (third paragraph) or 12.05.

 

None of the Company, any Registrar or the Trustee shall be required to exchange or register a transfer of any Securities or portions thereof in respect of which a Fundamental Change Purchase Notice has been delivered and not withdrawn by the Holder thereof (except, in the case of the purchase of a Security in part, the portion thereof not to be purchased).

 

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

 

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

 

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

 

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

 

Section 2.07 .  Replacement Securities.

 

If any mutilated Security is surrendered to the Company, a Registrar or the Trustee, or the Company, a Registrar and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the Company, the applicable Registrar and the Trustee such security or indemnity as will be required by them to save each of them harmless, then, in the absence of notice to the Company, such Registrar or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute, and upon its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated

 

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Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

 

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

 

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

 

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

 

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

 

Section 2.08 .  Outstanding Securities.

 

Securities outstanding at any time are all Securities authenticated by the Trustee, except for those canceled by it, those converted pursuant to Article 5, those delivered to it for cancellation or surrendered for transfer or exchange and those described in this Section 2.08 as not outstanding.

 

If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Company receives, subsequent to the new Security’s authentication, proof satisfactory to the Company that the replaced Security is held by a bona fide purchaser.

 

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

 

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

 

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Section 2.09 .  Treasury Securities.

 

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

 

Section 2.10 .  Temporary Securities.

 

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

 

Section 2.11 .  Cancellation.

 

The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar, the Paying Agent and the Conversion Agent shall forward to the Trustee or its agent any Securities surrendered to them for transfer, exchange, payment or conversion.  The Trustee and no one else shall cancel, in accordance with its standard procedures, all Securities surrendered for transfer, exchange, payment, conversion or cancellation and shall deliver the canceled Securities to the Company.  No Security shall be authenticated in exchange for any Security cancelled pursuant to this Section 2.11.

 

The Company may, to the extent permitted by law, purchase Securities in the open market or by tender offer at any price or by private agreement.  Any Securities purchased or otherwise acquired by the Company or any of its Subsidiaries prior to the Final Maturity Date may, to the extent permitted by law, be reissued or resold or may, at the option of the Company, be surrendered to the Trustee for cancellation.  Any Securities surrendered for cancellation may not be reissued or resold and shall be promptly cancelled by the Trustee, and the Company may not hold or resell such Securities or issue any new Securities to replace any such Securities or any Securities that any Holder has converted pursuant to Article 5.

 

Section 2.12 .  Additional Transfer Requirements.

 

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

 

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such Security has been registered in the name of such Person.  Notwithstanding any other provisions of this Indenture or the Securities, transfers of a Global Security, in whole or in part, shall be made only in accordance with this Section 2.12.

 

(b)                        The provisions of clauses (i) through (v) below shall apply only to Global Securities:

 

(i)                        Notwithstanding any other provisions of this Indenture or the Securities, a Global Security shall not be exchanged in whole or in part for a Security registered in the name of any Person other than the Depositary or one or more nominees thereof; provided that a Global Security may be exchanged for Securities registered in the names of any person designated by the Depositary in the event that (A) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or such Depositary has ceased to be a “clearing agency” registered under the Exchange Act, and a successor Depositary is not appointed by the Company within 90 days, (B) the Company has provided the Depositary with written notice that it has decided to discontinue use of the system of book-entry transfer through the Depositary or any successor Depositary or (C) an Event of Default has occurred and is continuing with respect to the Securities.  Any Global Security exchanged pursuant to clause (A) or (B) above shall be so exchanged in whole and not in part, and any Global Security exchanged pursuant to clause (C) above may be exchanged in whole or from time to time in part as directed by the Depositary.  Any Security issued in exchange for a Global Security or any portion thereof shall be a Global Security; provided that any such Security so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a Global Security.

 

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

 

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

 

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(iv)                 In the event of the occurrence of any of the events specified in clause (i) above, the Company will promptly make available to the Trustee a reasonable supply of Certificated Securities in definitive, fully registered form, without interest coupons.  If (A) an event described in Section 2.12(b)(i)(A) or (B) occurs and definitive Certificated Securities are not issued promptly to all beneficial owners or (B) the Registrar receives from a beneficial owner instructions to obtain definitive Certificated Securities due to an event described in Section 2.12(b)(i)(C) and definitive Certificated Securities are not issued promptly to any such beneficial owner, the Company expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 9.06 hereof, the right of any beneficial owner of Securities to pursue such remedy with respect to the portion of the Global Security that represents such beneficial owner’s Securities as if such definitive certificated Securities had been issued.

 

(v)                    Notwithstanding any provision to the contrary in this Indenture, so long as a Global Security remains outstanding and is held by or on behalf of the Depositary, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in accordance with Section 2.06, this Section 2.12 and the rules and procedures of the Depositary for such Global Security to the extent applicable to such transaction and as in effect from time to time.

