Exhibit 99.2
PROASSURANCE CORPORATION, as Issuer
SOUTHTRUST BANK, as Trustee
Up to $135,000,000 Aggregate Principal Amount of
3.90% Convertible Senior Debentures Due 2023
INDENTURE
Dated as of July 7, 2003
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE............................................................. 1
Section 1.1 Definitions........................................................................... 1
Section 1.2 Incorporation by Reference of Trust Indenture Act..................................... 9
Section 1.3 Rules of Construction................................................................. 9
Section 1.4 Acts of Holders....................................................................... 10
ARTICLE II THE SECURITIES........................................................................................ 11
Section 2.1 Form and Dating....................................................................... 11
Section 2.2 Execution and Authentication.......................................................... 12
Section 2.3 Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent.................. 13
Section 2.4 Paying Agent to Hold Cash and Securities in Trust..................................... 14
Section 2.5 Securityholder Lists.................................................................. 14
Section 2.6 Transfer and Exchange................................................................. 14
Section 2.7 Replacement Securities................................................................ 15
Section 2.8 Outstanding Securities; Determinations of Holders' Action............................. 16
Section 2.9 Temporary Securities.................................................................. 17
Section 2.10 Cancellation.......................................................................... 17
Section 2.11 Persons Deemed Owners................................................................. 17
Section 2.12 Additional Transfer and Exchange Requirements......................................... 18
Section 2.13 CUSIP Numbers......................................................................... 23
Section 2.14 Ranking............................................................................... 23
ARTICLE III REDEMPTION........................................................................................... 24
Section 3.1 The Company's Right to Redeem; Notice to Trustee...................................... 24
Section 3.2 Selection of Securities to Be Redeemed................................................ 24
Section 3.3 Notice of Redemption.................................................................. 25
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Section 3.4 Effect of Notice of Redemption........................................................ 26
Section 3.5 Deposit of Redemption Price........................................................... 26
Section 3.6 Securities Redeemed in Part........................................................... 26
Section 3.7 Repayment to the Company.............................................................. 27
ARTICLE IV REPURCHASE OF SECURITIES.............................................................................. 27
AT THE OPTION OF HOLDERS ON SPECIFIC DATES....................................................................... 27
Section 4.1 Optional Put.......................................................................... 27
Section 4.2 The Company's Right to Elect Manner of Payment of Repurchase Price.................... 30
Section 4.3 Effect of Repurchase Notice; Withdrawal of Repurchase Notice.......................... 32
Section 4.4 Deposit of Repurchase Price........................................................... 32
Section 4.5 Securities Repurchased in Part........................................................ 33
Section 4.6 Covenant to Comply With Securities Laws Upon Repurchase of Securities................. 33
Section 4.7 Repayment to the Company.............................................................. 34
ARTICLE V REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL........................................... 34
Section 5.1 Change of Control Put................................................................. 34
Section 5.2 The Company's Right to Elect Manner of Payment of Change of Control Repurchase
Price................................................................................. 37
Section 5.3 Effect of Change of Control Repurchase Notice; Withdrawal of Change of Control
Repurchase Notice..................................................................... 40
Section 5.4 Deposit of Change of Control Repurchase Price......................................... 40
Section 5.5 Securities Repurchased in Part........................................................ 41
Section 5.6 Covenant to Comply With Securities Laws Upon Repurchase of Securities................. 41
Section 5.7 Repayment to the Company.............................................................. 42
ARTICLE VI COVENANTS............................................................................................. 42
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Section 6.1 Payment of Securities................................................................. 42
Section 6.2 SEC and Other Reports to the Trustee.................................................. 43
Section 6.3 Compliance Certificate................................................................ 43
Section 6.4 Further Instruments and Acts.......................................................... 43
Section 6.5 Maintenance of Office or Agency of the Trustee, Registrar, Paying Agent and
Conversion Agent...................................................................... 43
Section 6.6 Delivery of Information Required Under Rule 144A...................................... 44
Section 6.7 Waiver of Stay, Extension or Usury Laws............................................... 44
Section 6.8 Statement by Officers as to Default................................................... 44
ARTICLE VII SUCCESSOR CORPORATION................................................................................ 45
Section 7.1 When Company May Merge or Transfer Assets............................................. 45
ARTICLE VIII DEFAULTS AND REMEDIES............................................................................... 46
Section 8.1 Events of Default..................................................................... 46
Section 8.2 Acceleration.......................................................................... 47
Section 8.3 Other Remedies........................................................................ 48
Section 8.4 Waiver of Past Defaults............................................................... 48
Section 8.5 Control by Majority................................................................... 48
Section 8.6 Limitation on Suits................................................................... 49
Section 8.7 Rights of Holders to Receive Payment or to Convert.................................... 49
Section 8.8 Collection Suit by Trustee............................................................ 49
Section 8.9 Trustee May File Proofs of Claim...................................................... 50
Section 8.10 Priorities............................................................................ 50
Section 8.11 Undertaking for Costs................................................................. 51
Section 8.12 Restoration of Rights and Remedies.................................................... 51
ARTICLE IX TRUSTEE............................................................................................... 51
Section 9.1 Duties of Trustee..................................................................... 51
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Section 9.2 Rights of Trustee..................................................................... 53
Section 9.3 Individual Rights of Trustee.......................................................... 54
Section 9.4 Trustee's Disclaimer.................................................................. 54
Section 9.5 Notice of Defaults.................................................................... 55
Section 9.6 Reports by Trustee to Holders......................................................... 55
Section 9.7 Compensation and Indemnity............................................................ 55
Section 9.8 Replacement of Trustee................................................................ 56
Section 9.9 Successor Trustee by Merger........................................................... 57
Section 9.10 Eligibility; Disqualification......................................................... 57
Section 9.11 Preferential Collection of Claims Against Company..................................... 57
ARTICLE X DISCHARGE OF INDENTURE................................................................................. 58
Section 10.1 Discharge of Liability on Securities.................................................. 58
Section 10.2 Repayment to the Company.............................................................. 58
ARTICLE XI AMENDMENTS............................................................................................ 58
Section 11.1 Without Consent of Holders............................................................ 58
Section 11.2 With Consent of Holders............................................................... 59
Section 11.3 Compliance with Trust Indenture Act................................................... 61
Section 11.4 Revocation and Effect of Consents, Waivers and Actions................................ 61
Section 11.5 Notation on or Exchange of Securities................................................. 61
Section 11.6 Trustee to Sign Supplemental Indentures............................................... 61
Section 11.7 Effect of Supplemental Indentures..................................................... 62
ARTICLE XII CONVERSION........................................................................................... 62
Section 12.1 Conversion Privilege.................................................................. 62
Section 12.2 Conversion Procedure; Conversion Rate; Fractional Shares.............................. 63
Section 12.3 Adjustment of Conversion Rate for Common Stock........................................ 65
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Section 12.4 Consolidation or Merger of the Company................................................ 74
Section 12.5 Notice of Adjustment.................................................................. 75
Section 12.6 Notice in Certain Events.............................................................. 76
Section 12.7 Company To Reserve Stock: Registration; Listing....................................... 76
Section 12.8 Taxes on Conversion................................................................... 77
Section 12.9 Conversion After Record Date.......................................................... 77
Section 12.10 Company Determination Final........................................................... 78
Section 12.11 Responsibility of Trustee for Conversion Provisions................................... 78
Section 12.12 Unconditional Right of Holders to Convert............................................. 78
Section 12.13 Cash Conversion Option................................................................ 78
ARTICLE XIII PAYMENT OF INTEREST................................................................................. 80
Section 13.1 Interest Payments..................................................................... 80
Section 13.2 Defaulted Interest.................................................................... 80
Section 13.3 Interest Rights Preserved............................................................. 81
ARTICLE XIV CONTINGENT INTEREST.................................................................................. 82
Section 14.1 Contingent Interest................................................................... 82
Section 14.2 Payment of Contingent Interest; Contingent Interest Rights Reserved................... 82
Section 14.3 Bid Solicitation Agent................................................................ 82
ARTICLE XV TAX TREATMENT......................................................................................... 82
Section 15.1 Tax Treatment......................................................................... 82
Section 15.2 Comparable Yield and Projected Payment Schedule....................................... 83
ARTICLE XVI MISCELLANEOUS........................................................................................ 84
Section 16.1 Trust Indenture Act Controls.......................................................... 84
Section 16.2 Notices............................................................................... 84
Section 16.3 Communication by Holders with Other Holders........................................... 85
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Section 16.4 Certificate and Opinion as to Conditions Precedent.................................... 85
Section 16.5 Statements Required in Certificate or Opinion......................................... 85
Section 16.6 Separability Clause................................................................... 86
Section 16.7 Rules by Trustee, Paying Agent, Conversion Agent and Registrar........................ 86
Section 16.8 Legal Holidays........................................................................ 86
Section 16.9 Governing Law; Submission to Jurisdiction; Service of Process......................... 86
Section 16.10 No Recourse Against Others............................................................ 86
Section 16.11 Successors............................................................................ 87
Section 16.12 Multiple Originals.................................................................... 87
Section 16.13 Benefits of Indenture................................................................. 87
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CROSS REFERENCE TABLE*
TIA Section Indenture Section
310(a)(1)............................................ 9.10
(a)(2)............................................ 9.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(b)............................................... 9.8;9.10
(c)............................................... N.A.
311(a)............................................... 9.11
(b)............................................... 9.11
(c)............................................... N.A.
312(a)............................................... 2.5
(b)............................................... 16.3
(c)............................................... 16.3
313(a)............................................... 9.6
(b)(1)............................................ N.A.
(b)(2)............................................ 9.6
(c)............................................... 16.2
(d)............................................... 9.6
314(a)............................................... 6.2; 6.3; 16.2
(b)............................................... N.A.
(c)(1)............................................ 16.4
(c)(2)............................................ 16.4
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 16.5
(f)............................................... N.A.
315(a)............................................... 9.1
(b)............................................... 9.5; 16.2
(c)............................................... 9.1
(d)............................................... 9.1
(e)............................................... 8.11
316(a)(last sentence)................................ 2.8
(a)(1)(A)......................................... 8.5
(a)(1)(B)......................................... 8.4
(a)(2)............................................ N.A.
(b)............................................... 8.7
317(a)(1)............................................ 8.8
(a)(2)............................................ 8.9
(b)............................................... 2.4
318(a)............................................... 16.1
N.A. means Not Applicable
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*Note: This Cross Reference Table shall not, for any purpose be deemed to be
part of the Indenture.
INDENTURE dated as of July 7, 2003 between PROASSURANCE CORPORATION, a
Delaware corporation (the "Company"), and SouthTrust Bank, an Alabama banking
corporation, as trustee (the "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 3.90% Convertible
Senior Debentures due 2023:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS
"ADDITIONAL AMOUNTS" has the meaning set forth in the Registration
Rights Agreement. All references herein or in the Securities to interest accrued
or payable as of any date shall include any Additional Amounts accrued or
payable as of such date as provided in the Registration Rights Agreement.
"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.
"AGENT MEMBERS" has the meaning set forth in Section 2.1(b).
"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 Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"APPLICABLE STOCK" means (a) the shares of Common Stock, and (b) in
the event of a merger, consolidation or other similar transaction involving the
Company that is otherwise permitted hereunder in which the Company is not the
surviving Person, the capital stock or ordinary shares of such surviving Person
or its direct or indirect parent entitled to vote generally in the election of
directors of such Person.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar
Federal or State law for the relief of debtors.
"BID SOLICITATION AGENT" has the meaning set forth in Section 2.3.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BOARD RESOLUTION" means a resolution of the Board of Directors.
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"BUSINESS DAY" means each day of the year other than a Saturday or a
Sunday or other day on which banking institutions in the cities of New York, New
York and Birmingham, Alabama are required or authorized by law or regulation to
close.
"CAPITAL STOCK" of any corporation or company 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 or the capital of that company.
"CASH" means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.
"CASH AMOUNT" has the meaning set forth in Section 12.13(a)(iii).
"CASH SETTLEMENT AVERAGING PERIOD" has the meaning set forth in Section
12.13(a).
"CASH SETTLEMENT NOTICE PERIOD" has the meaning set forth in Section
12.13(a).
"CERTIFICATED SECURITIES" means Securities that are in substantially
the form attached hereto as Exhibit A and that do not include the information
called for by footnote 1 and 3 thereof.
A "CHANGE OF CONTROL" will be deemed to have occurred at such time
after the Securities are originally issued when any of the following events
shall occur:
(a) the acquisition by any person, including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Exchange Act of beneficial
ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of purchase, merger or other acquisition
transactions, of 50% or more of the aggregate outstanding Voting Stock of the
Company, other than any acquisition of Voting Stock of the Company by any
Subsidiary or any of the Company's employee benefit plans;
(b) the acquisition by any person, including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Exchange Act of beneficial
ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of purchase, merger or other acquisition
transactions, of shares of the Capital Stock of the Company as a result of
which:
(i) the Common Stock ceases (or, upon consummation of or
immediately following such transaction or event, will cease) to be listed on a
United States national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system for automated
dissemination of quotations of securities prices; or
(ii) less than 20% of the outstanding shares of the Common Stock
remain beneficially owned by persons other than 10% Stockholders; or
(c) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new Directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the Company was approved pursuant to a vote
of a majority of the Directors then still in office who
2
were either Directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office; or
(d) any consolidation or merger of the Company with or into any
other person, any merger of another Person into the Company, or any conveyance,
transfer, sale, lease or other disposition of all or substantially all of the
Company's properties and assets to another Person, other than:
(i) any transaction: (A) that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
the Company's Capital Stock; and (B) pursuant to which holders of the Company's
Capital Stock immediately prior to the transaction have the entitlement to
exercise, directly or indirectly, 50% or more of the total voting power of all
shares of the Voting Stock of the continuing or surviving Person immediately
after giving effect to such issuance; and
(ii) any merger, share exchange, transfer of assets or similar
transaction solely for the purpose of changing the Company's jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of Common Stock, if at all, solely into common stock,
ordinary shares or American Depositary Shares of the surviving Person or a
direct or indirect parent of the surviving Person.
For the purposes of this definition of Change of Control, whether a
person is a "beneficial owner" shall be determined in accordance with Rule 13d-3
under the Exchange Act.
"CHANGE OF CONTROL REPURCHASE DATE" has the meaning set forth in
Section 5.1(a)(i).
"CHANGE OF CONTROL REPURCHASE NOTICE" has the meaning set forth in
Section 5.1(c).
"CHANGE OF CONTROL REPURCHASE PRICE" has the meaning set forth in
Section 5.1(a)(i).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock, $0.01 par value per share, of
the Company as that stock exists 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.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any two Officers, at least one of whom is
the Chief Executive Officer, the President or the Chief Financial Officer.
"CONTINGENT INTEREST" has the meaning set forth in Section 14.1.
3
"CONTINGENT INTEREST PERIOD" has the meaning set forth in Section 14.1.
"CONVERSION AGENT" has the meaning set forth in Section 2.3.
"CONVERSION NOTICE" has the meaning set forth in Section 12.2(b).
"CONVERSION OBLIGATION" has the meaning set forth in Section 12.13(a).
"CONVERSION PRICE" means, at any time, the dollar amount determined by
dividing $1,000 divided by the Conversion Rate in effect at such time, rounded
to two decimal places (rounded up if the third decimal place thereof is 5 or
more and otherwise rounded down).
"CONVERSION RATE" means the number of shares of Common Stock issuable
upon the conversion of each 81,000 principal amount of the Securities, initially
23.9037 shares of Common Stock per $1,000 principal amount of the Securities
subject to adjustment as set forth herein.
"CONVERSION RETRACTION PERIOD" has the meaning set forth in Section
12.13(a).
"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 110 Office Park Drive, 2nd Floor, Mail
Code: A-001-OB-0201, Birmingham, Alabama, 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).
"CURRENT MARKET PRICE" has the meaning set forth in Section 12.3(g).
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"DEFAULT" means, when used with respect to the Securities, any event
which is, or after notice or passage of time or both would be, an Event of
Default.
"DEFAULTED INTEREST" has the meaning set forth in Section 13.2.
"DEPOSITARY" means, with respect to any Global Securities, 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 Securities (or any successor
securities clearing agency so registered), which shall initially be DTC.
"DIRECTOR" means a member of the Board of Directors.
"DISTRIBUTED ASSETS" has the meaning set forth in Section 12.3(d).
"DTC" means The Depository Trust Company, a New York corporation.
"EVENT OF DEFAULT" has the meaning set forth in Section 8.1.
"EXCESS AMOUNT" has the meaning set forth in Section 12.3(e).
"EXCESS TENDER AMOUNT" has the meaning set forth in Section 12(f).
4
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.
"EX-DIVIDEND TIME" means, with respect to any dividend or distribution
on shares of Common Stock, the first Trading Day on which the shares of Common
Stock trade regular way on the principal securities market on which the shares
of Common Stock are then traded without the right to receive such dividend or
distribution.
"EXPIRATION TIME" has the meaning set forth in Section 12.3(f).
"FAIR MARKET VALUE" has the meaning set forth in Section 12.3(g).
"FIVE TRADING DAY PERIOD" means, with respect to any Contingent
Interest Period, the five Trading Days ending on the second Trading Day
immediately preceding the first day of such Contingent Interest Period.
"GLOBAL SECURITIES" means Securities that are in substantially the form
attached hereto as Exhibit A and that include the information called for by
footnotes 1 and 3 thereof and that are deposited with the Depositary or its
custodian and registered in the name of, the Depositary or its nominee.
"HOLDER" OR "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDEBTEDNESS" has the meaning set forth in Section 2.14.
"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 explicitly incorporated in this Indenture by reference to the TIA.
"INTEREST PAYMENT DATE" has the meaning set forth in Section 13.1.
"ISSUE DATE" of any Security means the date on which such Security was
originally issued or deemed issued as set forth on the face of the Security.
"LEGAL HOLIDAY" means any day other than a Business Day.
"MARKET CAPITALIZATION" has the meaning set forth in Section
12.3(e)(ii).
"MARKET PRICE" means:
(a) with respect to Securities, as of any date of determination, the
average of the secondary market bid quotations per $1,000 principal amount of
Securities obtained by the Bid Solicitation Agent (which shall initially be
SouthTrust Bank) for $5 million principal amount of Securities at approximately
4:00 p.m., Birmingham, Alabama time, on such determination date from three
securities dealers (none of which shall be an Affiliate of the Company) selected
by the Company and identified to the Bid Solicitation Agent by the Company in
writing at least fifteen (15) days prior to the date of determination; provided,
however, if (a) the Bid Solicitation Agent, through the exercise of reasonable
efforts, is unable to obtain a bid from each of such three securities dealers,
or (b) in the Company's reasonable judgment, the bid quotations are not
indicative of the secondary market value of the Securities as of such
determination date, then the
5
Market Price of a Security for such determination date shall equal (1) the
Conversion Rate in effect as of such determination date multiplied by (2) the
average Sale Price of a share of Common Stock for the five Trading Days ending
on such determination date, appropriately adjusted to take into account the
occurrence, during the period commencing on the first of such Trading Days
during such five Trading Day period and ending on such determination date, as
the case may be, of any event described in Sections 12.3 or 12.4; and
(b) with respect to Applicable Stock, the average of the Sale Price
of one share of Applicable Stock for the 20-Trading Day period immediately
preceding and including the third Business Day immediately preceding the
applicable Repurchase Date or Change of Control Repurchase Date, as the case may
be (or if the third Business Day immediately preceding the relevant date of
determination is not a Trading Day, then on the last Trading Day immediately
preceding such third Business Day), appropriately adjusted to take into account
the occurrence, during the period commencing on the first of such Trading Days
during such 20-Trading Day period and ending on the date of determination, as
the case may be, of any event described in Sections 12.3 or 12.4.
"MEASUREMENT PERIOD" means the last 30 Trading Days in any fiscal
quarter.
"NON-ELECTING SHARE" has the meaning set forth Section 12.4.
"NOTICE OF DEFAULT" has the meaning set forth in Section 8.1.
"NYSE" means The New York Stock Exchange, Inc., or any successor
thereto.
"OFFICER" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, any Vice President, the Treasurer,
the Controller, the Secretary, any Assistant Treasurer or Assistant Secretary of
the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 16.4 and 16.5, signed in the name of the
Company by any two Officers, at least one of whom is the Chief Executive
Officer, the President or the Chief Financial Officer, and delivered to the
Trustee. An Officers' Certificate given pursuant to Section 6.3 shall be signed
by the principal financial or accounting Officer of the Company and one other
Officer.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 16.4 and 16.5, from legal counsel. The counsel may be an
employee of, or counsel to, the Company.
"PAYING AGENT" has the meaning set forth in Section 2.3.
"PERSON" OR "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, and includes any syndicate or group that would be deemed to
be a "person" under Section 13(d)(3) of the Exchange Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
6
"RECORD DATE" has the meaning set forth in Section 12.3(g).
"REDEMPTION DATE" means, when used with respect to any Security to be
redeemed, the date fixed for redemption pursuant to this Indenture.
"REDEMPTION PRICE" has the meaning set forth in Section 3.1.
"REFERENCE PERIOD" has the meaning set forth in Section 12.3(d).
"REGISTRAR" has the meaning set forth in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated July 7, 2003, between the Company and the Initial Purchasers
named therein.
"REGULAR RECORD DATE" has the meaning set forth in Section 13.1.
"REPURCHASE DATE" has the meaning set forth in Section 4.1(a).
"REPURCHASE NOTICE" has the meaning set forth in Section 4.1(c).
"REPURCHASE PRICE" has the meaning set forth in Section 4.1(a).
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president or assistant treasurer or any other officer
of the Trustee who customarily performs functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.
"RESTRICTED CERTIFICATED SECURITY" means a Certificated Security which
is a Transfer Restricted Security.
"RESTRICTED GLOBAL SECURITY" means a Global Security that is a Transfer
Restricted Security.
"RESTRICTED SECURITY" means a Restricted Certificated Security or a
Restricted Global Security.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SALE PRICE" of a share of Applicable 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 there is more than one bid or ask
price, the average of the average bid and the average ask prices) on such date
as reported in composite transactions for the principal U.S. securities exchange
on which shares of the Common Stock are traded or, if the Common Stock is not
listed on a U.S. national or regional securities exchange, as reported by the
National Association of Securities Dealers Automated Quotation System or by the
National Quotation Bureau Incorporated. In the absence of
7
such a quotation, the Board of Directors shall be entitled to make a good faith
determination of the sale price on the basis it considers appropriate.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES" means any of the Company's 3.90% Convertible Senior
Debentures due 2023, as amended or supplemented from time to time, issued under
this Indenture.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02(w) of
Regulation S-X (or any successor law, rule or regulation).
"SPECIAL RECORD DATE" has the meaning set forth in Section 13.2.
"SPIN-OFF" has the meaning set forth in Section 12.3(d).
"STANDARD & POOR'S" means Standard & Poor's Ratings Service, a division
of The McGraw-Hill Companies, Inc., and its successors.
