MEDICIS PHARMACEUTICAL CORPORATION
2.5% Contingent Convertible Senior Notes Due 2032
---------------------------------------
INDENTURE
Dated as of June 4, 2002
---------------------------------------
Deutsche Bank Trust Company Americas
TRUSTEE
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
310 (a)(1)............................................................................................ 7.10
(a)(2)................................................................................................ 7.10
(a)(3)................................................................................................ N.A.
(a)(4)................................................................................................ N.A.
(a)(5)................................................................................................ N.A.
(b)................................................................................................... 7.08, 7.10
(c)................................................................................................... N.A.
311(a)................................................................................................ 7.11
(b)................................................................................................... 7.11
(c)................................................................................................... N.A.
312 (a)............................................................................................... 2.05
(b)................................................................................................... 11.03
(c)................................................................................................... 11.03
313(a)................................................................................................ 7.06
(b)(1)................................................................................................ 7.06
(b)(2)................................................................................................ 7.06
(c)................................................................................................... 7.06
(d)................................................................................................... 7.06
314(a)................................................................................................ 4.02, 4.03
(b)................................................................................................... N.A.
(c)(1)................................................................................................ 11.04
(c)(2)................................................................................................ 11.04
(c)(3)................................................................................................ N.A.
(d)................................................................................................... N.A.
(e)................................................................................................... 11.05
(f)................................................................................................... N.A.
315 (a)............................................................................................... 7.01(b)
(b)................................................................................................... 7.05
(c)................................................................................................... 7.01
(d)................................................................................................... 7.01(c)
(e)................................................................................................... 6.11
316(a)(1)(A).......................................................................................... 6.05
(a)(1)(B)............................................................................................. 6.04
(a)(2)................................................................................................ N.A.
(b)................................................................................................... 6.07
(c)................................................................................................... 1.05(e)
317 (a)(1)............................................................................................ 6.08
(a)(2)................................................................................................ 6.09
(b)................................................................................................... 2.04
318 (a)............................................................................................... N.A.
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
i
Table of Contents
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. ...................................................... 1
Section 1.02. Other Definitions. ................................................ 5
Section 1.03. Incorporation by Reference of Trust Indenture Act ................. 5
Section 1.04. Rules of Construction ............................................. 6
Section 1.05. Acts of Holders ................................................... 6
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating ................................................... 7
Section 2.02. Execution and Authentication ...................................... 9
Section 2.03. Registrar, Paying Agent and Conversion Agent ...................... 9
Section 2.04. Paying Agent to Hold Money in Trust ............................... 10
Section 2.05. Securityholder Lists .............................................. 10
Section 2.06. Transfer and Exchange ............................................. 10
Section 2.07. Replacement Securities ............................................ 12
Section 2.08. Outstanding Securities; Determinations of Holders' Action ......... 12
Section 2.09. Temporary Securities .............................................. 13
Section 2.10. Cancellation ...................................................... 13
Section 2.11. Persons Deemed Owners ............................................. 14
Section 2.12. Global Securities ................................................. 14
Section 2.13. CUSIP Numbers ..................................................... 16
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.01. Right To Redeem; Notices To Trustee ............................... 16
Section 3.02. Selection of Securities to Be Redeemed ............................ 17
Section 3.03. Notice of Redemption .............................................. 17
Section 3.04. Effect of Notice of Redemption .................................... 18
Section 3.05. Deposit of Redemption Price ....................................... 18
Section 3.06. Securities Redeemed in Part ....................................... 18
Section 3.07. Reserved. ......................................................... 18
Section 3.08. Purchase of Securities at Option of the Holder .................... 18
Section 3.09. Purchase of Securities at Option of the Holder upon Change in
Control ........................................................... 21
Section 3.10. Effect of Purchase Notice or Change in Control Purchase Notice .... 24
Section 3.11. Deposit of Purchase Price or Change in Control Purchase Price ..... 25
Section 3.12. Securities Purchased in Part ...................................... 25
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Section 3.13. Covenant to Comply with Securities Laws upon Purchase of Securities 25
Section 3.14. Repayment to the Company .......................................... 25
ARTICLE 4
COVENANTS
Section 4.01. Payment of Securities ............................................. 26
Section 4.02. Sec and Other Reports ............................................. 26
Section 4.03. Compliance Certificate ............................................ 26
Section 4.04. Further Instruments and Acts ...................................... 27
Section 4.05. Maintenance of Office or Agency ................................... 27
Section 4.06. Delivery of Certain Information ................................... 27