 

Section 2.13 .  CUSIP Numbers.

 

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

 

ARTICLE 3
PURCHASES OF SECURITIES UPON FUNDAMENTAL CHANGE

 

Section 3.01 .  Purchase of Securities at Option of the Holder Upon Fundamental Change.

 

(a)                         If at any time that Securities remain outstanding there shall occur a Fundamental Change, Securities shall be purchased by the Company at the option of the Holders, as of a date, determined by the Company in its sole discretion, that is not less than 20 Business Days and not more than 30 Business Days after the occurrence of the Fundamental Change (the “ Fundamental Change Purchase Date ”) at a purchase price equal to 100% of the principal amount of the Securities to be purchased, together with any accrued and unpaid interest to, but excluding, the Fundamental Change Purchase Date (the “ Fundamental Change Purchase

 

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Price ”), unless the Fundamental Change Purchase Date is after a Record Date and on or prior to the related Interest Payment Date, in which case interest accrued to the Interest Payment Date will be paid to Holders of the Securities as of the preceding Record Date and the Fundamental Change Purchase Price payable to any Holder surrendering such Holder’s Security for purchase pursuant to this Article 3 shall be equal to the principal amount of Securities subject to purchase and will not include any accrued and unpaid interest.  The Fundamental Change Purchase Price shall be payable in cash, subject to satisfaction by or on behalf of any Holder of the requirements set forth in subsection (c) of this Section 3.01.  Notwithstanding the foregoing, the Company may not repurchase the Securities upon the occurrence of a Fundamental Change if the principal amount of the Securities has been accelerated and such acceleration has not been rescinded on or prior to the Fundamental Change Purchase Date.

 

A “ Fundamental Change ” shall mean the occurrence of a Change in Control or a Termination of Trading.

 

A “ Change in Control ” shall be deemed to have occurred if any of the following occurs after the date hereof:

 

(i)                        any “person” or “group” (as such terms are defined below) is or becomes the “beneficial owner” (as defined below), directly or indirectly, of shares of Voting Stock of the Company representing 50% or more of the total voting power of all outstanding classes of Voting Stock of the Company or has the power, directly or indirectly, to elect a majority of the members of the Board of Directors;

 

(ii)                     the Company consolidates with, enters into a binding share exchange with, or merges with or into, another Person or the Company sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of the Company, or any Person consolidates with, or merges with or into, the Company, in any such event other than pursuant to a transaction (A) in which the Persons that “beneficially owned” (as defined below), directly or indirectly, shares of Voting Stock of the Company immediately prior to such transaction “beneficially own” (as defined below), directly or indirectly, shares of Voting Stock of the Company representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving or transferee Person, with such Holders’ proportional voting power immediately after such transaction vis-à-vis each other with respect to the securities they receive in such transaction being in substantially the same proportions as their respective voting power vis-à-vis each other immediately prior to such transaction, or (B) which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving Person; or

 

(iii)                  the holders of capital stock of the Company approve any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the terms of this Indenture).

 

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For the purpose of the definition of “ Change in Control ”, (i) “person” and “group” have the meanings given such terms under Section 13(d) and 14(d) of the Exchange Act or any successor provision to either of the foregoing, and the term “group” includes any group acting for the purpose of acquiring, holding, 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 of this Indenture, except that the number of shares of Voting Stock of the Company shall be deemed to include, in addition to all outstanding shares of Voting Stock of the Company and Unissued Shares deemed to be held by the “person” or “group” (as such terms are defined above) or other Person with respect to which the Change in Control determination is being made, all Unissued Shares deemed to be held by all other Persons, and (iii) the terms “beneficially owned” and “beneficially own” shall have meanings correlative to that of “beneficial owner.”  The term “ Unissued Shares ” means shares of Voting Stock not outstanding that are subject to options, warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of determination of a Change in Control.

 

Notwithstanding anything to the contrary set forth in this Section 3.01, Holders shall not have the right to require the Company to purchase any Securities under clauses (i) and (ii) above, and the Company shall not be required to deliver a written notice of a Fundamental Change incidental thereto as a result of any acquisition, consolidation, merger or binding share exchange or a sale, assignment, conveyance, transfer, lease or other disposition if at least 90% of the consideration (excluding cash payments for fractional shares and cash payments pursuant to dissenters’ appraisal rights) paid for the Common Stock in such transaction or transactions 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 which will be so traded immediately following the transaction or transactions) and as a result of such transaction or transactions the Securities become convertible into such shares of such common stock.

 

A “ Termination of Trading ” means that the Common Stock or other securities into which the Securities are convertible are not approved for listing the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors).

 

If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following completion of any related Make Whole Adjustment Event Period and any related Fundamental Change Purchase Date, references to the Company in the definitions of “Fundamental Change,” “Change of Control” and “Termination of Trading” above shall apply to such other entity instead.

