3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

Exhibit 4.13

 

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.,

as Issuer

THE SUBSIDIARY GUARANTORS PARTY HERETO,

as Guarantors

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

Indenture

DATED AS OF [    ], 2009

 

3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

 

TABLE OF CONTENTS

 

 

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INDENTURE, dated as of [    ], 2009, among American Medical Systems Holdings, Inc., a corporation duly organized and existing under the laws of the State of Delaware, as Issuer (the “ Company ”), having its principal office at 10700 Bren Road West, Minnetonka, Minnesota 55343, the Subsidiary Guarantors (as defined herein) and U.S. Bank National Association, a national banking association organized and existing under the laws of the United States, as Trustee (the “ Trustee ”).

RECITALS OF THE COMPANY

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of [ · ]% Convertible Senior Subordinated Notes due 2041 in aggregate amount not to exceed $250,000,000 (each a “ Security ” and collectively, the “ Securities ”) of the terms, tenor, amount and other provisions hereinafter set forth, and, to provide therefor, has duly authorized the execution and delivery of this Indenture; and

WHEREAS, the Subsidiary Guarantors have agreed to provide certain Guarantees (as defined herein) of the Securities, having the terms, tenor, amount and other provisions hereinafter set forth and, to provide therefor, each Subsidiary Guarantor has duly authorized the execution and delivery of this Indenture; and

WHEREAS, the Securities, the certificate of authentication to be borne by the Securities, a form of guarantee, a form of assignment, a form of option to elect repayment upon a Fundamental Change (as defined herein), a form of option to elect repayment on a Repurchase Date (as defined herein), a form of conversion notice and certificate of transfer to be borne by the Securities are to be substantially in the forms hereinafter provided for; and

WHEREAS, all acts and things necessary to make the Securities, when executed by the Company and authenticated and delivered by the Trustee or other authorized agent, as provided in this Indenture, the valid, binding and legal obligations of the Company, and all acts and things necessary to make the Guarantees, when executed by the Subsidiary Guarantors and delivered hereunder, as in this Indenture provided, the valid, binding and legal obligation of the Subsidiary Guarantors, and to make this Indenture a valid agreement of the Company and the Subsidiary Guarantees, in accordance with the terms of the Securities, the Subsidiary Guarantees and the Indenture, have been done and performed, and the execution of this Indenture and the issue hereunder of the Securities and the Subsidiary Guarantees have in all respects been duly authorized.

THIS INDENTURE WITNESSETH, for and in consideration of the premises and the exchange of the Securities for the Company’s 3.25% Convertible Senior Subordinated Notes due 2036 (the “ Existing Securities ”) pursuant to the exchange offer as set forth in the Final Prospectus (as defined herein), it is mutually covenanted and agreed, for the equal and proportionate benefit of the Holders (as defined herein) of the Securities as follows:

 

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ARTICLE 1

D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION

Section 1.01 . Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(i) the terms defined in this Article 1 have the meanings assigned to them in this Article 1 and include the plural as well as the singular;

(ii) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(iii) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; and

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

“ Act ,” when used with respect to any Holder, has the meaning specified in Section 1.04.

“ Additional Interest ” means all amounts, if any, payable pursuant to Section 12.03 hereof.

“ Additional Shares ” has the meaning specified in Section 11.06.

“ Adjustment Determination Date ” has the meaning specified in Section 11.03(j).

“ Adjustment Event ” has the meaning specified in Section 11.03(j).

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

 

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“ Agent Members ” has the meaning specified in Section 3.08.

“ AMS ” means American Medical Systems, Inc., a Delaware corporation and a wholly-owned Subsidiary of the Company.

“ Bid Solicitation Agent ” means an independent nationally recognized securities dealer selected by the Company to solicit market bid quotations for the Securities, which shall in no event be an Affiliate of the Company. The Trustee shall initially be the Bid Solicitation Agent.

“ Board of Directors ” means, with respect to any Person, either the board of directors of such Person or any duly authorized committee of that board.

“ Board Resolution ” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“ Business Day ” means any day other than a Saturday, a Sunday, a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

“ Capital Stock ” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock and, with respect to partnerships, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.

“Code” means the Internal Revenue Code of 1986, as amended.

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

“ Common Stock ” means the shares of common stock, par value $0.01 per share, of the Company as they exist on the date of this Indenture or any other shares of Capital Stock of the Company into which the Common Stock shall be reclassified or changed or, in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, common equity interests, ordinary shares or depositary shares or other certificates representing common equity interests of such surviving corporation or its direct or indirect parent corporation.

 

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“ Company ” has the meaning specified in the Recitals to this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

“ Company Request ” or “ Company Order ” means a written request or order signed in the name of the Company by any Officer of the Company, and delivered to the Trustee.

“ Contingent Debt Regulations ” has the meaning specified in Section 7.13.

“ Contingent Interest ” has the meaning specified in Section 4.02(a).

“ Conversion Agent ” means the Trustee or such other office or agency designated by the Company where Securities may be presented for conversion.

“ Conversion Date ” has the meaning specified in Section 11.02(e).

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

“ Conversion Rate ” has the meaning specified in Section 11.01(a).

“ Conversion Value ” means, at any date, the product of (i) the Conversion Rate in effect on such date and (ii) the average of the Volume-Weighted Average Prices of the Common Stock for the five consecutive Trading Days ending on the Trading Day immediately preceding the such date. In calculating the Conversion Value of any Security, the principal amount of such Security shall be multiplied by the Conversion Value calculated in the preceding sentence and divided by $1,000.

“ Corporate Trust Office ” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Indenture, located at U.S. Bank National Association, [633 West 5 ^th Street, 24 ^th Floor, Los Angeles, California 90071], Attention: [Corporate Trust Services], and shall mean for purposes of Section 7.02, U.S. Bank National Association, [ · ], Attention: [Bondholder Communications Dept.]

“ Corporation ” means a corporation, association, company, joint-stock company or business trust.

“ Credit Agreement ” means the Credit and Guaranty Agreement entered into on July 20, 2006 by and among AMS, as borrower, each of the Company’s majority-owned direct domestic subsidiaries and the Company, as Guarantors,

 

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CIT Healthcare LLC, as agent, and certain lenders from time to time party thereto, as amended on October 29, 2007 and August 12, 2009, and any amendment, modification, renewal, extension, or refinancing of such Credit and Guaranty Agreement; provided that such amended, modified, renewed, extended, or refinanced Credit and Guaranty Agreement is (i) an unsubordinated credit facility with a group of institutional lenders and (ii) contains restrictions on conversion of the Securities (including, without limitation, the provision by the Company for the cash payment upon conversion of the Securities), which restrictions shall not be materially less favorable to the Holders than the terms of the Credit and Guaranty agreement as initially entered into.