"STATED MATURITY", when used with respect to any Security, means June
30, 2023.
"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.
"10% STOCKHOLDER" means a Person that is the beneficial owner (as
determined by Rule 13d-3 of the Exchange Act) of 10% or more of the aggregate
outstanding Voting Stock of the Company.
"TENDER ADJUSTMENT CALCULATION DATE" has the meaning set forth in
Section 12.3(f).
"TIA" means the United States 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) if the applicable security is listed or admitted for trading on
the NYSE, a day on which the NYSE is open for business;
(b) if the applicable security is quoted on the Nasdaq National
Market, a day on which trades may be made on the Nasdaq National Market; or
(c) if the applicable security is not so listed or admitted for
trading on the NYSE and not so quoted on the Nasdaq National Market, a day on
which the principal U.S. national or regional exchange on which the securities
are listed is open for business.
"TRANSFER CERTIFICATE" has the meaning set forth in Section 2.12(f).
"TRANSFER RESTRICTED SECURITY" has the meaning set forth in Section
2.12(f).
8
"TRIGGER EVENT" has the meaning set forth in Section 12.3(d).
"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.
"UNRESTRICTED CERTIFICATED SECURITY" means a Certificated Security that
is not a Transfer Restricted Security.
"UNRESTRICTED GLOBAL SECURITY" means a Global Security that is not a
Transfer Restricted Security.
"VOTING STOCK" of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof are entitled to vote in
the election of, as applicable, directors, members or partners generally.
SECTION 1.2 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 but not defined 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 1.3 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with accounting principles generally accepted in
the United States as in effect from time to time;
9
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the
plural include the singular.
SECTION 1.4 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 an 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, as
described in Section 16.2. 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, if it so states. 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 principal amount and serial number of any Security and the
ownership of Securities shall be proved by the register maintained by the
Registrar 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
10
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.
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 Exhibit A attached hereto, which is a part of this
Indenture. 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) Restricted Global Securities. All of the Securities are being
offered and sold within the United States to QIBs in reliance on Rule 144A and
shall be issued initially in the form of one or more Restricted Global
Securities, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary and registered in the name of DTC or the
nominee thereof, duly executed by the Company and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of the Restricted Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary 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 initially represent the aggregate amount of
outstanding Securities stated thereon, but that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, repurchases and
conversions of such Securities.
Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 and shall
be made on the records of the Trustee and the Depositary.
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 contained
herein shall (A) prevent the Company, the
11
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 (B) impair, as between the Depositary,
its Agent Members and any other person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the exercise of
the rights of a holder of any Security.
(c) Certificated Securities. Certificated Securities will be issued
only under the limited circumstances provided in Section 2.12(a)(i).
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.
A Security bearing the manual or facsimile signature of an individual
who was at the time of the execution of the Security an Officer shall bind the
Company, notwithstanding that such individual has ceased to hold such office(s)
prior to the authentication and delivery of such Securities or did not hold such
office(s) 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 signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver the Securities for original
issue in an aggregate principal amount of up to $135,000,000 upon one or more
Company Orders without any further action by the Company (other than as
contemplated in Section 16.4 and Section 16.5). 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. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall receive and shall be fully protected in relying upon:
(a) a copy of the Board Resolution in or pursuant to which the terms
and form of the Securities were established, the issuance and sale of the
Securities was authorized, this Indenture was authorized and specified Officers
were authorized to establish the form and determine the terms of the Securities
and the form of this Indenture, to execute the Securities and this Indenture on
behalf of the Company and to take any other necessary actions relating thereto
and evidence of any actions taken by authorized Officers pursuant to that Board
Resolution, each certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors or taken by any
authorized Officer and to be in full force and effect as of the date of such
certificate;
(b) an Officers' Certificate delivered in accordance with Sections
16.4 and 16.5; and
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(c) an Opinion of Counsel reasonably satisfactory to the Trustee
which shall include a statement:
(i) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors' rights and
to general equity principles; and
(ii) that this Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting the enforcement of creditors' rights and to general equity
principles.
The Trustee shall act as the initial authenticating agent. Thereafter,
the Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
The Securities shall be issued only in registered form without coupons
and only in denominations of $1,000 of principal amount and any integral
multiple of $1,000.
SECTION 2.3 REGISTRAR, PAYING AGENT, CONVERSION AGENT AND BID
SOLICITATION 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 redemption, repurchase or
payment ("PAYING AGENT"), an office or agency where Securities may be presented
for conversion ("CONVERSION AGENT") and an office or agency where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company shall also appoint a bid solicitation agent ("BID
SOLICITATION AGENT") to act as set forth in Section 14.3. Pursuant to Section
6.5, the Company will at all times maintain a Registrar, Paying Agent,
Conversion Agent, and Bid Solicitation Agent and an office or agency where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served in Birmingham, Alabama. 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, one or more additional conversion agents and one or more
additional bid solicitation agents. The term Registrar includes co-registrars,
including any named pursuant to Section 6.5. The term Paying Agent includes any
additional paying agent, including any named pursuant to Section 6.5. The term
Conversion Agent includes any additional conversion agent, including any named
pursuant to Section 6.5. The term Bid Solicitation Agent includes any additional
bid solicitation agent, including any named pursuant to Section 6.5.
The Company shall enter into an appropriate limited agency agreement
with any Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or
co-registrar (in each case, if such
13
Person is a Person other than 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, Conversion Agent or Bid Solicitation Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 9.7. The Company or any Subsidiary or an Affiliate
of either of them may act as Paying Agent, Registrar, Conversion Agent or
co-registrar. None of the Company or any Subsidiary or any Affiliate of any of
them may act as Bid Solicitation Agent.
The Company hereby initially appoints the Trustee as Registrar, Paying
Agent, Conversion Agent and Bid Solicitation Agent in connection with the
Securities.
SECTION 2.4 PAYING AGENT TO HOLD CASH AND SECURITIES IN TRUST.
Except as otherwise provided herein, prior to 10:00 a.m., Birmingham,
Alabama time, on each due date of payments in respect of any Security, the
Company shall deposit with the Paying Agent cash (in immediately available funds
if deposited on the due date) or number of shares of Applicable 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 cash
and Applicable 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. If the Company, a Subsidiary or an Affiliate
of any of them acts as Paying Agent, it shall segregate the money and Applicable
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 cash and
Applicable Stock held by it to the Trustee, and to account for any funds and
Applicable Stock disbursed by it, and the Trustee may at any time during the
continuance of any such default, upon the written request to the Paying Agent,
require such Paying Agent to forthwith pay to the Trustee all cash and
Applicable Stock so held in trust. Upon doing so, the Paying Agent shall have no
further liability for the cash or Applicable 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 to
be furnished to the Trustee on or before each semiannual interest payment date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) Subject to compliance with any applicable additional
requirements contained in Section 2.12, when a Security is presented to the
Registrar with a request to register a transfer thereof or to exchange such
Security for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested; provided, however, that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by an
assignment form and, if applicable, a
14
transfer certificate, each in the form included in Exhibit A, attached hereto,
and in form satisfactory to the Registrar, and each duly executed by the Holder
thereof or its attorney duly authorized in writing. To permit registration of
transfers and exchanges, upon surrender of any Security for registration of
transfer or exchange at an office or agency maintained for such purpose pursuant
to Section 2.3, the Company shall execute, and the Trustee shall authenticate
Securities of a like aggregate principal amount at the Registrar's request. Any
transfer or exchange shall be without charge, except that the Company or the
Registrar 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.
Neither the Company, the Registrar nor the Trustee shall be required to
exchange or register a transfer of (i) any Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed), (ii) any Securities in respect of which a Repurchase Notice
or a Change of Control Repurchase 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 repurchased in part, the portion thereof not to be
repurchased), or (iii) any Securities for a period of 15 days before the mailing
of a notice of redemption of Securities to be redeemed.
All Securities issued upon any transfer or exchange of Securities shall
be valid obligations of the Company, evidencing the same debt and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
(b) Any Registrar appointed pursuant to Section 2.3 shall provide to
the Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Securities upon transfer or exchange of
Securities.
(c) Each Holder of a Security agrees to indemnify the Company, the
Registrar and the Trustee against any liability that may result from the
transfer, exchange or assignment of such Holder's Security in violation of any
provision of this Indenture and/or applicable United States federal or state
securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 2.7 REPLACEMENT SECURITIES.
If (a) any mutilated Security is surrendered to the Company, the
Registrar or the Trustee, or (b) the Company, the Registrar and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company, the Registrar 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, the Registrar or the
Trustee that such Security has
15
been acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount, bearing a
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 redeemed by the
Company pursuant to Article III or repurchased by the Company pursuant to
Article IV or V, the Company in its discretion may, instead of issuing a new
Security, pay, redeem or repurchase 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, assessment
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee or the Registrar)
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 outstanding at any time are all the Securities authenticated
by the Trustee, except for those cancelled by it pursuant to Section 2.10, those
delivered to it for cancellation, those replaced pursuant to Section 2.7 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,
waiver, or other Act 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, waiver or other Act,
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.
If a Security is replaced pursuant to Section 2.7, the replaced
Security ceases to be outstanding unless the Trustee receives proof satisfactory
to it that the replaced Security is held by a bona fide purchaser unaware that
such Security has been replaced.
If the Paying Agent holds, in accordance with the terms of this
Indenture, prior to 10:00 a.m., Birmingham, Alabama time, on the Stated Maturity
or a Redemption Date or on the Business
16
Day immediately following a Repurchase Date or a Change of Control Repurchase
Date, as the case may be, cash or securities, if permitted hereunder, sufficient
to pay Securities payable, then immediately after such Stated Maturity,
Redemption Date, Repurchase Date or Change of Control Repurchase Date, as the
case may be, such Securities shall cease to be outstanding and interest and
Additional Amounts, if any, on such Securities shall cease to accrue.
If a Security is converted in accordance with Article XII, then from
and after the time of conversion on the date of conversion, such Security shall
cease to be outstanding and interest and Additional Amounts, if any, on such
Security shall cease to accrue.
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 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, repurchase by the Company
pursuant to Articles IV or V, 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 XII. 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 as the owner of such
Security for the purpose of receiving payment (whether in cash or
17
Applicable Stock) of principal of, Redemption Price, Repurchase Price or Change
of Control Repurchase Price, and interest and Additional Amounts, if any, on,
the Security, for the purpose of receiving cash or Applicable Stock upon
conversion and for all other purposes whatsoever, whether or not such Security
is 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 ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS.
(a) Transfer and Exchange of Global Securities.
(i) Certificated Securities shall be issued in exchange for
interests in the Global Securities only if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Securities or if it at any time ceases to be a "clearing agency" registered
under the Exchange Act, if so required by applicable law or regulation and,
notwithstanding the commercially reasonable efforts of the Company, a successor
Depositary is not appointed by the Company within 90 days, (y) the Company
decides to discontinue use of the system of book-entry transfer through DTC (or
any successor depositary), or (z) an Event of Default has occurred and is
continuing. In either case, the Company shall execute, and the Trustee shall,
upon receipt of a Company Order (which the Company agrees to deliver promptly),
authenticate and deliver Certificated Securities in an aggregate principal
amount equal to the principal amount of such Global Securities in exchange
therefor. Only Restricted Certificated Securities shall be issued in exchange
for beneficial interests in Restricted Global Securities, and only Unrestricted
Certificated Securities shall be issued in exchange for beneficial interests in
Unrestricted Global Securities. Certificated Securities issued in exchange for
beneficial interests in Global Securities shall be registered in such names and
shall be in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver or cause to be delivered such
Certificated Securities to the Persons in whose name such Securities are so
registered. Such exchange shall be effected in accordance with the Applicable
Procedures.
(ii) Notwithstanding any other provisions of this Indenture other
than the provisions set forth in Section 2.12(a)(i), a Global Security may not
be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(b) Transfer and Exchange of Certificated Securities. In the event
that Certificated Securities are issued in exchange for beneficial interests in
Global Securities in accordance with Section 2.12(a)(i), and, on or after such
event, Certificated Securities are presented by a Holder to the Registrar with a
request:
(i) to register the transfer of the Certificated Securities to a
person who will take delivery thereof in the form of Certificated Securities
only; or
(ii) to exchange such Certificated Securities for an equal
principal amount of Certificated Securities of other authorized denominations,
such Registrar shall register
18
the transfer or make the exchange as requested; provided, however, that the
Certificated Securities presented or surrendered for register of transfer or
exchange:
(A) shall be duly endorsed or accompanied by a written
instrument of transfer in accordance with the proviso to the first
paragraph of Section 2.6; and
(B) in the case of a Restricted Certificated Security, such
request shall be accompanied by the following additional information
and documents, as applicable:
(1) if such Restricted Certificated Security is being
delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, or such Restricted Certificated
Security is being transferred to the Company or a Subsidiary of the
Company, a certification to that effect from such Holder (in
substantially the form set forth in the Transfer Certificate);
(2) if such Restricted Certificated Security is being
transferred to a person the Holder reasonably believes is a QIB in
accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect
from such Holder (in substantially the form set forth in the
Transfer Certificate); or
(3) if such Restricted Certificated Security is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144 or to
an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
pursuant to and in compliance with an exemption from the
registration requirements under the Securities Act, a certification
to that effect from the Holder (in substantially the form set forth
in the Transfer Certificate) and, in the case of a transfer to an
institutional accredited investor, a certificate containing certain
representations and warranties (in substantially the form set forth
in Exhibit B) and, in either case, if the Company or the Registrar
so requests, a customary Opinion of Counsel, certificates and other
information reasonably acceptable to the Company and the Registrar
to the effect that such transfer does not require registration under
the Securities Act.
(c) Transfer of a Beneficial Interest in a Restricted Global
Security for a Beneficial Interest in an Unrestricted Global Security. Any
person having a beneficial interest in a Restricted Global Security may upon
request, subject to the Applicable Procedures, transfer such beneficial interest
to a person who is required or permitted to take delivery thereof in the form of
an Unrestricted Global Security. Upon receipt by the Trustee of written
instructions, or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any person having a
beneficial interest in a Restricted Global Security and the following additional
information and documents in such form as is customary for the Depositary from
the Depositary or its nominee on behalf of the person having such beneficial
interest in the Restricted Global Security (all of which may be submitted by
facsimile or electronically):
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(i) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a certification to
that effect from the Holder (in substantially the form set forth in the Transfer
Certificate); or
(ii) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certification to that effect from the Holder (in
substantially the form set forth in the Transfer Certificate) and, if the
Company or the Trustee so requests, a customary Opinion of Counsel, certificates
and other information reasonably acceptable to the Company and the Trustee to
the effect that such transfer does not require registration under the Securities
Act, the Trustee, as the Registrar, shall reduce or cause to be reduced the
aggregate principal amount of the Restricted Global Security by the appropriate
principal amount and shall increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Security by a like principal amount.
Such transfer shall otherwise be effected in accordance with the Applicable
Procedures. If no Unrestricted Global Security is then outstanding, the Company
shall execute and the Trustee shall, upon receipt of a Company Order (which the
Company agrees to deliver promptly), authenticate and deliver an Unrestricted
Global Security.
(d) Transfer of a Beneficial Interest in an Unrestricted Global
Security for a Beneficial Interest in a Restricted Global Security. Any person
having a beneficial interest in an Unrestricted Global Security may upon
request, subject to the Applicable Procedures, transfer such beneficial interest
to a person who is required or permitted to take delivery thereof in the form of
a Restricted Global Security (it being understood that only QIBs may own
beneficial interests in Restricted Global Securities). Upon receipt by the
Trustee of written instructions, or such other form of instructions as is
customary for the Depositary, from the Depository or its nominee on behalf of
any person having a beneficial interest in an Unrestricted Global Security and
the following additional information and documents in such form as is customary
for the Depositary, from the Depositary or its nominee on behalf of the person
having such beneficial interest in the Unrestricted Global Security (all of
which may be submitted by facsimile or electronically): a certification from the
Holder (in substantially the form set forth in the Transfer Certificate) to the
effect that such beneficial interest is being transferred to a person that the
transferor reasonably believes is a QIB in accordance with Rule 144A. The
Trustee, as the Registrar, shall reduce or cause to be reduced the aggregate
principal amount of the Unrestricted Global Security by a like principal amount.
Such transfer shall otherwise be effected in accordance with the Applicable
Procedures. If no Restricted Global Security is then outstanding, the Company
shall execute and the Trustee shall, upon receipt of a Company Order (which the
Company Agrees to deliver promptly), authenticate and deliver a Restricted
Global Security.
(e) Transfers of Certificated Securities for Beneficial Interest in
Global Securities. In the event that Certificated Securities are issued in
exchange for beneficial interests in Global Securities and, thereafter, the
events or conditions specified in Section 2.12(a)(i) which required such
exchange shall cease to exist, the Company shall mail notice to the Trustee and
to the Holders stating that Holders may exchange Certificated Securities or
interests in Global Securities by complying with the procedures set forth in
this Indenture and briefly describing such procedures and the events or
circumstances requiring that such notice be given. Thereafter, if Certificated
Securities are presented by a Holder to a Registrar with a request:
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(i) to register the transfer of such Certificated Securities to a
person who will take delivery thereof in the form of a beneficial interest in a
Global Security, which request shall specify whether such Global Security will
be a Restricted Global Security or an Unrestricted Global Security, or
(ii) to exchange such Certificated Securities for an equal
principal amount of beneficial interests in a Global Security, which beneficial
interests will be owned by the Holder transferring such Certificated Securities
(provided that in the case of such an exchange, Restricted Certificated
Securities may be exchanged only for Restricted Global Securities and
Unrestricted Certificated Securities may be exchanged only for Unrestricted
Global Securities), the Registrar shall register the transfer or make the
exchange as requested by canceling such Certificated Security and causing, or
directing the Registrar to cause, the aggregate principal amount of the
applicable Global Security to be increased accordingly and, if no such Global
Security is then outstanding, the Company shall issue and the Trustee shall,
upon receipt of a Company Order (which the Company agrees to deliver promptly)
authenticate and deliver a new Global Security;
provided, however, that the Certificated Securities presented or surrendered for
registration of transfer or exchange:
(A) shall be duly endorsed or accompanied by a written
instrument of transfer in accordance with the proviso to Section 2.6;
(B) in the case of a Restricted Certificated Security to be
transferred for a beneficial interest in an Unrestricted Global
Security, such request shall be accompanied by the following additional
information and documents, as applicable:
(1) if such Restricted Certificated Security is being
transferred pursuant to an effective registration statement under
the Securities Act, a certification to that effect from such Holder
(in substantially the form set forth in the Transfer Certificate);
or
(2) if such Restricted Certificated Security is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144, a
certification to that effect from such Holder (in substantially the
form set forth in the Transfer Certificate) and, if the Company or
the Registrar so requests, a customary Opinion of Counsel,
certificates and other information reasonably acceptable to the
Company and the Trustee to the effect that such transfer does not
require registration under of the Securities Act;
(C) in the case of a Restricted Certificated Security to be
transferred or exchanged for a beneficial interest in a Restricted
Global Security, such request shall be accompanied by a certification
from such Holder (in substantially the form set forth in the Transfer
Certificate) to the effect that such Restricted Certificated Security
is being transferred to a person the Holder reasonably believes is a
QIB (which, in the case of an exchange, shall be such Holder) in
accordance with Rule 144A;
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(D) in the case of an Unrestricted Certificated Security to be
transferred or exchanged for a beneficial interest in an Unrestricted
Global Security, such request need not be accompanied by any additional
information or documents; and
(E) in the case of an Unrestricted Certificated Security to be
transferred or exchanged for a beneficial interest in a Restricted
Global Security, such request shall be accompanied by a certification
from such Holder (in substantially, the form set forth in the Transfer
Certificate) to the effect that such Unrestricted Certificated Security
is being transferred to a person the Holder reasonably believes is a
QIB (which, in the case of an exchange, shall be such Holder) in
accordance with Rule 144A.
(f) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Global Security and Certificated Security (and all Securities issued
in exchange therefor or upon registration of transfer or replacement thereof)
shall bear a legend in substantially the form called for by footnote 2 to
Exhibit A attached hereto (each a "TRANSFER RESTRICTED SECURITY"), for so long
as it is required by this Indenture to bear such legend. Each Transfer
Restricted Security shall have attached thereto a certificate (a "TRANSFER
CERTIFICATE") in substantially the form called for by footnote 5 to Exhibit A
attached hereto.
(ii) Upon any sale or transfer of a Transfer Restricted Security (x)
after the expiration of the holding period applicable to sales of the Securities
under Rule 144(k) of the Securities Act, (y) pursuant to Rule 144, or (z)
pursuant to an effective registration statement under the Securities Act:
(A) in the case of any Restricted Certificated Security, any
Registrar shall permit the Holder thereof to exchange such Restricted
Certificated Security for an Unrestricted Certificated Security, or
(under the circumstances described in Section 2.12(e)) to transfer such
Restricted Certificated Security to a transferee who shall take such
Security in the form of a beneficial interest in an Unrestricted Global
Security, and in each case shall rescind any restriction on the
transfer of such Security; provided, however, that the Holder of such
Restricted Certificated Security shall, in connection with such
exchange or transfer, comply with the other applicable provisions of
this Section 2.12; and
(B) in the case of any beneficial interest in a Restricted
Global Security, the Trustee shall permit the beneficial owner thereof
to transfer such beneficial interest to a transferee who shall take
such interest in the form of a beneficial interest in an Unrestricted
Global Security and shall rescind any restriction on transfer of such
beneficial interest; provided, however, that such Unrestricted Global
Security shall continue to be subject to the provisions of Section
2.12(a)(ii); and provided, further, that the owner of such beneficial
interest shall, in connection with such transfer, comply with the other
applicable provisions of this Section 2.12.
(iii) Upon the exchange, registration of transfer or replacement of
Securities not bearing the legend described in paragraph (1) above, the Company
shall execute, and
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the Trustee shall authenticate and deliver, Securities that do not bear such
legend and that do not have a Transfer Certificate attached thereto.
(iv) After the expiration of the holding period pursuant to Rule
144(k) of the Securities Act, the Company may with the consent of the Holder of
a Restricted Global Security or a Restricted Certificated Security, remove any
restriction of transfer on such Security, and the Company shall execute, and the
Trustee shall authenticate and deliver, Securities that do not bear such legend
and that do not have a Transfer Certificate attached thereto.
(v) Until the expiration of the holding period applicable to sales
of the Securities under Rule 144(k) of the Securities Act or a transfer pursuant
to Rule 144 or pursuant to an effective registration statement under the
Securities Act, the Shares of Common Stock issued upon conversion of the
Securities shall bear the legend in substantially the form called for by Exhibit
C attached hereto.
(g) Transfers to the Company. Nothing contained in this Indenture or in
the Securities shall prohibit the sale or other transfer of any Securities
(including beneficial interests in Global Securities) to the Company or any of
its Subsidiaries, which Securities shall thereupon be cancelled in accordance
with Section 2.10.