 

(b)                        Within 10 Business Days after the occurrence of a Fundamental Change, the Company shall mail a written notice of the Fundamental Change to the Trustee and to each Holder (and to beneficial owners as required by applicable law).  The Company shall also issue a press release announcing the occurrence of such Fundamental Change (and make such press

 

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release available on the Company’s website).  The notice shall include the form of a Fundamental Change Purchase Notice to be completed by the Holder and shall state:

 

                                       (i)                           briefly, the events causing such Fundamental Change;

 

                                      (ii)                           the effective date of such Fundamental Change;

 

                                     (iii)                           whether the Fundamental Change constitutes a Make Whole Adjustment Event and, if so, the Effective Date of such Make Whole Adjustment Event;

 

                                    (iv)                         briefly, the conversion rights of the Securities, the Conversion Price and any adjustments thereto;

 

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

 

                                    (vi)                         the Fundamental Change Purchase Date;

 

                                   (vii)                         the Fundamental Change Purchase Price;

 

                                  (viii)                         the date by which the Fundamental Change Purchase Notice pursuant to this Section 3.01 must be given;

 

                                    (ix)                           that Securities as to which a Fundamental Change Purchase Notice has been given may be converted into Cash and Common Stock (if any) pursuant to Article 5 of this Indenture only to the extent that the Fundamental Change Purchase Notice has been withdrawn in accordance with the terms of this Indenture;

 

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

 

                                    (xi)                           the procedures for withdrawing a Fundamental Change Purchase Notice, including a form of notice of withdrawal;

 

                                   (xii)                           that the Holder must satisfy the requirements set forth in the Securities in order to convert the Securities; and

 

                                  (xiii)                           the name and address of each Paying Agent and Conversion Agent.

 

If any of the Securities is in the form of a Global Security, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depositary applicable to the repurchase of Global Securities.

 

(c)                         A Holder may exercise its rights specified in subsection (a) of this Section 3.01 upon delivery of a written notice (which shall be in substantially the form included in Exhibit A hereto and which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of Global Securities, may (or, if definitive Certificated Securities have not been issued, shall) be delivered electronically or by

 

21

 

other means in accordance with the Depositary’s customary procedures) of the exercise of such rights (a “ Fundamental Change Purchase Notice ”) to any Paying Agent at any time during the period between the date on which notice is given of the Fundamental Change and the close of business on the second Scheduled Trading Day immediately preceding the Fundamental Change Purchase Date.  The Fundamental Change Purchase Notice must specify the Securities for which the purchase right is being exercised.

 

The delivery of such Security to any Paying Agent (together with all necessary endorsements) at the office of such Paying Agent shall be a condition to the receipt by the Holder of the Fundamental Change Purchase Price therefor.

 

The Company shall purchase from the Holder thereof, pursuant to this Section 3.01, a portion of a Security if the principal amount of such portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to the purchase of all of a Security pursuant to Section 3.01 through Section 3.04 also apply to the purchase of such portion of such Security.

 

Notwithstanding anything herein to the contrary, any Holder delivering to a Paying Agent the Fundamental Change Purchase Notice contemplated by this subsection (c) shall have the right to withdraw such Fundamental Change Purchase Notice in whole or in a portion thereof that is a principal amount of $1,000 or in an integral multiple thereof at any time prior to 5:00 p.m., New York City time, on the second Scheduled Trading Day immediately preceding the Fundamental Change Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.02.

 

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

 

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

 

Section 3.02 .  Effect of Fundamental Change Purchase Notice.

 

Upon receipt by any Paying Agent of the Fundamental Change Purchase Notice specified in Section 3.01(c), the Holder of the Security in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn as specified below) thereafter be entitled to receive the Fundamental Change Purchase Price with respect to such Security.  Such Fundamental Change Purchase Price shall be paid to such Holder promptly following the later of (a) the Fundamental Change Purchase Date with respect to such Security ( provided the conditions in Section 3.01(c) have been satisfied) and (b) the time of delivery of such Security to a Paying Agent by the Holder thereof in the manner required by Section 3.01(c).  Securities in respect of which a Fundamental Change Purchase Notice has been given by the Holder thereof may not be converted into shares of Common Stock pursuant to Article 5 on or after the date of the delivery of such Fundamental Change Purchase Notice unless such Fundamental Change Purchase Notice has first been validly withdrawn.

 

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A Fundamental Change Purchase Notice may be withdrawn by means of a written notice (which may be delivered by mail, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of Global Securities, may be delivered electronically or by other means in accordance with the Depositary’s customary procedures) of withdrawal delivered by the Holder to a Paying Agent at any time prior to 5:00 p.m., New York City time, on the second Scheduled Trading Day immediately preceding the Fundamental Change Purchase Date, specifying the principal amount of the Security or portion thereof (which must be a principal amount of $1,000 or an integral multiple of $1,000 in excess thereof) with respect to which such notice of withdrawal is being submitted.

