EXHIBIT 4.1
HASBRO, INC.
2.75% Convertible Senior Debentures due 2021
Indenture
Dated as of
November 30, 2001
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
Trustee
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions................................................................ 1
Section 1.2 Other Definitions.......................................................... 5
Section 1.3 Incorporation by Reference of Trust Indenture Act.......................... 6
Section 1.4 Rules of Construction...................................................... 6
Section 1.5 Acts of Holders............................................................ 7
ARTICLE II
THE SECURITIES
Section 2.1 Form and Dating............................................................ 8
Section 2.2 Execution and Authentication............................................... 9
Section 2.3 Registrar, Paying Agent and Conversion Agent............................... 10
Section 2.4 Paying Agent to Hold Money and Securities in Trust......................... 10
Section 2.5 Securityholder Lists....................................................... 11
Section 2.6 Transfer and Exchange...................................................... 11
Section 2.7 Replacement Securities..................................................... 12
Section 2.8 Outstanding Securities; Determinations of Holders' Action Securities....... 13
Section 2.9 Temporary Securities....................................................... 14
Section 2.10 Cancellation............................................................... 14
Section 2.11 Persons Deemed Owners...................................................... 14
Section 2.12 Global Securities.......................................................... 14
Section 2.13 CUSIP Numbers.............................................................. 19
Section 2.14 Ranking.................................................................... 19
Section 2.15 Regulation S............................................................... 19
ARTICLE III
REDEMPTION AND PURCHASES
Section 3.1 Company's Right to Redeem; Notices to Trustee.............................. 20
Section 3.2 Selection of Securities to Be Redeemed..................................... 20
Section 3.3 Notice of Redemption....................................................... 20
Section 3.4 Effect of Notice of Redemption............................................. 21
Section 3.5 Deposit of Redemption Price................................................ 21
Section 3.6 Securities Redeemed in Part................................................ 21
Section 3.7 Purchase of Securities by the Company at Option of the Holder.............. 21
Section 3.8 Purchase of Securities at Option of the Holder upon a Fundamental
Change..................................................................... 28
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TABLE OF CONTENTS
(continued)
PAGE
Section 3.9 Effect of Purchase Notice or Fundamental Change Purchase Notice............ 30
Section 3.10 Deposit of Purchase Price or Fundamental Change Purchase Price............. 32
Section 3.11 Securities Purchased in Part............................................... 32
Section 3.12 Covenant to Comply With Securities Laws Upon Purchase of Securities........ 32
Section 3.13 Repayment to the Company................................................... 32
ARTICLE IV
COVENANTS
Section 4.1 Payment of Securities...................................................... 33
Section 4.2 SEC and Other Reports...................................................... 33
Section 4.3 Compliance Certificate..................................................... 33
Section 4.4 Further Instruments and Acts............................................... 33
Section 4.5 Maintenance of Office or Agency............................................ 34
Section 4.6 Delivery of Certain Information............................................ 34
Section 4.7 Calculation of Original Issue Discount..................................... 34
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When Company May Merge or Transfer Assets.................................. 35
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.......................................................... 36
Section 6.2 Acceleration............................................................... 37
Section 6.3 Other Remedies............................................................. 38
Section 6.4 Waiver of Past Defaults.................................................... 38
Section 6.5 Control by Majority........................................................ 38
Section 6.6 Limitation on Suits........................................................ 38
Section 6.7 Rights of Holders to Receive Payment....................................... 39
Section 6.8 Collection Suit by Trustee................................................. 39
Section 6.9 Trustee May File Proofs of Claim........................................... 39
Section 6.10 Priorities................................................................. 40
Section 6.11 Undertaking for Costs...................................................... 40
Section 6.12 Waiver of Stay, Extension or Usury Laws.................................... 40
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TABLE OF CONTENTS
(continued)
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ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee.......................................................... 41
Section 7.2 Rights of Trustee.......................................................... 42
Section 7.3 Individual Rights of Trustee............................................... 43
Section 7.4 Trustee's Disclaimer....................................................... 43
Section 7.5 Notice of Defaults......................................................... 43
Section 7.6 Reports by Trustee to Holders.............................................. 44
Section 7.7 Compensation and Indemnity................................................. 44
Section 7.8 Replacement of Trustee..................................................... 45
Section 7.9 Successor Trustee by Merger................................................ 45
Section 7.10 Eligibility; Disqualification.............................................. 45
Section 7.11 Preferential Collection of Claims Against Company.......................... 46
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.1 Discharge of Liability on Securities....................................... 46
Section 8.2 Repayment to the Company................................................... 46
ARTICLE IX
AMENDMENTS
Section 9.1 Without Consent of Holders................................................. 46
Section 9.2 With Consent of Holders.................................................... 47
Section 9.3 Compliance with Trust Indenture Act........................................ 48
Section 9.4 Revocation and Effect of Consents, Waivers and Actions..................... 48
Section 9.5 Notation on or Exchange of Securities...................................... 48
Section 9.6 Trustee to Sign Supplemental Indentures.................................... 48
Section 9.7 Effect of Supplemental Indentures.......................................... 48
ARTICLE X
CONVERSIONS
Section 10.1 Conversion Privilege....................................................... 49
Section 10.2 Conversion Procedure....................................................... 49
Section 10.3 Fractional Shares.......................................................... 50
Section 10.4 Taxes on Conversion........................................................ 50
Section 10.5 Company to Provide Stock................................................... 51
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Section 10.6 Adjustment for Change in Capital Stock..................................... 51
Section 10.7 Adjustment for Rights Issue................................................ 52
Section 10.8 Adjustment for Other Distributions......................................... 53
Section 10.9 Adjustment for Self Tender Offer........................................... 55
Section 10.10 When Adjustment May Be Deferred............................................ 56
Section 10.11 When No Adjustment Required................................................ 56
Section 10.12 Notice of Adjustment....................................................... 56
Section 10.13 Voluntary Increase......................................................... 57
Section 10.14 Notice of Certain transactions............................................. 57
Section 10.15 Reorganization of Company; Special Distributions........................... 57
Section 10.16 Company Determination Final................................................ 58
Section 10.17 Trustee's Adjustment Disclaimer............................................ 58
Section 10.18 Simultaneous Adjustments................................................... 58
Section 10.19 Successive Adjustments..................................................... 58
Section 10.20 Restriction on Common Stock Issuable Upon Conversion....................... 58
ARTICLE XI
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls............................................... 59
Section 11.2 Notices.................................................................... 59
Section 11.3 Communication by Holders with Other Holders................................ 60
Section 11.4 Certificate and Opinion as to Conditions Precedent......................... 60
Section 11.5 Statements Required in Certificate or Opinion.............................. 61
Section 11.6 Separability Clause........................................................ 61
Section 11.7 Rules by Trustee, Paying Agent, Conversion Agent and Registrar............. 61
Section 11.8 Legal Holidays............................................................. 61
Section 11.9 Governing Law.............................................................. 61
Section 11.10 No Recourse Against Others................................................. 61
Section 11.11 Successors................................................................. 61
Section 11.12 Multiple Originals......................................................... 62
iv
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
310(a)(1)..................................................................7.10
(a)(2) ....................................................................7.10
(a)(3).....................................................................N.A.
(a)(4).....................................................................N.A.
(a)(5).....................................................................N.A.
(b)...................................................................7.8, 7.10
(c)........................................................................N.A.
311(a).....................................................................7.11
(b)........................................................................7.11
(c)........................................................................N.A.
312(a)......................................................................2.5
(b)........................................................................11.3
(c)........................................................................11.3
313(a)......................................................................7.6
(b)(1)......................................................................7.6
(b)(2)......................................................................7.6
(c).........................................................................7.6
(d).........................................................................7.6
314(a).................................................................4.2, 4.3
(b)........................................................................N.A.
(c)(1).....................................................................11.4
(c)(2).....................................................................11.4
(c)(3).....................................................................N.A.
(d)........................................................................N.A.
(e)........................................................................11.5
(f)........................................................................N.A.
315(a)...................................................................7.1(b)
(b).........................................................................7.5
(c) .....................................................................7.1(a)
(d)......................................................................7.1(c)
(e)........................................................................6.11
316(a)(1)(A)................................................................6.5
(a)(1)(B)...................................................................6.4
(a)(2).....................................................................N.A.
(b).........................................................................6.7
(c)......................................................................1.5(e)
317(a)(1)...................................................................6.8
(a)(2)......................................................................6.9
(b).........................................................................2.4
318(a).....................................................................N.A.
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
INDENTURE dated as of November 30, 2001 between HASBRO, INC., a
corporation duly organized and existing under the laws of the State of Rhode
Island ("Company") and THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK, a New
York banking corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 2.75% Convertible
Senior Debentures due 2021:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 DEFINITIONS.
"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 or cause the direction of 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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Board of Directors" means either the board of directors of the Company,
the executive committee of such board or any duly authorized committee of such
board.
"Business Day" means, with respect to any Security, a day that in the
City of New York, is not a day on which banking institutions are authorized by
law or regulation to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"Certificated Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.
"Common Stock" shall mean the shares of common stock, par value $0.50
per share, of the Company existing on the date of this Indenture or any other
shares of Capital Stock of the Company into which such common stock shall be
reclassified or changed.
"Company" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
1
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman, its President, its Chief Operating Officer, its Chief Financial
Officer, or an Executive Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of this Indenture or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
"Corporate Trust Office" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at One Liberty Plaza, New York, New York
10006, Attention: Corporate Trust Administration, or such other address as the
Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means, with respect to any Global Security, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Security (or any successor
securities clearing agency so registered), which shall initially be DTC.
"Global Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and that are issued to a Depositary.
"Holder" or "Securityholder" means a person in whose name a Security is
registered on the Registrar's books.
"Indebtedness" means, without duplication, the principal or face amount
of (i) all obligations for borrowed money, (ii) all obligations evidenced by
debentures, notes or other similar instruments, (iii) all obligations in respect
of letters of credit or bankers acceptances or similar instruments (or
reimbursement obligations with respect thereto), (iv) all obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (v) all obligations as lessee which
are capitalized in accordance with generally accepted accounting principles, and
(vi) all Indebtedness of others guaranteed by the Company or any of its
Subsidiaries or for which the Company or any of its Subsidiaries is legally
responsible or liable (whether by agreement to purchase indebtedness of, or to
supply funds or to invest in, others).
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
2
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Liquidated Damages" has the meaning specified in the Registration
Agreement dated as of November 30, 2001, between the Company and Salomon Smith
Barney Inc.
"Material Subsidiary" means any subsidiary of the Company which at the
date of determination is a "significant subsidiary" as defined in Rule 1-02(w)
of Regulation S-X under the Securities Act and the Exchange Act.
"NYSE" means The New York Stock Exchange.
"Officer" means the Chairman of the Board, the Vice Chairman, the
President, the Chief Operating Officer, the Chief Financial Officer, any
Executive Vice President, any Senior Vice President, any Vice President, the
Controller, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary
"Officers' Certificate" means a written certificate containing the
information specified in Sections 11.4 and 11.5, signed in the name of the
Company by the Chairman of the Board, the Vice Chairman, the President, the
Chief Operating Officer or an Executive Vice President, and by the Chief
Financial Officer, Controller, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. An Officers' Certificate given pursuant to Section 4.3 shall be signed
by an authorized financial or accounting officer of the Company but need not
contain the information specified in Sections 11.4 and 11.5.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 11.4 and 11.5, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Redemption Date" or "redemption date" shall mean the date specified in
a notice of redemption on which the Securities may be redeemed in accordance
with the terms of the Securities and this Indenture.
"Redemption Price" or "redemption price" shall have the meaning set
forth in Paragraph 5 of the Securities.
"Responsible Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust administration division of the Trustee or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
3
"Restricted Common Stock Legend" means the legend labeled as such and
that is set forth in Exhibit C hereto.
"Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A-1 and A-2 of
this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities" means any of the Company's 2.75% Convertible Senior
Debentures due 2021, as amended or supplemented from time to time, issued under
this Indenture.
"Securityholder" or "Holder" means a person in whose name a Security is
registered on the Registrar's books.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Agreement.
"Stated Maturity", when used with respect to any Security, means
December 1, 2021.
"Subsidiary" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"trading day" means a day during which trading in securities generally
occurs on the NYSE or, if the Common Stock is not listed on the NYSE, on the
principal other national or regional securities exchange on which the Common
Stock then is listed or, if the Common Stock is not listed on a national or
regional securities exchange, on the National Association of Securities Dealers
Automated Quotation System or, if the Common Stock is not quoted on the National
Association of Securities Dealers Automated Quotation System, on the principal
other market on which the Common Stock is then traded.
"Trustee" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Vice President," when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
4
"Voting Stock" of a person means Capital Stock of such person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
Section 1.2 OTHER DEFINITIONS.
Term Section: Defined in:
"Accreted Conversion Price".......................................... Exhibit A-1
"Accreted Value"..................................................... Exhibit A-1
"Act"................................................................ 1.5
"Administrative Action".............................................. Exhibit A-1
"Agent Members"...................................................... 2.12(e)
"Average Sale Price"................................................. 10.7
"beneficial owner"................................................... 3.8(a)
"cash"............................................................... 3.7(b)
"Clearstream"........................................................ 2.1(a)
"Company Notice"..................................................... 3.7(e)
"Company Notice Date"................................................ 3.7(c)
"Conversion Agent"................................................... 2.3
"Conversion Date".................................................... 10.2
"Conversion Rate".................................................... 10.1
"Euroclear".......................................................... 2.1(a)
"Event of Default"................................................... 6.1
"Exchange Act"....................................................... 3.7(d)
"Ex-Dividend Time"................................................... 10.1
"Extraordinary Cash Dividend"........................................ 10.8
"Fundamental Change"................................................. 3.8(a)
"Fundamental Change Purchase Date"................................... 3.8(a)
"Fundamental Change Purchase Notice"................................. 3.8(b)
"Fundamental Change Purchase Price".................................. 3.8(a)
"Interest Payment Date".............................................. Exhibit A-1
"Legal Holiday"...................................................... 11.8
"Legend"............................................................. 2.6(f)
"Market Price"....................................................... 3.7(d)
"Notice of Default".................................................. 6.1
"Option Exercise Date"............................................... Exhibit A-1
"Paying Agent"....................................................... 2.3
"Payment Default".................................................... 6.1(6)
"Purchase Date"...................................................... 3.7(a)
"Purchase Notice".................................................... 3.7(a)
"Purchase Price"..................................................... 3.7(a)
"QIB"................................................................ 2.1(a)
"Reference Fixed Rate"............................................... Exhibit A-1
"Registrar".......................................................... 2.3
5
"Regular Record Date"................................................ Exhibit A-1
"Regulation S"....................................................... 2.1(a)
"Reset Rate"......................................................... Exhibit A-1
"Reset Rate Agent"................................................... Exhibit A-1
"Rule 144A".......................................................... 2.1(a)
"Rule 144A Information".............................................. 4.6
"Sale Price"......................................................... 3.7(d)
"Securities Act"..................................................... 3.7(d)
"Tax Event".......................................................... Exhibit A-1
"Time of Determination".............................................. 10.1
"Upward Interest Adjustment"......................................... Exhibit A-1
Section 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.4 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles as in effect in
the United States from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the plural
include the singular.
6
Section 1.5 ACTS OF HOLDERS. (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 the "Act" of 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 conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's 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
deems sufficient.
(c) The ownership of Securities shall be proved by the register for the
Securities.
(d) 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.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a board resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
7
ARTICLE II
THE SECURITIES
Section 2.1 FORM AND DATING. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibits A-1
and A-2, which are a part of this Indenture. To the extent any provisions of the
Securities and this Indenture are in conflict, the provisions of this Indenture
shall control. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage (provided that any such notation,
legend or endorsement required by usage is in a form acceptable to the Company).