“ Daily Conversion Value ” has the meaning specified in Section 11.02(a).

“ Daily Settlement Amount ” has the meaning specified in Section 11.02(a).

“ Default ” means any event that is or with the passage of time or the giving of notice or both would become an Event of Default.

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

“ Domestic Subsidiary ” means any Subsidiary of the Company or any of the Company’s Subsidiaries that is organized and existing under the laws of the United States of America or any state thereof or the District of Columbia.

“ Event of Default ” has the meaning specified in Section 12.01.

“ Ex-Dividend Date ” means, with respect to any dividend, distribution or issuance on the Common Stock or any other equity security, the first date on which the shares of Common Stock or such other equity security trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution.

“ Existing Securities ” has the meaning specified in the Recitals to this Indenture.

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended.

“ Final Prospectus ” means the final prospectus dated August 14, 2009, relating to the Securities and filed by the Company with the SEC pursuant to Rule 424(b) promulgated under the Securities Act on 14, 2009.

 

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“ Fundamental Change ” shall mean the occurrence of any of the following:

(i) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, its Subsidiaries and the Company’s and its Subsidiaries’ employee benefit plans files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Common Stock representing more than 50% of the voting power of all shares of the Company’s common equity; or

(ii) consummation of any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any person other than the Company or one of its Subsidiaries; provided, however, that a transaction (A) that does not result in a reclassification, conversion, exchange or cancellation of the outstanding Common Stock (provided, however, that this subclause (A) shall not apply to any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Subsidiaries), or (B) that is effected solely to change the Company’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity or (C) pursuant to which the holders of all classes of the Company’s common equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event shall, in each case, not be deemed a Fundamental Change;

(iii) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company;

(iv) the Common Stock or other common stock into which the Securities are convertible cease to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors).

Notwithstanding the foregoing, a Fundamental Change as a result of clause (i) or (ii) above will not be deemed to have occurred if at least 90% of the consideration received or to be received by holders of Common Stock

 

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(excluding cash payments for fractional shares) in connection with the transaction or transactions constituting the Fundamental Change consists of shares of common stock that are listed or traded on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions the Securities become convertible into such consideration, excluding cash payments for fractional shares (subject to Section 11.02).

“ Fundamental Change Company Notice ” has the meaning specified in Section 9.01(b).

“ Fundamental Change Repurchase Date ” has the meaning specified in Section 9.01(a).

“ Fundamental Change Repurchase Notice ” has the meaning specified in Section 9.01(a).

“ Fundamental Change Repurchase Price ” has the meaning specified in Section 9.01(a).

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

“ Global Security ” means a Security in global form registered in the Security Register in the name of a Depositary or a nominee thereof.

“ Guarantee ” means any obligation, contingent or otherwise, of any Person guaranteeing in any manner any indebtedness of any other Person. The term “ Guarantee ” used as a verb has a corresponding meaning. The term “ Guarantor ” shall mean any Person guaranteeing any obligation.

“ Holder ” means a Person in whose name a Security is registered in the Security Register.

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

 

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“ Initial Conversion Rate ” has the meaning specified in Section 11.03.

“ Initial Conversion Value ” means [ · ]

“ Interest ” means (i) Regular Interest, (ii) Contingent Interest, if any, and (iii) Additional Interest, if any.

“ Interest Payment Date ” means, with respect to any payment of Interest, each March 15 and September 15 of each year, beginning March 15, 2010.

“ Investment Company Act ” means the Investment Company Act of 1940 and any statutory successor thereto, in each case as amended from time to time.

“ Issue Date ” means the date the Securities are originally issued as set forth on the face of the Security under this Indenture.

“ Junior Securities ” has the meaning specified in Section 5.08.

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

“ Majority Owned ” means, with respect to an entity, that another entity has “beneficial ownership” (as defined in Rule 13(d)(3) under the Exchange Act) of more than 50% of the total voting power of all shares of the first entity’s Capital Stock that are entitled to vote generally in the election of directors. “ Majority Owner ” has the correlative meaning.

“ Make-Whole Effective Date ” has the meaning specified in Section 11.06(b).

 

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“ Make-Whole Fundamental Change ” means any transaction or event that constitutes a Fundamental Change (determined after giving effect to any exceptions or exclusions to such definition, but without regard to subclause (C) in the proviso in clause (ii) of the definition thereof).

“ Market Disruption Event ” means (i) a failure by the primary United States national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.

“ Maturity, ” when used with respect to any Security, means the date on which the principal, Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity, on a Redemption Date, Fundamental Change Repurchase Date or Repurchase Date, by declaration of acceleration or otherwise.

“ Measurement Period ” has the meaning specified in Section 11.02(a)(ii).

“ Net Tangible Assets ” means, as of any date of determination, the sum of the amounts that would appear on a consolidated balance sheet of the Company and its Domestic Subsidiaries as the total assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) after giving effect to purchase accounting and after deducting therefrom, current liabilities and, to the extent otherwise included in the determination of Net Tangible Assets, the amounts of (without duplication): (a) the excess of cost over fair market value of assets or businesses acquired; (b) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization, research and developmental expenses and other intangible items; (c) minority interests in Domestic Subsidiaries held, directly or indirectly, by persons other than the Company; (d) treasury stock; (e) cash or securities set aside and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock to the extent such obligation is not reflected in current liabilities; and (f) the value of any Capital Stock of any foreign Subsidiary of the Company.

“ New Subsidiary Guarantor ” has the meaning specified in Section 6.06.

“ Non-Payment Default ” has the meaning specified in Section 5.02(b).

 

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“ Notice of Conversion ” has the meaning specified in Section 11.02(d).

“ Notice of Default ” has the meaning specified in Section 12.01.

“ Observation Period ” means, with respect to any Security surrendered for conversion, (i) if the relevant Conversion Date occurs on or after the date of issuance of a Notice of Redemption pursuant to Section 8.03, but prior to the relevant Redemption Date, the 20 consecutive Trading Days beginning on and including the third Scheduled Trading Day after such Redemption Date; (ii) if the relevant Conversion Date occurs during the 60 days prior to, but excluding, September 15, 2016 or September 15, 2041, the 20 consecutive Trading Days beginning on and including the third Scheduled Trading Day after September 15, 2016 or September 15, 2041, as applicable; and (iii) in all other instances, the 20 consecutive Trading Days beginning on and including the third Scheduled Trading Day after the relevant Conversion Date.