 

Section 3.03 .  Deposit of Fundamental Change Purchase Price.

 

On or before 11:00 a.m., New York City time, on the Fundamental Change Purchase Date, the Company shall deposit with the Trustee or with a Paying Agent (other than the Company or an Affiliate of the Company) an amount of money (in immediately available funds if deposited on such Fundamental Change Purchase Date) sufficient to pay the aggregate Fundamental Change Purchase Price of all the Securities or portions thereof that are to be purchased as of such Fundamental Change Purchase Date.  The manner in which the deposit required by this Section 3.03 is made by the Company shall be at the option of the Company; provided that such deposit shall be made in a manner such that the Trustee or a Paying Agent shall have immediately available funds on the Fundamental Change Purchase Date.

 

If a Paying Agent holds, in accordance with the terms hereof, money sufficient to pay the Fundamental Change Purchase Price of any Security for which a Fundamental Change Purchase Notice has been tendered and not withdrawn in accordance with this Indenture, then, on the Fundamental Change Purchase Date, (i) such Security will cease to be outstanding and interest will cease to accrue (whether or not book-entry transfer of such Security is made or whether or not such Security is delivered to the Paying Agent) and (ii) all other rights of the Holder in respect thereof shall terminate (other than the right to receive the Fundamental Change Purchase Price and previously accrued and unpaid interest as aforesaid).  The Company shall publicly announce the principal amount of Securities purchased as a result of such Fundamental Change on or as soon as practicable after the Fundamental Change Purchase Date.

 

To the extent that the aggregate amount of cash deposited by the Company pursuant to this Section 3.03 exceeds the aggregate Fundamental Change Purchase Price of the Securities or portions thereof that the Company is obligated to purchase, then promptly after the Fundamental Change Purchase Date the Trustee or a Paying Agent, as the case may be, shall return any such excess cash to the Company.

 

Section 3.04 .  Securities Purchased in Part.

 

Any Security that is to be purchased only in part shall be surrendered at the office of a Paying Agent, and promptly after the Fundamental Change Purchase Date the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of such authorized denomination or denominations

 

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as may be requested by such Holder, in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered that is not purchased.

 

Section 3.05 .  Compliance with Securities Laws Upon Purchase of Securities.

 

In connection with any offer to purchase or repurchase Securities under Section 3.01, the Company shall (a) comply with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act, to the extent any such rules are applicable, (b) file a Schedule TO (or any successor or similar schedule, form or report), if required, under the Exchange Act and (c) otherwise comply with all federal and state securities laws in connection with such offer to purchase or repurchase Securities, all so as to permit the rights of the Holders and obligations of the Company under Section 3.01 through Section 3.04 to be exercised in the time and in the manner specified therein.

 

ARTICLE 4
PAYMENT OF INTEREST AND MAKE WHOLE ADJUSTMENT EVENTS

 

Section 4.01 . Interest Payments

 

(a)                         The Company shall pay interest on the Securities at a rate of 2.50% per annum, payable semi-annually in arrears on May 1 and November 1 of each year (each, an “ Interest Payment Date ”), or if any such day is not a Business Day, the immediately following Business Day, commencing November 1, 2009.  Interest on a Security shall be paid to the Holder of such Security at the close of business on April 15 or October 15 (each, a “ Record Date ”), as the case may be, next preceding the related Interest Payment Date, and shall be computed on the basis of a 360-day year comprised of twelve 30-day months.  In the event of the maturity, conversion, or purchase of a Security by the Company at the option of the Holder, interest shall cease to accrue on such Security.  The Company shall pay interest on the Final Maturity Date to Holders of record of a Security on the Record Date immediately preceding the Final Maturity Date regardless of whether such Holders convert their Securities.

 

(b)                        Upon conversion of a Security, (i) a Holder shall not receive any cash payment of interest (unless such conversion occurs between a Record Date and the Interest Payment Date to which it relates, in which case a Holder that was the Holder on the Record Date will receive on the Interest Payment Date accrued and unpaid interest) and the Conversion Rate shall not be adjusted to account for accrued and unpaid interest and (ii) except as set forth in clause (c) below, the Company’s delivery to a Holder of cash and shares, if any, of Common Stock into which the Security is convertible shall be deemed to satisfy its obligation to pay the principal amount of such Security and accrued and unpaid interest, if any, to but not including the Conversion Date with respect to such Security.  Any accrued but unpaid interest shall be deemed to be paid in full upon conversion, rather than cancelled, extinguished or forfeited.