The Company shall provide any such notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.
(a) 144A/REGULATION S GLOBAL SECURITIES. The Securities are being
offered and sold (i) in reliance on Regulation S under the Securities Act
("Regulation S") or (ii) to "qualified institutional buyers" as defined in Rule
144A ("QIBs") in reliance on Rule 144A under the Securities Act ("Rule 144A"),
and shall be issued in the form of one or more permanent Global Securities
substantially in the form of Exhibit A-1. Such Global Securities shall be
deposited on behalf of the purchasers of the Securities represented thereby with
the Trustee, as custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary for the accounts of participants in
the Depositary (and, in the case of Securities held in accordance with
Regulation S, registered with the Depositary for the accounts of designated
agents holding on behalf of the Euroclear System ("Euroclear") or Clearstream
Banking, societe anonyme ("Clearstream")), duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of a Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its nominee
as hereinafter provided.
(b) GLOBAL SECURITIES IN GENERAL. Each Global Security shall represent
such of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and conversions.
Any adjustment of the aggregate principal amount of a Global Security to
reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) BOOK-ENTRY PROVISIONS. This Section 2.1(c) shall apply only to
Global Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(c), authenticate and deliver initially one or more Global Securities
that (a) shall be registered in the name of the Depositary, (b) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions and (c) shall bear legends substantially to the following effect:
8
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(d) CERTIFICATED SECURITIES. In the event that the Securities are issued
as Certificated Securities, including pursuant to Section 2.12(a)(ii), such
Securities will be issued substantially in the form of Exhibit A-2 attached
hereto.
Section 2.2 EXECUTION AND AUTHENTICATION. The Securities shall be
executed on behalf of the Company by any Officer. The signature of the Officer
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at the time of the execution of the Securities 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 authentication of
such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
9
The Trustee shall authenticate and deliver the Securities for original
issue in an aggregate principal amount of up to $250,000,000 upon one or more
Company Orders without any further action by the Company. The aggregate
principal amount of the Securities due at the Stated Maturity thereof
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.7 and upon the occurrence of an Upward
Interest Adjustment and a Tax Event as contemplated in the form of Security
attached hereto as Exhibit A-1.
The Securities shall be issued only in registered form without coupons
and only in denominations of $1,000 of principal amount (or the related Accreted
Value if a Tax Event has occurred) and any integral multiple thereof.
Section 2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 4.5. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.5.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (that is not also the
Trustee). The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.7. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar,
Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
Section 2.4 PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST. Except
as otherwise provided herein, on or prior to each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money (in immediately available funds if deposited on the due date) or shares
of Common Stock sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money and shares of Common Stock held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any default by the Company in making any such payment. At
any time during the continuance of any such default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
and shares of Common Stock so held in trust. If the Company, a Subsidiary or an
Affiliate of either of them acts as Paying Agent, it shall segregate the money
and shares of
10
Common Stock held by it as Paying Agent and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money and shares
of Common Stock held by it to the Trustee and to account for any funds and
Common Stock disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for the money or shares of Common Stock.
Section 2.5 SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause the Registrar to furnish to the Trustee at
least semiannually on June 1 and December 1 a listing of Securityholders dated
within 15 days of the date on which the list is furnished and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.
Section 2.6 TRANSFER AND EXCHANGE. (a) Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Security, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at the office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.3, 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 denomination or
denominations, of a like aggregate principal amount (or the related Accreted
Value if a Tax Event has occurred). The Company shall not charge a service
charge for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to pay all taxes, assessments or other governmental
charges that may be imposed in connection with the transfer or exchange of the
Securities from the Securityholder requesting such transfer or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount (or the related Accreted Value if a Tax Event has occurred),
upon surrender of the Securities to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Securityholder or such Securityholder's attorney duly authorized in writing, 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.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Fundamental
Change Purchase Notice has been given and not withdrawn by the Holder thereof in
accordance with the terms of this Indenture (except, in the case of Securities
to be purchased in part, the portion thereof not to be purchased) or any
Securities for a period of 15 days before the selection of Securities to be
redeemed in part.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.6(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole
or in
11
part, to the Depositary, to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.3 hereof shall provide
to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange or replacement
of Securities subject to restrictions on transfer and bearing the legends set
forth on the forms of Security attached hereto as Exhibits A-1 and A-2 setting
forth such restrictions (collectively, the "Legend"), or if a request is made to
remove the Legend on a Security, the Securities so issued shall bear the Legend,
or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence (which in
the case of a transfer pursuant to Rule 144 under the Securities Act may include
an Opinion of Counsel), as may be reasonably required by the Company and the
Registrar, that neither the Legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A, Regulation S or Rule 144 under the Securities Act or that such
Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon (i) provision of such satisfactory evidence, or (ii)
notification by the Company to the Trustee and Registrar of the sale of such
Security pursuant to a registration statement that is effective at the time of
such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
the Company or an Affiliate of the Company, the Legend shall be reinstated.
Section 2.7 REPLACEMENT SECURITIES. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
protected purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and principal amount (or the related Accreted Value if a
Tax Event has occurred), bearing a certificate number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3
12
hereof, the Company in its discretion may, instead of issuing a new Security,
pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, 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 benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 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 2.8 OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION
SECURITIES. Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those paid
pursuant to Section 2.7, those delivered to it for cancellation and those
described in this Section 2.8 as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite
principal amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or 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. Subject to the foregoing,
only Securities outstanding at the time of such determination shall be
considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Fundamental Change Purchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then
immediately after such Redemption Date, Purchase Date, Fundamental Change
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and interest, if any, on such Securities shall cease to
accrue; provided, that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
13
If a Security is converted in accordance with Article X, then from and
after the Conversion Date, such Security shall cease to be outstanding and
interest, if any, shall cease to accrue on such Security.
Section 2.9 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.3,
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 (or the
related Accreted Value if a Tax Event has occurred) of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
Section 2.10 CANCELLATION. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article X. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee in accordance with the Trustee's customary procedure.
Section 2.11 PERSONS DEEMED OWNERS. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the person in whose name such Security is
registered in the records of the Registrar as the owner of such Security for the
purpose of receiving payment of principal of the Security or the payment of any
Redemption Price, Purchase Price or Fundamental Change Purchase Price in respect
thereof, and interest thereon, for the purpose of conversion and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 2.12 GLOBAL SECURITIES. (a) Notwithstanding any other provisions
of this Indenture or the Securities, (A) transfers of a Global Security, in
whole or in part, shall be made
14
only in accordance with Section 2.6(b) and Section 2.12(a)(i), (B) transfers of
a beneficial interest in a Global Security for a Certificated Security shall
comply with Section 2.6 and Section 2.12(a)(ii) below, and (C) transfers of a
Certificated Security shall comply with Section 2.6 and Sections 2.12(a)(iii)
and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any person other than the
Depositary or one or more nominees or any successor thereof, and no such
transfer to any such other person may be registered; provided that this
clause (i) shall not prohibit any transfer of a Security that is issued
in exchange for a Global Security but is not itself a Global Security.
No transfer of a Security to any person shall be effective under this
Indenture or the Securities unless and until such Security has been
registered in the name of such person. Nothing in this Section
2.12(a)(i) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Security effected in accordance with the
other provisions of this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a
Global Security for a Certificated Security. A beneficial interest in a
Global Security may not be exchanged for a Certificated Security except
upon the circumstances contemplated in Section 2.12(e)(1) below and
additionally, upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a transfer of a beneficial interest in a
Global Security in accordance with Applicable Procedures for a
Certificated Security in the form satisfactory to the Trustee, together
with:
(A) so long as the Securities are Restricted Securities,
certification in the form set forth in Exhibit B,
(B) written instructions to the Trustee to make, or direct
the Registrar to make, an adjustment on its books and
records with respect to such Global Security to reflect
a decrease in the aggregate principal amount of the
Securities represented by the Global Security, such
instructions to contain information regarding the
Depositary account to be credited with such decrease,
and
(C) if the Company so requests, an opinion of counsel or
other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the
Legend,
the Trustee shall cause, or direct the Registrar to cause, in accordance
with the standing instructions and procedures existing between the
Depositary and the Registrar, the aggregate principal amount of the
Securities represented by the Global Security to be decreased by the
aggregate principal amount of the Certificated Security to be issued,
shall issue such Certificated Security and shall debit or cause to be
debited to the account of the person specified in such instructions a
beneficial interest in the Global Security equal to the principal amount
or the related Accreted Value of the Certificated Security so issued.
15
(iii) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented to the Registrar with a request:
(y) to register the transfer of such Certificated
Securities; or
(z) to exchange such Certificated Securities for an equal
principal amount of Certificated Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Certificated Securities surrendered for
transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
(2) so long as such Securities are Restricted Securities, such
Securities are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or
pursuant to clause (A), (B) or (C) below, and are accompanied by
the following additional information and documents, as
applicable:
(A) if such Certificated Securities are being delivered to
the Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if such Certificated Securities are being transferred to
the Company, a certification to that effect; or
(C) if such Certificated Securities are being transferred
pursuant to an exemption from registration, (i) a
certification to that effect (in the form set forth in
Exhibit B, if applicable) and (ii) if the Company so
requests, an opinion of counsel or other evidence
reasonably satisfactory to it as to the compliance with
the restrictions set forth in the Legend.
(iv) Restrictions on Transfer of a Certificated Security for a
Beneficial Interest in a Global Security. A Certificated Security may
not be exchanged for a beneficial interest in a Global Security except
upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(I) so long as the Securities are Restricted Securities,
certification, in the form set forth in Exhibit B-1, that such
Certificated Security is being transferred in accordance with Rule 144A,
Regulation S or Rule 144; and
(II) written instructions directing the Trustee to make, or to
direct the Registrar to make, an adjustment on its books and records
with respect to such Global Security to
16
reflect an increase in the aggregate principal amount of the Securities
represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with such
increase, then the Trustee shall cancel such Certificated Security and
cause, or direct the Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Registrar, the aggregate principal amount of Securities represented by
the Global Security to be increased by the aggregate principal amount of
the Certificated Security to be exchanged, and shall credit or cause to
be credited to the account of the person specified in such instructions
a beneficial interest in the Global Security equal to the principal
amount of the Certificated Security so cancelled. If no Global
Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate
principal amount.
(b) Subject to the succeeding paragraph (c), every Security shall be
subject to the restrictions on transfer provided in the Legend. Whenever any
Restricted Security is presented or surrendered for registration of transfer or
for exchange for a Security registered in a name other than that of the Holder,
such Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate principal amount, which shall
not bear the restrictive Legend. The Company shall inform the Trustee of the
effective date of any registration statement registering the resale of the
Securities under the Securities Act. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, loan, hypothecation, or
other disposition of any Security.
(e) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Securities:
17
(1) Notwithstanding any other provisions of this Indenture
or the Securities, a Global Security shall not be
exchanged in whole or in part for a Security registered
in the name of any person other than the Depositary or
one or more nominees or any successor thereof, provided
that a Global Security may be exchanged for Securities
registered in the names of any person designated by the
Depositary in the event that (i) the Depositary has
notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or such
Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor
Depositary is not appointed by the Company within 90
days, (ii) an Event of Default has occurred and is
continuing with respect to the Securities or (iii) the
Company in its sole discretion elects not to have the
Securities represented by a Global Security and to cause
the issuance of Certificated Securities. Any Global
Security exchanged pursuant to clause (i) or (iii) above
shall be so exchanged in whole and not in part, and any
Global Security exchanged pursuant to clause (ii) above
may be exchanged in whole or from time to time in part
as directed by the Depositary. Any Security issued in
exchange for a Global Security or any portion thereof
shall be a Global Security; provided that any such
Security so issued that is registered in the name of a
person other than the Depositary or a nominee thereof
shall not be a Global Security and shall be deemed a
Certificated Security.
(2) Securities issued in exchange for a Global Security or
any portion thereof shall be issued in definitive, fully
registered form, without interest coupons, shall have an
aggregate principal amount (or the related Accreted
Value if a Tax Event has occurred) equal to that of such
Global Security or portion thereof to be so exchanged,
shall be registered in such names and be in such
authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided
for herein. Any Global Security to be exchanged in whole
shall be surrendered by the Depositary to the Trustee,
as Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be
so surrendered for exchange or, if the Trustee is acting
as custodian for the Depositary or its nominee with
respect to such Global Security, the principal amount
thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the
Trustee. Upon any such surrender or adjustment, the
Trustee shall authenticate and deliver the Security
issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the
registered Holder may grant proxies and otherwise
authorize any person, including Agent Members (as
defined below) and persons that may hold interests
through Agent Members, to take any action which a holder
is entitled to take under this Indenture or the
Securities.
(4) In the event of the occurrence of any of the events
specified in clause (1) above, the Company will promptly
make available to the Trustee a reasonable supply of
18
Certificated Securities in definitive, fully registered
form, without interest coupons.
(5) Neither any members of, or participants in, the
Depositary (collectively, the "Agent Members") nor any
other persons on whose behalf Agent Members may act
shall have any rights under this Indenture with respect
to any Global Security registered in the name of the
Depositary or any nominee thereof, or under any such
Global Security, and the Depositary or such nominee, as
the case may be, may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as
the absolute owner and holder of such Global Security
for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or
other authorization furnished by the Depositary or such
nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other person on
whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the
exercise of the rights of a holder of any Security.
Section 2.13 CUSIP NUMBERS. The Company may issue the Securities with
one or more "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 of any change in the CUSIP numbers.
Section 2.14 RANKING. The Indebtedness of the Company arising under or
in connection with this Indenture and every outstanding Security issued under
this Indenture from time to time constitutes and will constitute a senior
unsecured obligation of the Company, ranking equally with other existing and
future senior unsecured Indebtedness of the Company and ranking senior to any
future subordinated Indebtedness of the Company.
Section 2.15 REGULATION S. The Company agrees that it will refuse to
register any transfer of Securities or any shares of Common Stock issued upon
conversion of Securities that is not made in accordance with the provisions of
Regulation S under the Securities Act, pursuant to a registration statement
which has been declared effective under the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities Act;
provided that the provisions of this paragraph shall not be applicable to any
Securities which do not bear a Legend or to any shares of Common Stock evidenced
by certificates which do not bear a Restricted Common Stock Legend.
19
ARTICLE III
REDEMPTION AND PURCHASES
Section 3.1 COMPANY'S RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company,
at its option, may redeem the Securities in accordance with the provisions of
Paragraph 5 of the Securities. If the Company elects to redeem Securities
pursuant to Paragraph 5 of the Securities, it shall notify the Trustee in
writing of the Redemption Date, the principal amount of Securities to be
redeemed and the Redemption Price. The Company shall give the notice to the
Trustee provided for in Section 3.3 by a Company Order, at least 40 days before
the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee).
Section 3.2 SELECTION OF SECURITIES TO BE REDEEMED. If less than all the
Securities are to be redeemed, unless the procedures of the Depositary provide
otherwise, the Trustee shall select the Securities to be redeemed by lot, on a
pro rata basis or by another method the Trustee considers fair and appropriate
(so long as such method is not prohibited by the rules of any stock exchange on
which the Securities are then listed). The Trustee shall make the selection at
least 35 days but not more than 60 days before the Redemption Date from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal amount of Securities that have
denominations larger than $1,000. Securities and portions of Securities that the
Trustee selects shall be in principal amounts of $1,000 or an integral multiple
of $1,000, if less than all of the Securities are being redeemed. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of the Securities to be redeemed.
If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities, which have been
converted during a selection of Securities to be redeemed, may be treated by the
Trustee as outstanding for the purpose of such selection.