“ Officer ” means the Chairman or any Co-Chairman of the Board of Directors, any Vice Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary, or any Assistant Secretary of the Company or any of the Subsidiary Guarantors, as the case may be.

“ Officers’ Certificate ” means a certificate signed on behalf of the Company or a Subsidiary Guarantor, as the case may be, by two Officers thereof, and delivered to the Trustee. One of the Officers signing an Officers’ Certificate given pursuant to Section 7.05 shall be the principal executive, financial or accounting officer of the Company or such Subsidiary Guarantor, as the case may be.

“ Opinion of Counsel ” means a written opinion of counsel, who may be external or in-house counsel for the Company, and who shall be reasonably acceptable to the Trustee.

“ Outstanding ,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or accepted by the Trustee for cancellation;

(ii) Securities, or portions thereof, for whose payment, redemption or repurchase money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such

 

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Securities; provided that if such Securities are to be redeemed or repurchased prior to the maturity thereof, notice of such redemption or repurchase shall have been given to the Holders as herein provided, or provision satisfactory to a Responsible Officer of the Trustee shall have been made for giving such notice; and

(iii) Securities that have been paid or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture;

provided, however, that, in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company, any Subsidiary Guarantor or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company, any Subsidiary Guarantor or any other obligor upon the Securities or any Affiliate of the Company, any Subsidiary Guarantor or of such other obligor.

“ Paying Agent ” means any Person (including the Company) authorized by the Company to pay the principal amount of, Interest on or Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of, any Securities on behalf of the Company. The Trustee shall initially be the Paying Agent.

“ Payment Blockage Notice ” has the meaning specified in Section 5.02(b).

“ Payment Default ” has the meaning specified in Section 5.02(a).

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

“ Physical Securities ” means permanent certificated Securities in registered form issued in denominations of $1,000 principal amount and multiples thereof.

 

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“ Record Date ” means, with respect to any payment of Interest, the close of business on each March 1 and September 1, as the case may be, immediately preceding the relevant Interest Payment Date (whether or not a Business Day).

“ Regular Interest ” has the meaning specified in Section 4.01(a).

“ Redemption Date ” shall mean the date specified for redemption of the Securities in accordance with the terms of the Securities and Article 8 hereof.

“ Redemption Price ” has the meaning specified in Section 8.01.

“ Repurchase Date ” has the meaning specified in Section 10.01(a).

“ Repurchase Election Notice ” has the meaning specified in Section 10.01(b).

“ Repurchase Notice ” has the meaning specified in Section 10.01(b).

“ Repurchase Notice Date ” has the meaning specified in Section 10.01(b).

“ Repurchase Price ” has the meaning specified in Section 10.01(a).

“ Reference Property ” has the meaning specified in Section 11.07(a).

“ Representative ” means the (i) indenture trustee or other trustee, agent or representative for any Senior Debt or (ii) with respect to any Senior Debt that does not have any such trustee, agent or other representative, (1) in the case of such Senior Debt issued pursuant to an agreement providing for voting arrangements as among the holders or owners of such Senior Debt, any holder or owner of such Senior Debt acting with the consent of the required Persons necessary to bind such holders or owners of such Senior Debt and (2) in the case of all other such Senior Debt, the holder or owner of such Senior Debt.

“ Responsible Officer ” means any officer of the Trustee within the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer of the Trustee to whom such matter is referred because of such officer’s knowledge and familiarity with the particular subject.

“ Scheduled Trading Day ” means a day that is scheduled to be a Trading Day on the primary United States national securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “ Scheduled Trading Day ” shall mean a Business Day.

 

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

“ Security ” or “ Securities ” has the meaning specified in the Recitals to this Indenture, and includes any Security or Securities, as the case may be, authenticated and delivered under this Indenture, including any Global Security.

“ Security Register ” and “ Security Registrar ” have the respective meanings specified in Section 3.05. The Trustee shall initially be the Security Registrar.

“ Senior Debt ” means, with respect to the Company, the principal of, premium, if any, interest on, including any interest accruing after the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowed as a claim in the proceeding, or termination payment with respect to or in connection with, and all fees, costs, expenses and other amounts accrued or due on or under, the Credit Agreement and any Guarantees thereof (including by any pledge, lien or security interest of collateral with respect thereto), as such facility may be amended, modified or supplemented from time to time, including any deferrals, renewals, extensions, refinancings or refundings thereof.

“ Settlement Amount ” has the meaning specified in Section 11.02(a).

“ Spin-Off ” has the meaning specified in Section 11.03(c).

“ Stated Maturity ,” when used with respect to any Security, means the date specified in such Security as the fixed date on which an amount equal to the principal amount of such Security together with accrued and unpaid Interest, if any, is due and payable.

“ Stock Price ” means, with respect to the Common Stock in connection with a Make-Whole Fundamental Change, (i) if holders of Common Stock receive only cash in a Make-Whole Fundamental Changed described in clause (ii) of the definition of Fundamental Change, the cash amount paid per share of Common Stock and (ii) if holders of Common Stock receive any consideration other than cash in such Make-Whole Fundamental Change, the average of the Last Reported Sales Price of the Common Stock over the five Trading Day period ending on, and including, the Trading Day immediately preceding the effective date of such Make-Whole Fundamental Change.

“ Stock Transfer Agent ” means [Wells Fargo Bank, National Association] or such other Person as may be designated by the Company as the transfer agent for the Common Stock.

 

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“ Subsidiary ” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“ Subsidiary Guarantees ” means Guarantees of the Company’s obligations under this Indenture and the Securities by the Subsidiary Guarantors in accordance with the provisions of this Indenture.

“ Subsidiary Guarantors ” means AMS, AMS Sales Corporation, AMS Research Corporation and Laserscope and each other Person that guarantees the Company’s obligations hereunder and under the Securities pursuant to Article 6 hereof and/or who executes a supplemental indenture to this Indenture providing for a Subsidiary Guarantee.

“ Surviving Entity ” has the meaning specified in Section 13.01.

“ Tax Triggering Event ” means the enactment of U.S. federal legislation, promulgation of Treasury regulations, issuance of a published ruling, notice, announcement or equivalent form of guidance by the Treasury or the Internal Revenue Service, or the issuance of a judicial decision if the Company determines, or receives an opinion of its outside counsel to the effect that, any such authority will have the effect of lowering the comparable yield or delaying or otherwise limiting the current deductibility of interest or original issue discount with respect to the Securities, provided that the Company determines that such reduction, delay, or limitation is material.

“ Trading Day ” means a day on which (i) trading of the Common Stock generally occurs on The NASDAQ Global Select Market, or if the Common Stock is not then listed on The NASDAQ Global Select Market on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then traded, or (ii) a Last Reported Sale Price for the Common Stock is available on such securities exchange or market. If the Common Stock (or other security for which the closing sale price must be determined) is not so listed or traded, “Trading Day” means any Business Day.