 

(c)                         Securities surrendered for conversion by a Holder after the close of business on any Record Date but prior to the next Interest Payment Date must be accompanied by payment of an

 

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amount equal to the interest that will be payable on the Securities so converted on such Record Date; provided , however, that no such payment need be made (1) if the Company has specified a Fundamental Change Purchase Date that is after a Record Date and on or prior to the corresponding Interest Payment Date, (2) with respect to any Securities surrendered for conversion following the Record Date for the payment of interest immediately preceding the Final Maturity Date or (3) only to the extent of overdue interest, if any overdue interest exists at the time of conversion with respect to such Securities.

 

Section 4.02 .  Increased Conversion Rate Applicable to Certain Securities Surrendered in Connection with Make Whole Adjustment Events.

 

(a)                         Notwithstanding anything herein to the contrary, in the event a Holder elects to surrender its Securities for conversion in accordance with Article 5, at any time from, and including, the Effective Date of a Make Whole Adjustment Event to, and including, the close of business on the second Scheduled Trading Day immediately preceding the related purchase date, or (in the case of a Make Whole Adjustment Event that does not also constitute a Fundamental Change) the 35th Scheduled Trading Day immediately following the Effective Date of such Make Whole Adjustment Event (such period, the “ Make Whole Adjustment Event Period ”), the Company will increase the Conversion Rate for the Securities surrendered for conversion by a number of additional shares of Common Stock (the “ Additional Shares ”), as described in this Section 4.02.

 

As used herein, a “ Make Whole Adjustment Event ” means (i) any Change in Control and (ii) any Termination of Trading; provided , however , that an acquisition, consolidation, merger or binding share exchange or a sale, assignment, conveyance, transfer, lease or other disposition otherwise constituting a Change in Control will not constitute a Make Whole Adjustment Event if at least 90% of the consideration (excluding cash payments for fractional shares and cash payments pursuant to dissenters’ appraisal rights) paid for the Common Stock in such transaction or transactions 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 which will be so traded immediately following the transaction or transactions) and as a result of such transaction or transactions the Securities become convertible into such shares of such common stock.

 

The number of Additional Shares by which the Conversion Rate shall be increased for conversions in connection with a Make Whole Adjustment Event shall be determined by reference to the table below and is based on the date on which the Make Whole Adjustment Event occurs or becomes effective (the “ Effective Date ”) and  (1) the price paid or deemed paid per share of Common Stock in the Change in Control in the case of a Make Whole Adjustment Event described in clause (ii) of the definition of Change in Control in Section 3.01, in the event that the Common Stock is acquired for cash, or (2) the average of the Closing Sale Prices of the Common Stock over the five consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of such other Make Whole Adjustment Event, in the case of any other Make Whole Adjustment Event (such amount determined under the first and second clause of this sentence, as applicable, the “ Stock Price ”).

 

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Effective		Stock Price
Date		$60.00		$61.00		$62.00		$63.00		$65.00		$70.00		$75.00		$80.00		$90.00		$100.00		$125.00		$150.00		$175.00		$200.00		$250.00
May 27, 2009		2.1700		2.0931		2.0147		1.9404		1.8019		1.5086		1.2749		1.0864		0.8055		0.6108		0.3256		0.1807		0.0991		0.0507		0.0000
May 1, 2010		2.1700		2.1700		2.0835		2.0000		1.8459		1.5215		1.2670		1.0646		0.7695		0.5710		0.2928		0.1582		0.0848		0.0420		0.0000
May 1, 2011		2.1700		2.1700		2.1468		2.0508		1.8738		1.5070		1.2245		1.0051		0.6956		0.4973		0.2385		0.1238		0.0641		0.0300		0.0000
May 1, 2012		2.1700		2.1700		2.1589		2.0460		1.8393		1.4180		1.1035		0.8674		0.5532		0.3684		0.1576		0.0780		0.0389		0.0166		0.0000
May 1, 2013		2.1700		2.0966		1.9527		1.8182		1.5754		1.0985		0.7658		0.5361		0.2714		0.1483		0.0514		0.0263		0.0131		0.0042		0.0000
May 1, 2014		2.1700		1.8974		1.6331		1.3771		0.8888		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000		0.0000

 

If the exact Stock Prices and Effective Dates are not set forth in the table, then:  (i) if the Stock Price is between two Stock Price amounts in the table or the Effective Date is between two Effective Dates in the table, the Additional Shares to be issued upon conversion of the Securities shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Price amounts and the two Effective Dates in the table, based on a 365-day year; (ii) if the Stock Price exceeds $250.00 per share, subject to adjustment as set forth herein, no Additional Shares shall be issued upon conversion of the Securities; and (iii) if the Stock Price is less than $60.00 per share, subject to adjustment as set forth herein, no Additional Shares shall be issued upon conversion of the Securities.

 

Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable upon conversion exceed 16.66 shares per $1,000 principal amount of Securities, subject to adjustments for the same events for which the Conversion Rate is adjusted and pursuant to the same adjustment factor applied in such Conversion Rate adjustment pursuant to Section 5.06.