Section 3.3 NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any time
before the close of business on the date that is two (2) Business Days prior to
the Redemption Date;
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(6) that Holders who want to convert their Securities must satisfy the
requirements set forth in Paragraph 8 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent at least two (2) Business Days prior to the Redemption Date to
collect the Redemption Price;
(8) if fewer than all of the outstanding Securities are to be redeemed,
the certificate numbers, if any, and principal amounts of the particular
Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, interest, if any, on Securities called for redemption will
cease to accrue on and after the Redemption Date; and
(10) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least three Business Days prior to the date by
which such notice of redemption must be given to Holders in accordance with this
Section 3.3.
Section 3.4 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Securities
which are converted in accordance with the terms of this Indenture.
Section 3.5 DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m. (New York
City time), on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall as promptly as practicable return to
the Company any money not required for that purpose because of conversion of
Securities pursuant to Article X. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
Section 3.6 SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in principal amount to the unredeemed portion of the Security
surrendered.
Section 3.7 PURCHASE OF SECURITIES BY THE COMPANY AT OPTION OF THE
HOLDER. (a) General. Securities shall be purchased by the Company pursuant to
Paragraph 6 of the Securities at the option of the Holder on December 1, 2005,
December 1, 2011 and December 1, 2016 (each, a "Purchase Date"), at the Accreted
Value plus accrued and unpaid current cash interest, if any, on such Purchase
Date (the "Purchase Price"). Purchases of Securities hereunder shall be made, at
the option of the Holder thereof, upon:
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(1) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "Purchase Notice") during the period beginning at any
time from the opening of business on the date that is 20 Business
Days prior to the relevant Purchase Date until the close of
business two Business Days prior to such Purchase Date stating:
(A) the certificate number of the Security which the Holder
will deliver to be purchased or the appropriate Depositary
procedures if Certificated Securities have not been
issued,
(B) the portion of the principal amount of the Security which
the Holder will deliver to be purchased, which portion
must be in principal amounts of $1,000 or an integral
multiple thereof, if less than all of the Securities are
being redeemed,
(C) that such Security shall be purchased by the Company as of
the Purchase Date pursuant to the terms and conditions
specified in Paragraph 6 of the Securities and in this
Indenture, and
(D) in the event the Company elects, pursuant to Section
3.7(b), to pay the Purchase Price, in whole or in part, in
shares of Common Stock but such portion of the Purchase
Price shall ultimately be paid to such Holder entirely in
cash because any of the conditions to payment of the
Purchase Price in shares of Common Stock is not satisfied
prior to the close of business two Business Days prior to
the relevant Purchase Date, as set forth in Section
3.7(d), whether such Holder elects (i) to withdraw such
Purchase Notice as to some or all of the Securities to
which such Purchase Notice relates (stating the principal
amount and certificate numbers, if any, of the Securities
as to which such withdrawal shall relate), or (ii) to
receive cash in respect of the entire Purchase Price for
all Securities (or portions thereof) to which such
Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements)
at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Purchase Price therefor;
provided, however, that such Purchase Price shall be so paid
pursuant to this Section 3.7 only if the Security so delivered to
the Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice, as determined by the
Company.
If a Holder, in such Holder's Purchase Notice and in any written notice
of withdrawal delivered by such Holder pursuant to the terms of Section 3.9,
fails to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.7(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the entire Purchase Price for all Securities subject
to such Purchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.7, a portion of a Security, only if the principal amount of such
portion is $1,000 or an integral
22
multiple of $1,000. Provisions of this Indenture that apply to the
purchase of all of a Security also apply to the purchase of such portion
of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.7 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.7(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business two Business Days prior to the Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 3.9.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE FOR
PAYMENT. The Securities to be purchased on any Purchase Date pursuant to Section
3.7(a) may be paid for, in whole or in part, at the election of the Company, in
U.S. legal tender ("cash") or shares of Common Stock, or in any combination of
cash and shares of Common Stock, subject to the conditions set forth in Sections
3.7(c) and (d). The Company shall designate, in the Company Notice delivered
pursuant to Section 3.7(e), whether the Company will purchase the Securities for
cash or shares of Common Stock, or, if a combination thereof, the percentages of
the Purchase Price of Securities in respect of which it will pay in cash or
shares of Common Stock; provided that the Company will pay cash for fractional
interests in shares of Common Stock. For purposes of determining the existence
of potential fractional interests, all Securities subject to purchase by the
Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to this Section 3.7 shall receive the same percentage of cash
or shares of Common Stock in payment of the Purchase Price for such Securities,
except (i) as provided in Section 3.7(d) with regard to the payment of cash in
lieu of fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase the Securities of a Holder or Holders for shares of Common
Stock because any necessary qualifications or registrations of the shares of
Common Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Securities of such Holder or Holders for cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Holders except pursuant to this Section 3.7(b) or
pursuant to Section 3.7(d) in the event of a failure to satisfy, prior to the
close of business two Business Days prior to the Purchase Date, any condition to
the payment of the Purchase Price, in whole or in part, in shares of Common
Stock.
At least three Business Days before each Company Notice Date (as defined
below), the Company shall deliver an Officers' Certificate to the Trustee
specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.7(e) in the Company
Notice,
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(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in shares of Common Stock,
that the conditions to such manner of payment set forth in
Section 3.7(d) have been or will be complied with,
(iv) whether the Company desires the Trustee to give the
Company Notice required by Section 3.7(e), and
(v) the principal amount of the Securities plus accrued and
unpaid interest.
(c) PURCHASE WITH CASH. At the option of the Company, the Purchase Price
of Securities in respect of which a Purchase Notice pursuant to Section 3.7(a)
has been given, or a specified percentage thereof, may be paid by the Company
with cash equal to the aggregate Purchase Price of such Securities, except that
accrued and unpaid current cash interest must be paid in cash. The Company
Notice, as provided in Section 3.7(e), shall be sent to Holders not less than 20
Business Days prior to such Purchase Date (the "Company Notice Date").
(d) PAYMENT BY ISSUANCE OF SHARES OF COMMON STOCK. At the option of the
Company, the Purchase Price of Securities in respect of which a Purchase Notice
pursuant to Section 3.7(a) has been given, or a specified percentage thereof,
may be paid by the Company by the issuance of a number of shares of Common Stock
equal to the quotient obtained by dividing (i) the portion of the Purchase Price
to be paid in shares of Common Stock by (ii) 97.5% of the Market Price of one
share of Common Stock as determined by the Company in the Company Notice,
subject to the next succeeding paragraph, except that accrued and unpaid current
cash interest must be paid in cash.
The Company will not issue fractional shares of Common Stock in payment
of the Purchase Price. Instead, the Company will pay cash based on the Market
Price for all fractional shares. For purposes of determining the existence of
potential fractional interests, all Securities subject to purchase by the
Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented).
If the Company elects to purchase the Securities by the issuance of
shares of Common Stock, the Company Notice, as provided in Section 3.7(e), shall
be sent to the Holders not later than the Company Notice Date.
The Company's right to exercise its election to purchase Securities
through the issuance of shares of Common Stock shall be conditioned upon:
(i) the Company's not having given its Company Notice of an
election to pay entirely in cash and its giving of timely Company Notice
of an election to purchase all or a specified percentage of the
Securities with shares of Common Stock as provided herein;
(ii) the registration of such shares of Common Stock under the
Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in each
case, if required by applicable law;
24
(iii) the listing of such shares of Common Stock on the principal
national securities exchange (currently the NYSE) or other principal
exchange or market on which the shares of Common Stock are listed or
traded;
(iv) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(v) the receipt by the Trustee by the Purchase Date of an
Officers' Certificate and an Opinion of Counsel each stating that
(A) the terms of the issuance of the shares of Common Stock are
in conformity with this Indenture and
(B) the shares of Common Stock to be issued by the Company in
payment of the Purchase Price in respect of Securities have
been duly authorized and, when issued and delivered
pursuant to the terms of this Indenture in payment of the
Purchase Price in respect of the Securities, will be
validly issued, fully paid and non-assessable and, to the
best of such counsel's knowledge, free from preemptive
rights, and, in the case of such Officers' Certificate,
stating that the conditions above and the condition set
forth in the second succeeding sentence have been satisfied
and, in the case of such Opinion of Counsel, stating that
the conditions in clauses (ii) through (iv) above have been
satisfied. Such Officers' Certificate shall also set forth
the number of shares of Common Stock to be issued for each
$1,000 principal amount of Securities and the Sale Price of
a share of Common Stock on each trading day during the
period commencing on the first trading day of the period
during which the Market Price is calculated and ending on
the third trading day prior to the applicable Purchase
Date. The Company may pay the Purchase Price (or any
portion thereof) in shares of Common Stock only if the
information necessary to calculate the Market Price is
published in a daily newspaper of national circulation. If
the foregoing conditions are not satisfied with respect to
a Holder or Holders prior to the close of business on the
last Business Day prior to the Purchase Date, and the
Company has elected to purchase the Securities pursuant to
this Section 3.7 through the issuance of shares of Common
Stock, the Company shall pay the entire Purchase Price of
the Securities of such Holder or Holders in cash.
The "Market Price" means the average of the Sale Prices of the shares of
Common Stock for the 20 trading day period ending on the third Business Day
prior to the applicable Purchase Date (if the third Business Day prior to the
applicable Purchase Date is a trading day, or if not, then on the last trading
day prior to the third Business Day), appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the trading
days during the five trading day period and ending on the Purchase Date, of any
event described in Sections 10.6, 10.7, 10.8 or 10.9; subject, however, to the
conditions set forth in Sections 10.10 and 10.11.
25
The "Sale Price" of the shares of Common Stock on any date means the
closing per share sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average asked prices) on such date as
reported on the NYSE or, if the shares of Common Stock are not listed on the
NYSE, as reported by the Nasdaq system. In the absence of such quotations, the
Company shall be entitled to determine the sales price on the basis of such
quotations as it considers appropriate.
Upon determination of the actual number of shares of Common Stock to be
issued upon redemption of Securities, the Company will disseminate a press
release through Dow Jones & Company, Inc. or Bloomberg Business News containing
this information or publish the information on the Company's Web site or through
such other public medium as the Company may use at that time.
(e) NOTICE OF ELECTION. In connection with any purchase of Securities
pursuant to Paragraph 6 of the Securities, the Company shall give notice to
Holders setting forth information specified in this Section 3.7(e) (the "Company
Notice").
In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with shares of Common Stock, the Company Notice
shall:
(1) state that each Holder will receive shares of Common Stock, 97.5%
of the Market Price (determined as of a specified date prior to
the Purchase Date) of which shares will be equal to such specified
percentage of the Purchase Price of the Securities held by such
Holder (except any cash amount to be paid in lieu of fractional
shares);
(2) set forth the method of calculating the Market Price of the shares
of Common Stock; and
(3) state that because the Market Price of shares of Common Stock will
be determined prior to the Purchase Date, Holders of the
Securities will bear the market risk with respect to the value of
the shares of Common Stock to be received from the date such
Market Price is determined to the Purchase Date.
In any case, each Company Notice shall include a form of Purchase Notice
to be completed by a Holder and shall state:
(i) the Purchase Price and the Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Securities as to which a Purchase Notice has been
given may be converted if they are otherwise convertible
only in accordance with Article X hereof and Paragraph 8 of
the Securities if the applicable Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment;
26
(v) that the Purchase Price for any security as to which a
Purchase Notice has been given and not withdrawn will be
paid promptly following the later of the Purchase Date and
the time of surrender of such Security as described in
(iv);
(vi) the procedures the Holder must follow to exercise its put
rights under this Section 3.7 and a brief description of
those rights;
(vii) briefly, the conversion rights of the Securities;
(viii) the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional
withdrawal pursuant to the terms of Section 3.7(a)(1)(D) or
Section 3.9);
(ix) that, unless the Company defaults in making payment on
Securities for which a Purchase Notice has been submitted,
interest, if any, on such Securities will cease to accrue
on the Purchase Date; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice in
the Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered upon
purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable, and
shall be free from preemptive rights and free of any lien or adverse claim.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in respect
of a cash purchases under this Section 3.7 or for fractional interests, as
applicable) or shares of Common Stock, or a combination thereof, as applicable,
at the time and in the manner as provided in Section 3.10, sufficient to pay the
aggregate Purchase Price of all Securities to be purchased pursuant to this
Section 3.7. As soon as practicable after the later of the Purchase Date and the
time of surrender of the Security, the Company shall deliver to each Holder
entitled to receive shares of Common Stock through the Paying Agent, a
certificate for the number of full shares of Common Stock issuable in payment of
the Purchase Price and cash in lieu of any fractional interests. The person in
whose name the certificate for the shares of Common Stock is registered shall be
treated as a holder of record of Common Stock on the Business Day following the
date of delivery of such certificate as described in the previous sentence.
Subject to Section 3.7(d), no payment or adjustment will be made for dividends
on the shares of Common Stock the record date for which occurred on or prior to
the Purchase Date.
(h) TAXES. If a Holder of a purchased Security is paid in shares of
Common Stock, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on such issue of Common Stock. However, the Holder shall pay
any such tax which is due because the Holder requests the Common Stock to be
issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the shares of Common Stock being issued in
a name other than the Holder's name until the Paying Agent receives a sum
sufficient
27
to pay any tax which will be due because the shares of Common Stock are to be
issued in a name other than the Holder's name. Nothing herein shall preclude any
income tax withholding required by law or regulations.
Section 3.8 PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A
FUNDAMENTAL CHANGE. (a) If a Fundamental Change occurs, the Securities not
previously purchased by the Company shall be purchased by the Company, at the
option of the Holder thereof, at a purchase price specified in Paragraph 6 of
the Securities (the "Fundamental Change Purchase Price"), as of the date that is
45 days after the date of the notice of Fundamental Change delivered by the
Company (the "Fundamental Change Purchase Date"), subject to satisfaction by or
on behalf of the Holder of the requirements set forth in Section 3.8(c).
A "Fundamental Change" shall be deemed to have occurred at such time
after the Securities are originally issued as any of the following events shall
occur:
(i) any person acquires beneficial ownership, directly or
indirectly, through a purchase, merger or other acquisition transaction
or series of transactions, of shares of the Company's Capital Stock
entitling the person to exercise 50% or more of the total voting power of
all shares of the Company's Capital Stock that are entitled to vote
generally in elections of directors, other than an acquisition by the
Company, any of its Subsidiaries or any of its employee benefit plans; or
(ii) the Company merges or consolidates with or into any other
person, any merger of another person into the Company, or the Company
conveys, sells, transfers or leases all or substantially all of its
assets to another person, other than any transaction:
(A) that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the
Company's Capital Stock, or
(B) pursuant to which the holders of Common Stock immediately
prior to the transaction have the entitlement to exercise,
directly or indirectly, 50% or more of the total voting
power of all shares of Capital Stock entitled to vote
generally in the election of directors of the continuing or
surviving corporation immediately after the transaction, or
(C) which is effected solely to change the Company's
jurisdiction of incorporation and results in a
reclassification, conversion or exchange of outstanding
shares of the Common Stock solely into shares of common
stock of the surviving entity; or
(iii) any time the Company's Continuing Directors do not
constitute a majority of the Board of Directors of the Company (or, if
applicable, a successor corporation to the Company).