Section 4.07. Tax Treatment of Securities ....................................... 27
Section 4.08. Liquidated Damages ................................................ 28
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. When the Company May Merge or Transfer Assets ..................... 28
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default ................................................. 29
Section 6.02. Defaults and Remedies ............................................. 30
Section 6.03. Other Remedies .................................................... 31
Section 6.04. Waiver of Past Defaults ........................................... 31
Section 6.05. Control by Majority ............................................... 31
Section 6.06. Limitation on Suits ............................................... 31
Section 6.07. Rights of Holders to Receive Payment .............................. 32
Section 6.08. Collection Suit by Trustee ........................................ 32
Section 6.09. Trustee May File Proofs of Claim .................................. 32
Section 6.10. Priorities ........................................................ 33
Section 6.11. Priorities ........................................................ 33
Section 6.12. Waiver of Stay, Extension or Usury Laws ........................... 34
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee ................................................. 34
Section 7.02. Rights of Trustee ................................................. 35
Section 7.03. Individual Rights of Trustee ...................................... 37
Section 7.04. Trustee's Disclaimer .............................................. 37
Section 7.05. Notice of Defaults ................................................ 37
Section 7.06. Reports by Trustee to Holders ..................................... 37
Section 7.07. Compensation and Indemnity ........................................ 38
Section 7.08. Replacement of Trustee ............................................ 38
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Section 7.09. Successor Trustee by Merger ....................................... 39
Section 7.10. Eligibility; Disqualification ..................................... 39
Section 7.11. Preferential Collection of Claims Against Company ................. 40
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities .............................. 40
Section 8.02. Repayment to the Company .......................................... 40
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders ........................................ 40
Section 9.02. With Consent of Holders ........................................... 41
Section 9.03. Compliance with Trust Indenture Act ............................... 42
Section 9.04. Revocation and Effect of Consents ................................. 42
Section 9.05. Notation on or Exchange of Securities ............................. 42
Section 9.06. Trustee to Sign Supplemental Indentures ........................... 42
Section 9.07. Effect of Supplemental Indentures ................................. 42
ARTICLE 10
CONVERSIONS
Section 10.01. Conversion Privilege ............................................. 43
Section 10.02. Conversion Procedure ............................................. 45
Section 10.03. Adjustments Below Par Value ...................................... 47
Section 10.04. Taxes on Conversion .............................................. 47
Section 10.05. Company to Provide Stock ......................................... 47
Section 10.06. Adjustment of Conversion Price ................................... 48
Section 10.07. No Adjustment .................................................... 53
Section 10.08. Equivalent Adjustments ........................................... 53
Section 10.09. Adjustment for Tax Purposes ...................................... 53
Section 10.10. Notice of Adjustment ............................................. 54
Section 10.11. Notice of Certain Transactions ................................... 54
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale on Conversion Privilege.......................... 55
Section 10.13. Trustee's Disclaimer. ............................................ 56
Section 10.14. Voluntary Reduction. ............................................. 56
Section 10.15. Simultaneous Adjustments.......................................... 56
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls ..................................... 56
Section 11.02. Notices .......................................................... 57
Section 11.03. Communication by Holders with Other Holders ...................... 58
Section 11.04. Certificate and Opinion as to Conditions Precedent................ 58
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Section 11.05. Statements Required in Certificate or Opinion..................... 58
Section 11.06. Separability Clause .............................................. 59
Section 11.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar.... 59
Section 11.08. Legal Holidays ................................................... 59
Section 11.09. Governing Law .................................................... 59
Section 11.10. No Recourse Against Others ....................................... 59
Section 11.11. Successors ....................................................... 59
Section 11.12. Multiple Originals ............................................... 60
Exhibit A-1 - Form of Global Security
Exhibit A-2 - Form of Certificated Security
Exhibit B - Transfer Certificate
v
INDENTURE dated as of June 4, 2002 between MEDICIS PHARMACEUTICAL
CORPORATION, a Delaware corporation (the "COMPANY"), and Deutsche Bank Trust
Company Americas, a New York banking corporation duly organized and existing
under the laws of the State of New York (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 2.5% Contingent
Convertible Senior Notes Due 2032 ("NOTES"):
Article 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 . Definitions.
"144A GLOBAL SECURITY" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A-1 that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"CONTROL" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BOARD RESOLUTION" means a copy of one or more resolutions, certified
by an Officer of the Company to have been duly adopted or consented to by the
applicable Board of Directors and to be in full force and effect, and delivered
to the Trustee.
"BUSINESS DAY" means, with respect to any Security, a day that in the
City of New York is not a day on which banking institutions are authorized by
law or regulation to close.
"CAPITAL STOCK" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.
"CERTIFICATED SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.
"CLASS A COMMON STOCK" shall mean shares of the Company's Class A
Common Stock, $0.014 par value per share, as they exist on the date of this
Indenture or any other shares of Capital Stock of the Company into which the
Class A Common Stock shall be reclassified or changed.
"CLASS B COMMON STOCK" shall mean shares of the Company's Class B
Common Stock, $0.014 par value per share, as they exist on the date of this
Indenture or any other shares of Capital Stock of the Company into which the
Class B Common Stock shall be reclassified or changed.
"COMMON STOCK" shall mean shares of the Company's Class A Common Stock
and Class B Common Stock.
"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 ORDER" means a written request or order signed in the name of
the Company by any two Officers.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any time the trust created by this Indenture shall be administered, which office
at the date hereof is located at 60 Wall Street, New York, New York 10005,
Attention: Corporate Trust and Agency Services, or such other address as the
Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"GLOBAL SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 2.06 such
Securities will be in the form of a 144A Global Security.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"INITIAL PURCHASER" shall mean Deutsche Bank Securities Inc.