“ Trading Price ” of the Securities on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of Securities obtained by the Bid Solicitation Agent (or for purposes of Section 4.02, the Trustee) for $5,000,000 principal amount of Securities at approximately 3:30 p.m., New York

 

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City time, on such determination date from three independent nationally recognized securities dealers that are selected by the Company; provided that if at least three such bids cannot reasonably be obtained by the Bid Solicitation Agent (or for purposes of Section 4.02, the Trustee), but two such bids can reasonably be obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained, that one bid shall be used. For purposes of Section 4.02, if the Trustee cannot reasonably obtain at least one such bid for $5,000,000 principal amount of Securities from a Bid Solicitation Agent selected by the Company or, in the reasonable judgment of the Company’s Board of Directors, the bid quotations are not indicative of the secondary market value of the Securities, the Trading Price per $1,000 principal amount of the Securities will be determined by the Company’s Board of Directors based on a good faith estimate of the fair value of the Securities.

“ Trading Price Condition ” has the meaning specified in Section 11.02(a)(ii).

“ Trust Indenture Act ” means the Trust Indenture Act of 1939 as in effect on the date as of which this Indenture was executed; provided, however , that in the event the Trust Indenture Act of 1939 is amended after such date, “ Trust Indenture Act ” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“ Trustee ” has the meaning specified in the Recital of this Agreement until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Trustee ” shall mean such successor Trustee.

“ Upside Trigger ” means $1,300 per $1,000 principal amount of Securities.

“ 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.”

“ Valuation Period ” has the meaning specified in 11.03(c).

“ Volume-Weighted Average Price ” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “AMMD.UQ <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The Volume-Weighted Average Price will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

 

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Section 1.02 . Compliance Certificates and Opinions. Upon any application or request by the Company or a Subsidiary Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or such Subsidiary Guarantor, as applicable, shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 1.03 . Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates

 

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to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or a Subsidiary Guarantor, as applicable, stating that the information with respect to such factual matters is in the possession of the Company or a Subsidiary Guarantor, as applicable, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.04 . Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as an “ Act ” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 14.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.04.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee reasonably deems sufficient.

(c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the

 

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case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 15.01) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

(d) The ownership of Securities shall be proved by the Security Register.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

Section 1.05 . Notices, Etc., to Trustee, Company and Subsidiary Guarantors. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

(i) the Trustee by any Holder, by the Company or by any Subsidiary Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including facsimile) to or with the Trustee at its applicable Corporate Trust Office; or

(ii) the Company or any Subsidiary Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing (including facsimile) and mailed, first-class postage prepaid, to the Company addressed to it or such Subsidiary Guarantor at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company or such Subsidiary Guarantor, Attention: Secretary.

Section 1.06 . Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at such Holder’s address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where

 

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

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

Whenever under this Indenture the Trustee is required to provide any notice by mail, in all cases the Trustee may alternatively provide notice by overnight courier or by facsimile, with confirmation of transmission.

Section 1.07 . Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required hereunder to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section 1.08 . Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof, and all Article and Section references are to Articles and Sections, respectively, of this Indenture unless otherwise expressly stated.

Section 1.09 . Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 1.10 . Severability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11 . Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their respective successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

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Section 1.12 . Governing Law; Waiver of Jury Trial. This Indenture, the Securities and the Subsidiary Guarantees, and any claim, controversy, or dispute arising under or related to this Indenture, the Securities and the Subsidiary Guarantees, shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof. EACH OF THE COMPANY, EACH SUBSIDIARY GUARANTOR AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES, THE SUBSIDIARY GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 1.13 . Legal Holiday. In any case where the Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or the Securities) payment of principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on at the Stated Maturity. If any Interest Payment Date, the Stated Maturity or any earlier Fundamental Change Repurchase Date of a Security falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no Interest on such payment will accrue in respect of the delay.

Section 1.14 . No Recourse Against Others. None of the Company’s, any of the Subsidiary Guarantors’ or any of their respective successor entity’s, direct or indirect stockholders, employees, officers or directors, as such, past, present or future, shall have any personal liability in respect of the obligations of the Company under the Indenture, the Securities or the Subsidiary Guarantees solely by reason of his, her or its status as such stockholder, employee, officer or director.

Section 1.15. Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

Section 1.16. U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that

 

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establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

Section 1.17. Execution in Counterparts . This Indenture may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or Portable Document Format (“PDF”) transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 1.18 . Calculations. Except as otherwise provided herein, the Company or its agents (other than the Trustee) will be responsible for making all calculations and determinations called for under the Indenture and the Securities. The Company or its agents (other than the Trustee) will make all such calculations and determinations in good faith and, absent manifest error, its calculations and determinations will be final and binding on Holders. The Company upon request will provide a schedule of its calculations to the Trustee, and the Trustee is entitled to rely conclusively upon the accuracy of the Company’s calculations and determinations without independent verification. The Trustee will deliver a copy of such schedule to any Holder upon the written request of such Holder.

Section 1.19 . Qualification Under the Trust Indenture Act. The Company shall qualify this Indenture under the Trust Indenture Act and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Company, the Trustee and the Holders) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Securities and the printing of this Indenture and the Securities.

ARTICLE 2

S ECURITY F ORMS

Section 2.01 . Forms Generally. The Securities and the Trustee’s certificates of authentication shall be in substantially the forms set forth in this Article 2, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor, the Code and regulations thereunder, or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. Each Security shall include the Subsidiary Guarantee in the form of Exhibit A attached hereto, executed by the Subsidiary Guarantors existing on the date of issuance of such Note, the terms of which Exhibit are incorporated in and made a part of this Indenture.

 

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The Securities shall initially be issued in the form of permanent Global Securities in registered form in substantially the form set forth in this Article 2. 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 Trustee, as custodian for the Depositary, as hereinafter provided.

[IF SECURITY IS A GLOBAL SECURITY — UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED

 

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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 IN AS MUCH THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

[ INCLUDE IN ALL SECURITIES — THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN INDENTURE DATED AS OF EVEN DATE HEREWITH, BY AND AMONG AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., AS ISSUER, THE SUBSIDIARY GUARANTORS PARTY THERETO, AS GUARANTORS, AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AND EACH HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INDENTURE, INCLUDING WITHOUT LIMITATION, THE SUBORDINATION TERMS THEREIN.]