Notwithstanding the foregoing provisions of this Section 3.8, a Fundamental
Change shall not be deemed to have occurred if (A) the Sale Price per share of
Common Stock for any five trading days within the period of 10 consecutive NYSE
trading days ending immediately after the later of a Fundamental Change or the
public announcement of a Fundamental Change, in the case of a
28
Fundamental Change relating to an acquisition of Capital Stock, or the period of
10 consecutive trading days ending immediately before a Fundamental Change, in
the case of a Fundamental Change relating to a merger, consolidation or asset
sale, equals or exceeds 105% of the Accreted Conversion Price of the Securities
in effect on each of those trading days or (B) all of the consideration
(excluding cash payments for fractional shares and cash payments made pursuant
to dissenters' appraisal rights) in a merger or consolidation otherwise
constituting a Fundamental Change under clause (i) and/or clause (ii) above
consists of shares of common stock traded on a national securities exchange or
quoted on the Nasdaq National Market (or will be so traded or quoted immediately
following the merger or consolidation) and as a result of the merger or
consolidation the Securities become convertible into such common stock. For
purposes of this Section 3.8, (x) whether a person is a "beneficial owner" shall
be determined in accordance with Rule 13d-3 under the Exchange Act and (y)
"person" includes any syndicate or group that would be deemed to be a "person"
under Section 13(d)(3) of the Exchange Act.
(b) No later than 30 days after the occurrence of a Fundamental
Change, the Company shall mail a written notice of the Fundamental Change
by first-class mail to the Trustee and to each Holder. The notice shall
include a form of written notice of purchase (the "Fundamental Change
Purchase Notice") to be completed by the Holder and shall state:
(1) briefly, the events causing a Fundamental Change and the
date of such Fundamental Change;
(2) the date by which the Fundamental Change Purchase Notice
pursuant to this Section 3.8 must be given;
(3) the Fundamental Change Purchase Date;
(4) the Fundamental Change Purchase Price;
(5) the name and address of the Paying Agent and the Conversion
Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that the Securities as to which a Fundamental Change
Purchase Notice has been given may be converted if they are
otherwise convertible pursuant to Article X hereof only if
the Fundamental Change Purchase Notice has been withdrawn
in accordance with the terms of this Indenture;
(8) that the Securities must be surrendered to the Paying Agent
to collect payment;
(9) that the Fundamental Change Purchase Price for any Security
as to which a Fundamental Change Purchase Notice has been
duly given and not withdrawn will be paid promptly
following the later of the Fundamental Change Purchase Date
and the time of surrender of such Security as described in
(8);
(10) briefly, the procedures the Holder must follow to exercise
rights under this Section 3.10;
29
(11) briefly, the conversion rights, if any, of the Securities;
(12) the procedures for withdrawing a Fundamental Change
Purchase Notice;
(13) that, unless the Company defaults in making payment of such
Fundamental Change Purchase Price, interest, if any, on
Securities surrendered for purchase by the Company will
cease to accrue on and after the Fundamental Change
Purchase Date; and
(14) the CUSIP number(s) of the Securities.
(c) A Holder may exercise its rights specified in Section 3.8(a)
upon delivery of an irrevocable Fundamental Change Purchase Notice to the
Paying Agent at any time on or prior to the 30th day after the date the
Company delivers its written Fundamental Change notice, stating:
(1) the certificate number of the Security which the Holder
will deliver to be purchased;
(2) the portion of the principal amount of the Security which
the Holder will deliver to be purchased, which portion, if
not the entire amount of the Security, must be $1,000 or an
integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the terms
and conditions specified in Paragraph 6 of the Securities.
The delivery of such Security to the Paying Agent with the Fundamental
Change Purchase Notice (together with all necessary endorsements) at the offices
of the Paying Agent shall be a condition to the receipt by the Holder of the
Fundamental Change Purchase Price therefor; provided, however, that such
Fundamental Change Purchase Price shall be so paid pursuant to this Section 3.8
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Fundamental Change
Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.8, a portion of a Security only if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.8 shall be consummated by the delivery of the consideration to be
received by the Holder on the Fundamental Change Purchase Date.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Fundamental Change Purchase Notice.
Section 3.9 EFFECT OF PURCHASE NOTICE OR FUNDAMENTAL CHANGE PURCHASE
NOTICE. Upon receipt by the Paying Agent of the Purchase Notice or the
Fundamental Change Purchase Notice specified in Section 3.7(a) or Section
3.8(c), as applicable, the Holder of the Security in respect
30
of which such Purchase Notice or Fundamental Change Purchase Notice, as the case
may be, was given shall (unless such Purchase Notice or Fundamental Change
Purchase Notice, as the case may be, is withdrawn as specified in the following
two paragraphs) thereafter be entitled to receive solely the Purchase Price or
the Fundamental Change Purchase Price, as the case may be, with respect to such
Security. Such Purchase Price or Fundamental Change Purchase Price shall be paid
to such Holder, subject to receipts of funds and/or securities by the Paying
Agent, as soon as practicable following the later of (x) the Purchase Date or
the Fundamental Change Purchase Date, as the case may be, with respect to such
Security (provided the conditions in Section 3.7(a) or Section 3.8(c), as
applicable, have been satisfied) and (y) the time of delivery of such Security
to the Paying Agent by the Holder thereof in the manner required by Section
3.7(a) or Section 3.8(c), as applicable. Securities in respect of which a
Purchase Notice or Fundamental Change Purchase Notice has been given by the
Holder thereof may not be converted pursuant to Article X hereof on or after the
date of the delivery of such Purchase Notice or Fundamental Change Purchase
Notice unless such Purchase Notice or Fundamental Change Purchase Notice has
first been validly withdrawn as specified in the following two paragraphs.
A Purchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Purchase Notice at any time prior to the close of business on the last Business
Day prior to the Purchase Date specifying:
(1) the certificate number, if any, of the Security in respect of
which such notice of withdrawal is being submitted,
(2) the principal amount of the Security with respect to which such
notice of withdrawal is being submitted, and
(3) the principal amount, if any, of such Security which remains
subject to the original Purchase Notice or Fundamental Change
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form
set forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.7(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.7(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any Securities pursuant to Section 3.7 or
3.8 if there has occurred (prior to, on or after, as the case may be, the
giving, by the Holders of such Securities, of the required Purchase Notice or
Fundamental Change Purchase Notice, as the case may be) and is continuing an
Event of Default (other than a default in the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be, with respect to such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, has been withdrawn in
compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default in the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be, with respect to such
Securities) in which case, upon
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such return, the Purchase Notice or Fundamental Change Purchase Notice with
respect thereto shall be deemed to have been withdrawn.
Section 3.10 DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE PURCHASE
PRICE. Prior to 10:00 a.m. (local time in the City of New York) on the Purchase
Date or the Fundamental Change Purchase Date, as the case may be, the Company
shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 2.4) an amount of cash
(in immediately available funds if deposited on such Business Day) or Common
Stock, if permitted hereunder, sufficient to pay the aggregate Purchase Price or
Fundamental Change Purchase Price, as the case may be, of all the Securities or
portions thereof which are to be purchased as of the Purchase Date or
Fundamental Change Purchase Date, as the case may be.
Section 3.11 SECURITIES PURCHASED IN PART. Any Certificated Security
which is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered which is not
purchased.
Section 3.12 COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES. When complying with the provisions of Section 3.7 or 3.8 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply with Rule 13e- 4 and Rule 14e-1 (or any
successor provision) under the Exchange Act, (ii) file the related Schedule TO
(or any successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply with all Federal and state securities laws so as to permit the
rights and obligations under Sections 3.7 and 3.8 to be exercised in the time
and in the manner specified in Sections 3.7 and 3.8.
Section 3.13 REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in Paragraph 12 of the Securities, together with interest
or dividends, if any, thereon (subject to the provisions of Section 7.1(f)),
held by them for the payment of the Purchase Price or Fundamental Change
Purchase Price, as the case may be; provided, however, that to the extent that
the aggregate amount of cash or shares of Common Stock deposited by the Company
pursuant to Section 3.10 exceeds the aggregate Purchase Price or Fundamental
Change Purchase Price, as the case may be, of the Securities or portions thereof
which the Company is obligated to purchase as of the Purchase Date or
Fundamental Change Purchase Date, as the case may be, then, unless otherwise
agreed in writing with the Company, promptly after the Business Day following
the Purchase Date or Fundamental Change Purchase Date, as the case may be, the
Trustee shall return any such excess to the Company together with interest or
dividends, if any, thereon (subject to the provisions of Section 7.1(f)).
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ARTICLE IV
COVENANTS
Section 4.1 PAYMENT OF SECURITIES. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Any amounts of cash or shares of
Common Stock to be given to the Trustee or Paying Agent, shall be deposited with
the Trustee or Paying Agent by 10:00 a.m. New York City time by the Company.
Principal amount, Accreted Value plus accrued interest, if any, Redemption
Price, Purchase Price, Fundamental Change Purchase Price and cash interest, if
any, shall be considered paid on the applicable date due if on such date (or, in
the case of a Purchase Price or Fundamental Change Purchase Price, on the
Business Day following the applicable Purchase Date or Fundamental Change
Purchase Date, as the case may be) the Trustee or the Paying Agent holds, in
accordance with this Indenture, cash or securities, if permitted hereunder,
sufficient to pay all such amounts then due.
Section 4.2 SEC AND OTHER REPORTS. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been required to be filed with
the SEC had the Company continued to have been subject to such reporting
requirements. In such event, such reports shall be provided at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. The Company also shall comply with
the other provisions of TIA Section 314(a). Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely conclusively on Officers'
Certificates).
Section 4.3 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 105 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 30, 2001) an Officers'
Certificate, stating whether or not to the best knowledge of the signers
thereof, the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
Section 4.4 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
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Section 4.5 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, the City of New York, an office or agency of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office of The Bank of Nova Scotia Trust Company of
New York, One Liberty Plaza, New York, New York 10006 (Attention: Corporate
Trust Administration), shall initially be such office or agency for all of the
aforesaid purposes. The Company shall give prompt written notice to the Trustee
of the location, and of any change in the location, of any such office or agency
(other than a change in the location of the office of the Trustee). If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes.
Section 4.6 DELIVERY OF CERTAIN INFORMATION. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of shares of Common Stock issued upon conversion thereof, or in
accordance with Section 3.8(c), the Company will promptly furnish or cause to be
furnished Rule 144A Information (as defined below) to such Holder or any
beneficial owner of Securities or holder or beneficial owner of shares of Common
Stock, or to a prospective purchaser of any such security designated by any such
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act in connection with the
resale of any such security. "Rule 144A Information" shall be such information
as is specified pursuant to Rule 144A(d)(4) under the Securities Act. Whether a
person is a beneficial owner shall be determined by the Company to the Company's
reasonable satisfaction.
Section 4.7 CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company and
each Holder will be deemed to have agreed (i) that for United States federal
income tax purposes the Securities will be treated as indebtedness subject to
the Treasury regulations governing contingent payment debt instruments, (ii)
that the Holders will report original issue discount and interest on the
Securities in accordance with the Company's determination of both the
"comparable yield" and the "projected payment schedule" and (iii) to be bound by
the Company's application of the Treasury regulations that govern contingent
payment debt instruments. For this purpose, the "comparable yield" for the
Securities is 8.24% compounded semi-annually and the "projected payment
schedule" is attached as Schedule A hereto. The Company shall file with the
Trustee no later than the end of each calendar year or at any other time as the
Trustee may request (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on outstanding
Securities as of the
34
end of such year and (ii) such other specific information relating to such
original issue discount as may then be relevant under the Internal Revenue Code
of 1986, as amended from time to time.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The Company
shall not, in a single transaction or a series of related transactions,
consolidate with or merge with or into any other person or convey, transfer,
sell or lease its properties and assets substantially as an entirety to any
person, or permit any person to consolidate with or merge into the Company,
unless:
(a) either (1) the Company shall be the continuing corporation or (2)
the person (if other than the Company) formed by such consolidation or into
which the Company is merged or the person which acquires by conveyance, transfer
or lease the properties and assets of the Company substantially as an entirety
(i) shall be a corporation, limited liability company, partnership or trust
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia and (ii) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all of the obligations of the Company
under the Securities and this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied; provided, however, that no
such Opinion of Counsel need to be delivered in connection with a transactions
or transactions whereby a Subsidiary is consolidated with or merged into the
Company.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of the properties and assets of one or more Subsidiaries (other
than to the Company or another Subsidiary), which, if such assets were owned by
the Company, would constitute all or substantially all of the properties and
assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental
indenture pursuant to Section 10.14, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 9.6, the
35
Company, the Trustee and the successor person shall enter into a supplemental
indenture to evidence the succession and substitution of such successor person
and such discharge and release of the Company.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in the payment of the Accreted Value plus
accrued and unpaid current cash interest on any Security when the same becomes
due and payable at its Stated Maturity, upon redemption, upon declaration, when
due for purchase by the Company or otherwise;
(2) the Company defaults in the payment of any cash interest (including
interest which becomes payable after an Upward Interest Adjustment or any
election by the Company to pay cash interest on the Securities following a Tax
Event) or Liquidated Damages when due and payable, and continuance of such
default for a period of 30 days;
(3) the Company fails to deliver the shares of Common Stock upon an
appropriate election by Holders to convert the Securities into shares of Common
Stock, and continuance of such default for a period of 10 days;
(4) the Company fails to comply in any material respect with any of its
agreements or covenants in the Securities or this Indenture (other than those
referred to in clause (1), (2) or (3) above) and such failure continues for 60
days after receipt by the Company of a Notice of Default;
(5) the Company fails to provide timely notice of any Fundamental
Change in accordance with Section 3.8(b);
(6) a default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any Material
Subsidiary of the Company (or the payment of which is guaranteed by the Company
or any of its Material Subsidiaries), whether such Indebtedness or guarantee
exists on the date of this Indenture or is created thereafter, which default (i)
is caused by a failure to pay when due any principal of such Indebtedness within
the grace period provided for in such Indebtedness (which failure continues
beyond any applicable grace period) (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity (without such
acceleration being rescinded or annulled) and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates $25,000,000 or more and such Payment
Default is not cured or such acceleration is not annulled within 30 days after
receipt by the Company of a Notice of Default; or
(7) a final, non-appealable judgment or final, non-appealable judgments
(other than any judgment as to which a reputable insurance company has accepted
full liability) for the payment
36
of money are entered by a court or courts of competent jurisdiction against the
Company or any Material Subsidiaries of the Company and remain unstayed,
unbonded or undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate amount of all such
judgments exceeds $25,000,000; or
(8) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company as bankrupt or insolvent, or approving as properly filed a petition by
one or more Persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or for any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90 consecutive
days; or
(9) the commencement by the Company or any Material Subsidiary of the
Company of a case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company or any
Material Subsidiary of the Company in a case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or any Material Subsidiary of the Company or
of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of corporate action
by the Company or by any Material Subsidiary of the Company in furtherance of
any such action.
A Default under clause (4) and (6) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause (4)
above after actual receipt of such notice. Any such notice must specify the
Default, demand that it be remedied and state that such notice is a "Notice of
Default".
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any Event of Default
under clause (5), (7) or (8) above or any event described in clause (4) or (6)
which would become an Event of Default upon the passage of time specified in
such clause (4) or (6) following a Notice of Default, its status and what action
the Company is taking or proposes to take with respect thereto.
Section 6.2 ACCELERATION. If an Event of Default (other than an Event
of Default specified in Section 6.1(8) or (9)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities at the
37
time outstanding by notice to the Company and the Trustee, may declare the
Accreted Value plus accrued and unpaid current cash interest, if any, on all the
Securities to be immediately due and payable. Upon such a declaration, such
accelerated amount shall be due and payable immediately. If an Event of Default
specified in Section 6.1(8) or (9) occurs and is continuing, the Accreted Value
plus accrued and unpaid current cash interest, if any, on all the Securities
shall become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholders. The Holders of a majority
in aggregate principal amount of the Securities at the time outstanding, by
notice to the Trustee (and without notice to any other Securityholder) may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of the Accreted Value plus accrued and
unpaid current cash interest, if any, that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.7 have been
paid. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
Section 6.3 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Accreted Value plus accrued and unpaid current cash interest, if any, on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.4 WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (a) an Event of Default described
in Section 6.1(1), (2), or (3) or (b) a Default in respect of a provision that
under Section 9.2 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right. This
Section 6.4 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
Section 6.5 CONTROL BY MAJORITY. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability unless the Trustee is offered indemnity satisfactory to it. This
Section 6.5 shall be in lieu of Section 316(a)(1)(A) of the TIA and such Section
316(a)(1)(A) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
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Section 6.6 LIMITATION ON SUITS. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
reasonably satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount of the Securities plus accrued and unpaid interest in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any Redemption Date, and to convert the
Securities in accordance with Article X, or to bring suit for the enforcement of
any such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of such Holder.