2
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"LIQUIDATED DAMAGES" has the meaning set forth in the Registration
Rights Agreement dated as of June 4, 2002 between the Company and the Initial
Purchaser.
"OFFICER" means the Chairman and Chief Executive Officer, the
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Chief Financial Officer, the Treasurer, the Secretary, any
Assistant Secretary or any Director of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 11.04 and 11.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by the Treasurer or
Chief Financial Officer of the Company but need not contain the information
specified in Sections 11.04 and 11.05.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Section 11.04 and 11.05, from legal counsel who is acceptable to
the Trustee in its reasonable discretion. The counsel may be an employee of, or
counsel to, the Company or the Trustee.
"PERSON" or "PERSON" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or other entity.
"PRINCIPAL AMOUNT" or "PRINCIPAL AMOUNT" of a Security means the
Principal Amount as set forth on the face of the Security.
"REDEMPTION DATE" or "REDEMPTION DATE" shall mean the date specified
for redemption of the Securities in accordance with the terms of the Securities
and this Indenture.
"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning set
forth in paragraph 5 of the Securities.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any director, managing director, vice president, assistant vice
president, assistant secretary, assistant treasurer, associate, trust officer 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 SECURITY" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A-1 and A-2 of
this Indenture.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
3
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means any of the Company's 2.5% Contingent Convertible
Senior Notes Due 2032, as amended or supplemented from time to time, issued
under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"STATED MATURITY", when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal Amount of such Security is due and payable.
"SUBSIDIARY" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"TRADING DAY" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Class A Common Stock is not
listed on the New York Stock Exchange, on the principal other national or
regional securities exchange on which the Class A Common Stock is then listed
or, if the Class A Common Stock is not listed on a national or regional
securities exchange, on the National Association of Securities Dealers Automated
Quotation System or, if the Class A Common Stock is not quoted on the National
Association of Securities Dealers Automated Quotation System, on the principal
other market on which the Class A Common Stock is then traded.
"TRUSTEE" means the party named as the "TRUSTEE" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"VOTING STOCK" of a person means Capital Stock of such person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
4
Section 1.02 . Other Definitions.
Defined in
Term: Section:
- ---- ----------
95% Trading Condition..................................................................................... 10.01
Act....................................................................................................... 1.05(a)
Agent Members............................................................................................. 2.12(e)(i)
Aggregate Market Premium.................................................................................. 10.06
beneficial owner.......................................................................................... 3.09(a)
cash...................................................................................................... 3.08(b)
Change in Control......................................................................................... 3.09(a)
Change in Control Purchase Date........................................................................... 3.09(a)
Change in Control Purchase Notice......................................................................... 3.09(c)
Change in Control Purchase Price.......................................................................... 3.09(a)
Closing Price............................................................................................. 10.06
Company Notice............................................................................................ 3.08(c)
Company Notice Date....................................................................................... 3.08(c)
Continuing Directors...................................................................................... 3.09(a)
Conversion Agent.......................................................................................... 2.03
Conversion Date........................................................................................... 10.02
Conversion Price.......................................................................................... 10.06
Conversion Share.......................................................................................... 10.01
Depositary................................................................................................ 2.01(a)
DTC....................................................................................................... 2.01(a)
Event of Default.......................................................................................... 6.01
ex-dividend date.......................................................................................... 10.01
Group..................................................................................................... 3.09
Legal Holiday............................................................................................. 11.08
Legend.................................................................................................... 2.06(f)
Market Capitalization..................................................................................... 10.06
Notice of Default......................................................................................... 6.01
Paying Agent.............................................................................................. 2.03
Principal Value Conversion................................................................................ 10.02
Principal Value Conversion Notice......................................................................... 10.02
Purchase Date............................................................................................. 3.08(a)
Purchase Notice........................................................................................... 3.08(a)
Purchase Price............................................................................................ 3.08(a)
QIB....................................................................................................... 2.01(a)
Quarter................................................................................................... 10.01
Registrar................................................................................................. 2.03
Rule 144A Information..................................................................................... 4.06
Security Trading Price.................................................................................... 10.01
Stockholder Rights Plan................................................................................... 10.06(f)
Section 1.03 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
5
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by a TIA reference to another statute or defined by an SEC rule have the
meanings assigned to them by such definitions.
Section 1.04 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 generally accepted
accounting principles as in effect from time to time;
(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 1.05 Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "ACT" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary
6
public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to such officer the execution thereof. Where such execution is by a signer
acting in a capacity other than such signer's individual capacity, such
certificate or affidavit shall also constitute sufficient proof of such signer's
authority.
The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
register maintained by the Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
Article 2
THE SECURITIES
Section 2.01 . Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the forms set forth on
Exhibits A-1 and A-2, which are a part of this Indenture and incorporated by
reference herein. 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.
7
(a) 144A Global Securities. Securities offered and sold to qualified
institutional buyers as defined in Rule 144A ("QIBS") in reliance on Rule 144A
shall be issued, initially in the form of a 144A 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 The Depository Trust Company
("DTC") or the nominee thereof (such depositary, or any successor thereto, and
any such nominee being hereinafter referred to as the "DEPOSITARY"), duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the 144A 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 represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and conversions.
Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. The Company shall execute and the Trustee
shall, in accordance with this Section 2.01(c), authenticate and deliver
initially one or more Global Securities that (a) shall be registered in the name
of the Depositary, (b) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions and (c) shall bear legends
substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO MEDICIS
PHARMACEUTICAL CORPORATION (THE "COMPANY") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
8
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
(d) Certificated Securities. Securities not issued as interests in the
Global Securities will be issued in certificated form substantially in the form
of Exhibit A-2 attached hereto.
Section 2.02 . Execution and Authentication. The Securities shall be
executed on behalf of the Company by any Officer, under its corporate seal
reproduced thereon. The signature of the officer of the Company on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of the execution of the Securities the proper Officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of
authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount of up to $400,000,000 (which shall
include the Initial Purchaser's option to purchase $50,000,000 of additional
Securities) upon a Company Order without any further action by the Company. The
aggregate Principal Amount of Securities outstanding at any time may not exceed
the amount set forth in the foregoing sentence, except as provided in Section
2.07
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 thereof.
Section 2.03 . Registrar, Paying Agent and Conversion Agent. The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency
where Securities may be presented for purchase or payment ("PAYING AGENT") and
an office or agency where Securities may be presented for conversion
("CONVERSION AGENT"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 4.05. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (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 or Conversion Agent, the Trustee shall act as such and shall be entitled
9
to appropriate compensation therefor pursuant to Section 7.07. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
Section 2.04 . Paying Agent to Hold Money in Trust. Except as otherwise
provided herein, on or prior to each due date of payments in respect of any
Security, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) sufficient to make
such payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any Default by the Company in making any such payment. At
any time during the continuance of any such Default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
so held in trust. If the Company, a Subsidiary or an Affiliate of either of them
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed by it. Upon doing so, the Paying Agent shall have no further
liability for the money.
Section 2.05 . 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 at least
semiannually on May 4 and November 4 a listing of Securityholders dated within
15 days of the date on which the list is furnished and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
Section 2.06 . Transfer and Exchange. (a) Subject to Section 2.12
hereof, upon surrender for registration of transfer of any Securities, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.03, the Company shall execute and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate Principal Amount. The Company shall not
charge a service charge for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with the transfer
or exchange of the Securities from the Securityholder requesting such transfer
or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's
10
attorney duly authorized in writing, at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities that the Holder making
the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(c). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange or replacement
of Securities subject to restrictions on transfer and bearing the legends set
forth on the forms of Securities attached hereto as Exhibits A-1 and A-2 setting
forth such restrictions (collectively, the "LEGEND"), or if a request is made to
remove the Legend on a Security, the Securities so issued shall bear the Legend,
or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel, as may be reasonably required by the
Company and the Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon (i) provision of such satisfactory evidence, or (ii)
notification by the Company to the Trustee and registrar of the sale of such
Security pursuant to a registration statement that is effective at the time of
such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Company, the Legend shall be reinstated.
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Section 2.07 . Replacement Securities. If any mutilated Security is
surrendered to the Trustee, or the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, and there
is delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a
protected purchaser (within the meaning of Section 8-303 of the Uniform
Commercial Code), the Company shall execute, and upon the Company's 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 number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 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 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 2.08 . 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, those paid pursuant to Section
2.07 delivered to it for cancellation and those described in this Section 2.08
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite Principal Amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).
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If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change in
Control Purchase Date, or on Stated Maturity, money sufficient to pay amounts
owed with respect to Securities payable on that date, then immediately after
such Redemption Date, Purchase Date, Change in Control Purchase Date or Stated
Maturity, as the case may be, such Securities shall cease to be outstanding and
interest, if any (including contingent interest, if any), and Liquidated
Damages, if any, on such Securities shall cease to accrue; provided that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made.
If a Security is converted in accordance with Article 10, then from and
after the time of conversion on the Conversion Date, such Security shall cease
to be outstanding and interest, if any (including contingent interest, if any),
shall cease to accrue on such Security.
Section 2.09 . Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as 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 2.03,
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,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange (other than Securities exchanged pursuant
to Section 10.02 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 that 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 10. 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
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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 of
the Principal Amount of the Security or the payment of any Redemption Price,
Purchase Price or Change in Control Purchase Price in respect thereof, and
accrued and unpaid interest thereon, for the purpose of conversion and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 2.12 . Global Securities. (a) A Global Security may not be
transferred, in whole or in part, to any Person other than the Depositary or a
nominee or any successor thereof, and no such transfer to any such other Person
may be registered; provided that the foregoing shall not prohibit any transfer
of a Security that is issued in exchange for a Global Security but is not itself
a Global Security. No transfer of a Security to any Person shall be effective
under this Indenture or the Securities unless and until such Security has been
registered in the name of such Person. Notwithstanding any other provisions of
this Indenture or the Securities, transfers of a Global Security, in whole or in
part, shall be made only in accordance with Section 2.06 and this Section 2.12.