 

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[ · ]% Convertible Senior Subordinated Notes due 2041

No.                                  CUSIP NO.                                  U.S. $                     

American Medical Systems Holdings, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the “ Company ”), which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [ · ] ($[ · ]) (which amount may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, in accordance with the rules and procedures of the Depositary) on September 15, 2041. Payment of the principal of this Security shall be made by check mailed to the address of the Holder of this Security specified in the register of Securities, or, at the option of the Company, by wire transfer in immediately available funds, in such lawful money of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

The issue date of this Security is [    ], 2009.

Reference is made to the further provisions of this Security set forth on the reverse hereof, including, without limitation, provisions giving the Company the right to redeem this Security under certain circumstances and provisions giving the Holder the right to convert this Security into Common Stock of the Company and to require the Company to repurchase this Security upon certain events on at certain date, in each case, on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture.

The Subsidiary Guarantors that are parties to the Indenture, and their successors under the Indenture, have jointly and severally, fully and unconditionally, guaranteed the payment of principal of and interest on the Securities, subject to the subordination provisions and other terms and conditions set forth in the Indenture.

Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Capitalized terms used but not defined herein shall have such meanings as are ascribed to such terms in the Indenture.

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

This Security shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

 

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

 

 

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Section 2.03. Form of Reverse of Security.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

[ · ]% Convertible Senior Subordinated Notes due 2041

This Security is one of a duly authorized issue of Securities of the Company, designated as its [ · ]% Convertible Senior Subordinated Notes due 2041 (the “ Securities ”), all issued or to be issued under and pursuant to an Indenture dated as of [    ], 2009 (the “ Indenture ”), among the Company, the Subsidiary Guarantors and U.S. Bank National Association (the “ Trustee ”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company, the Subsidiary Guarantors and the Holders of the Securities.

Interest . The Securities will bear Regular Interest at a rate of [ · ]% per year, payable semiannually in arrears on March 15 and September 15 of each year beginning on March 15, 2010. In addition to Regular Interest, the Securities will also bear Contingent Interest commencing on March 15, 2017, during any semiannual interest period in which the average trading price of the Securities for the five Trading Day period immediately preceding the first day of such semiannual period is greater than or equal to $1,300 per $1,000 principal amount of the Securities, at a rate of 0.75% of such trading price per annum. Pursuant to Section 12.03 of the Indenture, in certain circumstances, the Holders shall be entitled to receive Additional Interest.

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

Subsidiary Guarantees . The Company’s obligations under the Securities are fully and unconditionally guaranteed, jointly and severally, by the Subsidiary Guarantors as such Subsidiary Guarantors may change from time to time in accordance with the terms of the Indenture (including, without limitation, the subordination terms and conditions set forth in Article 5 of the Indenture).

Redemption at the Option of the Company . No sinking fund is provided for the Securities. The Securities are redeemable as a whole, or from time to time in part, (i) at any time commencing on September 15, 2016 at the option of the Company if the Last Reported Sale Price of the Common Stock has been greater than or equal to 130% of Conversion Price

 

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then in effect for at least 20 Trading Days (whether or not consecutive) during any 30 consecutive Trading Day period prior to the date on which the Company provides notice of redemption and (ii) on or prior to September 17, 2010, if certain U.S. federal tax legislation, regulations or rules are enacted or are issued. The redemption price (the “ Redemption Price ”) for any such redemption is equal to (a) in the case of a redemption described in clause (i) above, 100%, expressed as a percentage of the principal amount of Securities to be redeemed, together with accrued and unpaid Interest (subject to Section 4.01(c)(ii) of the Indenture) to, but excluding, the Redemption Date and (b) in the case of a redemption described in clause (ii) above, 101.5%, expressed as a percentage of the principal amount of Securities to be redeemed, together with accrued and unpaid Interest (subject to Section 4.01(c)(ii) of the Indenture) to, but excluding, the Redemption Date and, if the Conversion Value of the Securities being redeemed exceeds their Initial Conversion Value, 85% of the amount determined by subtracting the Initial Conversion Value of the Securities being redeemed from their Conversion Value.

Repurchase by the Company at the Option of the Holder Upon a Fundamental Change . Subject to the terms and conditions of the Indenture, the Company shall become obligated, at the option of the Holder, to repurchase the Securities if a Fundamental Change occurs at any time prior to the Stated Maturity at 100% of the principal amount plus accrued and unpaid Interest (subject to Section 4.01(c)(iii) of the Indenture) to, but excluding, the Fundamental Change Repurchase Date (the “ Fundamental Change Repurchase Price ”), which Fundamental Change Repurchase Price will be paid in cash.

Repurchase at the Option of the Holders . The Holders may require the Company to repurchase any outstanding Securities for cash on September 15, 2016 at a purchase price per Security equal to 100% of the aggregate principal amount of the Security, together with any accrued and unpaid interest, (subject to Section 4.01(c)(iv) of the Indenture) to but not including the applicable Repurchase Date.

Withdrawal of Fundamental Change Repurchase Notice and Repurchase Election Notice . Holders have the right to withdraw, in whole or in part, any Fundamental Change Repurchase Notice or Repurchase Election Notice, as the case may be, by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture.

Payment of Redemption Price, Fundamental Change Repurchase Price and Repurchase Price . If cash sufficient to pay the Redemption Price, Fundamental Change Repurchase Price or Repurchase Price, as the case may be, of all Securities or portions thereof to be redeemed or repurchased on a Redemption Date, a Fundamental Change Repurchase Date or Repurchase Date, as the case may be, is deposited with the Paying Agent on the Redemption Date,

 

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the Fundamental Change Repurchase Date or Repurchase Date, as the case may be, such Securities will cease to be outstanding and Interest will cease to accrue on such Securities (or portions thereof) immediately after such Redemption Date, Fundamental Change Repurchase Date or Repurchase Date, as the case may be, and the Holder thereof shall have no other rights as such (other than the right to receive the Redemption Price, Fundamental Change Repurchase Price or Repurchase Price, as the case may be, upon surrender of such Security).

Conversion . Subject to and in compliance with the provisions of the Indenture (including without limitation the conditions of conversion of this Security set forth in Article 11 thereof), the Holder hereof has the right, at its option, to convert the principal amount hereof or any portion of such principal which is $1,000 or a multiple thereof, into, subject to Section 11.01 of the Indenture, cash and shares of Common Stock, if any, at the Conversion Rate. The initial Conversion Rate (the “ Initial Conversion Rate ”) is 51.5318 shares of Common Stock per $1,000 principal amount of Securities, subject to adjustment in certain events described in the Indenture. Upon conversion, the Company shall deliver, for each $1,000 principal amount of Securities being converted, cash and shares of Common Stock, if any, equal to the Settlement Amount in accordance with the Indenture. No fractional shares will be issued upon any conversion, but an adjustment and payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Securities for conversion. Securities in respect of which a Holder is exercising its right to require repurchase on a Fundamental Change Repurchase Date or Repurchase Date may be converted only if such Holder withdraws its election to exercise such right in accordance with the terms of the Indenture.