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, however, 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 general
obligation of the Company, ranking equally with other existing and future senior
unsecured Indebtedness of the Company and ranking senior in right of payment to
any future Indebtedness of the Company that is expressly made subordinate to the
Securities by the terms of such Indebtedness.
For purposes of this Section 2.14 only, "INDEBTEDNESS" means, without
duplication, the principal or face amount of:
(a) all obligations for borrowed money;
(b) all obligations evidenced by notes or other similar instruments;
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(c) all obligations in respect of letters of credit or bankers
acceptances or similar instruments (or reimbursement obligations with respect
thereto);
(d) all obligations to pay the deferred purchase price of property
or services, except trade accounts payable arising in the ordinary course of
business;
(e) all obligations as lessee which are capitalized in accordance
with generally accepted accounting principles; and
(f) 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).
ARTICLE III
REDEMPTION
SECTION 3.1 THE COMPANY'S RIGHT TO REDEEM; NOTICE TO TRUSTEE.
Prior to July 7, 2008, the Securities will not be redeemable at the
Company's option. Beginning on July 7, 2008, the Company, at its option, may
redeem the Securities in accordance with this Article III for cash at any time
as a whole, or from time to time in part, at a redemption price equal to the
principal amount of the Securities rendered plus any accrued and unpaid interest
(including Contingent Interest, if any) and Additional Amounts, if any, on those
Securities to, but not including, the Redemption Date (the "REDEMPTION PRICE").
In the event that the Company elects to redeem the Securities on a date
that is on or after any Regular Record Date but before the corresponding
Interest Payment Date, the Company shall be required to pay any accrued and
unpaid interest (including Contingent Interest, if any) and Additional Amounts,
if any, to the same Holder to whom the Company pays the principal of such
Security regardless of whether such Holder was the registered Holder on the
Regular Record Date immediately preceding such Redemption Date.
If the Company elects to redeem 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 this notice to the
Trustee 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 fewer than all of the outstanding Securities are to be redeemed, unless
the procedures of the Depositary provide otherwise, the Trustee shall select the
Securities to be redeemed by lot or on a pro rata basis. The Trustee shall make
the selection within five Business Days after it receives the notice provided
for in Section 3.1 from outstanding Securities not previously called for
redemption.
Securities and portions of Securities that the Trustee selects shall be in
principal amounts of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to Securities called
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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.
Securities and portions of Securities that are to be redeemed are
convertible by the Holder until 5:00 p.m., Birmingham, Alabama time, on the
second Business Day immediately preceding the Redemption Date. 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 of redemption shall identify the Securities to be redeemed and
shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Rate;
(d) the name and address of the Paying Agent and Conversion Agent;
(e) that Securities called for redemption may be converted at any
time prior to 5:00 p.m., Birmingham, Alabama time, on the second Business Day
preceding the Redemption Date;
(f) that Holders who want to convert their Securities must satisfy
the requirements set forth in Article XII;
(g) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(h) in the case of any Security redeemed in part, that the Holder of
such Security will receive a new Security or Securities, of authorized
denominations for the principal amount thereof remaining unredeemed
(i) 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;
(j) that, unless the Company defaults in making payment of such
Redemption Price, interest and Additional Amounts, if any, on Securities called
for redemption will cease to accrue on and after the Redemption Date;
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(k) the CUSIP number(s) of the Securities; and
(l) any other information the Company wants to present.
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, however, that the
Company makes such request at least five Business Days (unless a shorter period
shall be satisfactory to the Trustee) prior to the date by which such notice of
redemption must be given to Holders in accordance with this Section 3.3;
provided, further, that the text of the notice of redemption shall be prepared
by the Company.
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,
except for Securities which are converted in accordance with the terms of this
Indenture. Upon surrender to the Paying Agent, such Securities shall be paid in
cash at the Redemption Price.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m., Birmingham, Alabama time, on the applicable
Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of any of them is acting as the Paying
Agent, shall cause the Paying Agent to segregate and hold in trust as provided
in Section 2.4) an amount of cash (in immediately available funds if deposited
on the Redemption Date) sufficient to pay the aggregate Redemption Price of all
Securities or portions thereof which are to be redeemed as of such Redemption
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.
If the Paying Agent holds, in accordance with the terms hereof, at 10:00
a.m., Birmingham, Alabama time, on the applicable Redemption Date, cash
sufficient to pay the Redemption Price of any Securities for which notice of
redemption is given, then, on such Redemption Date, such Securities will cease
to be outstanding and interest and Additional Amounts, if any, on such
Securities will cease to accrue, whether or not such Securities are delivered to
the Paying Agent, and the rights of the Holders in respect thereof shall
terminate (other than the right to receive the Redemption Price upon delivery of
such Securities).
SECTION 3.6 SECURITIES REDEEMED IN PART.
Any Certificated Security which is to be redeemed only in part shall be
surrendered at the office of the Paying Agent and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to the unredeemed
portion of the Security surrendered.
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SECTION 3.7 REPAYMENT TO THE COMPANY.
To the extent that the aggregate amount of cash deposited by the Company
pursuant to Section 3.5 exceeds the aggregate Redemption Price of the Securities
or portions thereof which the Company is redeeming as of the Redemption Date,
then, promptly after the Redemption Date, the Paying Agent shall return any such
excess to the Company.
ARTICLE IV
REPURCHASE OF SECURITIES
AT THE OPTION OF HOLDERS
ON SPECIFIC DATES
SECTION 4.1 OPTIONAL PUT.
(a) Securities shall be repurchased by the Company, at the option of
the Holder thereof, on June 30, 2008, June 30, 2013 and June 30, 2018 (each, a
"REPURCHASE DATE"), at a repurchase price equal to 100% of the principal amount
of those Securities plus accrued and unpaid interest (including Contingent
Interest, if any) and Additional Amounts, if any, to, but not including, such
Repurchase Date (the "REPURCHASE PRICE"), subject to satisfaction by or on
behalf of the Holder of the requirements set forth in Section 4.1(c).
(b) No later than 20 Business Days prior to each Repurchase Date,
the Company shall mail a written notice of the repurchase right by first class
mail to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Repurchase Notice to be
completed by the Holder and shall briefly state, as applicable:
(i) the date by which the Repurchase Notice must be delivered
to the Paying Agent in order for a Holder to exercise the repurchase right;
(ii) the Repurchase Date;
(iii) the Repurchase Price;
(iv) whether the Repurchase Price will be paid in cash or
shares of Common Stock, or a combination thereof and, in the case of a
combination, the percentage of each;
(v) if the Company elects to pay the Repurchase Price in
shares of Common Stock or a combination of cash and shares of Common Stock, that
the number of shares of Common Stock each Holder will receive will equal the
amount of the Repurchase Price to be paid in shares of Common Stock divided by
97.5% of the Market Price of one share of Common Stock;
(vi) if the Company elects to pay the Repurchase Price in
shares of Common Stock or a combination of cash and shares of Common Stock, the
method of calculating the Market Price of the shares of Common Stock;
(vii) that because the Market Price of one share of Common
Stock will be determined prior to the Repurchase Date, Holders of the Securities
will bear the market risk that the
27
shares of Common Stock to be received will decline in value between the date
such Market Price is determined and the Repurchase Date;
(viii) the name and address of the Paying Agent and the
Conversion Agent;
(ix) the Conversion Rate and any adjustments thereto;
(x) that the Securities as to which a Repurchase Notice has
been given may be converted if they are otherwise convertible pursuant to
Article XII only if the Repurchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(xi) that the Securities must be surrendered to the Paying
Agent to collect payment;
(xii) that the Repurchase Price for any Security as to which a
Repurchase Notice has been duly given and not withdrawn will be paid promptly
following the later of the Repurchase Date and the time of surrender of such
Security as described in Section 4.1(b)(xi);
(xiii) the procedures the Holder must follow to exercise its
put right under this Section 4.1;
(xiv) the conversion rights, if any, of the Securities;
(xv) the procedures for withdrawing a Repurchase Notice;
(xvi) that, unless the Company defaults in making payment of
such Repurchase Price, interest and Additional Amounts, if any, on Securities
surrendered for repurchase by the Company will cease to accrue on and after the
Repurchase Date; and
(xvii) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee shall give the notice of repurchase
right in the Company's name and at the Company's expense; provided, however,
that the Company makes such request at least five Business Days (unless a
shorter period shall be satisfactory to the Trustee) prior to the date by which
such notice of repurchase right must be given to the Holders in accordance with
this Section 4.1(b); provided, further, that the text of the notice of
repurchase right shall be prepared by the Company.
(c) A Holder may exercise its right specified in Section 4.1(a) upon
delivery of a written notice of repurchase (a "REPURCHASE NOTICE") to the Paying
Agent at any time during the period beginning at 9:00 a.m., Birmingham, Alabama
time, on the date that is 20 Business Days immediately preceding the relevant
Repurchase Date until 5:00 p.m., Birmingham, Alabama time, on the Business Day
immediately preceding such Repurchase Date, stating:
(i) the certificate number of the Security which the Holder
will deliver to be repurchased or the appropriate Depositary procedures if
Certificated Securities have not been issued;
28
(ii) the portion of the principal amount of the Security which
the Holder will deliver to be repurchased, which portion must be in principal
amounts of $1,000 or an integral multiple of $1,000;
(iii) that such Security shall be repurchased by the Company
as of the Repurchase Date pursuant to the terms and conditions specified in
Section 6 of the Securities and in this Indenture; and
(iv) in the event the Company elects, pursuant to Section
4.2(b), to pay the Repurchase Price, in whole or in part, in shares of Common
Stock but such portion of the Repurchase Price shall ultimately be paid to such
Holder entirely in cash because any of the conditions to payment of the
Repurchase Price in shares of Common Stock is not satisfied prior to 5:00 p.m.,
Birmingham, Alabama time, on the Business Day immediately preceding the relevant
Repurchase Date, as set forth in Section 4.2(b), whether such Holder elects to
(A) withdraw such Repurchase Notice as to some or all of the Securities to which
such Repurchase Notice relates (stating the principal amount and certificate
numbers, if any or the appropriate Depositary procedures, if applicable, of the
Securities as to which such withdrawal shall relate), or (B) receive cash in
respect of the entire Repurchase Price for all Securities (or portions thereof)
to which such Repurchase Notice relates.
The delivery of such Security to the Paying Agent with, or at any time
after delivery of, the Repurchase 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 Repurchase Price therefor; provided, however, that
such Repurchase Price shall be so paid pursuant to this Section 4.1 only if the
Security so delivered to the Paying Agent shall conform in all respects to the
description thereof in the related Repurchase Notice.
If a Holder, in such Holder's Repurchase Notice and in any written notice
of withdrawal delivered by such Holder pursuant to the terms of Section 4.3,
fails to indicate such Holder's choice with respect to the election set forth in
Section 4.1(c)(iv), such Holder shall be deemed to have elected to receive cash
in respect of the entire Repurchase Price for all Securities subject to such
Repurchase Notice in the circumstances set forth in such Section 4.1(c)(iv).
The Company shall repurchase from the Holder thereof, pursuant to this
Section 4.1, a portion of a Security, so long as the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the repurchase of all of a Security also apply to the
repurchase of such portion of such Security.
Any repurchase by the Company contemplated pursuant to the provisions of
this Section 4.1 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Repurchase Date and
the time of delivery of the Security.
Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Repurchase Notice contemplated by this
Section 4.1(c) shall have the right to withdraw such Repurchase Notice at any
applicable time prior to 5:00 p.m., Birmingham, Alabama time, on the Business
Day immediately preceding the Repurchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 4.3.
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The Paying Agent shall promptly notify the Company of the receipt by it of
any Repurchase Notice or written notice of withdrawal thereof.
SECTION 4.2 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF REPURCHASE
PRICE.
(a) The Securities to be repurchased on any Repurchase Date pursuant
to Section 4.1(a) may be paid for at the election of the Company, in cash or
shares of Common Stock, or in any combination of cash and shares of Common
Stock, subject to the conditions set forth in Section 4.2(b). The Company shall
designate, in the notice of repurchase right delivered pursuant to Section
4.1(b), whether the Company will repurchase the Securities for cash or shares of
Common Stock, or, if a combination thereof, the percentages of the Repurchase
Price in respect of which it will pay in cash or shares of Common Stock;
provided, however, that the Company will pay cash for fractional interests in a
share of Common Stock. For purposes of determining the existence of potential
fractional interests, all Securities subject to repurchase 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 repurchased
pursuant to Section 4.1 shall receive the same percentage of cash or shares of
Common Stock in payment of the Repurchase Price for such Securities, except as
provided in this Section 4.2(a) with regard to the payment of cash in lieu of
fractional shares of Common Stock. 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 notice of repurchase right to
Holders except in the event of a failure to satisfy, prior to 5:00 p.m.,
Birmingham, Alabama time, on the Business Day immediately preceding the
Repurchase Date, any condition to the payment of the Repurchase Price in whole
or in part, in shares of Common Stock.
(b) If the Company elects to pay all or a portion of the Repurchase
Price of Securities in respect of which a Repurchase Notice pursuant to Section
4.1(c) has been given in shares of Common Stock, the number of shares of Common
Stock to be issued shall be equal to (i) the amount of the Repurchase Price to
be paid in shares of Common Stock divided by (ii) 97.5% of the Market Price of
one share of Common Stock, subject to satisfaction of the conditions set forth
in the second succeeding paragraph.
The Company will not issue any fraction of a share of Common Stock in
payment of the Repurchase Price. Instead, the Company will make a cash payment
(calculated to the nearest cent) equal to such fraction of a share of Common
Stock multiplied by the Market Price of one share of Common Stock. If a Holder
elects to have more than one Security purchased, the number of shares of Common
Stock shall be based on the aggregate amount of Securities to be purchased.
The Company's right to exercise its election to repurchase Securities
through the issuance of shares of Common Stock shall be conditioned upon:
(i) the registration of such shares of Common Stock under the
Securities Act and the Exchange Act, in each case, if required;
(ii) any qualification or registration of such shares of
Common Stock under applicable state securities laws, if necessary, or the
availability of an exemption from such qualification and registration;
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(iii) the listing of such shares of Common Stock on a United
States national securities exchange or the quotation of such shares of Common
Stock in an inter-dealer quotation system of any registered United States
national securities association; and
(iv) the receipt by the Trustee of an Officers' Certificate
stating: (A) that the terms of the issuance of the shares of Common Stock are in
conformity with this Indenture; (B) that the shares of Common Stock to be issued
in payment of the Repurchase 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 Repurchase Price in respect of Securities, will be
validly issued, fully paid, non-assessable and free from preemptive rights; (C)
that the conditions above and the condition set forth in the second succeeding
sentence have been satisfied in all material respects; and (D) 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 Trading Day immediately
preceding the Repurchase Date; and
(v) the receipt by the Trustee of an Opinion of Counsel
stating that: (A) the shares of Common Stock to be issued in payment of the
Repurchase 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
Repurchase Price in respect of Securities, will be validly issued, fully paid
and non-assessable and, to the best of such counsel's knowledge, free from
preemptive rights; and (B) the conditions in clauses (i) through (iii) above
have been satisfied in all material respects.
If the foregoing conditions are not satisfied with respect to a Holder or
Holders prior to 5:00 p.m., Birmingham, Alabama time, on the Business Day
immediately preceding the Repurchase Date, and the Company has elected to
repurchase the Securities pursuant to this Section 4.2 through the issuance of
Common Stock, the Company shall pay the entire Repurchase Price of the
Securities of such Holder or Holders in cash.
Upon determination of the actual number of shares of Common Stock to be
issued upon repurchase of Securities, the Company shall be required to
disseminate a press release through a public medium as is customary for such a
press release.
(c) All shares of Common Stock delivered upon repurchase of the
Securities shall be newly issued 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.
(d) If a Holder of a repurchased 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 shares of Common Stock. However, the Holder
shall pay any such tax which is due because the Holder requests the shares of
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 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
contained herein shall preclude any income or other tax withholding required by
law or regulations.
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(e) After June 30, 2008, the Company may amend this Indenture to
prohibit the payment of the Repurchase Price in shares of Common Stock after the
date of the amendment. Such amendment shall be effected by the Trustee (subject
to the Trustee's rights under Article IX and Sections 11.6, 16.4 and 16.5) and
the Company, in the sole discretion of the Company, without the consent of the
Holders as permitted in Section 11.1(n) hereof.
SECTION 4.3 EFFECT OF REPURCHASE NOTICE; WITHDRAWAL OF REPURCHASE NOTICE.
Upon receipt by the Paying Agent of the Repurchase Notice specified in
Section 4.1(c), the Holder of the Security in respect of which such Repurchase
Notice was given shall (unless such Repurchase Notice is withdrawn as specified
in the following paragraph) thereafter be entitled to receive solely the
Repurchase Price with respect to such Security. Such Repurchase Price shall be
paid to such Holder, subject to receipt of cash and/or securities by the Paying
Agent, promptly following the later of the Repurchase Date with respect to such
Security (provided the conditions in Section 4.1(c) have been satisfied) and the
time of delivery of such Security to the Paying Agent by the Holder thereof in
the manner required by Section 4.1(c). Securities in respect of which a
Repurchase Notice has been given by the Holder thereof may not be converted
pursuant to Article XII on or after the date of the delivery of such Repurchase
Notice unless such Repurchase Notice has first been validly withdrawn as
specified in the following paragraph.
A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Repurchase Notice at any time prior to 5:00 p.m., Birmingham, Alabama time, on
the Business Day immediately preceding the Repurchase Date, specifying:
(a) the certificate(s) number, if any, or the appropriate Depositary
procedures, if applicable, of the Security in respect of which such notice of
withdrawal is being submitted;
(b) the principal amount of the Security with respect to which such
notice of withdrawal is being submitted; and
(c) the principal amount, if any, of such Security which remains
subject to the original Repurchase Notice and which has been or will be
delivered for repurchase by the Company.
SECTION 4.4 DEPOSIT OF REPURCHASE PRICE.
Prior to 10:00 a.m., Birmingham, Alabama time, on the applicable
Repurchase Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of any 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)
and/or shares of Common Stock, if permitted hereunder, sufficient to pay the
aggregate Repurchase Price of all the Securities or portions thereof which are
to be repurchased on such Repurchase Date.
If the Paying Agent holds, in accordance with the terms hereof, at 10:00
a.m., Birmingham, Alabama time, on the Business Day immediately following the
applicable Repurchase Date, cash and/or shares of Common Stock, if permitted
hereunder, sufficient to pay the Repurchase Price of any Securities for which a
Repurchase Notice has been tendered and not withdrawn pursuant to
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Section 4.3, then, immediately after such Repurchase Date, such Securities will
cease to be outstanding and interest, including, Contingent Interest, if any,
and Additional Amounts, if any, on such Securities will cease to accrue, whether
or not such Securities are delivered to the Paying Agent, and the rights of the
Holders in respect thereof shall terminate (other than the right to receive the
Repurchase Price upon delivery of such Securities).
As soon as practicable on and after the Repurchase Date, the Company shall
deliver to each Holder entitled to receive shares of Common Stock through the
Paying Agent, a certificate (other than in the case of Holders of Securities in
book-entry form with DTC, which shares shall be delivered in accordance with DTC
customary practices) for the number of full shares of Common Stock issuable in
payment of the Repurchase 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 shares of Common Stock on
the Repurchase Date. 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
Repurchase Date.
SECTION 4.5 SECURITIES REPURCHASED IN PART.
Any Certificated Security which is to be repurchased 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 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 repurchased.
SECTION 4.6 COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE OF
SECURITIES.
When complying with the provisions of Section 4.1 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), and subject to
any exemptions available under applicable law, the Company shall:
(a) comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) under the Exchange Act;
(b) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act; and
(c) otherwise comply with all Federal and state securities laws so
as to permit the rights and obligations under this Article IV to be exercised in
the time and in the manner specified therein.
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Article IV, the Company's compliance with
such laws and regulations shall not in and of itself cause a breach of its
obligations under this Article IV.
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SECTION 4.7 REPAYMENT TO THE COMPANY.
To the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 4.4 exceeds the aggregate
Repurchase Price of the Securities or portions thereof which the Company is
obligated to repurchase on the Repurchase Date, then, promptly after the
Repurchase Date, the Paying Agent shall return any such excess to the Company.
ARTICLE V
REPURCHASE AT THE OPTION OF HOLDERS
UPON A CHANGE OF CONTROL
SECTION 5.1 CHANGE OF CONTROL PUT.
(a) (i) If a Change of Control occurs, the Securities not previously
repurchased by the Company shall be repurchased by the Company, at the option of
the Holder thereof subject to satisfaction by or on behalf of the Holder of the
requirements set forth in Section 5.1(c), at the following purchase prices
expressed as a percentage of the principal amount of the Debentures to be
repurchased, plus accrued and unpaid interest (including Contingent Interest, if
any) and Additional Amounts, if any, to, but not including, the Change of
Control Repurchase Date (the "CHANGE OF CONTROL REPURCHASE PRICE"):
PERIOD REDEMPTION PRICE
------ ----------------
Beginning on July 7, 2003 and ending on June 29, 2004 110.0%
Beginning on June 30, 2004 and ending on June 29, 2005 108.0%
Beginning on June 30, 2005 and ending on June 29, 2006 104.0%
Beginning on June 30, 2006 and ending on June 29, 2008 102.0%
June 30, 2008 and thereafter 100.0%
The change of control repurchase date must be within 40 days after the date of a
notice of Change of Control delivered by the Company pursuant to Section 5.1(b)
hereof (the "CHANGE OF CONTROL REPURCHASE DATE").
(ii) Notwithstanding the foregoing provisions, the Company shall not
be required to repurchase the Securities of or send notices to the Holders
pursuant to this Article V if 100% of the consideration in the transaction or
transactions (other than cash payments for fractional shares and cash payments
made in respect of dissenters' appraisal rights) constituting a Change of
Control consists of shares of common stock, ordinary shares or American
Depositary Shares traded or to be traded immediately following a Change of
Control on a U.S. national or regional securities exchange or the Nasdaq
National Market, and, as a result of the transaction or transactions, the
Securities become convertible into that common stock, ordinary shares or
American Depositary Shares (and any rights attached thereto).