(b) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend including the
delivery of an opinion of counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate Principal Amount, which shall
not bear the restrictive Legend. The Company shall inform the Trustee of the
14
effective date of any registration statement registering the Securities under
the Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the
term "TRANSFER" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(e) The provisions of clauses (i), (ii), (iii) and(iv) below shall
apply only to Global Securities:
(i) Notwithstanding any other provisions of this Indenture or
the Securities, a Global Security shall not be exchanged in whole or in
part for a Security registered in the name of any Person other than the
Depositary or one or more nominees thereof; provided that a Global
Security may be exchanged for Securities registered in the names of any
person designated by the Depositary in the event that (x) the
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or such Depositary has
ceased to be a "clearing agency" registered under the Exchange Act, and
a successor Depositary is not appointed by the Company within 90 days,
(y) the Company has provided the Depositary with written notice that it
has decided to discontinue use of the system of book-entry transfer
through the Depositary or any successor Depositary or (z) an Event of
Default has occurred and is continuing with respect to the Securities.
Any Global Security exchanged pursuant to clauses (x) or (y) above
shall be so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (z) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Security
issued in exchange for a Global Security or any portion thereof shall
be a Global Security; provided that any such Security so issued that is
registered in the name of a Person other than the Depositary or a
nominee thereof shall not be a Global Security.
(ii) Securities issued in exchange for a Global Security or
any portion thereof shall be issued in definitive, fully registered
form, without interest coupons, shall have an aggregate Principal
Amount equal to that of such Global Security or portion thereof to be
so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall
bear the applicable legends provided for herein. Any Global Security to
be exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so surrendered
for exchange or, if the Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Security, the
Principal Amount thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender
or adjustment, the Trustee shall authenticate and deliver the Security
issuable on such exchange to or upon the order of the Depositary or an
authorized representative thereof.
(iii) Subject to the provisions of clause (v) below, the
registered Holder may grant proxies and otherwise authorize any Person,
including Agent Members (as defined
15
below) and persons that may hold interests through Agent Members, to
take any action which a holder is entitled to take under this Indenture
or the Securities.
(iv) In the event of the occurrence of any of the events
specified in clause (i) above, the Company will promptly make available
to the Trustee a reasonable supply of Certificated Securities in
definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the Depositary
(collectively, the "AGENT MEMBERS") nor any other Persons on whose
behalf Agent Members may act shall have any rights under this Indenture
with respect to any Global Security registered in the name of the
Depositary or any nominee thereof, or under any such Global Security,
and the Depositary or such nominee, as the case may be, may be treated
by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner and holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent Members
and any other person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the exercise
of the rights of a holder of any Security.
Section 2.13 . CUSIP Numbers. The Company may issue the Securities with
one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
Article 3
REDEMPTION AND PURCHASES
Section 3.01 . Right To Redeem; Notices To Trustee. (a) Optional
Redemption. The Company, at its option, may redeem the Securities in accordance
with the provisions of paragraphs 5 and 7 of the Securities and at the
Redemption Price specified in paragraph 5 of the Securities, together with
accrued and unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, thereon up to but not including the Redemption Date;
provided that if the Redemption Date is on or after an interest record date, but
on or prior to the related interest payment date, interest will be payable to
the Holders in whose names the Securities are registered at the close of
business on the relevant record date for payment of such interest.
(b) Notice to Trustee. If the Company elects to redeem Securities
pursuant to this Section 3.01, it shall notify the Trustee in writing of the
Redemption Date, the Principal Amount of Securities to be redeemed and the
Redemption Price. The Company shall give the notice to
16
the Trustee provided for in this Section 3.01(b) by a Company Order at least 45
days before the Redemption Date (unless a shorter notice shall be satisfactory
to the Trustee).
Section 3.02 . Selection of Securities to Be Redeemed. If less than all
the Securities are to be redeemed, unless the procedures of the Depositary
provide otherwise, the Trustee shall select the Securities to be redeemed on a
pro rata basis. The Trustee may select for redemption portions of the Principal
Amount of Securities that have denominations of $1,000 and integral multiples
thereof.
Securities and portions of them 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 for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be redeemed.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as possible) to be the portion selected for redemption. Securities that 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 3.03 . Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Price;
(d) the name and address of the Paying Agent and Conversion Agent;
(e) that Securities called for redemption may be converted at any
time before the close of business on the second Business Day
immediately preceding the Redemption Date;
(f) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;
(g) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price therefor,
together with all accrued and unpaid interest;
(h) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers, if any, and Principal
Amounts of the particular Securities to be redeemed;
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(i) that, unless the Company defaults in making payment of such
Redemption Price, interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, on
Securities called for redemption will cease to accrue on and
after the Redemption Date and the Securities will cease to be
convertible; and
(j) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided that the
Company makes such request prior to the date by which such notice of redemption
must be given to Holders in accordance with this Section 3.03 and the Company
provides the Trustee with all information required for such notice of
redemption.
Section 3.04 . Effect of Notice of Redemption. Once notice of
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the notice, except for
Securities which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice, together with accrued and unpaid
interest, if any (including contingent interest, if any), and Liquidated
Damages, if any, thereon, up to but not including the Redemption Date.