In the event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer, repurchase or conversion of this Security in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the rules and procedures of the Depositary.

If an Event of Default shall occur and be continuing, the principal amount plus Interest through such date on all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and any Subsidiary Guarantors and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Outstanding Securities, on behalf of the

 

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Holders of all the Securities, to waive compliance by the Company and any Subsidiary Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of any provision of or applicable to this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities, the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity satisfactory to it, the Trustee shall not have received from the Holders of a majority in principal amount of Outstanding Securities a direction inconsistent with such request, and the Trustee shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of the principal amount, Redemption Price, Fundamental Change Repurchase Price hereof on or after the respective due dates expressed herein or to convert the Securities in accordance with Article 11.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal amount, Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of, and Interest on, this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

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The Securities are issuable only in registered form in denominations of $1,000 and any multiple of $1,000 above that amount, as provided in the Indenture and subject to certain limitations therein set forth. Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company and the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and the Security Registrar and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

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

All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

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ASSIGNMENT FORM

If you want to assign this Security, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Security to:

      

      

      

(Print or type name, address and zip code and social security or tax ID number of assignee)

and irrevocably appoint                                                                                                    agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                                

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

31

CONVERSION NOTICE

If you want to convert this Security into Common Stock of the Company, check the box: ¨

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

$                               

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

      

(Insert other person’s social security or tax ID no.)

      

      

      

(Print or type other person’s name, address and zip code)

 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                                

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

32

Form of Fundamental Change Repurchase Notice

                                              ,             

U.S. Bank National Association

[633 West 5 ^th Street, 24 ^th Floor

Los Angeles, California 90071]

Attention: [Corporate Trust Services]

 

Re:

American Medical Services Holdings, Inc. (the “ Company ”)

 

[ · ]% Convertible Senior Subordinated Notes due 2041

This is a Fundamental Change Repurchase Notice as defined in Section 9.01(a) of the Indenture dated as of [    ], 2009 (the “Indenture”) among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to them in the Indenture.

Certificate No(s). of Securities:                                                              

I intend to deliver the following aggregate principal amount of Securities for purchase by the Company pursuant to Section 9.01 of the Indenture (in multiples of $1,000):

$                                                                    

I hereby agree that the Securities will be purchased as of the Fundamental Change Repurchase Date pursuant to the terms and conditions thereof and of the Indenture.

 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                                

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

33

Form of Repurchase Election Notice

                                              ,             

U.S. Bank National Association

[633 West 5 ^th Street, 24 ^th Floor

Los Angeles, California 90071]

Attention: [Corporate Trust Services]

 

Re:

American Medical Services Holdings, Inc. (the “ Company ”)

 

[ · ]% Convertible Senior Subordinated Notes due 2041

This is a Repurchase Election Notice as defined in Section 10.01(b) of the Indenture dated as of [    ], 2009 (the “ Indenture ”) among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to them in the Indenture.

Certificate No(s). of Securities:                                                              

I intend to deliver the following aggregate principal amount of Securities for purchase by the Company pursuant to Section 10.01 of the Indenture (in multiples of $1,000):

$                                                                

I hereby agree that the Securities will be purchased as of the Repurchase Date pursuant to the terms and conditions thereof and of the Indenture.

 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                                

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“ STAMP ”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

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Section 2.04 . Form of Trustee’s Certificate of Authentication. This is one of the Securities referred to in the within-mentioned Indenture.

Dated:                         

 

ARTICLE 3

T HE S ECURITIES

Section 3.01 . Title and Terms; Payments. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is limited to $250,000,000, except for Securities authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 3.04, 3.05, 3.06, 8.06, 9.05, 10.05 or 17.07.

The Securities shall be known and designated as the “[ · ]% Convertible Senior Subordinated Notes due 2041” of the Company. The principal amount shall be payable at the Stated Maturity.

The Securities shall not have the benefit of a sinking fund.

The Securities shall be subordinated to all Senior Debt of the Company.

The principal amount of and Interest on Global Securities registered in the name of The Depository Trust Company or its nominee shall be paid by wire transfer in immediately available funds to The Depository Trust Company or its nominee, as applicable.

The principal amount of Physical Securities shall be payable at the office or agency of the Company maintained for such purpose. Interest on Physical Securities will be payable (i) to Holders having an aggregate principal amount of $2,000,000 or less of Securities, by check mailed to such Holders and (ii) to Holders having an aggregate principal amount of more than $2,000,000 of Securities, either by check mailed to such Holders or, upon application by a Holder to the Security Registrar not later than the relevant Record Date for such Interest payment, by wire transfer in immediately available funds to such Holder’s account within the United States, which application shall remain in effect until the Holder notifies the Security Registrar to the contrary in writing.

 

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Section 3.02 . Denominations. The Securities shall be issuable only in registered form without coupons and in denominations of $1,000 and a multiple of $1,000 above that amount.

Section 3.03 . Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman or Co-Chairman of the Board of Directors, any Vice-Chairman of the Board of Directors, the President or any Vice President.

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities. The Company Order shall specify the amount of Securities to be authenticated, and shall further specify the amount of such Securities to be issued as a Global Security or as Physical Securities. The Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.

Section 3.04 . Temporary Securities. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities; provided , that any such temporary Securities shall bear legends on the face of such Securities as set forth in Section 2.01.

 

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If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 7.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of Physical Securities of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as Physical Securities.

Section 3.05 . Registration; Registration of Transfer and Exchange. (a) The Company shall cause to be kept at the applicable Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 7.02 being herein sometimes collectively referred to as the “ Security Register ”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed Security Registrar (the “ Security Registrar ”) for the purpose of registering Securities and transfers of Securities as herein provided.

Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 7.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount and tenor.

At the option of the Holder and subject to the other provisions of this Section 3.05 and to Section 3.09, Securities may be exchanged for other Securities of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

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

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

 

37

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company and the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04 not involving any transfer.