Section 6.8 COLLECTION SUIT BY TRUSTEE. If an Event of Default
described in Section 6.1(1) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 7.7.
Section 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal amount of the Securities plus accrued and unpaid
interest in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of any such amount)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of the principal
amount of the Securities plus accrued and unpaid interest and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the
39
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel or any other amounts due the Trustee under Section 7.7)
and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10 PRIORITIES. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the principal amount of the Securities plus accrued and
unpaid interest, ratably, without preference or priority of any kind,
according to such amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7 or a suit by Holders of more than 10% in aggregate principal amount of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 6.12 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any
40
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company from paying all
or any portion of the principal amount of the Securities plus accrued and unpaid
interest or any interest on such amounts, as contemplated herein, or which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE VII
TRUSTEE
Section 7.1 DUTIES OF TRUSTEE. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no duties shall
be inferred or implied; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture, but in case
of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture, but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein. This Section 7.1(b) shall be in lieu of
Section 315(a) of the TIA and such Section 315(a) is hereby
expressly excluded from this Indenture, as permitted by the
TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b)
of this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
41
Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.
Section 7.2 RIGHTS OF TRUSTEE. Subject to its duties and
responsibilities under the TIA (as modified by Section 7.1),
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(d) The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it believes to be authorized or
within its rights or powers conferred under this Indenture;
(e) The Trustee may consult with counsel selected by it and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or
42
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a board resolution;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other person employed to act
hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.3 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.4 TRUSTEE'S DISCLAIMER. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use or application of the proceeds from the
Securities, it shall not be responsible for any statement in the registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
Section 7.5 NOTICE OF DEFAULTS. If a Default occurs and if it is known
to the Trustee, the Trustee shall give to each Securityholder notice of the
Default within 60 days after it occurs
43
or, if later, within 15 days after it is known to the Trustee, unless such
Default shall have been cured or waived before the giving of such notice.
Notwithstanding the preceding sentence, except in the case of a Default
described in Section 6.1(1) or (2), the Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Securityholders. The second
sentence of this Section 7.5 shall be in lieu of the proviso to Section 315(b)
of the TIA and such proviso is hereby expressly excluded from this Indenture, as
permitted by the TIA. The Trustee shall not be deemed to have knowledge of a
Default unless a Responsible Officer of the Trustee has received written notice
of such Default.
Section 7.6 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
November 15 beginning with the November 15 following the date of this Indenture,
the Trustee shall mail to each Securityholder a brief report dated as of such
November 15 that complies with TIA Section 313(a), if required by such Section
313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee promptly
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
Section 7.7 COMPENSATION AND INDEMNITY. The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be caused by
its negligence or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and their
agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorney's fees and expenses, and taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee)) incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim (whether asserted
by the Company or any Holder or any other person) or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the principal
amount, plus accrued and unpaid interest on particular Securities.
44
The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(5) or (6), the expenses including the reasonable
charges and expenses of its counsel, are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8 REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; provided, however, no such resignation shall be effective
until a successor Trustee has accepted its appointment pursuant to this Section
7.8. The Holders of a majority in aggregate principal amount of the Securities
at the time outstanding may remove the Trustee by so notifying the Trustee and
the Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may petition any court of competent jurisdiction at the expense
of the Company for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Section 7.9 SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
45
Section 7.10 ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
(or its parent holding company) shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).
Section 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.1 DISCHARGE OF LIABILITY ON SECURITIES. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced or repaid pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash (and/or, as permitted by this Indenture, shares of Common
Stock) sufficient to pay all amounts due and owing on all outstanding Securities
(other than Securities replaced pursuant to Section 2.7), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 7.7, cease to be of further effect. The
Trustee shall join in the execution of a document prepared by the Company
acknowledging satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and Opinion of Counsel and at
the cost and expense of the Company.
Section 8.2 REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee and the Paying Agent
shall have no further liability to the Securityholders with respect to such
money or securities for that period commencing after the return thereof.
ARTICLE IX
AMENDMENTS
Section 9.1 WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency provided
that such modification or amendment does not materially and adversely affect the
interests of the holders of the Securities;
46
(2) to make any changes that the Company and the Trustee may deem
necessary or desirable, provided such amendment or modification does not
materially and adversely affect the interests of the holders of the Securities;
(3) to comply with Article 5 or Section 10.14;
(4) to secure the Company's obligations or add any guarantee under the
Securities and this Indenture;
(5) to add Events of Default with respect to the Securities; or
(6) to add to the Company's covenants for the benefit of the
Securityholders or to surrender any right or power conferred upon the Company;
or
(7) to make any change necessary for the registration of the Securities
under the Securities Act or to comply with the TIA, or any amendment thereto, or
to comply with any requirement of the SEC in connection with the qualification
of the Indenture under the TIA, provided that such modification or amendment
does not materially and adversely affect the interests of the holders of the
Securities.
(8) to provide for uncertificated Securities in addition to or in place
of certificated Securities or to provide for bearer Securities.
Section 9.2 WITH CONSENT OF HOLDERS. With the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
at the time outstanding, the Company and the Trustee may amend this Indenture or
the Securities. However, without the consent of each Securityholder affected, an
amendment to this Indenture or the Securities may not:
(1) reduce the interest rate or the rate of accrual upon an upward
interest adjustment referred to in paragraph 1 of the Securities or change the
time for payment of interest thereon;
(2) reduce the principal amount of or extend the Stated Maturity of any
Security;
(3) reduce the calculation of the value of the Common Stock to which
reference is made in determining whether an Upward Interest Adjustment will be
made on the Securities, or change the method by which this value is calculated;
(4) reduce the Redemption Price, Purchase Price or Fundamental Change
Purchase Price of any Security or change the time at which the Securities may be
redeemed or repurchased;
(5) make any payments on the Securities payable in currency or
securities other than as stated in the Security;
(6) make any change in the percentage of the principal amount of
Securities necessary to waive compliance with the provisions of Section 6.4,
Section 6.7 or this Section 9.2, except to increase any percentage set forth
therein;
47
(7) make any change that adversely affects the right to convert any
Security in accordance with the terms thereof and this Indenture;
(8) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms thereof and this
Indenture;
(9) impair a Holder's right to institute suit for the enforcement of
any payment on the Securities;
(10) waive a continuing default or Event of Default regarding any
payment on the Securities; or
(11) make any change that adversely effects the Holders' rights under
Section 3.7, Section 3.8 and Article X.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.2 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
Section 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.4 REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
Section 9.5 NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 9.6 TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture
the Trustee shall receive, and (subject to the provisions of Section 7.1) shall
be fully
48
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
Section 9.7 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
ARTICLE X
CONVERSIONS
Section 10.1 CONVERSION PRIVILEGE. A Holder of a Security may convert
such Security into shares of Common Stock at any time during the period stated
in Paragraph 8 of the Securities. The number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of principal amount thereof (the
"Conversion Rate") shall be that set forth in Paragraph 8 of the Securities,
subject to adjustment as herein set forth. The Company shall notify the Trustee
(which shall in turn notify the Holders promptly upon receipt of such
notification from the Company) of the date on which the Securities first become
convertible (and, if the Securities cease to be convertible at any time or from
time to time, of the first date thereafter on which the Securities again become
convertible), which notification shall set forth the calculations on which such
determination was made.
A Holder may convert a portion of the principal amount of a Security if
the portion converted is in a $1,000 principal amount or an integral multiple of
$1,000. Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.
In the event that the Ex-Dividend Time (as defined below) (or in the
case of a subdivision, combination or reclassification, the effective date with
respect thereto) with respect to a dividend, subdivision, combination or
reclassification to which Section 10.6(1), (2), (3) or (4) applies occurs during
the period applicable for calculating "Average Sale Price" pursuant to the
definition in the preceding sentence, "Average Sale Price" shall be calculated
for such period in a manner determined by the Board of Directors to reflect the
impact of such dividend, subdivision, combination or reclassification on the
Sale Price of the shares of Common Stock during such period.
"Time of Determination" means the time and date of the earlier of (i)
the determination of stockholders entitled to receive rights, warrants or
options or a distribution, in each case, to which Section 10.7 or 10.8 applies
and (ii) the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the NYSE or such other U.S. national or regional exchange or market on which the
shares of Common Stock are then listed or quoted.
Section 10.2 CONVERSION PROCEDURE. To convert a Security a Holder must
satisfy the requirements in Paragraph 8 of the Securities. The first Business
Day on which the Holder
49
satisfies all those requirements and submits such Holder's Securities for
conversion is the conversion date (the "Conversion Date").
As soon as practicable after the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full shares of Common Stock issuable upon the conversion or exchange
and cash in lieu of any fractional share determined pursuant to Section 10.3.
The person in whose name the certificate is registered shall be treated as a
shareholder of record as of the close of business on the Conversion Date. Upon
conversion of a Security in its entirety, such person shall no longer be a
Holder of such Security.
No payment or adjustment will be made for dividends on, or other
distributions with respect to, any shares of Common Stock except as provided in
this Article X. On conversion of a Security, except as provided below with
respect to cash interest payable on Securities or portions thereof converted
after a Regular Record Date, (x) that portion of accrued and unpaid current cash
interest on the converted Securities attributable to the period from the most
recent Interest Payment Date through the Conversion Date and (y) that portion of
accrued and unpaid interest adjustment, including interest adjustment payable in
cash, shall not be cancelled, extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder thereof through delivery of the shares
of Common Stock (together with the cash payment, if any, in lieu of fractional
shares) for the Security being converted pursuant to the provisions hereof. The
Company will not adjust the conversion rate to account for accrued interest, if
any. If the Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
total principal amount of the Securities converted.
The Securities or portions thereof surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the date on which such cash interest is payable shall (unless
such Securities or portions thereof have been called for redemption on a
Redemption Date within such period) be accompanied by payment to the Company or
its order, in New York Clearing House funds or other funds acceptable to the
Company, of an amount equal to the cash interest payable on such cash interest
payment date on the principal amount of the Securities or portions thereof being
surrendered for conversion.
If the last day on which a Security may be converted is a Legal
Holiday, the Security may be surrendered on the next succeeding day that is not
a Legal Holiday.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security in an authorized denomination equal in principal amount to the
unconverted portion of the Security surrendered.
Section 10.3 FRACTIONAL SHARES. The Company will not issue fractional
shares of Common Stock upon conversion of a Security. Instead, the Company will
pay cash based on the current Market Price for all fractional shares. The
current market value of a fractional share shall be determined, to the nearest
1/1,000th of a share, by multiplying the Sale Price on the last trading day
immediately prior to the Conversion Date, of a full share by the fractional
amount and rounding the product to the nearest whole cent. It is understood that
if a Holder elects to have more than one Security converted, the number of
shares of Common Stock shall be based on the aggregate principal amount of
Securities to be converted.
50
Section 10.4 TAXES ON CONVERSION. If a Holder submits a Security for
conversion, the Company shall pay all stamp and all other duties, if any, which
may be imposed by the United States or any political subdivision thereof or
taxing authority thereof or therein with respect to the issuance of shares of
Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificates representing the shares of Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.
Section 10.5 COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities under this Article X, and from time to time as may be
necessary, reserve out of its authorized but unissued shares of Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Securities.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable, and shall be free from preemptive
rights and free of any lien or adverse claim. The Company will endeavor promptly
to comply with all federal and state securities laws regulating the offer and
delivery of shares of Common Stock upon conversion of Securities, if any, and
will list or cause to have quoted such shares of Common Stock on each national
securities exchange or in the over-the-counter market or such other market on
which the shares of Common Stock are then listed or quoted.
Section 10.6 ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, after the
Issue Date of the Securities, the Company:
(1) pays a dividend or makes another distribution to all holders of its
Common Stock payable exclusively in shares of its Common Stock;
(2) subdivides the outstanding shares of its Common Stock into a
greater number of shares of Common Stock;
(3) combines the outstanding shares of its Common Stock into a smaller
number of shares of Common Stock; or
(4) issues by reclassification of its Common Stock any shares of
Capital Stock,
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company which such Holder would have owned immediately following such action if
such Holder had converted the Security immediately prior to the record date for
such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
51
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares of two or more classes of Capital Stock of the
Company, the Conversion Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article X with respect to the shares of Common Stock, on
terms comparable to those applicable to shares of Common Stock in this Article
X.
Section 10.7 ADJUSTMENT FOR RIGHTS ISSUE. Except as provided in Section
10.11, if after the Issue Date of the Securities, the Company distributes any
rights or warrants to all or substantially all holders of shares of its Common
Stock entitling them to purchase shares of Common Stock at a price per share
less than the Average Sale Price as of the Time of Determination, unless the
Holders of Securities may participate in the distribution without conversion on
a basis and with the notice that the Company's Board of Directors determines to
be fair and appropriate, the Conversion Rate shall be adjusted in accordance
with the formula:
(O + N)
R' = R x ---------------------
(O + (N x P)/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on
the record date for the distribution to which this
Section 10.7 is being applied.
N = the number of additional shares of Common Stock
offered pursuant to the distribution.
P = the offering price per share of the additional
shares.
M = the Average Sale Price, minus, in the case of (i) a
distribution to which Section 10.6(4) applies or (ii)
a distribution to which Section 10.8 applies, for
which, in each case, (x) the record date shall occur
on or before the record date for the distribution to
which this Section 10.7 applies and (y) the
Ex-Dividend Time shall occur on or after the date of
the Time of Determination for the distribution to
which this Section 10.7 applies, the fair market
value (on the record date for the distribution to
which this Section 10.7 applies) of the:
(1) Capital Stock of the Company distributed in respect of each share
of Common Stock in such Section 10.6(4) distribution; and
(2) the Company's debt, securities or assets or certain rights,
warrants or options to purchase securities of the Company distributed in respect
of each share of Common Stock in such Section 10.8 distribution.
52
The Board of Directors of the Company shall determine fair market
values for the purposes of this Section 10.7, except as Section 10.8 otherwise
provides in the case of a Spin-off.
"Average Sale Price" means the average of the Sales Prices of the
shares of Common Stock for the shorter of:
(i) 30 consecutive trading days ending on the last full
trading day prior to the Time of Determination with respect to the
rights, warrants or options or distribution in respect of which the
Average Sale Price is being calculated;
(ii) the period (x) commencing on the date next succeeding the
first public announcement of (a) the issuance of rights, warrants or
options or (b) the distribution, in each case, in respect of which the
Average Sale Price is being calculated and (y) proceeding through the
last full trading day prior to the Time of Determination with respect
to the rights, warrants or options or distribution in respect of which
the Average Sale Price is being calculated (excluding days within such
period, if any, which are not trading days); or
(iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time with respect to the next preceding (a)
issuance of rights, warrants or options or (b) distribution, in each
case, for which an adjustment is required by the provisions of Section
10.7, 10.8 or 10.9 and (y) proceeding through the last full trading day
prior to the Time of Determination with respect to the rights, warrants
or options or distribution in respect of which the Average Sale Price
is being calculated (excluding days within such period, if any, which
are not trading days).