Section 3.05 . Deposit of Redemption Price. Prior to 11:00 a.m. (New
York City time) on the Redemption Date the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date, together with
accrued and unpaid interest, if any (including contingent interest, if any), and
Liquidated Damages, if any, thereon, up to but not including the Redemption Date
other than Securities or portions of Securities called for redemption that on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 10. If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.
Section 3.06 . Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder, without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate Principal Amount equal to, and in exchange for, the
unredeemed portion of the Principal Amount of the Security surrendered.
Section 3.07 . Reserved.
Section 3.08 . Purchase of Securities at Option of the Holder. General.
Securities shall be purchased by the Company in accordance with the provisions
of paragraph 6 of the Securities on June 4, 2007, June 4, 2012 and June 4, 2017
(each, a "PURCHASE DATE") at a purchase price per Security equal to 100% of the
aggregate Principal Amount of the Security (the
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"PURCHASE PRICE"), together with accrued and unpaid interest (including
contingent interest, if any) and Liquidated Damages, if any, thereon, up to but
not including the Purchase Date; provided that if the Purchase Date is on or
after an interest record date but on or prior to the related interest payment
date, interest and Liquidated Damages, if any, will be payable to the Holders in
whose names the Securities are registered at the close of business on the
relevant record date.
Purchases of Securities hereunder shall be made, at the option of the
Holder thereof, upon:
(i) delivery to the Company and the Paying Agent by the Holder
of a written notice of purchase (a "PURCHASE NOTICE") at any time from
the opening of business on the date that is 20 Business Days prior to
the Purchase Date until the close of business on the Business Day prior
to such Purchase Date stating:
(A) the certificate number of the Security which the
Holder will deliver to be purchased;
(B) the portion of the Principal Amount of the
Security which the Holder will deliver to be purchased, which
portion must be in principal amounts at maturity of $1,000 or
an integral multiple thereof;
(C) that such Security shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified
in paragraph 6 of the Securities and in this Indenture; and
(ii) delivery of such Security to the Paying Agent prior to,
on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Purchase Price therefor,
together with accrued and unpaid interest, if any (including contingent
interest, if any), and Liquidated Damages, if any; provided, however,
that such Purchase Price, together with accrued and unpaid interest, if
any (including contingent interest, if any), and Liquidated Damages, if
any, shall be so paid pursuant to this Section 3.08 only if the
Security so delivered to the Paying Agent shall conform in all respects
to the description thereof in the related Purchase Notice, as
determined by the Company in its sole discretion.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Purchase Date and
the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.08(a)
shall have the right to withdraw
19
such Purchase Notice at any time prior to the close of business on the Business
Day prior to the Purchase Date by delivery of a written notice of withdrawal to
the Paying Agent at the principal office of the Paying Agent in accordance with
Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(b) Manner of Payment of Purchase Price. The Purchase Price of
Securities in respect of which a Purchase Notice pursuant to Section 3.08 has
been given shall be paid in U.S. legal tender ("CASH").
(c) Company Notice. In connection with any purchase of Securities
pursuant to Section 3.08, the Company shall give written notice of the Purchase
Date to the Holders (the "COMPANY NOTICE"). The Company Notice shall be sent by
first-class mail to the Trustee and to each Holder not less than 20 Business
Days prior to any Purchase Date (the "COMPANY NOTICE DATE"). Each Company Notice
shall include a form of Purchase Notice to be completed by a Securityholder and
shall state:
(i) the Purchase Price and the Conversion Price;
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Securities as to which a Purchase Notice has been
given may be converted if they are otherwise convertible only in
accordance with Article 10 hereof and paragraph 8 of the Securities if
the applicable Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent
to collect payment;
(v) that the Purchase Price for, and any accrued and unpaid
interest (including contingent interest, if any) and Liquidated
Damages, if any, on, any Security as to which a Purchase Notice has
been given and not withdrawn will be paid promptly following the later
of the Purchase Date and the time of surrender of such Security as
described in subclause (iv) above;
(vi) the procedures the Holder must follow to exercise rights
under Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities;
(viii) the procedures for withdrawing a Purchase Notice (as
specified in Section 3.10);
(ix) that, unless the Company defaults in making payment on
Securities for which a Purchase Notice has been submitted, interest, if
any (including contingent interest), and Liquidated Damages, if any, on
such Securities will cease to accrue on the Purchase Date; and
20
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice in
the Company's name and at the Company's expense; provided, however, that the
Company makes such request at least three (3) Business Days prior to the date by
which such Company Notice must be given to the Holders and that, in all cases,
the text of such Company Notice shall be prepared by the Company.
Section 3.09 . Purchase of Securities at Option of the Holder upon
Change in Control. If at any time that Securities remain outstanding there shall
have occurred a Change in Control (as hereinafter defined), Securities shall be
repurchased by the Company, at the option of the Holder thereof, at a purchase
price (the "CHANGE IN CONTROL PURCHASE PRICE") equal to the principal amount
thereof plus accrued and unpaid interest, if any (including contingent interest,
if any), and Liquidated Damages, if any, thereon, up to and including the date
(the "CHANGE IN CONTROL PURCHASE DATE") fixed by the Company that is not less
than 45 days nor more than 60 days after the date of the Company Notice, subject
to satisfaction by or on behalf of the Holder of the requirements set forth in
Section 3.09(c).