(b) No later than 30 days after the occurrence of a Change of
Control, the Company shall mail a written notice of the Change of Control by
first class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law). The notice shall include a
34
form of Change of Control Repurchase Notice to be completed by the Holder and
shall briefly state, as applicable:
(i) the events causing a Change of Control and the date of
such Change of Control;
(ii) that the Holder has a right to require us to repurchase
the Holder's Securities;
(iii) the date by which the Change of Control Repurchase
Notice must be delivered to the Paying Agent in order for a Holder to exercise
the Change of Control repurchase right;
(iv) the Change of Control Repurchase Date;
(v) the Change of Control Repurchase Price;
(vi) whether the Change of Control Repurchase Price will be
paid in cash or shares of Applicable Stock, or a combination thereof and, in the
case of a combination, the percentage of each;
(vii) if the Company elects to pay the Change of Control
Repurchase Price in shares of Applicable Stock or a combination of cash and
shares of Applicable Stock, that the number of shares of Applicable Stock each
Holder will receive will equal the amount of the Change of Control Repurchase
Price to be paid in shares of Applicable Stock divided by 97.5% of the Market
Price of one share of Applicable Stock;
(viii) if the Company elects to pay the Change of Control
Repurchase Price in shares of Applicable Stock or a combination of cash and
shares of Applicable Stock, the method of calculating the Market Price of the
shares of Applicable Stock;
(ix) that because the Market Price of the Applicable Stock
will be determined prior to the Change of Control Repurchase Date, Holders of
the Securities will bear the market risk that the shares of Applicable Stock to
be received will decline in value between the date such Market Price is
determined and the Change of Control Repurchase Date;
(x) the name and address of the Paying Agent and the
Conversion Agent;
(xi) the Conversion Rate and any adjustments thereto;
(xii) that the Securities as to which a Change of Control
Repurchase Notice has been given may be converted if they are otherwise
convertible pursuant to Article XII only if the Change of Control Repurchase
Notice has been withdrawn in accordance with the terms of this Indenture;
(xiii) that the Securities must be surrendered to the Paying
Agent to collect payment;
35
(xiv) that the Change of Control Repurchase Price for any
Security as to which a Change of Control Repurchase Notice has been duly given
and not withdrawn will be paid promptly following the later of the Change of
Control Repurchase Date and the time of surrender of such Security as described
in 5.1(b)(xiii);
(xv) the procedures the Holder must follow to exercise its put
right under this Section 5.1;
(xvi) the conversion rights, if any, of the Securities;
(xvii) the procedures for withdrawing a Change of Control
Repurchase Notice;
(xviii) that, unless the Company defaults in making payment of
such Change of Control Repurchase Price, interest and Additional Amounts, if
any, on Securities surrendered for repurchase by the Company will cease to
accrue on and after the Change of Control Repurchase Date; and
(xix) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee shall give the notice of Change of
Control in the Company's name and at the Company's expense; provided, however,
that the Company makes such request at least five Business Days (unless a
shorter period shall be satisfactory to the Trustee) prior to the date by which
such notice of Change of Control must be given to the Holders in accordance with
this Section 5.1(b); provided, further, that the text of the notice of Change of
Control shall be prepared by the Company.
(c) A Holder may exercise its right specified in Section 5.1(a) upon
delivery of a written notice of repurchase (a "CHANGE OF CONTROL REPURCHASE
NOTICE") to the Paying Agent at any time prior to 5:00 p.m., Birmingham, Alabama
time, on the Business Day immediately preceding the Change of Control Repurchase
Date, stating:
(i) the certificate number of the Security which the Holder
will deliver to be repurchased or the appropriate depositary procedures if
Certificated Securities have not been issued;
(ii) the portion of the principal amount of the Security which
the Holder will deliver to be repurchased, which portion must be $1,000 or an
integral multiple of $1,000;
(iii) that such Security shall be repurchased with respect to
the Change of Control Repurchase Date pursuant to the terms and conditions
specified in Section 6 of the Securities and in this Indenture; and
(iv) in the event the Company elects, pursuant to Section
5.2(b), to pay the Change of Control Repurchase Price, in whole or in part, in
shares of Applicable Stock but such portion of the Change of Control Repurchase
Price shall ultimately be paid to such Holder entirely in cash because any of
the conditions to payment of the Change of Control Repurchase Price in shares of
Applicable Stock is not satisfied prior to 5:00 p.m., Birmingham, Alabama time,
on the
36
Business Day immediately preceding the Change of Control Repurchase Date, as set
forth in Section 5.2(b), whether such Holder elects to (A) withdraw such Change
of Control Repurchase Notice as to some or all of the Securities to which such
Change of Control Repurchase Notice relates (stating the principal amount and
certificate numbers, if any, or the appropriate Depositary procedures, if
applicable, of the Securities as to which such withdrawal shall relate), or (B)
receive cash in respect of the entire Change of Control Repurchase Price for all
Securities (or portions thereof) to which such Change of Control Repurchase
Notice relates.
The delivery of such Security to the Paying Agent with, or at any time
after delivery of, the Change of Control Repurchase 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 Change of Control Repurchase Price therefor;
provided, however, that such Change of Control Repurchase Price shall be so paid
pursuant to this Section 5.1 only if the Security so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change of Control Repurchase Notice.
If a Holder, in such Holder's Change of Control Repurchase Notice and in
any written notice of withdrawal delivered by such Holder pursuant to the terms
of Section 5.3, fails to indicate such Holder's choice with respect to the
election set forth in Section 5.1(c)(iv), such Holder shall be deemed to have
elected to receive cash in respect of the entire Change of Control Repurchase
Price for all Securities subject to such Change of Control Repurchase Notice in
the circumstances set forth in such Section 5.1(c)(iv).
The Company shall repurchase from the Holder thereof, pursuant to this
Section 5.1, a portion of a Security, so long as the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the repurchase of all of a Security also apply to the
repurchase of such portion of such Security.
Any repurchase by the Company contemplated pursuant to the provisions of
this Section 5.1 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change of Control
Repurchase Date and the time of delivery of the Security.
Notwithstanding anything contained herein to the contrary, any Holder
delivering to the Paying Agent the Change of Control Repurchase Notice
contemplated by this Section 5.1(c) shall have the right to withdraw such Change
of Control Repurchase Notice at any time prior to 5:00 p.m., Birmingham, Alabama
time, on the Business Day immediately preceding the Change of Control Repurchase
Date by delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 5.3.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change of Control Repurchase Notice or written notice of withdrawal thereof.
SECTION 5.2 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF CHANGE OF
CONTROL REPURCHASE PRICE.
(a) The Securities to be repurchased with respect to any Change of
Control Repurchase Date pursuant to Section 5.1(a) may be paid for at the
election of the Company in cash
37
or shares of Applicable Stock, or in any combination of cash and shares of
Applicable Stock, subject to the conditions set forth in Section 5.2(b). The
Company shall designate, in the notice of Change of Control delivered pursuant
to Section 5.1(b), whether the Company will repurchase the Securities for cash
or shares of Applicable Stock, or, if a combination thereof, the percentages of
the Change of Control Repurchase Price in respect of which it will pay in cash
or shares of Applicable Stock; provided, however, that the Company will pay cash
for fractional interests in shares of Applicable Stock. For purposes of
determining the existence of potential fractional interests, all Securities
subject to repurchase 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 repurchased pursuant to Section 5.1 shall receive
the same percentage of cash or shares of Applicable Stock in payment of the
Change of Control Repurchase Price for such Securities, except (i) as provided
in this Section 5.2(a) with regard to the payment of cash in lieu of fractional
shares of Applicable Stock, and (ii) in the event that the Company is unable to
purchase the Securities of a Holder or Holders for shares of Applicable Stock
because any necessary qualifications or registrations of the shares of
Applicable Stock under applicable 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 notice of Change of Control to Holders except in the event of a
failure to satisfy, prior to 5:00 p.m., Birmingham, Alabama time, on the
Business Day immediately preceding the Change of Control Repurchase Date, any
condition to the payment of the Change of Control Repurchase Price in whole or
in part, in shares of Applicable Stock.
(b) If the Company elects to pay all or a portion of the Change of
Control Repurchase Price of Securities in respect of which a Change of Control
Repurchase Notice pursuant to Section 5.1(c) has been given in Applicable Stock,
the number of shares of Applicable Stock to be issued shall be equal to the
amount of the Change of Control Repurchase Price to be paid in shares of
Applicable Stock divided by (ii) 97.5% of the Market Price of one share of
Applicable Stock, subject to satisfaction of the conditions set forth in the
second succeeding paragraph.
The Company will not issue any fraction of a share of Applicable Stock in
payment of the Change of Control Repurchase Price. Instead, the Company will
make a cash payment (calculated to the nearest cent) equal to such fraction of a
share of Applicable Stock multiplied by the Market Price of one share of
Applicable Stock. If a Holder elects to have more than one Security purchased,
the number of shares of Applicable Stock shall be based on the aggregate amount
of Securities to be purchased.
The Company's right to exercise its election to repurchase Securities
through the issuance of shares of Applicable Stock shall be conditioned upon:
(i) the registration of such shares of Applicable Stock under
the Securities Act and the Exchange Act, in each case, if required;
(ii) any qualification or registration of such shares of
Applicable Stock under applicable state securities laws, if necessary, or the
availability of an exemption from such qualification and registration;
38
(iii) the listing of such shares of Applicable Stock on a
United States national securities exchange or the quotation of such shares of
Applicable Stock in an inter-dealer quotation system of any registered United
States national securities association; and
(iv) the receipt by the Trustee of an Officers' Certificate
stating: (A) that the terms of the issuance of the shares of Applicable Stock
are in conformity with this Indenture; (B) that the shares of Applicable Stock
to be issued in payment of the Change of Control Repurchase 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 Change of Control Repurchase Price
in respect of Securities, will be validly issued, fully paid, non-assessable and
free from preemptive rights; (C) that the conditions above and the condition set
forth in (v) below have been satisfied in all material respects; and (D) the
number of shares of Applicable Stock to be issued for each $1,000 principal
amount of Securities and the Sale Price of a share of Applicable 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 Trading Day
immediately preceding the Change of Control Repurchase Date; and
(v) the receipt by the Trustee of an Opinion of Counsel
stating that: (A) the shares of Applicable Stock to be issued by the Company in
payment of the Change of Control Repurchase 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 Change of Control Repurchase Price in respect
of Securities, will be validly issued, fully paid and non-assessable and, to the
best of such counsel's knowledge, free from preemptive rights; and (B) the
conditions in clauses (i) through (iii) above have been satisfied in all
material respects.
If the foregoing conditions are not satisfied with respect to a Holder or
Holders prior to 5:00 p.m., Birmingham, Alabama time, on the Business Day
immediately preceding the Change of Control Repurchase Date, and the Company has
elected to repurchase the Securities pursuant to this Section 5.2 through the
issuance of shares of Applicable Stock, the Company shall pay the entire Change
of Control Repurchase Price of the Securities of such Holder or Holders in cash.
Upon determination of the actual number of shares of Applicable Stock to be
issued upon repurchase of Securities, the Company shall be required to
disseminate a press release through a public medium as is customary for such a
press release.
(c) All shares of Applicable Stock delivered upon repurchase of the
Securities shall be newly issued 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.
(d) If a Holder of a repurchased Security is paid in shares of
Applicable Stock, the Company shall pay any documentary, stamp or similar issue
or transfer tax due on such issue of Applicable Stock. However, the Holder shall
pay any such tax which is due because the Holder requests the Applicable 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 Applicable Stock being
issued in a name other than the Holder's name until the Paying Agent receives a
sum sufficient to pay any tax which will be due because the shares of Applicable
Stock are to be issued in a name other than the Holder's name. Nothing contained
herein shall preclude any income or other tax withholding required by law or
regulations.
39
(e) After June 30, 2008, the Company may amend this Indenture to
prohibit the payment of the Change of Control Repurchase Price in shares of
Applicable Stock after the date of the amendment. Such amendment may be effected
by the Trustee (subject to the Trustee's rights under Article IX and Sections
11.6, 16.4 and 16.5) and the Company, in the sole discretion of the Company,
without the consent of the Holders as permitted in Section 11.1(n).
SECTION 5.3 EFFECT OF CHANGE OF CONTROL REPURCHASE NOTICE; WITHDRAWAL OF
CHANGE OF CONTROL REPURCHASE NOTICE.
Upon receipt by the Paying Agent of the Change of Control Repurchase
Notice specified in Section 5.1(c), the Holder of the Security in respect of
which such Change of Control Repurchase Notice was given shall (unless such
Change of Control Repurchase Notice is withdrawn as specified in the following
paragraph) thereafter be entitled to receive solely the Change of Control
Repurchase Price with respect to such Security. Such Change of Control
Repurchase Price shall be paid to such Holder, subject to receipts of cash
and/or securities by the Paying Agent, promptly following the later of (a) the
Change of Control Repurchase Date with respect to such Security (provided the
conditions in Section 5.1(c) have been satisfied) and (b) the time of delivery
of such Security to the Paying Agent by the Holder thereof in the manner
required by Section 5.1(c). Securities in respect of which a Change of Control
Repurchase Notice has been given by the Holder thereof may not be converted
pursuant to Article XII on or after the date of the delivery of such Change of
Control Repurchase Notice unless such Change of Control Repurchase Notice has
first been validly withdrawn as specified in the following paragraph.
A Change of Control Repurchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent in
accordance with the Change of Control Repurchase Notice at any time prior to
5:00 p.m., Birmingham, Alabama time, on the Business Day immediately preceding
the Change of Control Repurchase Date, specifying:
(a) the certificate number, if any, or the appropriate Depository
procedures, if applicable, of the Security in respect of which such notice of
withdrawal is being submitted;
(b) the principal amount of the Security with respect to which such
notice of withdrawal is being submitted; and
(c) the principal amount, if any, of such Security which remains
subject to the original Change of Control Repurchase Notice and which has been
or will be delivered for repurchase by the Company.
SECTION 5.4 DEPOSIT OF CHANGE OF CONTROL REPURCHASE PRICE.
Prior to 10:00 a.m., Birmingham, Alabama time, on the applicable Change of
Control Repurchase Date, the Company shall deposit with the Paying Agent (or if
the Company or a Subsidiary or an Affiliate of any 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) and/or Applicable Stock, if permitted hereunder, sufficient to pay the
aggregate Change of Control Repurchase Price of all the Securities or portions
thereof which are to be repurchased on such Change of Control Repurchase Date.
40
If the Paying Agent holds, in accordance with the terms hereof, at 10:00
a.m., Birmingham, Alabama time, on the Business Day immediately following the
applicable Change of Control Repurchase Date, cash and/or Applicable Stock, if
permitted hereunder, sufficient to pay the Change of Control Repurchase Price of
any Securities for which a Change of Control Repurchase Notice has been tendered
and not withdrawn pursuant to Section 5.3, then, immediately after such Change
of Control Repurchase Date, such Securities will cease to be outstanding and
interest and Additional Amounts, if any, on such Securities will cease to
accrue, whether or not such Securities are delivered to the Paying Agent, and
the rights of the Holders in respect thereof shall terminate (other than the
right to receive the Change of Control Repurchase Price upon delivery of such
Securities).
As soon as practicable on and after the Change of Control Repurchase Date,
the Company shall deliver to each Holder entitled to receive shares of
Applicable Stock through the Paying Agent, a certificate (other than in the case
of Holders of Securities in book-entry form with DTC, which shares shall be
delivered in accordance with DTC customary practices) for the number of full
shares of Applicable Stock issuable in payment of the Change of Control
Repurchase Price and cash in lieu of any fractional interests. The person in
whose name the certificate for the shares of Applicable Stock is registered
shall be treated as a holder of record of Applicable Stock on the Change of
Control Repurchase Date. No payment or adjustment will be made for dividends on
the shares of Applicable Stock the record date for which occurred on or prior to
the Change of Control Repurchase Date.
SECTION 5.5 SECURITIES REPURCHASED IN PART.
Any Certificated Security which is to be repurchased 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 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 repurchased.
SECTION 5.6 COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE OF
SECURITIES.
When complying with the provisions of Section 5.1 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), and subject to
any exemptions available under applicable law, the Company shall:
(a) comply with Rule 13e- 4 and Rule 14e-1(or any successor
provision) under the Exchange Act;
(b) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act; and
41
(c) otherwise comply with all Federal and state securities laws so
as to permit the rights and obligations under this Article V to be exercised in
the time and in the manner specified therein.
To the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Article V, the Company's compliance with
such laws and regulations shall not in and of itself cause a breach of their
obligations under this Article V.
SECTION 5.7 REPAYMENT TO THE COMPANY.
To the extent that the aggregate amount of cash or shares of Applicable
Stock deposited by the Company pursuant to Section 5.4 exceeds the aggregate
Change of Control Repurchase Price of the Securities or portions thereof which
the Company is obligated to repurchase as of the Change of Control Repurchase
Date then, promptly after the Change of Control Repurchase Date, the Paying
Agent shall return any such excess to the Company.
ARTICLE VI
COVENANTS
SECTION 6.1 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. Principal amount, Redemption Price, Repurchase Price and Change of
Control Repurchase Price and accrued and unpaid interest (including Contingent
Interest, if any) and Additional Amounts, if any, shall be considered paid on
the applicable date due if by 10:00 a.m., Birmingham, Alabama time, on such date
the Paying Agent holds, in accordance with this Indenture, cash or other
immediately available funds or securities, if permitted hereunder, sufficient to
pay all such amounts then due. The Company shall, to the fullest extent
permitted by law, pay interest on overdue principal and overdue installments of
interest, Contingent Interest and Additional Amounts, if any, as provided in
Section 13.1. All references in this Indenture or the Securities to interest
shall be deemed to include Contingent Interest as well as Additional Amounts, if
any, payable pursuant to the Registration Rights Agreement.
Payment of the principal of and interest (including Contingent Interest,
if any) and Additional Amounts, if any, on the Securities shall be in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts or in Applicable Stock, as the
case may be.
If a Security is redeemed pursuant to Article III hereof or the Holder
elects to require the Company to repurchase such Security pursuant to either
Article IV or Article V hereof on a date that is after the Regular Record Date
and prior to the corresponding Interest Payment Date, interest (including
Contingent Interest, if any) and Additional Amounts, if any, accrued and unpaid
on such Security to, but not including, the applicable Redemption Date,
Repurchase Date or Change of Control Repurchase Date will be paid to the same
Holder to whom the Company pays the principal of such Security regardless of
whether such Holder was the registered Holder on the Regular Record Date
immediately preceding the applicable Redemption Date, Repurchase Date or Change
of Control Repurchase Date.
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Holders must surrender the Securities to the Paying Agent to collect
payment of principal.
SECTION 6.2 SEC AND OTHER REPORTS TO THE TRUSTEE.
The Company shall ensure delivery to the Trustee within 15 calendar 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
accordance with TIA Section 314(a). 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 annual and quarterly
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 6.3 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee within 120 calendar days after
the end of each fiscal year of the Company (beginning with the fiscal year
ending December 31, 2003) an Officers' Certificate, stating whether or not to
the 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 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 6.4 FURTHER INSTRUMENTS AND ACTS.
Upon reasonable request of the Trustee, or as otherwise necessary, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
SECTION 6.5 MAINTENANCE OF OFFICE OR AGENCY OF THE TRUSTEE, REGISTRAR,
PAYING AGENT AND CONVERSION AGENT.
The Company will maintain in Birmingham, Alabama, 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, redemption, repurchase 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 SouthTrust Bank, located at 110
Office Park Drive, 2nd Floor, Mail Code: A-001-OB-0201, Birmingham, Alabama
35223, 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
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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 16.2.
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 Birmingham,
Alabama, for such purposes.
SECTION 6.6 DELIVERY OF INFORMATION REQUIRED UNDER RULE 144A.
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, the Company will make available the information required pursuant to
Rule 144A(d)(4) under the Securities Act 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. Whether a person is a beneficial owner shall be determined by
the Company to the Company's reasonable satisfaction.
SECTION 6.7 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 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, Redemption Price, Repurchase Price or Change of Control Repurchase Price
in respect of Securities, or any interest and Additional Amounts, if any, 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.
SECTION 6.8 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company shall deliver to the Trustee, as soon as practicable and in
any event within five Business Days after the Company becomes aware of the
occurrence of any Default or Event of Default or, an Officers' Certificate
setting forth the details of such Default or Event of Default and the action
which the Company proposes to take with respect thereto.
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ARTICLE VII
SUCCESSOR CORPORATION
SECTION 7.1 WHEN COMPANY MAY MERGE OR TRANSFER ASSETS.
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer, sell, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person, unless:
(a) either (i) the Company shall be the continuing corporation, or
(ii) 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, sale, lease or other disposition all or substantially all of the
properties and assets of the Company substantially as an entirety (1) shall be
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia, and (2) 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 Default
shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and, if requested by the Trustee, an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer, sale, lease or
other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, complies with this Article
VII and that all conditions precedent herein provided for relating to such
transaction have been satisfied.
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,
sale, lease or other disposition 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, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities. Subject to Section 11.6, the
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.
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ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT.
So long as any Securities are outstanding, each of the following shall be
an "EVENT OF DEFAULT":
(a) the Company defaults in the payment of the principal amount (or
premium, if any), with respect to the Securities, when the same become due and
payable;
(b) the Company defaults in the payment of any accrued and unpaid
interest (including Contingent Interest, if any) or Additional Amounts, if any,
in each case, when due and payable, and continuance of such default for a period
of 30 days;
(c) the Company fails to satisfy its conversion obligation with
respect to any portion of the principal amount of any Security following the
exercise by the Holder of the right to convert such Security into shares of
Common Stock (or cash or a combination of shares of Common Stock and cash, if
the Company so elects) pursuant to and in accordance with Article XII, unless
such failure is cured within five days after written notice of default is given
to the Company by the Trustee or the Holder of such Security;
(d) the Company defaults in its obligation to redeem any Security,
or any portion thereof, called for redemption by the Company pursuant to and in
accordance with Article III;
(e) the Company defaults in its obligation to pay the Repurchase
Price or Change of Control Repurchase Price with respect to any Security, or any
portion thereof, upon the exercise by the Holder of such Holder's right to
require the Company to repurchase such Securities pursuant to and in accordance
with Article IV or V;
(f) the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to in
clause (a) through (e) above) and such failure continues for 60 days after
receipt by the Company of a Notice of Default (defined below);
(g) the Company fails to pay when due at maturity or there occurs a
default that results in the acceleration of maturity of any indebtedness for
borrowed money of the Company or any Significant Subsidiary in an aggregate
amount of $10,000,000 or more, unless the acceleration is rescinded, stayed or
annulled within 30 days after receipt by the Company of a Notice of Default;
(h) the Company or any Significant Subsidiary, pursuant to or under
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the entry of any order for relief against it
in an involuntary case or proceeding or the commencement of any case against it;
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(iii) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files a petition in bankruptcy or answer or consent
seeking reorganization or relief; or
(vi) consents to the filing of such petition or the
appointment of or taking possession by a Custodian; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any Significant
Subsidiary, in an involuntary case or proceeding, or adjudicates the Company or
any Significant Subsidiary insolvent or bankrupt;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary, or for any substantial part of its property; or
(iii) orders the winding up or liquidation of the Company or
any Significant Subsidiary, and the order of decree remains unstayed and in
effect for 60 days.
A Default under clause (f) or (g) 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 (f) or (g) 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."
SECTION 8.2 ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 8.1(h) or (i)) 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 time outstanding by notice to the Company and the Trustee, may
declare the principal amount plus accrued and unpaid interest (including
Contingent Interest, if any) and Additional Amounts, 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 8.1(h) or (i) occurs and is
continuing, the principal amount plus accrued and unpaid interest (including
Contingent Interest, if any) and Additional Amounts, 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 not less than 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
47
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 principal amount plus accrued and
unpaid interest (including Contingent Interest, if any) and Additional Amounts,
if any, that have become due solely as a result of acceleration and if all
amounts due to the Trustee under Section 9.7 have been paid. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 8.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may, but
shall not be obligated to, pursue any available remedy to collect the payment of
the principal amount plus accrued and unpaid interest (including Contingent
Interest, if any) and Additional Amounts, 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 8.4 WAIVER OF PAST DEFAULTS.