 

The Company shall deliver the additional conversion consideration payable pursuant to this Section 4.02 after the Effective Date of the applicable Make Whole Adjustment Event, notwithstanding that the Settlement Date in respect of other conversion consideration payable by the Company may occur earlier.  The Company shall deliver the portion of the conversion consideration payable on account of the increase in the Conversion Rate as soon as practicable, but in no event later than the third Business Day after the later of:  (i) the date a Holder surrenders its Security for conversion; (ii) the last Trading Day in the applicable Conversion Period; and (iii) the Effective Date of the Make Whole Adjustment Event.

 

As soon as practicable after the Company determines the anticipated Effective Date of any proposed Make Whole Adjustment Event, the Company shall mail to each Holder, the Trustee and the Conversion Agent written notice of, and shall use commercially reasonable efforts to give such notice not more than 70 Scheduled Trading Days nor less than 35 Scheduled Trading Days in advance of such anticipated Effective Date.  The Company shall also issue a press release announcing the anticipated Effective Date (and make such press release available on the Company’s website).  Each such notice and press release shall also state that in

 

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connection with such Make Whole Adjustment Event, the Company shall increase, in accordance herewith, the Conversion Rate applicable to Securities entitled to such increase as provided herein (along with a description of how such increase shall be calculated and the time periods during which Securities must be surrendered in order to be entitled to such increase).

 

Section 4.03 .  Adjustments Relating to Make Whole Adjustment Event.

 

Whenever the Conversion Price shall be adjusted from time to time by the Company pursuant to Section 5.06, each Stock Price set forth in the table under the row titled “Stock Price” in the table in Section 4.02(a) shall be adjusted in the same manner in which, at the same time and for the same events for which, the Conversion Price is to be so adjusted.  The Stock Prices in the table in Section 4.02(a) will be adjusted by the same adjustment factor applied to the Conversion Price pursuant to Section 5.06 and the number of additional shares by which the Conversion Rate will be increased will be adjusted by the inverse of that adjustment factor.

 

ARTICLE 5
CONVERSION

 

Section 5.01 .  Conversion Privilege.

 

(a)                         Subject to the further provisions of this Article 5 and paragraph 6 of the Securities, a Holder of a Security may convert the principal amount of such Security (or any portion thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof) into cash and shares of Common Stock any time until the close of business on November 1, 2013, at the Conversion Price then in effect, if, during any calendar quarter commencing after September 30, 2009, the Closing Sale Price of the Common Stock, for at least 20 Trading Days in the period of 30 consecutive Trading Days ending on the last Trading Day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the Conversion Price per share of Common Stock in effect on such last Trading Day (the “ Closing Sale Price Condition ”), subject to the additional exceptions provided in Section 5.01(b).

 

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

 

A Security in respect of which a Holder has delivered a Fundamental Change Purchase Notice pursuant to Section 3.01(c) exercising the option of such Holder to require the Company to purchase such Security may be converted only if such Fundamental Change Purchase Notice is withdrawn by a written notice of withdrawal delivered to a Paying Agent prior to 5:00 p.m., New York City time, on the second Scheduled Trading Day immediately preceding the Fundamental Change Purchase Date in accordance with Section 3.02.

 

A Holder of Securities is not entitled to any rights of a holder of Common Stock until such Holder has converted its Securities and only to the extent such Securities are deemed to have been converted into Common Stock pursuant to this Article 5.

 

(b)                        Even if the Closing Sale Price Condition is not satisfied,

 

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(i)                                      if, after any five consecutive Trading Day period in which the Trading Price for the Securities for each such Trading Day was less than 98% of the Closing Sale Price of the Common Stock on such date multiplied by the then current Conversion Rate, a Holder may surrender Securities for conversion at any time during the following 10 Trading Days.  Upon request by the Trustee or any Holder or beneficial owner of the Securities, the Conversion Agent shall, on behalf of the Company, determine if the Securities are convertible pursuant to this Section 5.01(b)(i) and will notify the Company and the Trustee accordingly.  The Conversion Agent shall have no obligation to determine the Trading Price of the Securities unless the Company requests such determination in writing, the Company has no obligation to make such request unless the Trustee provides the Company with reasonable evidence that the Trading Price of the Securities on any Trading Day would be less than 98% of the product of the then-current Conversion Rate times the Closing Sale Price of the Common Stock on such date, and the Trustee has no obligation to provide such evidence unless directed by the Company or a Holder.  At such time, the Company shall instruct the Conversion Agent to determine the Trading Price of the Securities beginning on such Trading Day and on each of the next four Trading Days;

 

(ii)                                   in the event that the Company declares a dividend or distribution to all or substantially all holders of Common Stock of:

 