Whenever in this Indenture there is a reference to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Change in Control Purchase Price payable in respect of such Security to the
extent that such Change in Control Purchase Price is, was or would be payable at
such time, and express mention of the Change in Control Purchase Price in any
provision of this Indenture shall not be construed as excluding the Change in
Control Purchase Price in those provisions of this Indenture when such express
mention is not made.
A "CHANGE IN CONTROL" shall be deemed to have occurred at such time
after the original issuance of the Securities as any of the following occur:
(i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company and its subsidiaries,
taken as a whole, to any person or group of related persons, as defined
in Section 13(d) of the Exchange Act (a "GROUP");
(ii) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of
the Company (whether or not otherwise in compliance with the provisions
of this indenture);
(iii) any person or Group shall become the owner, directly or
indirectly, beneficially or of record, of shares representing more than
50% of the aggregate ordinary voting power represented by the Company's
issued and outstanding Voting Stock of or any successor to all or
substantially all of the Company's assets; or
(iv) the first day of which a majority of the members of the
Company's Board of Directors are not Continuing Directors (as
hereinafter defined).
"BENEFICIAL OWNER" shall be determined in accordance with Rules 13d-3
and 13d-5 promulgated by the SEC under the Exchange Act or any successor
provision, except that a
21
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether exercisable immediately or only
after the passage of time.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of the original issuance of the Securities or
(ii) was nominated for election or elected to the Board of Directors with the
approval of a majority of the continuing directors who were members of such
Board of Directors at the time of such nomination or election.
(b) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice of the Change in 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 form of Change in Control Purchase
Notice to be completed by the Securityholder and shall state:
(i) briefly, the events causing a Change in Control and the
date of such Change in Control;
(ii) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.09 must be given;
(iii) the Change in Control Purchase Date;
(iv) the Change in Control Purchase Price;
(v) the name and address of the Paying Agent and the
Conversion Agent;
(vi) the Conversion Price and any adjustments thereto;
(vii) that Securities as to which a Change in Control Purchase
Notice has been given may be converted pursuant to Article 10. hereof
only if the Change in Control Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
(viii) that Securities must be surrendered to the Paying Agent
to collect payment;
(ix) that the Change in Control Purchase Price for any
Security as to which a Change in Control Purchase Notice has been duly
given and not withdrawn will be paid promptly following the later of
the Change in Control Purchase Date and the time of surrender of such
Security as described in clause (viii);
(x) briefly, the procedures the Holder must follow to exercise
rights under this Section 3.09;
(xi) briefly, the conversion rights of the Securities;
(xii) the procedures for withdrawing a Change in Control
Purchase Notice (as specified in Section 3.10);
22
(xiii) that, unless the Company defaults in making payment of
such Change in Control Purchase Price, interest (including contingent
interest, if any) and Liquidated Damages, if any, on Securities
surrendered for purchase by the Company will cease to accrue on and
after the Change in Control Purchase Date; and
(xiv) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "CHANGE IN CONTROL PURCHASE
NOTICE"), together with the securities subject thereto, to the Company and the
Paying Agent at any time prior to the close of business on the third Business
Day prior to the Change in Control Purchase Date, stating:
(i) the certificate number of the Security that the Holder
will deliver to be purchased;
(ii) the portion of the Principal Amount of the Security which
the Holder will deliver to be purchased, which portion must be $1,000
or an integral multiple thereof; and
(iii) that such Security shall be purchased pursuant to the
terms and conditions specified in paragraph 6 of the Securities.
The delivery of such Security to the Paying Agent prior to, on or after
the Change in Control Purchase Date (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 in Control Purchase Price therefor; provided, however, that
such Change in Control Purchase Price shall be so paid pursuant to this Section
3.09 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 in Control
Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Security to the Paying Agent in
accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Business Day preceding
the Change in Control Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.
23
Notwithstanding anything herein to the contrary, the Company's
obligations pursuant to this Section 3.09 shall be satisfied if a third party
makes a change of control offer in the manner and at the times and otherwise in
compliance in all material respects with the requirements of this Section 3.09
and purchases all Securities properly tendered and not withdrawn pursuant to the
requirements of this Section 3.09.
Section 3.10 . Effect of Purchase Notice or Change in Control Purchase
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08 or Section 3.09(c), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice is withdrawn
as specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price, together with all accrued and unpaid interest
(including contingent interest, if any) and Liquidated Damages, if any, thereon,
to but not including the Purchase Date or Change in Control Purchase Price, as
the case may be, with respect to such Security. Such Purchase Price, together
with accrued and unpaid interest, if any (including contingent interest, if
any), and Liquidated Damages, if any, thereon, to but not including the Purchase
Date or Change in Control Purchase Price, as the case may be, shall be paid to
such Holder, subject to receipt of funds and/or securities by the Paying Agent,
promptly following the later of (x) the Purchase Date or the Change in Control
Purchase Date, as the case may be, with respect to such Security (provided that
the conditions in Section 3.08 or Section 3.09(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.08 or Section 3.09(c), as
applicable. Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted pursuant to Article 10 hereof on or after the date
of the delivery of such Purchase Notice or Change in Control Purchase Notice, as
the case may be, unless such Purchase Notice or Change in Control Purchase
Notice, as the case may be, has first been validly withdrawn as specified in the
following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Business Day prior to the Purchase Date or prior to the close of
business on the Change in Control Purchase Date, as the case may be, specifying:
(i) the certificate number, if any, of the Security in respect of
which such notice of withdrawal is being submitted,
(ii) the Principal Amount of the Security with respect to which
such notice of withdrawal is being submitted, and
(iii) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Change in Control
Purchase Notice, as the case may be, and which has been or
will be delivered for purchase by the Company.