In the event that the Ex-Dividend Time (or in the case of a
subdivision, combination or reclassification, the effective date with respect
thereto) with respect to a dividend, subdivision, or combination or
reclassification to which Section 10.6(1), (2), (3) or (4) applies occurs during
the period applicable for calculating "Average Sale Price" pursuant to the
definition in the preceding sentence, "Average Sale Price" shall be calculated
for such period in a manner determined by the Board of Directors of the Company
to reflect the impact of such dividend, subdivision, combination or
reclassification on the Sales Price of the shares of Common Stock during such
period.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights, warrants
or options to which this Section 10.7 applies. If all of the shares of Common
Stock subject to such rights, warrants or options have not been issued when such
rights, warrants or options expire, then the Conversion Rate shall promptly be
readjusted to the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights, warrants or options been made on
the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights, warrants or options.
No adjustment shall be made under this Section 10.7 if the application
of the formula stated above in this Section 10.7 would result in a value of R'
that is equal to or less than the value of R.
53
Section 10.8 ADJUSTMENT FOR OTHER DISTRIBUTIONS. Except as provided in
Section 10.11, if, after the Issue Date of the Securities, the Company
distributes to all holders of its shares of Common Stock any of its debt,
securities or assets or any rights, warrants or options to purchase securities
of the Company (including securities or cash, but excluding (x) distributions of
Capital Stock referred to in Section 10.6 and distributions of rights, warrants
or options referred to in Section 10.7 and (y) payments made to redeem rights
issued under any present or future rights agreement of the Company and (z) cash
dividends or other cash distributions that do not exceed the per share amount of
the immediately preceding regular cash dividend on the Common Stock and other
cash dividends or distributions unless such other cash dividends or cash
distributions are Extraordinary Cash Dividends) and unless the Holders of
Securities may participate in the distribution without conversion, the
Conversion Rate shall be adjusted, subject to the provisions of the last
paragraph of this Section 10.8, in accordance with the formula:
R x M
R' = -------------
(M - F)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price.
F = the fair market value (on the record date for the
distribution to which this Section 10.8 applies) of
the assets, securities, rights, warrants or options
to be distributed in respect of each share of Common
Stock in the distribution to which this Section 10.8
is being applied (including, in the case of cash
dividends or other cash distributions giving rise to
an adjustment, all such cash distributed
concurrently).
In the event the Company distributes shares of Capital Stock of a
Subsidiary, the Conversion Rate will be adjusted, if at all, based on the market
value of the Subsidiary stock so distributed relative to the market value of the
Common Stock, as discussed below. The Board of Directors of the Company shall
determine fair market values for the purposes of this Section 10.8, except that
in respect of a dividend or other distribution of shares of Capital Stock of any
class or series, or similar equity interests, of or relating to a Subsidiary or
other business unit of the Company (a "Spin-off"), the fair market value of the
securities to be distributed shall equal the average of the daily Sales Prices
of those securities for the five consecutive trading days commencing on and
including the sixth day of trading of those securities after the effectiveness
of the Spin-off and the average of the Sales Prices shall mean the average Sales
Prices for the Company's Common Stock for the same five trading days. In the
event, however, that an underwritten initial public offering of the securities
in the Spin-off occurs simultaneously with the Spin-off, fair market value of
the securities distributed in the Spin-off shall mean the initial public
offering price of such securities and the Average Sale Price, for purposes of
this sentence, shall mean the Sales Price for the Company's Common Stock on the
same trading day.
54
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the distribution to
which this Section 10.8 applies, except that an adjustment related to a Spin-off
shall become effective at the earlier to occur of (i) 10 trading days after the
effective date of the Spin-off and (ii) the initial public offering of the
securities distributed in the Spin-off.
For purposes of this Section 10.8, the term "Extraordinary Cash
Dividend" shall mean all all-cash distributions to all or substantially all
holders of the Company's Common Stock made within the 365 days preceding the
Time of Determination (or the period from the Issue Date to the Time of
Determination if such period is shorter than 365 days) not triggering a
Conversion Rate adjustment (other than payments made to redeem rights issued
under any present or future rights agreement of the Company and cash dividends
or other cash distributions that do not exceed the per share amount of the
immediately preceding regular cash dividend on the Common Stock), to the extent
such aggregate amount exceeds an amount equal to 15% of the Sale Price of the
Company's Common Stock on the Business Day immediately preceding the day on
which the Company declares the distribution times the number of shares of Common
Stock outstanding on such day.
If, upon the date prior to the Ex-Dividend Time with respect to a cash
dividend on the shares of Common Stock, the aggregate amount of such cash
dividend together with the amounts of all cash dividends and distributions
referred to in the definition of Extraordinary Cash Dividend gives rise to an
adjustment of the Conversion Rate, then such cash dividend together with all
such other cash dividends and distributions shall, for purposes of applying the
formula set forth above in this Section 10.8, cause the value of "F" to equal
(y) the aggregate amount of such cash dividend and other cash dividends and
distributions, minus (z) the aggregate amount of all cash dividends or other
cash distributions during the preceding 365 days for which an adjustment in the
Conversion Rate was previously made.
In the event that, with respect to any distribution to which this
Section 10.8 would otherwise apply, the difference "M-F" as defined in the above
formula is less than $1.00 or "F" is equal to or greater than "M", then the
adjustment provided by this Section 10.8 shall not be made and in lieu thereof
the provisions of Section 10.15 shall apply to such distribution.
Section 10.9 ADJUSTMENT FOR SELF TENDER OFFER. If, after the Issue Date
of the Securities, the Company or any Subsidiary of the Company pays holders of
the Company's Common Stock in respect of a tender or exchange offer, other than
an odd-lot offer by the Company or any of its Subsidiaries, for the Company's
Common Stock (excluding stock options) consideration per share of Common Stock
having a fair market value, as determined in good faith by the Board of
Directors of the Company, whose determination shall be conclusive, in excess of
110% of the Sale Price of the Common Stock as of the first Business Day (the
"Measurement Date") next succeeding the last Business Day tenders or exchanges
may be made pursuant to the offer (the "Expiration Time"), the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the effectiveness
of the Conversion Rate adjustment contemplated by this Section 10.9 by a
fraction, the numerator of which shall be the sum of (x) the fair market value
of the aggregate consideration payable to stockholders based on the acceptance
of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time up to the maximum
55
specified in the tender or exchange offer (the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Sale Price of a share of Common Stock on
the Measurement Date, and the denominator of which shall be the number of shares
of Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time (including the Purchased Shares) multiplied by the Sale Price of
one share of Common Stock on the Measurement Date. Such reduction shall become
effective immediately prior to the opening of business on the day following the
Measurement Date.
Section 10.10 WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article X shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be.
Section 10.11 WHEN NO ADJUSTMENT REQUIRED. No adjustment to the
Conversion Rate need be made as a result of:
(1) (i) the issuance of the rights; (ii) the distribution of separate
certificates representing the rights; (iii) the exercise or redemption of the
rights in accordance with any rights agreement; or (iv) the termination or
invalidation of the rights, in each case, pursuant to the Company's existing
stockholders rights plan, as amended, modified, or supplemented from time to
time or any newly adopted stockholders rights plans;
(2) upon the issuance of any shares of Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or interest
payable on securities of the Company and the investment of additional optional
amounts in shares of Common Stock under any plan;
(3) upon the issuance of any shares of Common Stock or options or
rights to purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of or assumed by the Company or
any of its Subsidiaries; or
(4) upon the issuance of any shares of Common Stock pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible security
outstanding as of the date the Securities were first issued.
To the extent the Securities become convertible pursuant to this
Article X in whole or in part into cash, no adjustment need be made thereafter
as to the cash. Interest will not accrue on the cash.
Section 10.12 NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the adjustment.
The Company shall file with the Trustee and the Conversion Agent such notice
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence that the adjustment is correct.
Neither the Trustee nor any Conversion Agent shall be under any duty or
56
responsibility with respect to any such certificate except to exhibit the same
to any Holder desiring inspection thereof.
Section 10.13 VOLUNTARY INCREASE. The Company from time to time may
increase the Conversion Rate by any amount at any time for at least 20 days, so
long as the increase is irrevocable during such period. Whenever the Conversion
Rate is increased, the Company shall mail to Securityholders and file with the
Trustee and the Conversion Agent a notice of the increase. The Company shall
mail the notice at least 15 days before the date the increased Conversion Rate
takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect. A voluntary increase of the Conversion Rate does
not change or adjust the Conversion Rate otherwise in effect for purposes of
Section 10.6, 10.7 or 10.8.
Section 10.14 NOTICE OF CERTAIN TRANSACTIONS. If:
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 10.6, 10.7, 10.8 or 10.9 (unless no
adjustment is to occur pursuant to Section 10.11); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.16; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend,
distribution or subdivision or the proposed effective date of a combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.
Section 10.15 REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS. If the
Company is a party to a transaction subject to Section 5.1 (other than a sale of
all or substantially all of the assets of the Company in a transaction in which
the holders of shares of Common Stock immediately prior to such transaction do
not receive securities, cash or other assets of the Company or any other person)
or a merger or binding share exchange which reclassifies or changes its
outstanding shares of Common Stock, the person obligated to deliver securities,
cash or other assets upon conversion of Securities shall enter into a
supplemental indenture. If the issuer of securities deliverable upon conversion
of Securities is an Affiliate of the successor Company, that issuer shall join
in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security
may convert it into the kind and amount of securities, cash or other assets
which such Holder would have received immediately after the consolidation,
merger, binding share exchange or transfer if such Holder had converted the
Security immediately before the effective date of the transaction, assuming (to
the extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of non-
electing Holders. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to
57
the adjustments provided for in this Article X. The successor Company shall mail
to Securityholders a notice briefly describing the supplemental indenture.
If this Section applies, neither Section 10.6 nor 10.7 applies.
If the Company makes a distribution to all holders of its shares of
Common Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that, but for the provisions of
the last paragraph of Section 10.8, would otherwise result in an adjustment in
the Conversion Rate pursuant to the provisions of Section 10.8, then, from and
after the record date for determining the holders of shares of Common Stock
entitled to receive the distribution, a Holder of a Security that converts such
Security in accordance with the provisions of this Indenture shall upon such
conversion be entitled to receive, in addition to the shares of shares of Common
Stock into which the Security is convertible, the kind and amount of securities,
cash or other assets comprising the distribution that such Holder would have
received if such Holder had converted the Security immediately prior to the
record date for determining the holders of shares of Common Stock entitled to
receive the distribution.
Section 10.16 COMPANY DETERMINATION FINAL. Any determination that the
Company or the Board of Directors must make pursuant to Section 10.3, 10.6,
10.7, 10.8, 10.9, 10.10, 10.11, 10.15 or 10.17 is conclusive, absent manifest
error.
Section 10.17 TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no duty
to determine when an adjustment under this Article X should be made, how it
should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 10.15 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article X. Each Conversion Agent shall have the same protection under this
Section 10.17 as the Trustee. All calculations required under Article X shall be
performed by the Company, with notice thereof to the Trustee.
Section 10.18 SIMULTANEOUS ADJUSTMENTS. In the event that this Article
X requires adjustments to the Conversion Rate under more than one of Sections
10.6(4), 10.7 or 10.8, and the record dates for the distributions giving rise to
such adjustments shall occur on the same date, then such adjustments shall be
made by applying, first, the provisions of Section 10.6, second, the provisions
of Section 10.8 and, third, the provisions of Section 10.7.
Section 10.19 SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article X, any subsequent event requiring an
adjustment under this Article X shall cause an adjustment to the Conversion Rate
as so adjusted.
Section 10.20 RESTRICTION ON COMMON STOCK ISSUABLE UPON CONVERSION.
(1) Shares of Common Stock to be issued upon conversion of the
Securities prior to the effectiveness of a Shelf Registration Statement shall be
physically delivered in certificated form to the holders converting such
Securities, and the certificate representing such shares of Common Stock shall
bear the Restricted Common Stock Legend unless removed in accordance with
Section 10.20(3).
58
(2) If (i) shares of Common Stock to be issued upon conversion of a
Security prior to the effectiveness of a Shelf Registration Statement are to be
registered in a name other than that of the holder of such Security or (ii)
shares of Common Stock represented by a certificate bearing the Restricted
Common Stock Legend are transferred subsequently by such holder, then, unless
the Shelf Registration Statement has become effective and such shares are being
transferred pursuant to the Shelf Registration Statement, the holder must
deliver to the transfer agent for the Common Stock a certificate in
substantially the form of Exhibit D as to compliance with the restrictions on
transfer applicable to such shares of Common Stock, and neither the transfer
agent nor the registrar for the Common Stock shall be required to register any
transfer of such Common Stock not so accompanied by a properly completed
certificate.
(3) Except for transfers in connection with a Shelf Registration
Statement, if certificates representing shares of Common Stock are issued upon
the registration of transfer, exchange or replacement of any other certificate
representing shares of Common Stock bearing the Restricted Common Stock Legend,
or if a request is made to remove such Restricted Common Stock Legend from
certificates representing shares of Common Stock, the certificates so issued
shall bear the Restricted Common Stock Legend, or the Restricted Common Stock
Legend shall not be removed, as the case may be, unless there is delivered to
the Company such satisfactory evidence, which, in the case of a transfer made
pursuant to Rule 144 under the Securities Act, may include an opinion of counsel
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under
the Securities Act or that such shares of Common Stock are securities that are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such reasonably satisfactory evidence, the Company
shall cause the transfer agent for the Common Stock to countersign and deliver
certificates representing shares of Common Stock that do not bear the legend.
ARTICLE XI
MISCELLANEOUS
Section 11.1 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.2 NOTICES. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Hasbro, Inc.
200 Narrangansett Park Drive
Pawtucket, RI 02862-0200
Attn: Treasurer
59
with a copy to:
Hasbro, Inc.
1027 Newport Avenue
Pawtucket, RI 02862
Attn: General Counsel
if to the Trustee:
The Bank of Nova Scotia Trust Company of New York
One Liberty Plaza
New York, NY 10006
Telephone No. (212) 635-4452
Facsimile No. (212) 635-4165
Attention: Corporate Trust Administration
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed
to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders,
it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 11.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
Section 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
60
Section 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
Section 11.6 SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.7 RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 11.8 LEGAL HOLIDAYS. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest, if any, shall accrue for the intervening
period.
Section 11.9 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD AS TO CONFLICT OF LAWS
PRINCIPLES.
Section 11.10 NO RECOURSE AGAINST OTHERS. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
Section 11.11 SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
61
Section 11.12 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
62
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
HASBRO, INC.
By: /s/ MARTIN R. TRUEB
-----------------------------------
Name: Martin R. Trueb
Title: Senior Vice President and
Treasurer
THE BANK OF NOVA SCOTIA TRUST COMPANY
OF NEW YORK, as Trustee
By: /s/ WARREN A. GOSHINE
----------------------------------
Name: WARREN A. GOSHINE
Title: SECRETARY
63
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY WILL BE SUBJECT TO THE REGULATIONS GOVERNING CONTINGENT
PAYMENT DEBT INSTRUMENTS FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. AS
REQUIRED UNDER APPLICABLE TREASURY REGULATIONS, THE COMPANY HAS SET FORTH THE
"COMPARABLE YIELD" IN SECTION 4.7 OF THE INDENTURE PURSUANT TO WHICH THIS
SECURITY IS BEING ISSUED. THE HOLDER OF THIS SECURITY MAY OBTAIN THE PROJECTED
PAYMENT SCHEDULE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO HASBRO,
INC., 200 NARRAGANSETT PARK DRIVE, PAWTUCKET, RI 02862-0200, ATTENTION:
TREASURER.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUE HEREOF (OR ANY PREDECESSOR SECURITY HEREOF) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
A-1-1
RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS
PERMITTED BY THE SECURITIES ACT.
The foregoing legend may be removed from this Security on satisfaction
of the conditions specified in the Indenture.
A-1-2
HASBRO, INC.