Subject to Sections 8.7 and 11.2, the Holders of not less than 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 in the payment of the principal of, any
premium or interest (including Contingent Interest, if any) on, or any
Additional Amounts with respect to, any Security; or
(b) a Default in respect of any provision of this Indenture or the
Securities, which, under Section 11.2, cannot be amended or modified without the
consent of each Securityholder affected thereby.
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 8.4 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 8.5 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 prejudicial to the rights of other Securityholders
or would involve the Trustee in personal liability unless the Trustee is offered
indemnity satisfactory to it.
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This Section 8.5 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.
SECTION 8.6 LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(b) 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;
(c) such Holder or Holders offer to the Trustee security or
indemnity satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of such notice, request and offer of security or indemnity; and
(e) 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 8.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT OR TO CONVERT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the principal amount, Redemption Price, Repurchase
Price, Change of Control Repurchase Price or interest (including Contingent
Interest, if any) and Additional Amounts, if any, in respect of the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities and in this Indenture, and to convert such Securities in accordance
with Article XII, or to bring suit for the enforcement of any such payment on or
after such respective dates or the right to convert, is absolute and
unconditional and shall not be impaired or affected adversely without the
consent of such Holder.
SECTION 8.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default described in Section 8.1(a), (b), (d) or (e) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or another obligor on the
Securities for the whole amount owing with respect to the Securities and the
amounts provided for in Section 9.7.
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SECTION 8.9 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, Redemption
Price, Repurchase Price, Change of Control Repurchase Price or interest and
Additional Amounts, if any, 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, Redemption Price, Repurchase Price, Change of Control Repurchase Price,
or interest and Additional Amounts, if any, 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 reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel or any other
amounts due the Trustee under Section 9.7) 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 it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 9.7.
Nothing contained herein 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 8.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article VIII, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 9.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the principal amount, Redemption Price, Repurchase Price,
Change of Control Repurchase Price or interest (including Contingent
Interest, if any) and Additional Amounts, if any, as the case may be,
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.
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The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10. 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 8.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant (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 8.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 8.7 or a suit by Holders
of more than 10% in aggregate principal amount of the Securities at the time
outstanding. This Section 8.11 shall be in lieu of Section 315(e) of the TIA and
such Section 315(e) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
SECTION 8.12 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceedings to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
ARTICLE IX
TRUSTEE
SECTION 9.1 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 of those rights and powers
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. For purposes of this Section 9.1 and any
applicable provisions of the TIA relating to the subject matter of this Section
that are not permissively excluded from this Indenture in accordance with
provisions of the TIA, the term "default" is hereby defined as an Event of
Default which has occurred and is continuing and of which the Trustee has actual
knowledge under this Indenture.
(b) Except during the continuance of an Event of Default:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture (including those
incorporated as reference to the TIA), and the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
51
(ii) 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 the 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 9.1(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
grossly negligent action, its own grossly negligent failure to act or its own
willful misconduct, except that:
(i) this Section (c) does not limit the effect of Section (b)
of this Section 9.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 8.5.
Subparagraphs (c)(i), (ii) and (iii) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA, respectively, 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 9.1.
(e) The Trustee may refuse to perform any duty or exercise any right
or power or expend 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.
(g) Notwithstanding anything contained in this Indenture to the
contrary, the duties and responsibilities of the Trustee under this Indenture
shall be subject to the protections, exculpations and limitations on liability
afforded to the Trustee under the provisions of the TIA, including those
provisions of such Act deemed by the TIA to be included herein (except to the
extent expressly excluded herein pursuant to a provision of the TIA permitting
such exclusion).
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(h) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 9.2 RIGHTS OF TRUSTEE.
Subject to its duties and responsibilities under Section 9.1 and under the
TIA,
(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 any number of
agents (including, without limitation, authenticating agents and paying agents),
servicers, custodians, nominees or attorneys, (any or all of which agents,
servicers, custodians, nominees or attorneys, in Trustee's discretion, may be
affiliates of the Trustee) and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, servicer, custodian, nominee
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 reliance on 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 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,
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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.
(l) the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company, except as otherwise set forth herein.
(m) in the event that the Trustee is also acting as Paying Agent,
Registrar, Conversion Agent, Bid Solicitation Agent or transfer agent hereunder,
the rights, indemnities (including without limitation Section 9.7) and
protections afforded to the Trustee pursuant to this Article Nine shall also be
afforded to such Paying Agent, Registrar, Conversion Agent, Bid Solicitation
Agent or transfer agent.
SECTION 9.3 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 9.10 and 9.11.
SECTION 9.4 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 any registration statement for the Securities under the
Securities Act or in any offering document for the Securities, this 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.
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SECTION 9.5 NOTICE OF DEFAULTS.
If a Default occurs and if the Trustee has actual knowledge of such
Default, the Trustee shall give to each Securityholder notice of the Default
within 90 days after it occurs 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 8.1(a), (b), (d) or (e), 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 best interest of the
Securityholders and provided, further, that in the case of any Default described
in Section 8.1(f), no such notice need be given to Holders until at least 30
days after the occurrence thereof. The preceding sentence 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.
SECTION 9.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each April 15 beginning with April 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such April 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 9.7 COMPENSATION AND INDEMNITY.
The Company agrees to:
(a) 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) reimburse the Trustee upon its request for all expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the compensation and the expenses,
advances and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its own gross negligence or
willful misconduct; and
(c) indemnify, defend and hold harmless the Trustee and its
directors, officers, agents and employees (collectively, the "INDEMNITEES") from
and against any and all claims, liabilities, losses, damages, fines, penalties,
taxes (other than taxes on the income of the Trustee) and expenses, including
without limitation out-of-pocket and incidental expenses and reasonable legal
fees (including the allocated costs and expenses of in-house counsel and legal
staff) ("LOSSES") that may be imposed on, incurred by, or asserted against, the
Indemnitees or any one or
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more of them in connection with following any instructions or other directions
upon which the Trustee is authorized to rely pursuant to the terms of this
Indenture; and
(d) in addition to and not in limitation of the provisions of
subsection (c) of this Section 9.7, indemnify, defend and hold harmless the
Indemnitees and each of them from and against any and all Losses that may be
imposed on, incurred by, or asserted against the Indemnitees or any one or more
of them in connection with or arising out of the exercise of performance by the
Trustee of any of its powers, rights or duties under this Indenture or as
required by law, other than Losses arising from the gross negligence or willful
misconduct of the applicable Indemnitee.
The Trustee shall have the right to employ separate counsel in any such
action or proceeding and participate in the investigation and defense thereof,
and the Company shall pay the reasonable fees and expenses of such separate
counsel; provided, however, that the Trustee may only employ separate counsel at
the expense of the Company if in the judgment of the Trustee (i) a conflict of
interest exists by reason of common representation, or (ii) there are legal
defenses available to the Trustee that are different from or are in addition to
those available to the Company or if all parties commonly represented do not
agree as to the action (or inaction) of counsel.
To secure the Company's payment obligations in this Section 9.7, 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, Redemption Price, Repurchase Price, Change of Control Repurchase Price
or interest (including Contingent Interest, if any) and Additional Amounts, if
any, as the case may be, on particular Securities.
"Trustee" for purposes of this Section shall include any predecessor
Trustee; provided, however, that the negligence, willful misconduct or bad faith
of any person serving as Trustee under this Indenture shall not affect the
rights under this Section 9.7 of any other person serving as Trustee under this
Indenture.
The Company's payment obligations pursuant to this Section 9.7 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 8.1(h) or (i), the expenses including the reasonable
charges and expenses of its counsel, are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 9.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company; provided, however,
that no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 9.8. 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:
(a) the Trustee fails to comply with Section 9.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the Trustee or its
property; or
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(d) 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 9.7.
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 at the expense of the Company 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 9.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 9.9 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.
SECTION 9.10 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 contained herein shall
prevent the Trustee from filing with the Commission the application referred to
in the penultimate paragraph of TIA Section 310(b).
SECTION 9.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE X
DISCHARGE OF INDENTURE
SECTION 10.1 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
(whether at the Stated Maturity or upon acceleration, or on any Redemption Date,
or with respect to any Repurchase Date or Change of Control Repurchase Date, or
upon conversion) and the Company deposits with the Paying Agent or Conversion
Agent cash or Applicable 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 9.7, 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 10.2 REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company upon written
request any cash 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 cash 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 cash or securities for that period
commencing after the return thereof.
ARTICLE XI
AMENDMENTS
SECTION 11.1 WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder to:
(a) add to the covenants of the Company for the benefit of the
Holders of Securities;
(b) surrender any right or power herein conferred upon the Company;
(c) provide for conversion rights of Holders of Securities if any
reclassification or change of the shares of Common Stock or any consolidation,
merger or sale of all or substantially all of the Company's assets occurs;
(d) provide for the assumption of the Company's obligations to the
Holders of Securities in the case of a merger, consolidation, conveyance,
transfer, sale, lease or other disposition pursuant to Article VII;
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(e) increase the Conversion Rate and reduce the Conversion Price;
provided, however, that such increase in the Conversion Rate and reduction in
the Conversion Price is in accordance with the terms of this Indenture or shall
not adversely affect the interests of the Holders of Securities (after taking
into account tax and other consequences of such reduction) in any material
respect;
(f) comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(g) provide for a successor Trustee with respect to the Securities;
(h) add any additional Events of Default with respect to all or any
of the Securities;
(i) secure the Securities;
(j) supplement any of the provisions of the Indenture to such extent
as shall be necessary to permit or facilitate the discharge of the Securities,
provided that such change or modification does not adversely affect the
interests of the Holders of the Securities in any material respect;
(k) make any changes or modifications necessary in connection with
the registration of the Securities under the Securities Act as contemplated in
the Registration Rights Agreement; provided, however, that such action pursuant
to this clause (k) does not, in the good faith opinion of the Board of Directors
of the Company (as evidenced by a Board Resolution) and the Trustee, adversely
affect the interests of the Holders of Securities in any material respect;
(l) cure any ambiguity, correct or supplement any provision herein
which may be inconsistent with any other provision herein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under this Indenture which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of this Indenture;
provided, however, that such action pursuant to this clause (l) does not, in the
good faith opinion of the Board of Directors of the Company (as evidenced by a
Board Resolution) and the Trustee, adversely affect the interests of the Holders
of Securities in any material respect;
(m) add or modify any other provisions herein with respect to
matters or questions arising hereunder which the Company and the Trustee may
deem necessary or desirable and which would not reasonably be expected to
adversely affect the interests of the Holders of Securities in any material
respect; and
(n) after June 30, 2008, eliminate the right of the Company to pay
the Repurchase Price in Common Stock, or to pay the Change of Control Repurchase
Price in Applicable Stock.
SECTION 11.2 WITH CONSENT OF HOLDERS.
Except as provided below in this Section 11.2, this Indenture or the
Securities may be amended, modified or supplemented, and noncompliance in any
particular instance with any provision of this Indenture or the Securities may
be waived, in each case with the written consent
59
or affirmative vote of the Holders of not less than a majority of the principal
amount of the Securities at the time outstanding.
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby (in addition to the written consent or the
affirmative vote of the holders of at least a majority of the principal amount
of the Securities at the time outstanding), an amendment or waiver under this
Section 11.2 may not:
(a) change the maturity of the principal amount of, or the payment
date of any installment of interest (including Contingent Interest, if any) or
Additional Amounts, if any, on, any Security;
(b) reduce the principal amount of, or rate of interest (including
Contingent Interest, if any) or Additional Amounts, if any, on, or the premium
amount, Redemption Price, Repurchase Price or Change of Control Repurchase Price
of, any Security;
(c) change the place of payment or the currency of payment of
principal amount of, or interest (including Contingent Interest, if any) or
Additional Amounts, if any, on, or the Redemption Price, Repurchase Price or
Change of Control Repurchase Price of, any Security from U.S. Dollars or shares
of Additional Stock as provided herein;
(d) alter the manner of calculation or rate of accrual of Contingent
Interest, on any Security;
(e) impair the right of any Holder to institute suit for the
enforcement of any repurchase of, payment on or with respect to, or conversion
of, any Security on or after the stated maturity of the Securities, in the case
of redemption, on or after the Redemption Date, or in the case of repayment at
the option of the Holder, on or after the Repurchase Date or Change of Control
Repurchase Date;
(f) modify the obligation of the Company to maintain an agency in
Birmingham, Alabama pursuant to Section 6.5;
(g) adversely affect the right of Holders of the Securities to
convert such Securities as provided in Article XII;
(h) adversely affect the right of Holders of the Securities to
require us to repurchase such Securities as provided in Articles IV and V;
(i) modify the optional redemption provisions of Article III in a
manner adverse to the Holders of the Securities;
(j) reduce the percentage of the principal amount of the outstanding
Securities the written consent or affirmative vote of whose Holders is required
to take specific actions under the Indenture;
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(k) reduce the percentage of the principal amount of the outstanding
Securities the written consent or affirmative vote of whose Holders is required
for any waiver of any past Default provided for in this Indenture; or
(l) modify any of (a)-(k) above.
It shall not be necessary for the consent of the Holders under this
Section 11.2 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 11.2 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
Nothing contained in this Section 11.2 shall impair the ability of the
Company and the Trustee to amend this Indenture or the Securities without the
consent of any Securityholder to provide for the assumption of the Company's
obligations to the Holders of Securities in the case of a merger, consolidation,
conveyance, transfer, sale, lease or other disposition pursuant to Article VII.
SECTION 11.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
comply with the TIA.
SECTION 11.4 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 11.5 NOTATION ON OR EXCHANGE OF SECURITIES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article XI 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 11.6 TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article XI if the amendment contained therein does not affect the rights,
duties, liabilities or immunities of the
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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 9.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 11.7 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, except to the extent provided in Section 11.2(a)-(l).
ARTICLE XII
CONVERSION
SECTION 12.1 CONVERSION PRIVILEGE.
(a) Subject to and upon compliance with the provisions of this
Article XII, a Holder of a Security shall have the right, at such Holder's
option, to convert all or any portion (if the portion to be converted is $1,000
or an integral multiple of $1,000) of such Security into shares of Common Stock
at the Conversion Rate in effect on the date of conversion only as follows:
(i) during any fiscal quarter if the Sale Price of the Common
Stock for at least 20 Trading Days in the Measurement Period of the immediately
preceding quarter exceeds 120% of the Conversion Price in effect as of the last
Trading Day of such Measurement Period (in the event that the Conversion Price
on such last Trading Day of such Measurement Period is not the same as the
Conversion Price in effect for each of the Trading Days in such Measurement
Period, the Conversion Agent shall make such adjustments as it, in its
discretion, deems appropriate in determining whether the foregoing condition has
been met);
(ii) at any time prior to the close of business on the second
Business Day immediately preceding the Redemption Date, if such Security has
been called for redemption pursuant to Article III hereof; provided, however,
that if a Holder already has delivered a Repurchase Notice or a Change of
Control Repurchase Notice with respect to a Security, the Holder may not
surrender that Security for conversion until the Holder has withdrawn the notice
in accordance with Section 4.3 or Section 5.3 hereof; or
(iii) as provided in Section (b) of this Section 12.1.
The Conversion Agent shall, on behalf of the Company, determine at the end
of each applicable Measurement Period whether the Securities shall be
convertible as a result of the occurrence of an event specified in clause (i)
above and, if the Securities shall be so convertible, the Conversion Agent shall
promptly deliver to the Company and the Trustee written notice thereof. Whenever
the Securities shall become convertible pursuant to this Section 12.1, the
Company or, at the Company's request, the Trustee in the name and at the expense
of the Company, shall notify the Holders in writing of the event triggering such
convertibility in the manner provided in Section 16.2, and the Company shall
also publicly announce such information
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and publish it on the Company's Website. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
(b) In addition, in the event that:
(i) (A) the Company elects to distribute to all holders of
its Common Stock rights or warrants entitling them (for a period expiring within
60 days of the Record Date for such distribution) to subscribe for or purchase
shares of Common Stock, at a price per share less than the average Sale Price of
the Common Stock for the ten Trading Days immediately preceding the date of
declaration of such distribution;
(B) the Company distributes to all holders of its Common
Stock, cash or other assets, debt securities or rights to purchase its
securities, where the Fair Market Value of such distribution per share of Common
Stock exceeds 15% of the Sale Price of a share of Common Stock on the Business
Day immediately preceding the date of declaration of such distribution; or
(C) a Change of Control occurs but Holders of Securities
do not have the right to require the Company to purchase their Securities as a
result of such Change of Control, because of the provisions set forth in Section
5.1(a)(ii);
then, in each case, the Securities may be surrendered for conversion at any time
on and after the date that 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 distribution, in the case of (A) or (B), or within 30 days after the
occurrence of the Change of Control, in the case of (C), until the earlier of
the close of business on the Business Day immediately preceding the Ex-Dividend
Time or the date the Company announces that such distribution will not take
place, in the case of (A) or (B), or the earlier of 30 days after the Company's
delivery of the Change of Control Purchase Notice or the date the Company
announces that the Change of Control will not take place, in the case of (C);
provided, however, that in the case of (A) or (B), a Holder of Securities may
not surrender Securities for conversion if the Holder will otherwise participate
in such distribution; and
(ii) the Company consolidates with or merges into another
corporation, or is a party to a binding share exchange pursuant to which the
shares of Common Stock would be converted into cash, securities or other
property as set forth in Section 12.4 hereof, then the Securities may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the date announced by the Company as the anticipated effective date of
such transaction until 15 days after the actual date of such transaction;
provided, however, that the Securities shall be converted into the kind and
amount of cash, securities or other property which the Holder of the Securities
is entitled under Section 12.3(g).
SECTION 12.2 CONVERSION PROCEDURE; CONVERSION RATE; FRACTIONAL SHARES.
(a) Each Security shall be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares (calculated to the
nearest 1/100th of a share) of Common Stock. The Security will be converted into
shares Common Stock at the Conversion Rate therefor.
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No payment or adjustment shall be made in respect of dividends on the
Common Stock or accrued interest or accrued and unpaid Contingent Interest, if
any, on a converted Security, except as described in Section 12.9 hereof.
The Company shall not issue any fraction of a share of Common Stock in
connection with any conversion of Securities, but instead shall, subject to
Sections 12.3(h) and 12.13(a)(iii) hereof, make a cash payment (calculated to
the nearest cent) equal to such fraction multiplied by the Sale Price of the
Common Stock on the last Trading Day prior to the date of conversion.
Notwithstanding the foregoing, a Security in respect of which a Holder has
delivered a Purchase Notice or Change of Control Purchase Notice exercising such
Holder's option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn in accordance with
Sections 4.3 or 5.3 hereof, as the case may be, prior to the close of business
on the Business Day immediately preceding the applicable Repurchase Date or
Change of Control Repurchase Date, as the case may be.
(b) Before any Holder of a Security shall be entitled to convert the
same into Common Stock, such Holder shall, in the case of Securities issued in
global form, comply with the procedures of the Depository in effect at that
time, and in the case of definitive Securities, surrender such Securities, duly
endorsed to the Company or in blank, at the office of the Conversion Agent, and
shall give written notice to the Company at said office or place in the form of
the Conversion Notice attached to the Security (the "CONVERSION NOTICE") that
such Holder elects to convert the same and shall state in writing therein the
principal amount of Security to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock to be issued.
Before any such conversion, a Holder also shall pay all funds required, if
any, relating to interest on the Securities, as provided in Section 12.9, and
all taxes or duties, if any, as provided in Section 12.8.
If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full shares of Common Stock which shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Security (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at the office
of the Conversion Agent to such Holder of a Security, or to such Holder's
nominee or nominees, certificates (other than in the case of Holders of
Securities in book-entry form with DTC, which shares shall be delivered in
accordance with DTC customary practices) for the number of full shares of Common
Stock to which such Holder shall be entitled as aforesaid, together, subject to
the next to last sentence of Section (a) above, with cash in lieu of any
fraction of a share to which such Holder would otherwise be entitled. The
Company shall not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or the security register are duly
closed for any purpose, but certificates for shares of Common Stock shall be
issued and delivered as soon as practicable after the opening of such books or
security register.
If shares of Common Stock to be issued upon conversion of a Restricted
Security are to be issued in the name of a Person other than the Holder of such
Restricted Security, such Holder must
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deliver to the Conversion Agent a certification in substantially the form set
forth in a Transfer Certificate dated the date of surrender of such Restricted
Security and signed by such Holder, as to compliance with the restrictions on
transfer applicable to such Restricted Security. The Company shall not be
required to issue Common Stock upon conversion of any such Restricted Security
to a Person other than the Holder if such Restricted Security is not so
accompanied by a properly completed certification, and the Registrar shall not
be required to register Common Stock upon conversion of any such Restricted
Security in the name of a Person other than the Holder if such Restricted
Security is not so accompanied by a properly completed certification.
(c) A Security shall be deemed to have been converted as of the
close of business on the date that such Security has been surrendered for
conversion or the procedures of the Depositary have been complied with, as the
case may be, as provided above, and all other procedures and requirements for
conversion have been complied with, and the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for all
purposes as the record Holder or Holders of such Common Stock as of the close of
business on such date. Upon conversion, all obligations under the Securities so
converted will be deemed satisfied, including with respect to any accrued and
unpaid interest (including Contingent Interest, if any).
(d) In case any Certificated Security shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate
and deliver to or upon the written order of the Holder of the Security so
surrendered, without charge to such Holder (subject to the provisions of Section
12.8 hereof), a new Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Certificated Securities. A Holder will not be entitled to any rights as a holder
of shares of Common Stock, including, among other things, the right to vote and
receive dividends and notices of stockholder meetings, until the conversion is
effective.
SECTION 12.3 ADJUSTMENT OF CONVERSION RATE FOR COMMON STOCK.
The Conversion Rate shall be adjusted from time to time as follows:
(a) In case the Company shall, at any time or from time to time
while any of the Securities are outstanding, pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to all holders of its
outstanding shares of Common Stock, then the Conversion Rate in effect at the
opening of business on the date next following the Record Date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by multiplying such Conversion Rate by a
fraction:
(i) the numerator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on such Record Date
fixed for such determination and the total number of shares constituting such
dividend or other distribution; and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the Record Date.
Such increase shall become effective immediately prior to the opening of
business on the day following the Record Date fixed for such determination.
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If any dividend or distribution of the type described in this Section
12.3(a) is declared but not so paid or made, the Conversion Rate shall again be
adjusted to the Conversion Rate which would then be in effect if such dividend
or distribution had not been declared.