Neither the Company nor the Security Registrar shall be required to exchange or register a transfer of any Security (i) during the period beginning at the opening of business 15 days before the mailing of a notice of redemption to all Holders of Securities to be redeemed and ending at the close of business on the date on which a notice of redemption is mailed to all Holders of Securities to be redeemed, (ii) after any notice of redemption has been given to Holders, except that where such notice provides that such Security is to be redeemed only in part, the Company and the Security Registrar shall be required to exchange or register a transfer of the portion thereof not to be redeemed, (iii) that has been surrendered for conversion (iv) as to which a Fundamental Change Repurchase Notice has been delivered and not withdrawn, except that where such Fundamental Change Repurchase Notice provides that such Security is to be purchased only in part, the Company and the Security Registrar shall be required to exchange or register a transfer of the portion thereof not to be purchased or (v) as to which a Repurchase Election Notice has been delivered and not withdrawn, except that where such Repurchase Election Notice provides that such Security is to be purchased only in part, the Company and the Security Registrar shall be required to exchange or register a transfer of the portion thereof not to be purchased.

(b) Neither the Trustee, the Security Registrar nor any of their respective agents shall have any 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 3.06 . Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

38

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable or has been called for redemption in full, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section 3.06, the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section 3.06 in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

The provisions of this Section 3.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 3.07 . Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee, the Security Registrar and any agent of the Company, the Trustee or the Security Registrar may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of the principal of such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee, the Security Registrar nor any agent of the Company, the Trustee or the Security Registrar shall be affected by notice to the contrary.

 

39

Section 3.08 . Book-Entry Provisions for Global Securities. (a) The Global Securities initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for the Depositary and (iii) bear legends as set forth on the face of the form of Security in Section 2.01.

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 the Trustee as its custodian, or under the Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of any Holder.

(b) Transfers of the Global Securities shall be limited to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred or exchanged, in whole or in part, for Physical Securities in accordance with the rules and procedures of the Depositary and the provisions of Section 3.09. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in the Global Securities if (A) such Depositary has notified the Company that the Depositary (i) is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act when the Depositary is required to be so registered to act as such Depositary and, in either such case, no successor Depositary shall have been appointed within 90 days of such notification, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Outstanding Securities shall have become due and payable pursuant to Section 12.02 and the Trustee requests that Physical Securities be issued or (C) the Company, at its option, notifies the Trustee that it elects to cause the issuance of Physical Securities, subject to applicable procedures of the Depositary.

(c) In connection with any transfer or exchange of a portion of the beneficial interest in the Global Security to beneficial owners pursuant to paragraph (b) above, the Security Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and amount.

 

40

(d) In connection with the transfer of the entire Global Security to beneficial owners pursuant to paragraph (b) above, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate principal amount of Physical Securities of authorized denominations and the same tenor.

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

Section 3.09 . Cancellation and Transfer Provisions. The Company at any time may deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold. The Trustee shall cancel and dispose of all Securities surrendered for registration of transfer, exchange, payment, purchase, repurchase, redemption, conversion (pursuant to Article 11 hereof) or cancellation in accordance with its customary practices. If the Company shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation. The Company may not issue new Securities to replace Securities it has paid in full or delivered to the Trustee for cancellation.

The Security Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 3.09. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar.

Section 3.10 . CUSIP Numbers. In issuing the Securities, the Company may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption 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 redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

41

ARTICLE 4

I NTEREST

Section 4.01. Generally.

(a) Regular interest (“ Regular Interest ”) shall accrue on the Securities from [                    ], 2009 at a rate of [ · ]% per annum until the principal thereof is paid or made available for payment. Regular Interest shall be payable semiannually in arrears on March 15 and September 15 of each year, commencing March 15, 2010.

(b) Interest on the Securities shall be computed (i) for any full semiannual period for which a particular interest rate (inclusive of any Contingent Interest or Additional Interest payable with respect to the Securities) is applicable, on the basis of a 360-day year of twelve 30-day months and (ii) for any period for which a particular interest rate (inclusive of any Contingent Interest or Additional Interest payable with respect to the Securities) is applicable shorter than a full semiannual period for which interest is calculated, on the basis of a 30-day month and, for such periods of less than a month, the actual number of days elapsed over a 30-day month.

(c) Except as otherwise provided in this Section 4.01(c), a Holder of any Securities at the close of business on a Record Date shall be entitled to receive Interest on such Securities on the corresponding Interest Payment Date.

(i) A Holder of any Securities as of a Record Date that are converted after the close of business on such Record Date and prior to the opening of business on the corresponding Interest Payment Date shall be entitled to receive Interest on the principal amount of such Securities, notwithstanding the conversion of such Securities prior to such Interest Payment Date. However, a Holder that surrenders any Securities for conversion between the close of business on a Record Date and the opening of business on the corresponding Interest Payment Date shall be required to pay the Company an amount equal to the Interest payable by the Company with respect to such Securities on such Interest Payment Date at the time such Holder surrenders such Securities for conversion, provided , however, that this sentence shall not apply to a Holder that converts Securities:

(A) in respect of which the Company has given notice of redemption pursuant to Section 8.03 on a Redemption Date that is after the relevant Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date;

 

42

(B) in respect of which the Company has specified a Fundamental Change Repurchase Date that is after the relevant Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date;

(C) following the Record Date for the payment of Regular Interest on September 15, 2016 or September 15, 2041; or

(D) to the extent of any overdue Interest, if any overdue Interest exists at the time of conversion with respect to the Securities being converted.

Accordingly, a Holder that converts Securities under any of the circumstances described in clauses (A), (B), (C) or (D) above (in the case of clause (D), to the extent that applicable) will not be required to pay to the Company an amount equal to the Interest payable by the Company with respect to such Securities on the relevant Interest Payment Date.

(ii) Notwithstanding any other provision of this Section 4.01(c), any Interest payable on a Redemption Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date shall be payable to the Holder of record on the corresponding Record Date as provided in Section 8.01(b) and shall not be payable to the Holder of the Securities being redeemed. The payment of such Interest to the Holder on the Record Date as provided in Section 8.01(b) shall be deemed to satisfy the Company’s obligations in respect of such Interest.

(iii) Notwithstanding any other provision of this Section 4.01(c), any Interest payable on a Fundamental Change Repurchase Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date shall be payable to the Holder of record on the corresponding Record Date as provided in Section 9.01(a) and shall not be payable to the Holder of the Securities being repurchased. The payment of such Interest to the Holder on the Record Date as provided in Section 9.01(a) shall be deemed to satisfy the Company’s obligations in respect of such Interest.

(iv) Notwithstanding any other provision of this Section 4.01(c), any Interest payable on a Repurchase Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date shall be payable to the Holder of record on the corresponding Record Date as provided in Section 10.01(a) and shall not be payable to the Holder of the Securities being repurchased. The payment of such Interest to the Holder on the Record Date as provided in Section 10.01(a) shall be deemed to satisfy the Company’s obligations in respect of such Interest.