2.75% Convertible Senior Debentures due 2021
No. CUSIP: 418056 AM 9
Issue Date: November 30, 2001
Issue Price: 100% of principal amount
HASBRO, INC., a corporation duly organized and existing under the laws
of the State of Rhode Island, promises to pay to Cede & Co. or registered
assigns, the principal amount of [__________________] ($___________) on December
1, 2021.
This Security shall bear interest at a rate of 2.75% per year except as
specified on the other side of this Security. This Security is convertible as
specified on the other side of this Security.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
HASBRO, INC.
By:
-----------------------------------
Title:
----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By
------------------------------------------------
Authorized Signatory
Dated:
A-1-3
[FORM OF REVERSE OF GLOBAL SECURITY]
2.75% Convertible Senior Debentures due 2021
1. Interest.
Except as provided below, this Security shall bear interest at a rate
of 2.75% per year on the Accreted Value (as defined below) hereof, from November
30, 2001 or from the most recent Interest Payment Date (as defined below) to
which payment has been paid or duly provided for, payable semiannually in
arrears on June 1 and December 1 of each year (each an "Interest Payment Date")
to the persons in whose names the Securities are registered at the close of
business on May 15 and November 15 (each a "Regular Record Date") (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Interest on the Securities will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Cash interest on Securities converted after a record date, but prior to
the corresponding Interest Payment Date, will be paid to the Holder of the
Securities on the Regular Record Date but, upon conversion, the Holder must pay
the Company the cash interest which has accrued and will be paid on such
Interest Payment Date. No such payment needs to be made with respect to
Securities that will be redeemed after a Regular Record Date and prior to the
corresponding Interest Payment Date.
If the principal amount of a Security, plus accrued and unpaid
interest, or any portion thereof, is not paid when due (whether upon
acceleration pursuant to Section 6.2 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to Paragraph 5 hereof, upon the date
set for payment of the Purchase Price or the Fundamental Change Purchase Price
pursuant to Paragraph 6 hereof, or upon the Stated Maturity of this Security),
then, in each such case, the overdue amount shall, to the extent permitted by
law, bear interest at a rate of 2.75% per year, compounded semi-annually, which
interest shall accrue from the date such overdue amount was originally due to
the date of payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand and shall be
based on a 360-day year comprised of twelve 30-day months.
(a) Upward Interest Adjustment. The interest rate on this Security will
be 2.75% per year through December 1, 2005. If the average of the Sale Prices
(as defined below) of the Company's Common Stock is less than or equal to 45% of
the Accreted Conversion Price (as defined below) of this Security for any 20 out
of the last 30 trading days ending on the fifth day preceding each June 1 and
December 1, beginning on December 1, 2005, then the interest rate on this
Security will be subject to an upward interest adjustment for the six-month
period beginning on such June 1 or December 1 (an "Upward Interest Adjustment").
The Upward Interest Adjustment will result in the interest on this Security
being equivalent to the applicable Reset Rate (as defined below).
If an Upward Interest Adjustment is then in effect for any six-month
period and the average of the Sale Prices of the Company's Common Stock is not
less than or equal to 45% of the Accreted Conversion Price of this Security for
any 20 out of the last 30 trading days of the six-month period ending on the
fifth day preceding any June 1or December 1, as applicable, then
A-1-4
the interest rate on this Security for the six-month period beginning on such
June 1 or December 1 will revert to 2.75% per year of the Accreted Value.
If an Upward Interest Adjustment is in effect for a particular
six-month period, the Company will pay a portion of the Upward Interest
Adjustment as cash interest at a rate of 0.25% per year (0.125% per six-month
period) of the Accreted Value, and the remaining interest will be accrued and
payable at the Stated Maturity or earlier upon the redemption or repurchase of
the Securities.
The applicable "Reset Rate" for any six-month period in which there is
an Upward Interest Adjustment in effect, as determined by the Reset Rate Agent
(as defined below), will be set as of the Purchase Date on which such adjustment
is required or, if the adjustment is required as of a date that is not a
Purchase Date, the immediately preceding Purchase Date, and will be equal to the
rate (the "Reference Fixed Rate") that would, in the sole and reasonable
judgment of the Reset Rate Agent, result in a trading price of par for a
hypothetical issue of senior, non-convertible, fixed-rate, callable debt
securities of the Company with:
(i) a final maturity equal to the term from the most recent
Purchase Date until the next Purchase Date;
(ii) an aggregate principal amount equal to the then Accreted
Value of the Securities; and
(iii) provisions that are, insofar as would be practicable for
an issue of senior, non-convertible, fixed-rate, callable debt
securities with no restrictive covenants, substantially identical to
those of the Securities.
In no case, however, will the applicable Reset Rate for any period
exceed 11% per year. Also, if the Reset Rate Agent determines in its reasonable
judgment that there is no suitable Reference Fixed Rate, the applicable interest
rate on this Security for that period will be the interest rate then in effect
and to remain in effect until the Reset Rate Agent determines that there is a
suitable Reference Fixed Rate at which time the Reset Rate Agent shall determine
a new applicable Reset Rate for the period ending on the next Purchase Date.
"Accreted Conversion Price" means, as of any date, the Accreted Value
of this Security divided by the number of shares of Common Stock issuable upon
conversion of this Security on that day.
"Accreted Value" for any Security means, as of any date, the sum of the
principal amount of such Security and the accrued and unpaid non-current
interest thereon as of such date.
The "Sale Price" of the Common Stock on any date means the closing per
share sale price (or if no closing sale price is reported, the average of the
bid and ask prices or, if more than one in either case, the average of the
average bid and the average asked prices) on that date as reported on The New
York Stock Exchange or, if the Common Stock is not then listed on The New York
Stock Exchange, then as reported on the National Association of Securities
Dealers Automated Quotation System.
A-1-5
The Company and the Trustee agree that Salomon Smith Barney Inc. will
act as the Reset Rate Agent (the "Reset Rate Agent") unless and until removed as
provided below. For the determination of the applicable Reset Rate, the Reset
Rate Agent will seek indicative reference rates from one other nationally
recognized investment bank. The determination of any applicable Reset Rate shall
be made by the Reset Rate Agent by averaging the indicative reference rates
obtained by Salomon Smith Barney Inc. and such other investment bank. The
determination of any applicable Reset Rate by the Reset Rate Agent will be
conclusive and binding upon the Reset Rate Agent, the Company, the Trustee and
the holders of the Securities, in the absence of manifest error. The Reset Rate
Agent may be removed at any time with or without cause by the Company giving at
least sixty (60) days' written notice to the Reset Rate Agent. The Reset Rate
Agent may resign at any time upon giving at least thirty (30) days' written
notice to the Company. A successor Reset Rate Agent, if any, will be appointed
by the Company.
In the event of any Upward Interest Adjustment, the Company will
disseminate a press release through Dow Jones & Company, Inc. or Bloomberg
Business News containing this information or publish the information on the
Company's web site or through such other public medium as the Company may use at
that time.
(b) TAX EVENT.
From and after the date of the occurrence of a Tax Event, the Company
will have the option to elect to pay interest at the applicable Reset Rate on
this Security entirely in cash instead of accruing interest pursuant to an
Upward Interest Adjustment. Following the Company's election to pay interest in
cash following a Tax Event, the Company will execute new Securities to restate
the principal amount of the Securities to reflect the Accreted Value of the
Securities, and interest will be payable on the Accreted Value of the Securities
as of the date of the Company's election (the "Option Exercise Date").
Such interest shall accrue from the Option Exercise Date and will be
payable semiannually on the Interest Payment Dates to Holders of record as of
the Regular Record Dates immediately preceding the Interest Payment Dates. The
Company will give notice to the Holders, no later than 30 days prior to each
Regular Record Date, of the amount of cash interest to be paid on the subsequent
Interest Payment Date. Cash interest accrued and unpaid to the Option Exercise
Date shall be paid to the Holders of the Securities together with the cash
interest at the higher rate accrued from the Option Exercise Date.
A "Tax Event" means that the Company shall have received an opinion
from a nationally recognized independent tax counsel experienced in such matters
to the effect that as a result of:
- any amendment to or change (including any announced
prospective change (which will not include a proposed change))
in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority of the
United States or any political subdivision, provided that a
tax event will not occur more than 90 days before the
effective date of any prospective change in such laws or
regulations; or
A-1-6
- any judicial decision or official administrative
pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent
to adopt such procedures or regulations (an "Administrative
Action"); or
- any amendment to or change in the administrative position or
interpretation of any Administrative Action or judicial
decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court,
governmental agency or regulatory body, irrespective of the
manner in which such amendment or change is made known, which
amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date
of original issuance of the debentures;
there is more than an insubstantial risk that interest on the debentures,
including interest pursuant to an upward interest adjustment, either:
- would not be deductible in its entirety on a current accrual
basis; or
- would not be deductible under any other method, in whole or in
part, by the Company for United States federal income tax
purposes.
(c) GENERAL. Except as provided below, interest and Liquidated Damages,
if any, will be paid (i) on the Global Securities to DTC in immediately
available funds, (ii) on the definitive Securities having an aggregate principal
amount of $10,000,000 or less, by check mailed to the Holders of such
Securities, and (iii) on the definitive Securities having an aggregate principal
amount of more than $10,000,000, by wire transfer in immediately available funds
at the election of the Holders of these Securities.
2. METHOD OF PAYMENT.
Subject to the terms and conditions of the Indenture, the Company will
make payments in cash in respect of Redemption Prices, Purchase Prices,
Fundamental Change Purchase Prices and at Stated Maturity to Holders who
surrender Securities to the Paying Agent to collect such payments in respect of
the Securities, provided that the Company may make payments in shares of Common
Stock or combination of cash and Common Stock in respect of the Purchase Price
on a Purchase Date, as provided for in Section 3.7 of the Indenture. The Company
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may make such cash payments by check payable in such money.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR.
Initially, The Bank of Nova Scotia Trust Company of New York (the
"Trustee") will act as Paying Agent, Conversion Agent and Registrar. The Company
may appoint and change any Paying Agent, Conversion Agent or Registrar without
notice, other than notice to the Trustee; provided that the Company will
maintain at least one Paying Agent in the State of New York, City of New York,
Borough of Manhattan, which shall initially be an office or agency of the
Trustee. The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent or Registrar.
A-1-7
4. INDENTURE.
The Company issued the Securities under an Indenture dated as of
November 30, 2001 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect from time to time (the "TIA"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms. To the extent any
provisions of this Security and the Indenture conflict, the provisions of the
Indenture shall control.
The Securities are senior unsecured obligations of the Company limited
to $250,000,000 aggregate principal amount (subject to Section 2.7 of the
Indenture, Upward Interest Adjustments and the Company's election to pay
interest in cash following a Tax Event). The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. REDEMPTION AT THE OPTION OF THE COMPANY.
No sinking fund is provided for the Securities. The Securities are
redeemable at the option of the Company in whole or in part, on or after
December 6, 2005 upon not less than 30 nor more than 60 days' notice by mail for
a cash price equal to the Accreted Value plus accrued and unpaid current cash
interest, if any, to the Redemption Date (the "Redemption Price"), if the Sale
Price of the Common Stock for at least 20 trading days in any period of 30
consecutive trading days ending on the fifth Business Day preceding the date of
such notice is more than 125% of the Accreted Conversion Price as of the last
day of such 30 trading day period.
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Securities held by such Holder on any Purchase Date in integral multiples of
$1,000, if less than all of the Securities are being redeemed, at a Purchase
Price equal to the Accreted Value plus accrued and unpaid current cash interest,
if any, to the Purchase Date. To exercise such right, a Holder shall deliver to
the Company a Purchase Notice containing the information set forth in the
Indenture at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business two
Business Days prior to such Purchase Date, and shall deliver the Securities to
the Paying Agent as set forth in the Indenture.
The Purchase Price may be paid, at the option of the Company, in cash
or by the issuance and delivery of shares of Common Stock, or in any combination
thereof, provided that accrued and unpaid current cash interest shall be paid in
cash.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to offer to purchase the
Securities held by such Holder within 30 days (which purchase shall occur 45
days after the date of such offer) after the occurrence of a Fundamental Change
for a Fundamental Change Purchase Price equal to the Accreted Value plus accrued
and unpaid current cash interest, if any, to the Fundamental Change Purchase
Date, which Fundamental Change Purchase Price shall be paid in cash.
A-1-8
Holders have the right to withdraw any Purchase Notice or Fundamental
Change Purchase 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.
If cash (and/or shares of Common Stock if permitted under the
Indenture) sufficient to pay the Purchase Price or Fundamental Change Purchase
Price, as the case may be, of all Securities or portions thereof to be purchased
on the Purchase Date or the Fundamental Change Purchase Date, as the case may
be, is deposited with the Paying Agent on the Purchase Date or the Fundamental
Change Purchase Date, interest ceases to accrue on such Securities or portions
thereof immediately after such Purchase Date or Fundamental Change Purchase
Date, and the Holder thereof shall have no other rights as such other than the
right to receive the Purchase Price or Fundamental Change Purchase Price upon
surrender of such Security.
7. NOTICE OF REDEMPTION.
Notice of redemption pursuant to Paragraph 5 of this Security will be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities or portions
thereof to be redeemed on the Redemption Date is deposited with the Paying Agent
prior to or on the Redemption Date, interest ceases to accrue on such Securities
or portions thereof immediately after such Redemption Date. Securities in
denominations larger than $1,000 of principal amount may be redeemed in part but
only in integral multiples of $1,000 of principal amount, if less than all of
the Securities are being redeemed.
8. CONVERSION.
Holders may surrender Securities for conversion into shares of Common
Stock if during any calendar quarter the Sale Price of our Common Stock for at
least 20 trading days in the period of 30 consecutive trading days ending on the
last trading day of the previous quarter is more than 110% of the Accreted
Conversion Price per share of the Common Stock on such last trading day. A
Holder may also surrender for conversion a Security or portion of a Security
which has been called for redemption pursuant to Paragraph 5 hereof, even if
bthe foregoing provision has not been satisfied, and such Securities may be
surrendered for conversion until the close of business on the day that is two
Business Days prior to the Redemption Date.
In the event that the Conversion Rate must be adjusted because the
Company declares a dividend or distribution described in Section 10.7 of the
Indenture or a dividend or a distribution described in Section 10.8 of the
Indenture where the fair market value of such dividend or distribution per share
of Common Stock, as determined in the Indenture, exceeds 15% of the Sale Price
of a share of Common Stock as of the Business Day prior to the date of
declaration for such distribution, unless the Holder may participate in this
distribution without conversion, the Securities may be surrendered for
conversion beginning on the date the Company gives notice to the Holders of such
right, which shall be not less than 20 days prior to the Ex-Dividend Time for
such dividend or distribution, and the Securities may be surrendered for
conversion at any time thereafter until the close of business on the Business
Day prior to the Ex-Dividend Time or until the Company announces that such
distribution will not take place.
A-1-9
In the event the Company is a party to a consolidation, merger or
binding share exchange pursuant to which the shares of Common Stock would be
converted into cash, securities or other property (other than if such property
consists of shares of voting common stock of the surviving person that are, or
upon issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States, and such shares represent at least 95% of the aggregate
fair market value (as determined by the Board of Directors) of such property),
the Securities may be surrendered for conversion at any time from and after the
date which is 15 days prior to the date the Company announces as the anticipated
effective time until 15 days after the actual date of such transaction.
Finally, if the long-term credit rating assigned to the Securities by
any two of Moody's Investors Service, Inc., Standard & Poor's Ratings Group or
Fitch IBCA Duff & Phelps are reduced two notches below Ba3, BB and BB,
respectively, or if the Securities are no longer rated by any two of these
ratings services or if the ratings for the Securities have been suspended by two
of these rating services, the Securities may be surrendered for conversion
beginning on the date the Company gives notice to the Holders of such right,
which shall not be later than 15 days after the date on which the Company is
notified of any such event by the relevant ratings service.