(b) In case the Company shall, at any time or from time to time
while any of the Securities are outstanding, issue rights or warrants for a
period expiring within 60 days after the date of announcement of such issuance
(other than any rights or warrants referred to in Section 12.3(d)), to all
holders of its shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into or exchangeable
or exercisable for shares of Common Stock), at a price per share (or having a
conversion, exchange or exercise price per share) less than the Sale Price of
the Common Stock on the Business Day immediately preceding the date of the
announcement of such issuance (treating the conversion, exchange or exercise
price per share of the securities convertible into or exchangeable or
exercisable for Common Stock as equal to (x) the sum of (i) the price for a unit
of the security convertible into or exchangeable or exercisable for Common Stock
and (ii) any additional consideration initially payable upon the conversion,
exchange or exercise of such security into Common Stock divided by (y) the
number of shares of Common Stock initially underlying such convertible,
exchangeable or exercisable security), then the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect at the opening of business on the date after such date
of announcement by a fraction:
(i) the numerator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date of announcement,
plus the total number of additional shares of Common Stock so offered for
subscription or purchase (or into which the convertible, exchangeable or
exercisable securities so offered are convertible, exchangeable or exercisable);
and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding on the close of business on the date of announcement,
plus the number of shares (or convertible, exchangeable or exercisable
securities) which the aggregate offering price of the total number of shares (or
convertible, exchangeable or exercisable securities) so offered for subscription
or purchase (or the aggregate conversion, exchange or exercise price of the
convertible securities so offered) would purchase at the Sale Price of the
Common Stock on the Business Day immediately preceding the date of the
announcement of such issuance (determined by multiplying such total number of
shares so offered by the exercise price of such rights or warrants and dividing
the product so obtained by such Sale Price).
Such adjustment shall become effective immediately prior to the opening of
business on the day following the date of announcement of such issuance.
To the extent that shares of Common Stock (or securities convertible into
or exchangeable or exercisable for shares of Common Stock) are not delivered
pursuant to such rights or warrants, upon the expiration or termination of such
rights or warrants, the Conversion Rate shall be readjusted to the Conversion
Rate which would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made on the basis of the delivery of only the
number of shares of Common Stock (or securities convertible into or exchangeable
or exercisable for shares of Common Stock) actually delivered. In the event that
such rights or warrants are not so issued, the
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Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be in effect if the date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Sale Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received for such rights or warrants and the
value of such consideration if other than cash, to be determined in good faith
by the Board of Directors of the Company.
(c) In case the Company shall, at any time or from time to time
while any of the Securities are outstanding, subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
increased, and conversely, in case the Company shall, at any time or from time
to time while any of the Securities are outstanding, combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
reduced. In each such case, the Conversion Rate shall be adjusted by multiplying
such Conversion Rate by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately after giving effect to such
subdivision or combination and the denominator of which shall be the number of
shares of Common Stock outstanding immediately prior to such subdivision or
combination. Such reduction or increase, as the case may be, shall become
effective immediately prior to the opening of business on the day following the
day upon which such subdivision or combination becomes effective.
(d) (i) In case the Company shall, at any time or from time to time
while any of the Securities are outstanding, by dividend or otherwise,
distribute to all holders of its shares of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock is not changed or
exchanged), shares of its capital stock (other than any dividends or
distributions to which Section 12.3(a) applies), evidences of its Indebtedness
or assets, including securities, but excluding (w) any rights or warrants
referred to in Section 12.3(c), (x) dividends or distributions of stock referred
to in Section 12.3(a), (y) dividends and distributions of stock, securities or
other property or assets (including cash) in connection with the
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 12.4 applies and (z) dividends
and distributions paid exclusively in cash referred to in Section 12.3(e) (such
capital stock, evidence of its indebtedness, assets or securities being
distributed hereinafter in this Section 12.3(d) called the "DISTRIBUTED
ASSETS"), then, in each such case, subject to the other provisions of this
Section 12.3(d), the Conversion Rate shall be increased so that the same shall
be equal to the price determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Record Date with respect to
such distribution by a fraction:
(A) the numerator of which shall be the Current Market
Price of the Common Stock; and
(B) the denominator of which shall be such Current
Market Price less the Fair Market Value on such date of the portion
of the distributed assets so distributed applicable to one share of
Common Stock (determined on the basis of the
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number of shares of Common Stock outstanding on the Record Date)
(determined as provided in Section 12.3(g)).
Such increase shall become effective immediately prior to the opening of
business on the day following the Record Date for such distribution. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared.
(ii) If the Board of Directors determines the Fair Market
Value of any distribution for purposes of this Section 12.3(d) by reference to
the actual or when issued trading market for any distributed assets comprising
all or part of such distribution, it must in doing so consider the prices in
such market over the same period (the "REFERENCE PERIOD") used in computing the
Current Market Price pursuant to Section 12.3(g) to the extent possible, unless
the Board of Directors determines in good faith that determining the Fair Market
Value during the Reference Period would not be in the best interest of the
Holders.
(iii) In the event any such distribution consists of shares of
capital stock of, or similar equity interests in, one or more of the Company's
Subsidiaries (a "SPIN-OFF"), the Fair Market Value of the securities to be
distributed shall equal the average of the closing sale prices of such
securities on the principal securities market on which such securities are
traded for the five consecutive Trading Days commencing on and including the
sixth Trading Day of those securities after the effectiveness of the Spin-Off,
and the Current Market Price shall be measured for the same period. 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 Current Market Price shall mean the
Sale Price for the Common Stock on the same Trading Day.
(iv) Rights or warrants distributed by the Company to all
holders of its shares of Common Stock entitling them to subscribe for or
purchase shares of the Company's capital stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence of a
specified event or events ("TRIGGER EVENT"), are deemed to be transferred with
such shares of Common Stock, (y) are not exercisable, and (z) are also issued in
respect of future issuances of shares of Common Stock shall be deemed not to
have been distributed for purposes of this Section 12.3(d) (and no adjustment to
the Conversion Rate under this Section 12.3(d) will be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different distributed assets, evidences of
indebtedness or other assets, or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be deemed
to be the date of issuance and record date with respect to a new right or
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Rate under
this Section 12.3(d):
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(A) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Rate shall be readjusted upon such
final redemption or repurchase to give effect to such distribution
or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price
received by a holder of shares of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of shares of Common Stock as of the
date of such redemption or repurchase; and
(B) in the case of such rights or warrants which shall
have expired or been terminated without exercise, the Conversion
Rate shall be readjusted as if such rights and warrants had never
been issued.
(v) For purposes of this Section 12.3(d) and Sections 12.3(a),
12.3(b) and 12.3(c), any dividend or distribution to which this Section 12.3(d)
is applicable that also includes (x) shares of Common Stock, (y) a subdivision
or combination of shares of Common Stock to which Section 12.3(b) applies, or
(z) rights or warrants to subscribe for or purchase shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock to
which Section 12.3(c) applies (or any combination thereof), shall be deemed
instead to be:
(A) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants,
other than such shares of Common Stock, such subdivision or
combination or such rights or warrants or securities convertible
into or exercisable or exchangeable for Common Stock to which
Sections 12.3(a), 12.3(b) and 12.3(c) apply, respectively (and any
Conversion Rate increase required by this Section 12.3(d) with
respect to such dividend or distribution shall then be made),
immediately followed by
(B) a dividend or distribution of such shares of Common
Stock, such subdivision or combination or such rights or warrants or
securities convertible into or exercisable or exchangeable for
Common Stock (and any further Conversion Rate increase required by
Sections 12.3(a), 12.3(b) and 12.3(c) with respect to such dividend
or distribution shall then be made), except:
(1) the Record Date of such dividend or
distribution shall be substituted as (x) "the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution," "Record Date fixed for such determinations" and
"Record Date" within the meaning of Section 12.3(a), (y) "the day
upon which such subdivision becomes effective" and "the day upon
which such combination becomes effective" within the meaning of
Section 12.3(b), and (z) as "the date fixed for the determination of
stockholders entitled to receive such rights or warrants," "the
Record Date fixed for the determination of the stockholders entitled
to receive such rights or warrants" and such "Record Date" within
the meaning of Section 12.3(c); and
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(2) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the
close of business on the date fixed for such determination" within
the meaning of Section 12.3(a) and any reduction or increase in the
number of shares of Common Stock resulting from such subdivision or
combination shall be disregarded in connection with such dividend or
distribution.
(e) In case the Company shall, at any time or from time to time
while any of the Securities are outstanding, by dividend or otherwise,
distribute to all holders of its shares of Common Stock, cash (excluding any
cash that is distributed upon a reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance to which Section 12.4
applies or as part of a distribution referred to in Section 12.3(d)) in an
aggregate per share amount that exceeds (the "Excess Amount"):
(i) from the Issue Date to June 30, 2008, $0.025 per share of
Common Stock for any fiscal quarter or $0.10 per share of Common Stock for any
fiscal year; or
(ii) after June 30, 2008, 0.625% of Market Capitalization,
on a per share basis, for any fiscal quarter or 2.5% of Market Capitalization on
a per share basis, for any fiscal year where "MARKET CAPITALIZATION" equates to
the product of (y) the Sale Price of the Common Stock on the Record Date with
respect to such distribution times (z) the number of shares of Common Stock
outstanding on such Record Date;
then, and in each such case, immediately after the close of business on such
Record Date the Conversion Rate shall be increased so that the same shall equal
the price determined by multiplying the Conversion Rate in effect immediately
prior to the close of business of such Record Date by a fraction:
(A) the numerator of which shall be equal to the Current
Market Price on the Record Date; and
(B) the denominator of which shall be equal to the
Current Market Price on the Record Date, less an amount equal to the
Excess Amount.
(f) In case a tender offer or exchange offer made by the Company or
any of its Subsidiaries for all or any portion of the shares of Common Stock
shall expire and such tender offer or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender offer or
exchange offer) of shares tendered) of an aggregate consideration having a Fair
Market Value that exceeds the product of the Sale Price of the Common Stock on
the last Trading Day before such tender offer or exchange offer is publicly
announced, (the "TENDER ADJUSTMENT CALCULATION DATE"), times the number of
shares of Common Stock purchased in such tender offer or exchange offer (such
excess, the "EXCESS TENDER AMOUNT"), then, and in each such case, immediately
prior to the opening of business on the Trading Day after the last date the
tender could have been made pursuant to the tender offer or exchange 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 close of business on the date of the Expiration Time by
a fraction:
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(A) the numerator of which shall be the product of the
number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time multiplied by the Sale
Price of the Common Stock on the Tender Adjustment Calculation
Date; and
(B) the denominator of which shall be the (y) the
product of (1) the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time multiplied
by (2) Sale Price of the Common Stock on the Tender Adjustment
Calculation Date, less (z) the Excess Tender Amount.
Such increase (if any) shall become effective immediately prior to the
opening of business on the Business Day following the Expiration Time. In the
event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all or a portion of such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate
which would then be in effect if such (or such portion of the) tender offer had
not been made.
Pursuant to rights issued under any of the Company's rights plans, if
holders of the Securities exercising the right of conversion attaching after the
date the rights separate from the underlying Common Stock are not entitled to
receive the rights that would otherwise be attributable to the shares of Common
Stock received upon conversion, the Conversion Rate will be adjusted as though
the rights were being distributed to holders of Common Stock on the date of such
separation. If such an adjustment is made and the rights are later redeemed,
invalidated or terminated, then a corresponding reversing adjustment will be
made to the Conversion Rate on an equitable basis.
(g) If the Company is a party to a consolidation, merger, or binding
share exchange, reclassifies the shares of Common Stock or conveys, transfers or
leases its properties and assets substantially as an entirety to any Person, in
each case pursuant to which the shares of Common Stock are converted into cash,
securities or other property, then at the effective time of the transaction, the
right to convert a Security into shares of Common Stock will be changed into a
right to convert a Security into the kind and amount of cash, securities or
other property that the Holder would have received if the Holder had converted
such Securities immediately prior to the transaction.
(h) For purposes of this Article XII, the following terms shall have
the meanings indicated:
"CURRENT MARKET PRICE" on any date means the average of the daily Sale
Prices per share of Common Stock for the three consecutive Trading Days
immediately prior to such date; provided, however, that if:
(i) the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Rate pursuant to Section 12.3(a), (b),
(c), (d), (e), or (f) occurs during such three consecutive
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Trading Days, the Sale Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by dividing such Sale Price by the same
fraction by which the Conversion Rate is so required to be adjusted as a result
of such other event;
(ii) the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Rate pursuant to Section 12.3(a), (b), (c), (d), (e), or (f) occurs
on or after the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Sale Price for each Trading
Day on and after the "ex" date for such other event shall be adjusted by
dividing such Sale Price by the reciprocal of the fraction by which the
Conversion Rate is so required to be adjusted as a result of such other event;
and
(iii) the "ex" date for the issuance or distribution requiring
such computation is prior to the day in question, after taking into account any
adjustment required pursuant to clause (i) or (ii) of this proviso, the Sale
Price for each Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the Fair Market Value (determined in a
manner consistent with any determination of such value for purposes of Section
12.3(d), (e) or (f)) of the evidences of Indebtedness, shares of capital stock
or assets being distributed applicable to one share of Common Stock as of the
close of business on the day before such "ex" date.
For purposes of any computation under Section 12.3(f), if the "ex" date for any
event (other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Rate pursuant to Section 12.3(a), (b), (c), (d), or
(f) occurs on or after the Expiration Time for the tender or exchange offer
requiring such computation and prior to the day in question, the Sale Price for
each Trading Day on and after the "ex" date for such other event shall be
adjusted by dividing such Sale Price by the reciprocal of the fraction by which
the Conversion Rate is so required to be adjusted as a result of such other
event. For purposes of this paragraph, the term "ex" date, when used:
(i) with respect to any issuance or distribution, means the
first date on which the shares of Common Stock trade regular way on the relevant
exchange or in the relevant market from which the Sale Price was obtained
without the right to receive such issuance or distribution;
(ii) with respect to any subdivision or combination of shares
of Common Stock, means the first date on which the shares of Common Stock trade
regular way on such exchange or in such market after the time at which such
subdivision or combination becomes effective; and
(iii) with respect to any tender or exchange offer, means the
first date on which the shares of Common Stock trade regular way on such
exchange or in such market after the public announcement of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Rate are called for pursuant to this Section 12.3, such adjustments shall be
made to the Current Market Price as
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may be necessary or appropriate to effectuate the intent of this Section 12.3
and to avoid unjust or inequitable results as determined in good faith by the
Board of Directors.
"FAIR MARKET VALUE" shall mean the amount which a willing buyer would pay
a willing seller in an arm's length transaction (as determined in good faith by
the Board of Directors, whose good faith determination shall be conclusive).
"RECORD DATE" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of shares of Common Stock have
the right to receive any cash, securities or other property or in which the
shares of Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
(i) The Company shall be entitled to make such additional increases
in the Conversion Rate, in addition to those required by Sections 12.3(a), (b),
(c), (d), (e) and (f), as shall be necessary in order that any dividend or
distribution of Common Stock, any subdivision, reclassification or combination
of shares of Common Stock or any issuance of rights or warrants referred to
above shall not be taxable to the holders of Common Stock for United States
Federal income tax purposes.
(j) To the extent permitted by applicable law, the Company may, from
time to time, increase the Conversion Rate by any amount for any period of time,
if such period is at least 20 days, the Board of Directors determines that the
increase in the Conversion Rate is in the best interest of the Company, and the
increase is irrevocable during the period. Whenever the Conversion Rate is
increased pursuant to the preceding sentence, the Company shall mail to the
Trustee and each Holder at the address of such Holder as it appears in the
register of the Securities maintained by the Registrar, at least 15 days prior
to the date the increased Conversion Rate takes effect, a notice of the increase
stating the increased Conversion Rate and the period during which it will be in
effect.
(k) In any case in which this Section 12.3 shall require that any
adjustment be made effective as of or retroactively immediately following a
Record Date, the Company may elect to defer (but only for five Trading Days
following the filing of the statement referred to in Section 12.5) issuing to
the Holder of any Securities converted after such Record Date the shares of
Common Stock issuable upon such conversion over and above the shares of Common
Stock issuable upon such conversion on the basis of the Conversion Rate prior to
adjustment; provided, however, that the Company shall deliver to such Holder a
due bill or other appropriate instrument evidencing such Holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(l) All calculations under this Section 12.3 shall be made to the
nearest cent or one-hundredth of a share, with one-half cent and 0.005 of a
share, respectively, being rounded upward. Notwithstanding any other provision
of this Section 12.3, the Company shall not be required to make any adjustment
of the Conversion Rate unless such adjustment would require an increase or
decrease of at least 1% of such price. Any lesser adjustment shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment which, together
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with any adjustment or adjustments so carried forward, shall amount to an
increase or decrease of at least 1% in such price. Any adjustments under this
Section 12.3 shall be made successively whenever an event requiring such an
adjustment occurs.
(m) In the event that at any time, as a result of an adjustment made
pursuant to this Section 12.3, the Holder of any Securities thereafter
surrendered for conversion shall become entitled to receive any shares of stock
of the Company other than shares of Common Stock into which the Securities
originally were convertible, the Conversion Rate of such other shares so
receivable upon conversion of any such Security shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to Common Stock contained in subparagraphs (a)
through (k) of this Section 12.3, and the provision of Sections 12.1, 12.2 and
12.4 through 12.9 with respect to the Common Stock shall apply on like or
similar terms to any such other shares and the good faith determination of the
Board of Directors as to any such adjustment shall be conclusive.
(n) No adjustment shall be made pursuant to this Section 12.3, (i)
if the effect thereof would be to reduce the Conversion Price below the par
value (if any) of the Common Stock, or (ii) if the Holders of the Securities may
participate in the transaction that would otherwise give rise to an adjustment
pursuant to this Section 2.3.
SECTION 12.4 CONSOLIDATION OR MERGER OF THE COMPANY.
If any of the following events occurs, namely:
(a) any reclassification or change of the outstanding Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination);
(b) any merger, consolidation, binding statutory share exchange or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock;
or
(c) any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other person as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock;
then the Company or the successor or purchasing person, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such supplemental indenture, if
such supplemental indenture is then required to so comply) providing that such
Securities shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) which such Holder would
have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Securities been converted into Common
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Stock immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided, that if
the kind or amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance is not the
same for each share of Common Stock in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purposes of
this Section 12.4, the kind and amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
XII. If, in the case of any such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, the
stock or other securities and assets receivable thereupon by a holder of Common
Stock includes shares of stock or other securities and assets of a corporation
other than the successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the register of the Securities maintained by the Registrar, within 20
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section 12.4 shall similarly apply to
successive reclassifications, changes, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.
If this Section 12.4 applies to any event or occurrence, Section 12.3
shall not apply.
SECTION 12.5 NOTICE OF ADJUSTMENT.
Whenever an adjustment in the Conversion Rate with respect to the
Securities is required:
(a) the Company shall forthwith place on file with the Trustee and
any Conversion Agent for the Securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion Rate determined as provided herein and
setting forth in reasonable detail such facts as shall be necessary to show the
reason for and the manner of computing such adjustment; and
(b) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company, to each Holder in the
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manner provided in Section 12.6 hereof. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
SECTION 12.6 NOTICE IN CERTAIN EVENTS.
In case:
(a) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or conveyance to another Person or entity or group of Persons or entities
acting in concert as a partnership, limited partnership, syndicate or other
group (within the meaning of Rule 13d-3 under the Exchange Act or any successor
rule or regulation) of all or substantially all of the property and assets of
the Company; or
(b) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(c) of any action triggering an adjustment of the Conversion Rate
referred to in clauses (y) or (z) below;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Securities
in the manner provided in Section 16.2 hereof, at least 15 days prior to the
applicable date hereinafter specified, a notice stating:
(y) the date on which a record is to be taken for the purpose
of any distribution or grant of rights or warrants or other securities
triggering an adjustment to the Conversion Rate pursuant to this Article XII,
or, if a record is not to be taken, the date as of which the holders of record
of Common Stock entitled to such distribution, rights or warrants or other
securities are to be determined, or
(z) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Rate pursuant to this Article XII is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger
sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clauses (a), (b) or (c) of
this Section 12.6.
SECTION 12.7 COMPANY TO RESERVE STOCK: REGISTRATION; LISTING.
(a) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock for the purpose of effecting the conversion of the Securities, such number
of its duly authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all Securities then outstanding into such
Common Stock at any time (assuming that, at the time of the computation of such
number of shares or securities, all such Securities would be held by a single
Holder). The
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Company covenants that all shares of Common Stock which may be issued upon
conversion of Securities will upon issue be fully paid and nonassessable and
free from all liens and charges and, except as provided in Section 12.8, taxes
with respect to the issue thereof.
(b) If any shares of Common Stock which would be issuable upon
conversion of Securities hereunder require registration with or approval of any
governmental authority before such shares or securities may be issued upon such
conversion, the Company will use its commercially reasonable efforts to cause
such shares or securities to be duly registered or approved, as the case may be.
The Company further covenants that so long as the Common Stock shall be listed
on the NYSE, the Company will use its commercially reasonable efforts, if
permitted by the rules of the NYSE, to list and keep listed all Common Stock
issuable upon conversion of the Securities, and the Company will use its
commercially reasonable efforts to list the shares of Common Stock required to
be delivered upon conversion of the Securities prior to such delivery upon any
other national securities exchange upon which the outstanding Common Stock is
listed at the time of such delivery.
SECTION 12.8 TAXES ON CONVERSION.
The issue of stock certificates on conversion of Securities shall be made
without charge to the converting Holder for any documentary, stamp or similar
issue or transfer taxes in respect of the issue thereof, and the Company shall
pay any and all documentary, stamp or similar issue or transfer taxes that may
be payable in respect of the issue or delivery of shares of Common Stock on
conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or the portion, if
any, of the Securities which are not so converted in a name other than that in
which the Securities so converted were registered, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of such tax or has established to the satisfaction of the
Company that such tax has been paid.
The Company agrees, and each Holder is deemed to agree, that delivery to
such Holder of the full number of shares of Common Stock into which each
Security is convertible, together with any cash payment of such Holder's
fractional shares or otherwise in accordance with Section 12.13, will be treated
as a contingent payment (in an amount equal to the sum of the then Fair Market
Value of such Common Stock and such cash payment, if any) on the Securities for
purposes of applicable regulations governing contingent payment debt
obligations.
SECTION 12.9 CONVERSION AFTER RECORD DATE.
Except as provided below, a converting Holder of Securities shall not be
entitled to receive any accrued and unpaid interest (including Contingent
Interest, if any)on any such Securities being converted. By delivery to the
Holder of the number of shares of Common Stock or other consideration issuable
upon conversion in accordance with this Article XII, any accrued and unpaid
interest (including Contingent Interest, if any) on such Securities will be
deemed to have been paid in full. If any Securities are surrendered for
conversion subsequent to the Record Date preceding an Interest Payment Date but
prior to such Interest Payment Date, the Holder of such Securities at the close
of business on such Record Date shall receive the interest payable on such
Security on
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such Interest Payment Date notwithstanding the conversion thereof. Securities
surrendered for conversion during the period from the close of business on any
Record Date preceding any Interest Payment Date to the opening of business on
such Interest Payment Date shall (except in the case of Securities which have
been called for redemption on a Redemption Date within such period) be
accompanied by payment from converting Holders, for the account of the Company,
in New York Clearing House funds, or other funds of an amount equal to the
interest payable on such Interest Payment Date on the Securities being
surrendered for conversion.