(A)                           any rights, options or warrants entitling them to subscribe for or purchase, for a period expiring within 60 days, shares of Common Stock at a price per share less than the Closing Sale Price on the record date for such dividend or distribution, or

 

(B)                             cash, debt securities (or other evidences of indebtedness) or other assets (excluding dividends or distributions for which Conversion Price adjustment is required to be made under Section 5.06(a) or Section 5.06(b) of this Indenture), where the fair market value of such dividend or distribution per share of Common Stock, as determined in this Indenture, together with all other such dividends or distributions within the preceding twelve months, has a per share value exceeding 10% of the Closing Sale Price of the Common Stock as of the Trading Day immediately preceding the date of declaration for such dividend or distribution,

 

then the Securities may be surrendered for conversion beginning on the date the Company gives notice to the Holders of such right, which notice shall be given not less than 35 Scheduled Trading Days prior to the Ex-Dividend Date for such dividend or distribution, until the earlier of the close of business on the Business Day prior to the Ex-Dividend Date or until the Company announces that such distribution will not take place;

 

(iii)                                upon the occurrence of a Fundamental Change with respect to the Company, the Securities may be surrendered for conversion at any time from or after the

 

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effective time of the Fundamental Change until the close of business on the second Scheduled Trading Day immediately preceding the related Fundamental Change Purchase Date, or, if there is no such Fundamental Change Purchase Date, the 35th Scheduled Trading Day immediately following the effective date of the Fundamental Change;

 

(iv)                               if the Company is a party to a consolidation, merger or binding share exchange or a sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of its property and assets that does not also constitute a Fundamental Change (including any event that would be a Fundamental Change but for the existence of an exception specified in the paragraph immediately preceding the definition of “Termination of Trading” in Section 3.01 hereof), in each case pursuant to which the Common Stock would be converted into cash, securities or other property, the Securities may be surrendered conversion at any time from or after the effective date of such transaction as announced by the Company (with the Company using commercially reasonable efforts to give such announcement at least 35 Scheduled Trading Days prior to such anticipated effective date), until the close of business on the 35th Scheduled Trading Day following the effective date of such transaction; and

 

(v)                                  at any time after November 1, 2013 and until the close of business on the second Scheduled Trading Day immediately prior to the Final Maturity Date, the Securities may be surrendered for conversion regardless of whether any of the foregoing conditions has been satisfied.

 

Section 5.02 .  Conversion Procedure.

 

The right to convert any Security may be exercised, (a) if such Security is represented by a Global Security, by book-entry transfer to the Conversion Agent (which initially shall be the Trustee) through the facilities of the Depositary in accordance with the Applicable Procedures, and, if required, by payment of any tax or duty, in accordance with Section 5.04, that may be payable in respect of any transfer involving the issue or delivery of the Common Stock in the name of Person other than the Holder of the Security, or (b) if such Security is represented by a Certificated Security, by delivery of such Security at the specified office of the Conversion Agent, accompanied by:  (i) a completed and duly signed conversion notice, in the form as set forth on the reverse of Security attached hereto as Exhibit A (a “ Conversion Notice ”); (ii) if such Certificated Security has been lost, stolen, destroyed or mutilated, a notice to the Conversion Agent in accordance with Section 2.07 regarding the loss, theft, destruction or mutilation of the Security; (iii) appropriate endorsements and transfer documents if required by the Conversion Agent; and (iv) payment of any tax or duty, in accordance with Section 5.04, which may be payable in respect of any transfer involving the issue or delivery of the Common Stock in the name of a Person other than the Holder of the Security.  The “ Conversion Date ” shall be the Business Day on which the Holder satisfies all of the requirements set forth in the immediately preceding sentence; provided , however , if a Holder surrenders for conversion a Security at any time after the 30th Scheduled Trading Day prior to the Final Maturity Date, the Conversion Date shall be deemed to be the 30th Trading Day immediately preceding such

 

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Security’s Final Maturity Date.  On the third Business Day following the last day of the related Conversion Period, subject to Section 5.05, the Company shall deliver to the Holder through a Conversion Agent a certificate for the number of whole shares of Common Stock issuable upon the conversion and cash in an amount payable upon conversion (including cash in lieu of any fractional shares pursuant to Section 5.03).

 

The person in whose name the Common Stock certificate is registered shall be deemed to be a stockholder of record as of the last Trading Day of the related Conversion Period; provided , however , that if the related Conversion Date or such last Trading Day of the Conversion Period occurs on any date when the stock transfer books of the Company shall be closed, such occurrence shall not be effective to constitute the person or persons entitled to receive any such shares of Common Stock due upon conversion as the record holder or holders of such shares of Common Stock on such date, but such occurrence shall be effective to constitute the person or persons entitled to receive such shares of Common Stock as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open.  Upon conversion of Securities, such person shall no longer be a Holder.