A Security in respect of which a Holder has delivered a Purchase Notice
or Fundamental Change Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 46.2963 shares of Common Stock per
$1,000 principal amount of Securities, subject to adjustment in certain events
described in the Indenture. A Holder that surrenders Securities for conversion
will receive cash or a check in lieu of any fractional shares of Common Stock.
To surrender a Security for conversion, a Holder must (1) complete and
manually sign the irrevocable conversion notice below (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender the Security to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents and (4) pay any transfer or
similar tax, if required.
A Holder may convert a portion of a Security if the principal amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the shares of Common Stock except as
provided in the Indenture. Except as provided in Paragraph 1 hereof, on
conversion of a Security, the Holder will not receive any cash payment
representing accrued interest with respect to the converted Securities. Instead,
upon conversion the Company will deliver to the Holder a fixed number of shares
of Common Stock and any cash payment to account for fractional shares. Accrued
interest will be deemed paid in full rather than canceled, extinguished or
forfeited. The Company will not adjust the Conversion Rate to account for
accrued interest.
The Conversion Rate will be adjusted as provided in Article 10 of the
Indenture. The Company may increase the Conversion Rate for at least 20 days, so
long as the increase is irrevocable during such period.
A-1-10
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, then at the effective time of
the transaction the right to convert a Security into shares of Common Stock may
be changed into a right to convert it into securities, cash or other assets of
the Company or another person.
9. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the day that is two Business Days prior to the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into shares of Common
Stock and to make payment for such Securities to the Trustee in trust for such
Holders.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in fully registered form, without coupons, in
minimum denominations of $1,000 of principal amount and integral multiples of
$1,000 (except as necessary to reflect the related Accreted Value of any
Security). A Holder may transfer or exchange the Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Securities selected for redemption (except, in the case
of a Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities in respect of which a Purchase Notice or Fundamental
Change Purchase Notice has been given and not withdrawn (except, in the case of
a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
12. UNCLAIMED MONEY OR SECURITIES.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person.
13. AMENDMENT; WAIVER.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate
A-1-11
principal amount of the Securities at the time outstanding and (ii) certain
Defaults may be waived with the written consent of the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder, the Company and the Trustee may amend the Indenture or the Securities
among other things, (i) to cure any ambiguity, omission, defect or
inconsistency, provided that such modification or amendment does not materially
and adversely affect the interests of the holders of the Securities, (ii) to
comply with Article 5 or Section 10.14 of the Indenture, (iii) to secure the
Company's obligations or to add any guarantee under the Securities and the
Indenture; (iv) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the Company, (v) to
make any change necessary for the registration of the Securities under the
Securities Act or to comply with the TIA, or any amendment thereto, or to comply
with any requirement of the SEC in connection with the qualification of the
Indenture under the TIA, provided that such modification or amendment does not
materially and adversely affect the interests of the holders of the Securities,
(vi) to provide for uncertificated Securities in addition to or in place of
certificated Securities or to provide for bearer Securities or (vii) to make any
modifications or amendments that that the Company and the Trustee may deem
necessary or desirable, provided such amendment or modification does not
materially and adversely affect the interests of the Holders of the Securities.
14. DEFAULTS AND REMEDIES.
Under the Indenture, Events of Default include (i) default in payment
of the principal amount of the Securities plus accrued and unpaid interest when
the same becomes due and payable at Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise, (ii) default in
the payment of any cash interest (including interest which becomes payable after
an Upward Interest Adjustment or any election by the Company to pay interest
entirely in cash on the Securities following a Tax Event), when due and payable,
subject to lapse of time, (iii) failure by the Company to comply in any material
respect with other agreements or covenants in the Indenture or the Securities,
subject to notice and lapse of time; (iv) failure by the Company to deliver
shares of Common Stock upon the election by the Holders to convert their
Securities, subject to lapse of time; (v) failure to provide timely notice of a
Fundamental Change; (vi) default under any credit agreement, mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the Company or any of its
Material Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Material Subsidiaries), whether such Indebtedness or guarantee exists
on the date of the Indenture or is created thereafter, which default (A) is
caused by a failure to pay when due any principal of such Indebtedness within
the grace period provided for in such Indebtedness (which failure continues
beyond any applicable grace period) (a "Payment Default") or (B) results in the
acceleration of such Indebtedness prior to its express maturity (without such
acceleration being rescinded or annulled) and, in each case, the principal
amount of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates $25,000,000 or more and such Payment
Default is not cured or such acceleration is not annulled within 30 days after
notice; or (vii) failure by the Company or any Material Subsidiary of the
Company to pay final, non-appealable judgments (other than any judgment as to
which a reputable insurance company has accepted full liability) aggregating in
excess of $25,000,000, which judgments are not stayed, bonded or discharged
within 60 days
A-1-12
after their entry; and (vii) certain events of bankruptcy, insolvency and
reorganization of the Company.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from the Holders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(ii) above) if it determines that withholding notice is in their interests.
15. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee.
16. CALCULATIONS IN RESPECT OF SECURITIES.
The Company will be responsible for making all calculations called for
under the Securities, except for such calculations made by the Reset Rate Agent.
These calculations include, but are not limited to, determination of the market
prices for the Common Stock, accrued interest payable on the Securities and the
Accreted Conversion Price of the Securities. Any calculations made in good faith
and without manifest error will be final and binding on Holders of the
Securities. The Company will be required to deliver to each of the Trustee and
the Conversion Agent a schedule of its calculations and each of the Trustee and
the Conversion Agent will be entitled to rely upon the accuracy of such
calculations without independent verification. The Trustee will forward the
Company's calculations to any Holder of the Securities upon the request of such
Holder.
17. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Holder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
18. AUTHENTICATION.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants
A-1-13
with right of survivorship and not as tenants in common), CUST (=custodian), and
U/G/M/A (=Uniform Gift to Minors Act).
20. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture which has in it the text of this Security in
larger type. Requests may be made to:
Hasbro, Inc.
200 Narragansett Park Drive
Pawtucket, RI 02862-0200
Attn: Treasurer
21. REGISTRATION RIGHTS.
The Holders of the Securities are entitled to the benefits of a
Registration Agreement, dated as of November 30, 2001, between the Company and
Salomon Smith Barney Inc., including the receipt of liquidated damages upon a
registration default (as defined in such agreement).
A-1-14
FORM OF CONVERSION NOTICE
To: HASBRO, INC.
The undersigned beneficial owner of the Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Hasbro, Inc. in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and
Securities representing any unconverted principal amount hereof, be issued and
delivered to the beneficial owner hereof unless a different name has been
indicated below. If shares or any portion of this Security not converted are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest, Liquidated Damages and taxes
accompanies this Security.
Dated: --------------------------------------------------------
Fill in for registration of shares if to be delivered, --------------------------------------------------------
and Securities if to be issued, other than to and in
the name of the beneficial owner --------------------------------------------------------
(Please Print): Signature(s)
Principal amount to be converted (if less than all):
- ----------------------------------------------------------
(Name) $___,000
- ---------------------------------------------------------- ---------------------------------------------------------
(Street Address) Social Security or other Taxpayer Identification Number
- ----------------------------------------------------------
(City, State and Zip Code)
Signature Guarantee:
- ----------------------------------------------------------
Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Securities are to be delivered, other than to and in the name of the registered
holder(s).
A-1-15
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________ agent to transfer
this Security on the books of the Company. The agent may substitute another to
act for him.
Your Signature: ______________________________________________
(Sign exactly as your name appears on the other side of this Security)
Date:
----------------------------
Medallion Signature Guarantee:
-----------------------------------------
[FOR INCLUSION ONLY IF THIS SECURITY BEARS A RESTRICTED SECURITIES LEGEND] In
connection with any transfer of any of the Securities evidenced by this
certificate which are "restricted securities" (as defined in Rule 144 (or any
successor thereto) under the Securities Act), the undersigned confirms that such
Securities are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [ ] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) [ ] pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder.
Unless one of the boxes is checked, the Registrar will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof; provided,
however, that if box (3) or (4) is checked, the Trustee may
A-1-16
require, prior to registering any such transfer of the Securities, such
certifications and other information, and if box (4) is checked such
legal opinions, as the Company has reasonably requested in writing, by
delivery to the Trustee of a standing letter of instruction, to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act of 1933; provided that this paragraph shall not be
applicable to any Securities which are not "restricted securities" (as
defined in Rule 144 (or any successor thereto) under the Securities
Act).
Your Signature:
--------------------------------------------------------
(Sign exactly as your name appears on the other side
of this Security)
Date:
-------------------------------
Medallion Signature Guarantee:
-----------------------------------------
A-1-17
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ($ ).
------------- -----------
Date Amount of Increase Amount of Decrease in Principal Amount of Notation by
in Principal Amount Principal Amount of Global Security Registrar or
of Global Security Global Security After Increase or Security Custodian
Decrease
A-1-18
EXHIBIT A-2
[FORM OF FACE OF CERTIFICATED SECURITY]
THIS SECURITY WILL BE SUBJECT TO THE REGULATIONS GOVERNING CONTINGENT
PAYMENT DEBT INSTRUMENTS FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. AS
REQUIRED UNDER APPLICABLE TREASURY REGULATIONS, THE COMPANY HAS SET FORTH THE
"COMPARABLE YIELD" IN SECTION 4.7 OF THE INDENTURE PURSUANT TO WHICH THIS
SECURITY IS BEING ISSUED. THE HOLDER OF THIS SECURITY MAY OBTAIN THE PROJECTED
PAYMENT SCHEDULE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO HASBRO,
INC., 200 NARRAGANSETT PARK DRIVE, PAWTUCKET, RI 02862-0200.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUE HEREOF (OR ANY PREDECESSOR SECURITY HEREOF) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS
PERMITTED BY THE SECURITIES ACT.
The foregoing legend may be removed from this Security on satisfaction
of the conditions specified in the Indenture.
A-2-1
HASBRO, INC.
2.75% Convertible Senior Debentures due 2021
No. CUSIP: 418056 AM 9
Issue Date: November 30, 2001
Issue Price: 100% of principal amount
HASBRO, INC., a corporation duly organized and existing under the laws
of the State of Rhode Island, promises to pay to ____________________, or
registered assigns, the principal amount of [($__________________) on December
1, 2021.
This Security shall bear interest at a rate of 2.75% per year except as
specified on the other side of this Security. This Security is convertible as
specified on the other side of this Security.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
HASBRO, INC.
By:
------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By
------------------------------------------------
Authorized Signatory
Dated:
A-2-2
[FORM OF REVERSE OF CERTIFICATED SECURITY
IS IDENTICAL TO EXHIBIT A-1]
A-2-3
EXHIBIT B
2.75% Convertible Senior Debentures due 2021
Transfer Certificate
In connection with any transfer of any of the Securities within the period prior
to the expiration of the holding period applicable to the sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act")
(or any successor provision), the undersigned registered owner of this Security
hereby certifies with respect to $____________ principal amount of the
above-captioned Securities presented or surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), the undersigned confirms that such
Securities are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [ ] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) [ ] pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder.
Unless one of the boxes is checked, the Registrar will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof; provided,
however, that if box (3) or (4) is checked, the Trustee may require,
prior to registering any such transfer of the Securities, such
certifications and other information, and if box (4) is checked such
legal opinions, as the Company has reasonably requested in writing, by
delivery to the Trustee of a standing letter of instruction, to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act of 1933; provided that this paragraph shall not be
applicable to any Securities which are not "restricted securities" (as
defined in Rule 144 (or any successor thereto) under the Securities
Act).
Your Signature:
--------------------------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Date:
----------------------------------
Medallion Signature Guarantee:
-----------------------------------------
B-1
EXHIBIT C
FORM OF RESTRICTED COMMON STOCK LEGEND
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO, INCLUDING THE RELATED
DEBENTURE) OR (Y) BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF
RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A
QUALIFIED INSTITUTIONAL BUYER OR (2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN
ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED BY THE
SECURITIES ACT."
C-1
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OF RESTRICTED COMMON STOCK
(Transfers pursuant to Section 10.20 of the Indenture)
[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]
Re: Hasbro, Inc. 2.75% Convertible Senior Debentures due 2021 (the
"Securities")
Reference is hereby made to the Indenture dated as of November 30, 2001
(the "Indenture") between Hasbro, Inc. and The Bank of Nova Scotia Trust Company
of New York, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given them in the Indenture.
This letter relates to _________ shares of Common Stock represented by
the accompanying certificate(s) that were issued upon conversion of Securities
and which are held in the name of [name of transferor] (the "Transferor") to
effect the transfer of such Common Stock.
In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [ ] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) [ ] pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144 thereunder.
D-1
Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Common Stock evidenced by this certificate in the name of
any person other than the registered holder thereof; provided, however, that if
box (3) or (4) is checked, the transfer agent may require, prior to registering
any such transfer of the Common Stock such certifications and other information,
and if box (4) is checked such legal opinions, as the Company has reasonably
requested in writing, by delivery to the transfer agent of a standing letter of
instruction, to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.
[Name of Transferor],
By
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Dated:
D-2
SCHEDULE A
Projected Payment Schedule*
Projected Payment per
Period Debenture
------ ---------
November 30, 2001 - June 1, 2002 $13.75
June 1, 2002 - December 1, 2002 $13.75
December 1, 2002 - June 1, 2003 $13.75
June 1, 2003 - December 1, 2003 $13.75
December 1, 2003 - June 1, 2004 $13.75
June 1, 2004 - December 1, 2004 $13.75
December 1, 2004 - June 1, 2005 $13.75
June 1, 2005 - December 1, 2005 $13.75
December 1, 2005 - June 1, 2006 $14.05
June 1, 2006 - December 1, 2006 $14.07
December 1, 2006 - June 1, 2007 $14.09
June 1, 2007 - December 1, 2007 $14.10
December 1, 2007 - June 1, 2008 $14.12
June 1, 2008 - December 1, 2008 $14.13
December 1, 2008 - June 1, 2009 $14.15
June 1, 2009 - December 1, 2009 $14.16
December 1, 2009 - June 1, 2010 $14.17
June 1, 2010 - December 1, 2010 $14.18
December 1, 2010 - June 1, 2011 $14.20
June 1, 2011 - December 1, 2011 $14.21
December 1, 2011 - June 1, 2012 $14.22
June 1, 2012 - December 1, 2012 $14.23
December 1, 2012 - June 1, 2013 $14.24
June 1, 2013 - December 1, 2013 $14.25
December 1, 2013 - June 1, 2014 $14.26
June 1, 2014 - December 1, 2014 $14.27
December 1, 2014 - June 1, 2015 $14.28
June 1, 2015 - December 1, 2015 $14.29
December 1, 2015 - June 1, 2016 $14.30
June 1, 2016 - December 1, 2016 $14.32
December 1, 2016 - June 1, 2017 $14.33
June 1, 2017 - December 1, 2017 $14.34
December 1, 2017 - June 1, 2018 $14.35
June 1, 2018 - December 1, 2018 $14.36
December 1, 2018 - June 1, 2019 $14.37
June 1, 2019 - December 1, 2019 $14.38
December 1, 2019 - June 1, 2020 $14.39
June 1, 2020 - December 1, 2020 $14.40
December 1, 2020 - June 1, 2021 $14.41
June 1, 2021 - December 1, 2021 $3,668.19
- -------------------
* The comparable yield and the schedule of projected payments are determined on
the basis of certain assumptions and are not determined for any purpose other
than for the determination of interest accruals and adjustments thereof in
respect of the Securities for United States federal income tax purposes. The
comparable yield and the schedule of projected payments do not constitute a
projection or representation regarding the amounts payable on Securities.