Except as provided in this Section 12.9, no adjustments in respect of
payments of interest, including Contingent Interest, if any, on Securities
surrendered for conversion or any dividends or distributions or interest on the
Common Stock issued upon conversion shall be made upon the conversion of any
Securities.
SECTION 12.10 COMPANY DETERMINATION FINAL.
Any determination that the Company or the Board of Directors must make
pursuant to this Article XII shall be conclusive if made in good faith and in
accordance with the provisions of this Article, absent manifest error, and set
forth in a Board Resolution.
SECTION 12.11 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.
The Trustee has no duty to determine when an adjustment, calculation or
other action under this Article XII should be made, how it should be made or
what it should be. The Trustee 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 any failure of the Company to comply with
this Article XII. Each Conversion Agent other than the Company shall have the
same protection under this Section 12.11 as the Trustee.
The rights, privileges, protections, immunities and benefits given to the
Trustee under the Indenture including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent or Conversion Agent acting
hereunder.
SECTION 12.12 UNCONDITIONAL RIGHT OF HOLDERS TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to convert
its Security in accordance with this Article XII and to bring an action for the
enforcement of any such right to convert, and such rights shall not be impaired
or affected without the consent of such Holder.
SECTION 12.13 CASH CONVERSION OPTION.
(a) If a Holder elects to convert all or any portion of a Security
into shares of Common Stock as set forth in Section 12.1, the Company may choose
to satisfy all or any portion of its conversion obligation (the "CONVERSION
OBLIGATION") in cash. Upon such election, the Company will notify such Holder
through the Trustee of the dollar amount to be satisfied in cash (which must be
expressed either as 100% of the Conversion Obligation or as a fixed dollar
amount) at any time on or before the date that is two Business Days following
receipt of written notice of
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conversion as specified in Section 12.2 (such period, the "CASH SETTLEMENT
NOTICE PERIOD"). If the Company elects to pay cash for any portion of the shares
otherwise issuable to the Holder, the Holder may retract the conversion notice
at any time during the two Business Day period beginning on the day after the
final day of the Cash Settlement Notice Period (a "CONVERSION RETRACTION
PERIOD"); no such retraction may be made (and a conversion notice shall be
irrevocable) if the Company does not elect to deliver cash in lieu of shares
(other than cash in lieu of fractional shares). If the conversion notice has not
been retracted, then settlement (in cash and/or shares) will occur on the
Business Day following the final Trading Day of the 20 Trading Day period
beginning on the first Trading Day after the final day of the Conversion
Retraction Period (subject to paragraph (b) of this section, the "CASH
SETTLEMENT AVERAGING PERIOD"). Settlement amounts will be computed as follows:
(i) if the Company elects to satisfy the entire Conversion
Obligation in shares of Common Stock, the Company will deliver to such Holder a
number of shares equal to (x) the aggregate original principal amount at
maturity of the Securities to be converted divided by 1,000, multiplied by (y)
the Conversion Rate;
(ii) if the Company elects to satisfy the entire Conversion
Obligation in cash, the Company will deliver to such Holder cash in an amount
equal to the product of:
(1) a number equal to (y) the quotient of (A) the aggregate original
principal amount at maturity of Securities to be converted and (B) 1,000,
multiplied by (z) the Conversion Rate, and
(2) the average Sale Price of the Common Stock during the Cash
Settlement Averaging Period; and
(iii) if the Company elects to satisfy a fixed portion (other
than 100%) of the Conversion Obligation in cash, the Company will deliver to
such Holder such cash amount ("CASH AMOUNT") and a number of shares of Common
Stock equal to the greater of (y) zero (-0-) or (z) the excess, if any, of the
number of shares Common Stock calculated as set forth in clause (i) above based
on the aggregate principal amount at maturity of the Securities to be converted
less the number of shares of Common Stock equal to the sum, for each day of the
Cash Settlement Averaging Period, of (1) the pro rated portion of the Cash
Amount for such day (e.g. 1/20 based on 20 Trading Days in the period) divided
by (2) the Sale Price of the Common Stock on such day; provided that cash will
be paid for fractional shares at the average Sale Price of the Common Stock
during the Cash Settlement Averaging Period.
Notwithstanding the foregoing, a Security in respect of which a Holder has
delivered a Purchase Notice or Change of Control Purchase Notice exercising such
Holder's option to require the Company to repurchase such Security may be
converted as described in this Section 12.13(a) only if such notice of exercise
is withdrawn in accordance with Section 4.3 or 5.3 hereof, as applicable.
(b) If a Holder elects to convert all or any portion of a Security
into shares of Common Stock after the Company has exercised its right to redeem
all or any portion of the Securities pursuant to Section 5 of the Securities or
within 20 days of the Stated Maturity (if the Securities are then otherwise
convertible), the Company may choose to satisfy all or any portion of
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the Conversion Obligation in cash provided the Company notifies such Holder
through the Trustee of the dollar amount to be satisfied in cash (which must be
expressed either as 100% of the Conversion Obligation or as a fixed dollar
amount) at any time on or before the date that is 2 days prior to Stated
Maturity or Redemption Date. Settlement amounts will be computed in the same
manner as set forth in (a) above except that the "CASH SETTLEMENT AVERAGING
PERIOD" shall be the 20 Trading Day period beginning on the first Trading Day
after the Stated Maturity or Redemption Date, as the case may be. Settlement (in
cash and/or shares) will occur on the Business Day following the final day of
such Cash Settlement Averaging Period.
ARTICLE XIII
PAYMENT OF INTEREST
SECTION 13.1 INTEREST PAYMENTS.
The Company shall pay interest on the outstanding principal amount of the
Securities semiannually in arrears at the interest rate specified herein, on
December 30 and June 30 in each year (each, an "INTEREST PAYMENT DATE"),
commencing on December 30, 2003. The Securities shall bear interest from July 7,
2003, or from the most recent Interest Payment Date to which interest has been
paid, until the principal hereof is paid in immediately available funds or made
available for payment in immediately available funds at June 30, 2023 or upon
acceleration, or until such date on which the Securities are converted, redeemed
or repurchased as provided herein, at the rate of 3.90% per annum. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will be paid in immediately available funds to the Person in whose name
this Security (or one or more predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which will be December
15 and June 15 (whether or not a Business Day), as the case may be, next
preceding the corresponding Interest Payment Date (a "REGULAR RECORD DATE"), at
the office or agency of the Company maintained for such purpose. If the
principal amount hereof or any portion of such principal amount or any interest,
including Contingent Interest, if any, and Additional Amounts, if any, on any
Security is not paid when due, then in each case such overdue amount shall, to
the extent permitted or by law, bear interest at the rate of 3.90% per annum,
compounded semiannually, 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 in immediately available funds or duly provided
for in immediately available funds, and such interest shall be payable in
immediately available funds on demand. Each installment of semiannual interest,
Contingent Interest or Additional Amount on any Security shall be paid in
immediately available funds by transfer to an account maintained by the payee
located inside the United States, if the Trustee shall have received proper wire
transfer instructions from such payee not later than the related Regular Record
Date or accrual date, as the case may be, or, if no such instructions have been
received, by check mailed to the payee at its address set forth on the
Registrar's books. In the case of a Global Security, semiannual interest,
Contingent Interest or Additional Amount payable on any applicable payment date
will be paid to the Depositary with respect to such Global Security held for its
account, for the purpose of permitting Depositary to credit the interest
received by it in respect of such Global Security to the accounts of the
beneficial owners thereof.
SECTION 13.2 DEFAULTED INTEREST. Except as otherwise specified with
respect to the Securities, any semiannual interest, Contingent Interest or
Additional Amount on any Security that is payable, but is not punctually paid or
duly provided for, within 30 days following any applicable payment date (herein
called "Defaulted Interest," which term shall include any accrued and unpaid
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interest that has accrued on such defaulted amount in accordance with paragraph
1 of the Securities), shall be paid by the Company, at its election in each case
(x) to the Holder as of Special Record Date, as determined in accordance with
clause (a) below, or (y) in the manner set forth in clause (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Securities are registered at the close of
business on a special record date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security and the date of the proposed payment (which shall not be less than
20 days after such notice is received by the Trustee), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to beheld in trust for
the benefit of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date (the "SPECIAL
RECORD DATE") for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first-class postage prepaid, to each Holder of Securities at his
address as it appears on the list of Securityholders maintained pursuant to
Section 2.5 hereof not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the persons in whose names the Securities are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b) of this Section 13.2.
(b) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
SECTION 13.3 INTEREST RIGHTS PRESERVED.
Subject to the foregoing provisions of this Article XIII and Section 2.6
hereof, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to semiannual interest, Contingent Interest and Additional Amount accrued
and unpaid, and to accrue, which were carried by such other Security.
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ARTICLE XIV
CONTINGENT INTEREST
SECTION 14.1 CONTINGENT INTEREST.
The Company shall make payments of contingent interest ("Contingent
Interest") to the Holders of Securities, as set forth in Section 14.2 below,
during any six month period from June 30 and December 29 and from December 30 to
June 29, beginning with the six-month period commencing on June 30, 2008 (each a
"CONTINGENT INTEREST PERIOD") if, but only if, the average Market Price for the
Five Trading Day Period immediately preceding the first day of the applicable
Contingent Interest Period equals 120% or more of the principal amount of such
Security. During any Contingent Interest Period when Contingent Interest is
payable pursuant to this section, each Contingent Interest payment due and
payable on each $1,000 principal amount of the Securities shall be calculated
for the applicable Contingent Interest Period, and in each instance shall equal
0.1875% of the average Market Price of a Security for the Five Trading Day
Period. Contingent Interest shall be calculated on the basis of a 360-day year
of twelve 30-day months.
SECTION 14.2 PAYMENT OF CONTINGENT INTEREST; CONTINGENT INTEREST RIGHTS
RESERVED.
If payable, Contingent Interest on a Security shall be paid to the Person
who is the Holder of that Security on the Regular Record Date as provided in
Section 13.1 hereof.
Upon determination that Holders of Securities will be entitled to receive
Contingent Interest during a Contingent Interest Period, on or prior to the
start of such Contingent Interest Period, the Company shall deliver an Officer's
Certificate to the Trustee setting forth the amount of such Contingent Interest
per $1,000 principal amount of the Securities and shall issue a press release
through a public medium as is customary for such a press release.
The Company may unilaterally increase the amount of Contingent Interest it
is required to pay or pay interest or other amounts it is not obligated to pay
but will have no obligation to do so.
SECTION 14.3 BID SOLICITATION AGENT.
The Bid Solicitation Agent shall solicit bids from securities dealers
which the Company indicates that it believes are willing to bid for the
Securities which may include securities dealers recommended by the Company. The
Company initially appoints the Trustee to act as the Bid Solicitation Agent. The
Company may change the Bid Solicitation Agent at its discretion; provided,
however, that the Bid Solicitation Agent may not be an Affiliate of the Company.
ARTICLE XV
TAX TREATMENT
SECTION 15.1 TAX TREATMENT.
(a) The parties hereto hereby agree, and each Holder and any
beneficial holder of a Security by its purchase of a Security hereby agrees (in
the absence of administrative pronouncement or judicial ruling to the contrary):
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(i) to treat the Securities as indebtedness of the Company for
all United States federal income tax purposes;
(ii) to treat the Securities as debt instruments that are
subject to Treasury Regulation section 1.1275-4(b) (or any successor
regulation); and
(iii) to treat the delivery of Common Stock or cash (including
cash delivered in lieu of a fractional share) to a Holder of a Security upon
conversion of such Security, or upon a purchase of such Security by the Company
at the option of the Holder of a Security where the Company makes a payment in
cash (including cash paid in lieu of a fractional share) or elects to pay in
Common Stock, as a contingent payment (in an amount equal to the sum of the Fair
Market Value of such Common Stock and any cash received) under Treasury
Regulation section 1.1275-4(b) (or any successor regulation).
SECTION 15.2 COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE.
(a) Solely for purposes of applying Treasury Regulation section
1.1275-4(b) (or any successor regulation) to the Securities:
(i) for United States federal income tax purposes, the Company
shall accrue interest with respect to outstanding Securities as original issue
discount according to the "noncontingent bond method," as set forth in Treasury
Regulation section 1.1275-4(b) (or any successor regulation) using a comparable
yield of 8.75%, compounded semiannually. The Company shall provide to the Holder
of a Security the amount of original issue discount, the comparable yield issue
date, yield to maturity and projected payment schedule upon a telephonic or
written request to the Company at 100 Brookwood Place, Birmingham, Alabama
35209, Attention: Corporate Communications and Investor Relations Department,
Telephone: (205) 877-4400.
(ii) the Company shall file with the Trustee promptly at the
end of each calendar year (A) a written notice specifying the amount of original
issue discount for United States federal income tax purposes accrued on
outstanding Securities as of the end of such year, and (B) such other specific
information relating to such original issue discount that the Company determines
to be relevant under the Internal Revenue Code of 1986, as amended from time to
time, including the amount of any adjustment made under the noncontingent bond
method to account for the amount of any difference between the amount of an
actual payment and the amount of a projected payment; and
(iii) the Company acknowledges and agrees, and each Holder and
any beneficial holder of a Security, by its purchase of a Security shall be
deemed to acknowledge and agree, that (A) the comparable yield and the projected
payment schedule are determined on the basis of an assumption of linear growth
of stock price, (B) the comparable yield and the projected payment schedule are
not determined for any purpose other than for the purpose of applying Treasury
Regulation section 1.1275-4(b)(4) (or any successor regulation) to the Security,
(C) the comparable yield and the projected payment schedule do not constitute a
projection or representation regarding the actual amounts payable on the
Securities, (D) the Company's application of Treasury Regulation section
1.1275-4(b) (or any successor regulation) shall be binding on each Holder and
any beneficial holder of a Security, including the
83
Company's determination of the comparable yield and the projected payment
schedule, and (E) the possibility that the Additional Amounts will have to be
paid is a "remote" or "incidental" contingency within the meaning of Treasury
Regulation Section 1.1275-2(h).
ARTICLE XVI
MISCELLANEOUS
SECTION 16.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by TIA Section 318(c), such section of the TIA shall control.
If any provision of this Indenture expressly modifies or excludes any provision
of the TIA that may be so modified or excluded, the Indenture provision so
modifying or excluding such provision of the TIA shall be deemed to apply.
SECTION 16.2 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:
PROASSURANCE CORPORATION
100 Brookwood Place
Birmingham, Alabama 35209
Attn: Chief Financial Officer
Facsimile No (205) 877-4405
if to the Trustee:
SouthTrust Bank
Corporate Trust Department
110 Office Park Drive, 2nd Floor
Mail Code: A-001-OB-0201
Birmingham, Alabama 35223
Facsimile No. (205) 254-4180
Attention: Woodie E. Alston, Vice President and Trust Officer
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.
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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 16.3 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 16.4 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, if the
Trustee so requests:
(a) 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
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 16.5 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:
(a) a statement that each person making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(c) 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
(d) a statement that, in the opinion of such person, such covenant
or condition has been complied with.
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SECTION 16.6 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 16.7 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 16.8 LEGAL HOLIDAYS.
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 16.9 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS.
This indenture shall be governed by, and construed in accordance with, the
laws of the State of New York without regard to its principles of conflicts
of law which would result in the application of the laws of any other
jurisdiction.
The Company submits to the nonexclusive jurisdiction of the courts of the
State of Alabama and the courts of the United States of America, in each case
located in Birmingham, Alabama over any suit, action or proceeding arising under
or in connection with this Indenture or the transactions contemplated hereby or
the Securities. The Company waives any objection that it may have to the venue
of any suit, action or proceeding arising under or in connection with this
Indenture or the transactions contemplated hereby or the Securities in the
courts of the State of Alabama or the courts of the United States of America, in
each case located in Birmingham, Alabama, or that such suit, action or
proceeding brought in the courts of the State of Alabama or the courts of the
United States of America, in each case located in Birmingham, Alabama, was
brought in an inconvenient court and agrees not to plead or claim the same.
SECTION 16.10 NO RECOURSE AGAINST OTHERS.
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future stockholder, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issue of the
Securities.
86
SECTION 16.11 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.
SECTION 16.12 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.
SECTION 16.13 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any person, other than the parties hereto and the Holders of the
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture or the Debentures.
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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.
PROASSURANCE CORPORATION,
As Issuer
By: /s/ Victor T. Adamo
-------------------------------------------
Name: Victor T. Adamo
Title: President and Chief Operating Officer
SOUTHTRUST BANK,
As Trustee
By: /s/ Woodie E. Alston
-------------------------------------------
Name: Woodie E. Alston
Title: Vice President and Trust Officer
88
EXHIBIT A
[FORM OF FACE OF SECURITY]
THIS DEBENTURE HAS BEEN ISSUED WITH AN INDETERMINATE AMOUNT OF ORIGINAL
ISSUE DISCOUNT , FOR PURPOSES OF SECTIONS 1272, 1273, AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED. THE ISSUE DATE IS [____], 2003. PURSUANT TO
SECTION 15.1 OF THE INDENTURE, PROASSURANCE CORPORATION AGREES, AND BY
ACCEPTANCE OF A BENEFICIAL OWNERSHIP INTEREST IN THE SECURITY, EACH BENEFICIAL
HOLDER OF THE SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES, (i) TO TREAT THE SECURITIES AS INDEBTEDNESS THAT IS
SUBJECT TO SECTION 1.1275-4(b) OF THE UNITED STATES TREASURY REGULATIONS (THE
"CONTINGENT PAYMENT REGULATIONS") AND, FOR PURPOSES OF THE CONTINGENT PAYMENT
REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF ANY STOCK BENEFICIALLY RECEIVED
BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE DEBENTURES AS A CONTINGENT
PAYMENT, AND (ii) TO BE BOUND BY THE COMPANY'S DETERMINATION OF THE "COMPARABLE
YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN THE MEANING OF THE CONTINGENT
PAYMENT REGULATIONS, WITH RESPECT TO THE DEBENTURES. THE COMPANY'S DETERMINATION
OF THE "COMPARABLE YIELD" IS 8.75% PER ANNUM, COMPOUNDED SEMIANNUALLY. YOU MAY
OBTAIN THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY,
COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE FOR THE SECURITY BY TELEPHONING
PROASSURANCE CORPORATION AT 1-800-282-6242 OR SUBMITTING A WRITTEN REQUEST FOR
SUCH INFORMATION TO PROASSURANCE CORPORATION, 100 BROOKWOOD PLACE, BIRMINGHAM,
ALABAMA 35209, ATTENTION: CHIEF FINANCIAL OFFICER.
[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 II OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
[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. THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE
89
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM,
THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1)
[THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT OF 1933, OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR");
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A)
TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OF 1933, (C) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OF
1933 (IF AVAILABLE), (D) TO ANY INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933 (IF AVAILABLE) AND THAT PRIOR TO SUCH TRANSFER, FURNISHES
TO SOUTHTRUST BANK, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE),
CERTIFICATIONS AND OPINIONS OF COUNSEL REQUIRED BY THE COMPANY OR TRUSTEE (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER;
- ----------
(1) This legend should be included only if the Security is a Global
Security
90
(3) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITIES IN
CANADA TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT EXCEPT IN ACCORDANCE WITH
APPLICABLE CANADIAN SECURITIES LAWS; AND
(4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(C)
OR 2(E) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.](2)
[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION
RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO
COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)
The foregoing legend, except the tax legend in the first paragraph, may be
removed from this Security on satisfaction of the conditions specified in the
Indenture.
- ----------
(2) This legend should be included only if the Security is a Transfer
Restricted Security.
91
PROASSURANCE CORPORATION
3.90% CONVERTIBLE SENIOR DEBENTURES DUE 2023
CUSIP No.:_______
Debenture No.:_______
PROASSURANCE CORPORATION, a Delaware corporation (the "Company", which
term shall include any successor corporation under the Indenture referred to on
the reverse hereof), promises to pay to ___________________________________ , or
registered assigns, the principal amount of ________________________ Dollars
($____________), [or such greater or lesser amount as is indicated in the
records of the Trustee and the Depositary],(3) on June 30, 2023, and to pay
interest thereon from July 7, 2003, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, on December 30 and
June 30 in each year (each, an "Interest Payment Date"), commencing on December
30, 2003, at the rate of 3.90% per annum, until the principal hereof is paid or
made available for payment at June 30, 2023 or upon acceleration, or until such
date on which the Securities are converted, redeemed or repurchased as provided
herein, and at the rate of 3.90% per annum on any overdue principal and on any
overdue installment of interest, Contingent Interest and Additional Amounts, if
any. The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture (as hereinafter
defined), be paid to the Person in whose name this Security (or one or more
predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which will be December 15 and June 15 (whether or
not a Business Day), as the case may be, next preceding the corresponding
Interest Payment Date (a "Regular Record Date"). Any such interest, Contingent
Interest and Additional Amounts, if any, not so punctually paid or duly provided
for within 30 days following any applicable payment date will forthwith cease to
be payable to the Holder on such Regular Record Date and may be paid (a) to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Trustee (a "Special Record Date"),
notice whereof will be given to Holders not less than 10 calendar days prior to
such Special Record Date, or (b) at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
- ----------
(3) This phrase should be included only if the Security is a Global
Security.
92
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ________________, ____
PROASSURANCE CORPORATION
_____________________________________
By:
Title:
93
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: ________, ____
SOUTHTRUST BANK
as Trustee
By:_________________________________________
Authorized Signatory
94
[FORM OF REVERSE OF SECURITY]
3.90% Convertible Senior Debentures due 2023
This Security is one of a duly authorized issue of 3.90% Convertible
Senior Debentures due 2023 (the "Securities") of PROASSURANCE CORPORATION, a
Delaware corporation (including any successor corporation under the Indenture
hereinafter referred to, the "Company"), issued under an Indenture, dated as of
July 7, 2003 (the "Indenture"), between the Company and SouthTrust Bank, as
trustee (the "Trustee"). The terms of the Security include those stated in the
Indenture, those made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended ("TIA"), and those set forth in this Security. This
Security is subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control. Capitalized terms used but not defined herein have the meanings
assigned to them in the Indenture unless otherwise indicated.
1. Interest.
The Company promises to pay interest on the principal amount of the
Securities at the interest rate specified herein, plus Contingent Interest, if
any, and Additional Amounts, if any, semi-annually in arrears on December 30 and
June 30 of each year (each, an "Interest Payment Date"), commencing December 30,
2003.