 

Upon surrender of a Security that is converted in part, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder, a new Security equal in principal amount to the unconverted portion of the Security surrendered.

 

No Conversion Notice with respect to any Securities may be given by a Holder thereof if such Holder has also delivered a Fundamental Change Purchase Notice to the Company in respect of such Securities and not validly withdrawn such Fundamental Change Purchase Notice in accordance with Section 3.01, unless the Company defaults in the payment of the Fundamental Change Purchase Price.

 

Except as provided below, the Company shall pay or deliver the cash and shares of Common Stock, if any, payable or deliverable, as the case may be, upon conversion of a Security (the “ Conversion Obligation ”), through the Conversion Agent on the third Business Day immediately following the last Trading Day of the Conversion Period; provided , that if prior to the relevant Conversion Date, the Common Stock has been replaced by Reference Property consisting solely of cash, pursuant to Section 5.12, the Company shall pay such cash on the third Trading Day immediately following the relevant Conversion Date.  Notwithstanding the foregoing, if any information required to calculate the Conversion Obligation is not available as of the applicable Settlement Date, the Company will deliver the Conversion Obligation on the third Trading Day after the earliest Trading Day on which such calculation can be made (but in no event later than October 31, 2014).  If application of the provisions described above would result in settlement of a conversion during the 10 Trading Days immediately following the effective date of a Fundamental Change, settlement will instead take place on the 10th Trading Day following the relevant effective date. If any shares of Common Stock are due to a converting Holder, the Company 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 number of full shares of Common Stock to which such Holder shall be entitled in satisfaction of such Conversion Obligation.

 

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Section 5.03 .  Fractional Shares.

 

The Company will not issue fractional shares of Common Stock upon conversion of a Security.  Instead, the Company will pay cash in lieu of fractional shares by multiplying the Daily VWAP of a full share of Common Stock on the last Trading Day of such Conversion Period by the fractional amount and rounding the product to the nearest whole cent.  Whether fractional shares are issuable upon a conversion will be determined on the basis of the aggregate principal amount of Securities that the Holder is then converting into cash and shares of Common Stock, if any, and the aggregate number of shares, if any, of Common Stock issuable upon such conversion.

 

Section 5.04 .  Taxes on Conversion.

 

If a Holder converts a Security, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon such conversion; provided , however , that the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name.  The Conversion Agent may refuse to deliver the certificate representing the Common Stock being issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the Holder’s name.  Nothing herein shall preclude any tax withholding required by law or regulation.

 

Section 5.05 .  Settlement Upon Conversion.

 

(a)                         Subject to Section 5.01, a Holder upon conversion will receive, in respect of each $1,000 aggregate principal amount of such Holder’s Securities being converted, cash in an amount equal to the sum of the Principal Portions for each Trading Day during the relevant Conversion Period.  In addition, if the Daily Conversion Value exceeds $40.00 on any Trading Day during the relevant Conversion Period, the Company will also deliver shares of Common Stock in an amount equal to (i) the excess of the Daily Conversion Value over $40.00 divided by (ii) the Daily VWAP of the Common Stock on such Trading Day.

 

“ Conversion Period ”, with respect to any Security, means the 25 consecutive Trading Day period beginning on and including the third Trading Day immediately following the related Conversion Date, except that if a Holder surrenders a Security for conversion at any time after the 30th Scheduled Trading Day prior to the Final Maturity Date and until the close of business on the second Scheduled Trading Day immediately preceding the Final Maturity Date, then (i) the Holder will be deemed to have surrendered such Security as of the 30th Trading Day immediately preceding the Final Maturity Date, (ii) the Conversion Period for such Security will commence on the 27th Trading Day immediately preceding the Final Maturity Date, and (iii) the Settlement Date for the conversion of such Security will be the Final Maturity Date (assuming no delay in settlement due to Market Disruption Events).

 

“ Daily Conversion Value ” means, for each of the 25 consecutive Trading Days during the Conversion Period, for each $1,000 aggregate principal amount of Securities, one-twenty-

 

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fifth (1/25th) of the product of (i) the applicable Conversion Rate and (ii) the Daily VWAP of the Common Stock (or other Reference Property, if applicable) on such Trading Day.

 

“ Daily Settlement Amount, ” for each of the 25 consecutive Trading Days during the relevant Conversion Period, for each $1,000 aggregate principal amount of Securities will consist of:

 

(i)                                      cash equal to the lesser of (a) $40.00 and (b) the Daily Conversion Value for such Trading Day (the amount determined pursuant to this clause (i) being the “ Principal Portion ”); and

 

(ii)                                   to the extent the Daily Conversion Value exceeds $40.00, a number of shares of Common Stock equal to (a) the difference between the Daily Conversion Value and $40.00, divided by (b) the Daily VWAP of the Common Stock for such Trading Day.

 

“ Daily VW