 

43

Section 4.02. Contingent Interest. (a) Contingent interest on the Securities (“ Contingent Interest ”) shall accrue and the Company shall pay such Contingent Interest to the Holders as follows:

(i) beginning with the semiannual interest period commencing September 15, 2016, during any semiannual interest period where the average Trading Price for the five Trading Days immediately preceding the first day of such semiannual period is greater than or equal to the Upside Trigger, in which case the Contingent Interest payable on each $1,000 principal amount for such semiannual period shall be equal to 0.75% per annum of the average Trading Price for the five Trading Days immediately preceding the first day of such semiannual period.

(b) The Company shall have no obligation to determine the Trading Price of the Securities or to request the Trustee to determine the Trading Price of the Securities unless a Holder of Securities provides the Company with reasonable evidence that the Trading Price of the Securities is greater than or equal to the Upside Trigger, at which time the Company shall instruct the Trustee to determine the Trading Price of the Securities beginning on the next Trading Day and on each successive Trading Day until the Trading Price of the Securities is less than the Upside Trigger.

Section 4.03 . Trustee’s Responsibilities in Respect of Contingent Interest. The Trustee’s sole responsibility pursuant to Section 4.02 shall be, upon request of the Company, to obtain the Trading Price of the Securities for each of the five Trading Days immediately preceding the first day of the applicable semiannual interest period and to provide such information to the Company. The Company shall determine whether Holders are entitled to receive Contingent Interest, and if so, provide written notice to the Trustee and issue a press release as required by Section 4.05. Notwithstanding any term contained in this Indenture or any other document to the contrary, the Trustee shall have no responsibilities, duties or obligations for or with respect to (i) determining whether the Company must pay Contingent Interest or (ii) determining the amount of Contingent Interest, if any, payable by the Company.

Section 4.04 . Payment of Contingent Interest. Subject to Section 4.01 hereof, Contingent Interest for any semiannual interest period shall be paid on the applicable Interest Payment Date to the Holder in whose name any Security is registered on the Security Register at the corresponding Record Date. Contingent Interest due under this Article 4 shall be treated for all purposes of this Indenture like any other interest accruing on the Securities.

 

44

Section 4.05. Contingent Interest Notification. By the third Business Day of a semiannual interest period for which Contingent Interest specified in Section 4.02(a)(i) will be paid, the Company will disseminate a press release through Reuters Economic Services and Bloomberg Business News stating that Contingent Interest will be paid on the Securities and identifying such semiannual period as the semiannual period for which such Contingent Interest will be paid.

ARTICLE 5

S UBORDINATION

Section 5.01. Agreement of Subordination. The Company covenants and agrees, and each Holder of Securities issued hereunder by its acceptance thereof likewise covenants and agrees, that all Securities and the Subsidiary Guarantees shall be issued subject to the provisions of this Article 5; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions.

The payment of the principal of and Interest on all Securities (including, but not limited to, the Redemption Price, the Fundamental Change Repurchase Price and the Repurchase Price with respect to the Securities subject to redemption or repurchase in accordance with Articles 8, 9 or 10, as the case may be, and the payment of any cash upon conversion in accordance with Article 11) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full in cash or other payment satisfactory to the holders of all Senior Debt, whether outstanding at the date of this Indenture or thereafter incurred.

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

Section 5.02. Payments to Holders. No payment shall be made with respect to the principal of or Interest on the Securities (including, but not limited to, the Redemption Price, the Fundamental Change Repurchase Price and the Repurchase Price with respect to the Securities subject to redemption or repurchase in accordance with Articles 8, 9 or 10, as the case may be, and any payment of cash upon conversion in accordance with Article 11), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 5.05, if:

(a) a default in the payment of principal, premium, interest or other amounts due on any Senior Debt, or in respect of any redemption or repurchase obligation under any Senior Debt, occurs and is continuing (or, in the case of Senior Debt for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Debt) (a “ Payment Default ”); or

 

45

(b) a default, other than a Payment Default, on any Senior Debt occurs and is continuing that then permits holders of such Senior Debt (or any Representative) to accelerate its maturity (a “ Non-Payment Default ”) and a Responsible Officer of the Trustee receives at the Corporate Trust Office a written notice of the default (a “ Payment Blockage Notice ”) from the Company or a Representative of Senior Debt.

Notwithstanding the foregoing, following the delivery of a Payment Blockage Notice, no new Payment Blockage Notice may be delivered and no new period of payment blockage with respect to the Securities may begin until both (i) 365 consecutive days have elapsed since the Company’s receipt of the first Payment Blockage Notice and (ii) all scheduled payments of principal of and Interest with respect to the Securities that have come due have been paid in full in cash. No default that existed or was continuing on the date of delivery to the Trustee of any Payment Blockage Notice with respect to the Senior Debt whose holders delivered the Payment Blockage Notice may be made the basis of a subsequent Payment Blockage Notice by the holders of such Senior Debt, whether or not within a period of 365 consecutive days.

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

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

(2) in the case of a Non-Payment Default, on the earlier to occur of (A) the date on which such default is cured or waived or otherwise ceases to exist, or (B) 179 days after the date on which the applicable Payment Blockage Notice is received; provided , that if the maturity of such Senior Debt has been accelerated, no payment or distribution may be made on the Securities until such default is cured or waived or such Senior Debt is discharged or paid in full.

Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or liquidation or reorganization of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership or similar proceedings, all amounts due or to become due upon all Senior Debt shall first be paid in full in cash, or other payments satisfactory to the holders of Senior Debt before any payment of cash, property or securities is made on account of the principal of or Interest on, or with respect to the conversion of, the Securities (except, to the extent required by applicable law, payments made

 

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pursuant to Article 16 from monies deposited with the Trustee pursuant thereto prior to commencement of proceedings for such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization of the Company or bankruptcy, insolvency, receivership or other proceeding, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled, except for the provision of this Article 5, shall (except as aforesaid) be paid by the Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Debt (pro rata to such holders on the basis of the respective amounts of Senior Debt held by such holders, or as otherwise required by law or a court order) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Debt may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Debt in full in cash, or other payment satisfactory to the holders of Senior Debt, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt, before any payment or distribution is made to the Holders of the Securities or to the Trustee.

For purposes of this Article 5, the words, “cash, property or securities” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article 5 with respect to the Securities to the payment of all Senior Debt which may at the time be outstanding; provided that (i) the Senior Debt is assumed by the new corporation, if any, resulting from any reorganization or readjustment, and (ii) the rights of the holders of Senior Debt (other than leases which are not assumed by the Company or the new Corporation, as the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance, transfer or lease of all or substantially all its property to another corporation upon the terms and conditions provided for in Article 13 shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 5.02 if such other corporat