The Securities shall bear interest from July 7, 2003, or from the most
recent Interest Payment Date to which interest has been paid until the principal
amount thereof is paid or made available for payment at June 30, 2023, or upon
acceleration, or until such date on which the Securities are converted, redeemed
or purchased as provided herein at a rate of 3.90% per annum.
Interest on the Securities shall be computed (i) for any full semi-annual
period for which a particular Interest Rate is applicable, on the basis of a
360-day year of twelve 30-day months and (ii) for any period for which a
particular Interest Rate is applicable for less than a full semiannual period
for which Interest is calculated, on the basis of a 30-day month and, for such
periods of less than a month, the actual number of days elapsed over a 30-day
month.
In addition, the Company shall pay contingent interest ("Contingent
Interest") to the Holders during any six-month period (a "Contingent Interest
Period") from June 30 to December 29 and from December 30 to June 29, commencing
June 30, 2008, if the average Market Price of a Security for the Five Trading
Day Period with respect to such Contingent Interest Period equals $1,200 (120%
of the principal amount of a Security) or more.
Upon a determination by the Company that Holders will be entitled to
receive Contingent Interest which will become payable during a Contingent
Interest Period, on or prior to the first day of such Contingent Interest
Period, the Company shall provide an Officer's Certificate to the Trustee
setting forth the amount of such Contingent Interest per $1,000 principal amount
of Securities and shall issue a press release through a public medium as is
customary for such a press release.
95
The amount of Contingent Interest payable per $1,000 principal amount of
Securities in respect of any Contingent Interest Period shall equal 0.1875% of
the average Market Price of a Security for the Five Trading Day Period.
Contingent Interest, if any, will accrue and be payable to Holders in the same
manner as regular cash interest as provided herein and the Indenture.
If this Security is redeemed pursuant to Section 5 of this Security or the
Holder elects to require the Company to repurchase this Security pursuant to
Section 6 of this Security, on a date that is after the Regular Record Date and
prior to the corresponding Interest Payment Date, interest (including Contingent
Interest, if any) and Additional Amounts, if any, accrued and unpaid hereon to,
but not including, the applicable Redemption Date, Repurchase Date or Change of
Control Repurchase Date will be paid to the same Holder to whom the Company pays
the principal of such Security regardless of whether such Holder was the
registered Holder on the Regular Record Date immediately preceding the
applicable Redemption Date, Repurchase Date or Change of Control Repurchase
Date.
Interest, Contingent Interest and Additional Amounts, if any, on
Securities converted after the close of business on a Regular Record Date but
prior to the opening of business on 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 interest and Additional Amounts,
if any, which has accrued and will be paid on such Interest Payment Date. No
such payment need be made with respect to Securities which will be converted
after a Regular Record Date and prior to the corresponding Interest Payment Date
after being called for redemption by the Company.
If the principal amount hereof or any portion of such principal amount or
any interest, including Contingent Interest, if any, and Additional Amounts, if
any, on any Security is not paid when due, then in each such case the overdue
amount shall, to the extent permitted by law, bear interest at the rate of
3.90%, 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.
Any reference herein to interest accrued or payable as of any date shall
include any Additional Amounts accrued or payable on such date as provided in
the Registration Rights Agreement.
2. Method of Payment.
Payment of the principal of and interest, Contingent Interest and
Additional Amounts, if any, on the Securities shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts or in Applicable Stock, as the case may be,
as permitted in the Indenture. The Holder must surrender the Securities to the
Paying Agent to collect payment of principal. Payment of interest, Contingent
Interest and Additional Amounts, if any, on Certificated Securities will be made
by check mailed to the address of the Person entitled thereto as such address
appears in the Register. Notwithstanding the foregoing, so long as the
Securities are registered in the name of a Depositary or its nominee,
96
all payments with respect to the Securities shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
3. Paying Agent, Registrar, Conversion Agent and Bid Solicitation Agent.
Initially, the Trustee will act as Paying Agent, Registrar, Conversion
Agent and Bid Solicitation Agent. The Company may appoint and change any Paying
Agent, Registrar, Conversion Agent or Bid Solicitation Agent without notice,
other than notice to the Trustee; provided that the Company will maintain at
least one Paying Agent in Birmingham, Alabama, 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, Registrar or Conversion Agent. None
of the Company or any Subsidiary or any Affiliate of any of them may act as Bid
Solicitation Agent.
4. Indenture.
The Securities are general unsecured obligations of the Company limited to
up to $135,000,000 aggregate principal amount. 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 Company may, at its
option, redeem the Securities for cash at any time as a whole, or from time to
time in part, on or after July 7, 2008, at a redemption price equal to the
principal amount of the Securities redeemed, plus any accrued and unpaid
interest (including Contingent Interest, if any) and Additional Amounts, if any,
on those Securities to, but not including, the Redemption Date (the "Redemption
Price").
Notice of redemption pursuant to this Section 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
cash 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 10:00 a.m., Birmingham, Alabama time, on the Redemption Date,
then on such Redemption Date interest and Additional Amounts, if any cease to
accrue on such Securities or portions thereof. 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.
6. Repurchase By the Company at the Option of the Holder or Upon a Change of
Control.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase, at the option of the Holder, all or any portion
of the Securities held by such Holder on June 30, 2008, June 30, 2013 and June
30, 2018 in integral multiples of $1,000 at the Repurchase Price. To exercise
such right, a Holder shall deliver to the Paying Agent a Repurchase Notice
containing the information set forth in the Indenture, at any time from 9:00
a.m., Birmingham, Alabama time, on the date that is 20 Business Days immediately
preceding such Repurchase Date until 5:00 p.m., Birmingham, Alabama time, on the
Business Day immediately preceding such Repurchase Date, and shall deliver the
Securities to the Paying Agent as set forth in the Indenture.
97
The Repurchase Price may be paid, at the option of the Company, in cash or
by the issuance and delivery of shares of shares of Common Stock, or in any
combination thereof, subject to the terms and conditions of the Indenture. After
June 30, 2008, the Company may amend the Indenture to prohibit the payment of
the Repurchase Price in shares of Common Stock.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase, at the option of the Holder, all or any portion
of the Securities held by such Holder upon a Change of Control of the Company in
integral multiples of $1,000 at the Change of Control Repurchase Price. To
exercise such right, a Holder shall deliver to the Paying Agent a Change of
Control Repurchase Notice containing the information set forth in the Indenture,
at any time prior to 5:00 p.m., Birmingham, Alabama time, on the Business Day
immediately preceding the Change of Control Repurchase Date, and shall deliver
the Securities to the Paying Agent as set forth in the Indenture.
The Change of Control Repurchase Price may be paid, at the option of the
Company, in cash or by the issuance and delivery of shares of Applicable Stock,
or in any combination thereof, subject to the terms and conditions of the
Indenture. After June 30, 2008, the Company may amend the Indenture to prohibit
the payment of the Change of Control Repurchase Price in shares of Applicable
Stock.
Holders have the right to withdraw any Repurchase Notice or Change of
Control Repurchase Notice by delivering to the Paying Agent a written notice of
withdrawal in accordance with the provisions of the Indenture.
If cash and/or Applicable Stock, if permitted under the Indenture, is
sufficient to pay the Repurchase Price or Change of Control Repurchase Price, as
the case may be, of all Securities or portions thereof to be repurchased with
respect to a Repurchase Date or Change of Control Repurchase Date, as the case
may be, is deposited with the Paying Agent, at 10:00 a.m., Birmingham, Alabama
time, on the Business Day immediately following the Repurchase Date or Change of
Control Repurchase Date, as the case may be then, immediately after the
Repurchase Date or Change of Control Repurchase Date, as applicable, such
Securities will cease to be outstanding and interest, Contingent Interest and
Additional Amounts, if any, on such Securities will cease to accrue and the
Holder thereof shall have no other rights as such other than the right to
receive the Repurchase Price or Change of Control Repurchase Price upon
surrender of such Security.
7. Conversion.
Subject to and in compliance with the provisions of the Indenture
(including, without limitation, the conditions to conversion of this Security
set forth in Section 12.1 thereof), a Holder is entitled, at such Holder's
option, to convert the Holder's Security (or any portion of the principal amount
thereof that is $1,000 or an integral multiple $1,000), into, subject to Section
12.13 thereof, fully paid and nonassessable of shares of Common Stock at the
Conversion Rate in effect on the date of conversion.
98
The Company will notify Holders of any event triggering the right to
convert the Securities as specified above in accordance with the Indenture.
A Security in respect of which a Holder has delivered a Repurchase Notice
or Change of Control Repurchase Notice, as the case may be, exercising the right
of such Holder to require the Company to repurchase such Security may be
converted only if such Repurchase Notice or Change of Control Repurchase Notice
is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 23.9037, subject to adjustment in certain
events described in the Indenture.
To surrender a Security for conversion, a Holder must, in the case of
Global Securities, comply with the Applicable Procedures of the Depositary in
effect at that time, and in the case of Certificated Securities, (1) surrender
the Security duly endorsed or in blank at the office of the Conversion Agent,
(2) complete and manually sign the conversion notice below (or complete and
manually sign a facsimile of such notice) and deliver such notice to the
Conversion Agent, (3) furnish appropriate endorsements and transfer documents
and (4) pay all funds required, if any, relating to interest (including
Contingent Interest, if any) or Additional Amounts, if any, and any transfer or
similar taxes or duties, if required pursuant to this Security or the Indenture.
No fractional share of Common Stock shall be issued upon conversion of any
Security. The Company shall pay a cash adjustment in lieu thereof as provided in
the Indenture.
No payment or adjustment will be made for accrued and unpaid interest
(including Contingent Interest, if any) and Additional Amounts, if any, or
dividends on the shares of Common Stock, except as provided in the Indenture.
On conversion of a Security, accrued interest, including original issue
discount attributable to the period from the Issue Date through the Conversion
Date and (except as provided above) accrued Contingent Interest, if any, with
respect to the converted Security shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through the delivery of the Common Stock (together with the cash payment, if
any, in lieu of fractional shares) in exchange for the Security being converted
pursuant to the terms hereof.
Upon conversion, the Company may choose to deliver, in lieu of shares of
Common Stock, cash or a combination of cash and shares of Common Stock in
accordance with the Indenture.
If the Company (i) is a party to a consolidation, merger or binding share
exchange (ii) reclassifies the shares of Common Stock or (iii) conveys,
transfers or leases its properties and assets substantially as an entirety to
any Person, the right to convert a Security into shares of shares of Common
Stock may be changed into a right to convert it into securities, cash or other
assets of the Company or such other Person, in each case in accordance with the
Indenture.
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8. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes 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 Repurchase Notice or Change of Control
Repurchase Notice has been given and not withdrawn (except, in the case of a
Security to be repurchased in part, the portion of the Security not to be
repurchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.
9. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
10. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written
request any cash 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.
11. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent or
affirmative vote of the Holders of not less than a majority in aggregate
principal amount of the outstanding Securities and (ii) certain Defaults may be
waived with the written consent or affirmative vote of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
outstanding.
Without the consent of any Securityholder, the Company and the Trustee
may amend the Indenture or the Securities to (i) add to the covenants of the
Company for the benefit of the Holders of Securities, (ii) surrender any right
or power conferred upon the Company, (iii) provide for conversion rights of
Holders of Securities if any reclassification or change of the shares of Common
Stock or any consolidation, merger or sale of all or substantially all of the
Company's assets occurs; (iv) provide for conversion rights of Holders of
Securities if any reclassification or change of the Company's shares of Common
Stock or any consolidation, merger or sale of all or substantially all of the
Company's assets occurs, (v) provide for the assumption of the Company's
obligations to the Holders of Securities in the case of a merger, consolidation,
conveyance, transfer, sale, lease or other disposition pursuant to Article VII
of the Indenture, (vi) increase the Conversion Rate and reduce the Conversion
Price; provided, however, that such increase in the Conversion Rate and
reduction in the Conversion Price is in accordance with the terms of the
Indenture or shall not adversely affect the interest of the Holders of
Securities (after taking into account tax and other consequences of
100
such reduction) in any material respect, (vii) comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture under
the TIA, (viii) provide for a successor Trustee with respect to the Securities,
(ix) add any additional Events of Default with respect to all or any of the
Securities, (x) secure the Securities, (xi) supplement any of the provisions of
the Indenture to such extent as shall be necessary to permit or facilitate the
discharge of the Securities, provided that such change or modification does not
adversely affect the interests of the Holders of the Securities in any material
respect, (xii) make any changes or modifications necessary in connection with
the registration of the Securities under the Securities Act as contemplated in
the Registration Rights Agreement; provided, however, that such action pursuant
to this clause does not, in the good faith opinion of the Board of Directors of
the Company (as evidenced by a Board Resolution) and the Trustee, adversely
affect the interests of the Holders of Securities in any material respect,
(xiii) cure any ambiguity, correct or supplement any provision in the Indenture
which may be inconsistent with any other provision therein or which is otherwise
defective, or to make any other provisions with respect to matters or questions
arising under the Indenture which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of the Indenture;
provided, however, that such action pursuant to this clause does not, in the
good faith opinion of the Board of Directors of the Company (as evidenced by a
Board Resolution) and the Trustee, adversely affect the interests of the Holders
of Securities in any material respect, (xiv) add or modify any other provisions
in the Indenture with respect to matters or questions arising thereunder which
the Company and the Trustee may deem necessary or desirable and which would not
reasonably be expected to adversely affect the interests of the Holders of
Securities in any material respect; and (xv) after June 30, 2008, eliminate the
right of the Company to pay the Repurchase Price in Common Stock or to pay the
Change of Control Repurchase Price in Applicable Stock.
12. Defaults and Remedies.
If any Event of Default with respect to the Securities shall occur and be
continuing, the principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture. If an Event of
Default occurs as a result of certain events of bankruptcy, insolvency or
reorganization of the Company or its Significant Subsidiaries, the principal of
all the Securities shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and to
the extent provided in the Indenture.
13. 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 and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
14. Calculations in Respect of Securities.
The Company or its agents will be responsible for making all calculations
called for under the Securities including, but not limited to, determination of
the Market Price and Sale
101
Price of the Applicable Stock, the number of shares of Applicable Stock and/or
the amount of cash issuable or payable upon conversion, the amounts of interest
and Additional Amounts, if any, on the Securities, and the calculation of any
notice periods, deadlines, expirations and other temporal terms. Any
calculations made in good faith and without manifest error will be final and
binding on Holders of the Securities. The Company or its agents will be required
to deliver to the Trustee a schedule of its calculations and the Trustee will be
entitled to conclusively rely upon the accuracy of such calculations without
independent verification.
15. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture, or in this Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future stockholder, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issue of the
Securities.
16. 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.
17. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (tenants in common), TEN ENT (tenants by the
entireties), JT TEN (joint tenants with right of survivorship and not as tenants
in common), CUST (custodian), and U/G/M/A (Uniform Gift to Minors Act).
18. INDENTURE TO CONTROL; GOVERNING LAW.
IN THE CASE OF ANY CONFLICT BETWEEN THE PROVISIONS OF THIS SECURITY AND
THE INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL CONTROL. THE INDENTURE AND
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW
WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture. Requests may be made to:
PROASSURANCE CORPORATION
100 Brookwood Place
Birmingham, Alabama 35209
Attn: Chief Financial Officer
Facsimile No. (205) 868-4053
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19. Registration Rights.(3)
The Holders of the Securities are entitled to the benefits of a
Registration Rights Agreement, dated as of July 7, 2003, between the Company and
the Initial Purchasers named therein, including the receipt of Additional
Amounts upon a registration default (as defined in such agreement).
- ----------
(3) This section shall be deleted from any Securities that are not
Transfer Restricted Security.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax ID 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:
Date:
------------------------- -----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Signature Guaranteed
- ------------------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
By:
---------------------------------------
Authorized Signatory
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CONVERSION NOTICE
To convert this Security into shares of Common Stock (or cash or a combination
of shares of Common Stock and cash, if the Company so elects) of the Company,
check the box:
To convert only part of this Security, state the principal amount to be
converted (which must be $1,000 or an integral multiple of $1,000):
If you want the stock certificate made out in another person's name fill in the
form below:
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax ID no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Your Signature:
Date:
------------------------ ------------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Signature Guaranteed
- ------------------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
By:
---------------------------------------
Authorized Signatory
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TRANSFER CERTIFICATE(2)
Re: 3.90% Convertible Senior Debentures due 2023
(the "Securities") of ProAssurance Corporation (the "Company")
The Transferor has requested a Registrar or the Trustee to exchange or
register the transfer of such Securities.
[ ] book-entry or [ ] definitive form by (the "Transferor")
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Securities as provided in Sections 2.6 and 2.12 of
the Indenture dated July [ ], 2003 between the Company and SouthTrust Bank, as
trustee (the "Indenture"), and the transfer of such Security is being made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act") (check applicable box) or the transfer
or exchange, as the case may be, of such Security does not require registration
under the Securities Act because (check applicable box):
[ ] Such Security is being transferred to the Company or a Subsidiary; or
[ ] Such Security is being transferred in compliance with Rule 144A under
the Securities Act; or
[ ] Such Security is being transferred pursuant to and in compliance with
an exemption from the registration requirements under the Securities Act in
accordance with Rule 144 (or any successor thereto) ("Rule 144") under the
Securities Act; or
[ ] Such Security is being transferred to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) pursuant to and in compliance with an exemption from the
registration requirements under the Securities Act; or
[ ] Such Security is being acquired for the Transferor's own account,
without transfer.
The Transferor acknowledges and agrees that, if the transferee will hold
any such Securities in the form of beneficial interests in a global Security
which is a "restricted security" within the meaning of Rule 144 under the
Securities Act, then such transfer can only be made pursuant to Rule 144A under
the Securities Act and such transferee must be a "qualified institutional buyer"
(as defined in Rule 144A).
- ----------
(2) This certificate should only be included if this Security is
Transfer Restricted Security.
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DATE:____________________ ________________________________________
Signature(s) of Transferor
(If the registered owner is a corporation, partnership or fiduciary, the title
of the person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
________________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By:_____________________________________
Authorized Signatory
107
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ____________________ ($_________)
Date Amount of Amount of Principal Notation by
Increase in Decrease in Amount of Registrar or
Principal Principal Global Security Security
Amount of Amount of After Increase Custodian
Global Security Global Security or Decrease
108
EXHIBIT B
[FORM OF CERTIFICATE TO BE DELIVERED BY
TRANSFEREE IN CONNECTION WITH TRANSFERS
TO INSTITUTIONAL ACCREDITED INVESTORS]
[Date]
SouthTrust Bank, as Trustee
Corporate Trust Department
111 Office Park Drive, 2nd Floor
Mail Code: A-001-OB-0201
Birmingham, AL 35223
Attention: Woodie E. Alston
Vice President and Trust Officer
Mellon Investor Services LLC, as Transfer Agent
44 Wall Street
New York, New York _____
Attention: Robert Kavanaugh
Re: ProAssurance Corporation
Ladies and Gentlemen:
In connection with the undersigned's proposed purchase of $_____________
aggregate principal amount of 3.90% Convertible Senior Debentures due 2023 (the
"Debentures") of ProAssurance Corporation (the "Company") or shares of Common
Stock of the Company issued upon conversion of the Debentures, par value $0.01
per share (the "shares of Common Stock," and together with the Debentures, the
"Securities"), the undersigned confirms, represents and warrants that:
(1) The undersigned is an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
of 1933, as amended (the "Securities Act") (an "Institutional
Accredited Investor").
(2) (A) Any purchase of the Securities by the undersigned will be for
the undersigned's own account or for the account of one or more
other Institutional Accredited Investors or as fiduciary for the
account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities
Act and for each of which the undersigned exercises sole investment
discretion or (B) the undersigned is a "bank", within the meaning of
Section 3(a)(2) of the Securities Act, or a "savings and loan
association" or other institution described in Section 3(a)(5)(A) of
the Securities Act that is acquiring
109
the Securities as fiduciary for the account of one or more
institutions for which the undersigned exercises sold investment
discretion.
(3) The undersigned has such knowledge and experience in financial and
business matters that the undersigned is capable of evaluating the
merits and risks of its investment in the Securities, and the
undersigned and any accounts for which it is acting is each able to
bear the economic risk of its or their investment.
(4) The undersigned has been given an opportunity to ask questions and
receive answers concerning the terms and conditions of the
Securities and to obtain any additional information which the
Company possesses or can acquire without reasonable effort or
expense that is necessary to verify the accuracy of the information
furnished.
(5) The undersigned is not acquiring the Securities with a view to
distribution thereof or with any present intention of offering or
selling any Securities, except as permitted below; provided that the
disposition of the undersigned's property and the property of any
accounts for which the undersigned is acting as fiduciary will
remain at all times within the undersigned's control.
(6) The undersigned understands that the Securities have not been
registered under the Securities Act or any applicable state
securities laws.
(7) The undersigned agrees, on its own behalf and on behalf of each
account for which the undersigned acquires any Securities, that if
in the future the undersigned decides to resell or otherwise
transfer such Securities within two years after the original
issuance of the Notes, such Securities may be resold or otherwise
transferred only:
to the Company or any subsidiary thereof;
with respect to Debentures only, to a person which is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) in
compliance with Rule 144A under the Securities Act;
pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available);
pursuant to an exemption from registration under the Securities Act
to an Institutional Accredited Investor that prior to such transfer, furnishes
to you (and the trustee or the transfer agent, as the case may be) a signed
letter substantially in the form of this letter, a transfer certificate
substantially in the form provided in the Indenture and an opinion of counsel;
or
pursuant to a registration statement which has been declared
effective under the Securities Act and continues to be effective at the time of
such transfer.
110
The undersigned further agrees to provide to any person purchasing any of
the Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
(8) The undersigned understands that, on any proposed resale of any
Securities, the undersigned will be required to furnish to the
Trustee or the Transfer Agent, as the case may be, and the Company
such certifications, legal opinions and other information as you and
the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. The undersigned further
understands that the Securities purchased by the undersigned will be
certificated securities and will bear a legend to the foregoing
effect.
Each of the Company, the Trustee or the Transfer Agent, as the case may
be, and the initial purchasers of the Securities are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.
Very truly yours,
By:
----------------------------------
Name:
--------------------------------
Title:
--------------------------------
Address:
------------------------------
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EXHIBIT C
[FORM OF RESTRICTIVE LEGEND FOR
COMMON STOCK ISSUED UPON CONVERSION]
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933"), OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT OF 1933 OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR");
(2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THE SECURITY UPON THE CONVERSION OF WHICH THE SHARES OF COMMON STOCK
EVIDENCED HEREBY WERE ISSUED, RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OF 1933 (IF AVAILABLE), (C) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE) TO ANY
INSTITUTIONAL ACCREDITED INVESTOR THAT PRIOR TO SUCH TRANSFER, FURNISHES TO
COMPUTER SHARE INVESTOR SERVICES LLC, AS TRANSFER AGENT (OR ANY SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), CERTIFICATIONS AND OPINION OF COUNSEL REQUIRED
BY THE COMPANY OR TRANSFER AGENT OR (D) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(B)
OR 2(D) ABOVE), A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
112