24
Section 3.11 . Deposit of Purchase Price or Change in Control Purchase
Price. Prior to 11:00 a.m. (New York City time) on the Business Day following
the Purchase Date or the Change in Control Purchase Date, as the case may be,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of money (in immediately available funds if deposited on such Business
Day) sufficient to pay the aggregate Purchase Price, together with all accrued
and unpaid interest (including contingent interest, if any) and Liquidated
Damages, if any, thereon, to but not including the Purchase Date or Change in
Control Purchase Price, as the case may be, of all the Securities or portions
thereof which are to be purchased as of the Purchase Date or Change in Control
Purchase Date, as the case may be.
Section 3.12 . Securities Purchased in Part. Any Certificated Security
that is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate Principal Amount equal to, and in exchange for, the
portion of the Principal Amount of the Security so surrendered which is not
purchased.
Section 3.13 . Covenant to Comply with Securities Laws upon Purchase of
Securities. When complying with the provisions of Sections 3.08 or 3.09 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply in all material respects with Rule 13e-4
and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act, and (iii) otherwise
comply in all material respects with all Federal and state securities laws so as
to permit the rights and obligations under Sections 3.08 or 3.09 to be exercised
in the time and in the manner specified in Sections 3.08 or 3.09.
Section 3.14 . Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed as provided in
paragraph 11 of the Securities, together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.01(f)), held by them for the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be, and accrued and unpaid interest, if any (including contingent interest,
if any), and Liquidated Damages, if any; provided, however, that to the extent
that the aggregate amount of cash deposited by the Company pursuant to Section
3.11 exceeds the aggregate Purchase Price or Change in Control Purchase Price,
as the case may be, of the Securities or portions thereof which the Company is
obligated to purchase as of the Purchase Date or Change in Control Purchase
Date, as the case may be, and accrued and unpaid interest thereon, if any
(including contingent interest, if any), and Liquidated Damages, if any then,
unless otherwise agreed in writing with the Company, promptly after the Business
Day following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of Section
7.01(f)).
25
Article 4
COVENANTS
Section 4.01 . Payment of Securities. The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts to be
given to the Trustee or Paying Agent, as the case may be, shall be deposited
with the Trustee or Paying Agent, as the case may be, by 11:00 a.m. (New York
City time) by the Company. Interest installments, Liquidated Damages, Principal
Amount, Redemption Price, Purchase Price, Change in Control Purchase Price and
interest, if any, due on overdue amounts shall be considered paid on the
applicable date due if at 11:00 a.m. (New York City time) on such date (or, in
the case of a Purchase Price or Change in Control Purchase Price, on the
Business Day following the applicable Purchase Date or Change in Control
Purchase Date, as the case may be) the Trustee or the Paying Agent, as the case
may be, holds, in accordance with this Indenture, money sufficient to pay all
such amounts then due.
The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the
Securities, compounded semiannually, which interest shall accrue from the date
such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in addition to the continued accrual of interest on the
Securities.
Section 4.02 . Sec and Other Reports. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been required to be filed with
the SEC had the Company continued to have been subject to such reporting
requirements. In such event, such reports shall be provided to the Trustee at
the times the Company would have been required to provide reports had it
continued to have been subject to such reporting requirements.
In addition, the Company shall comply with the other provisions of TIA
Section 314(a).
Section 4.03 . Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on June 30, 2002) an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such Defaults and the nature and status thereof of
which they may have knowledge.
26
Section 4.04 . Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 4.05 . Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Corporate Trust Office of the Trustee
shall initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office of the Trustee). If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
11.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes.
Section 4.06 . Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of Class A Common Stock delivered upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder or any beneficial owner of Securities or holder or
beneficial owner of Class A Common Stock, or to a prospective purchaser of any
such security designated by any such holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act in connection with the resale of any such security. "RULE 144A
INFORMATION" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act or any successor provisions. Whether a
person is a beneficial owner shall be determined by the Company to the Company's
reasonable satisfaction.
Section 4.07 . Tax Treatment of Securities. The Company and the
Holders, by purchasing the Securities, agree that (i) the Securities are
contingent payment debt instruments as described in Treasury Regulations Section
1.1275-4, (ii) each Holder shall be bound by the Company's application of the
Treasury Regulations to the Securities, including the Company's determination
that the rate at which interest will be deemed to accrue on the Securities for
United States federal income tax purposes, will be 9.5% compounded
semi-annually, which is the rate comparable to the rate at which the Company
would borrow on a noncontingent, nonconvertible borrowing with terms and
conditions otherwise comparable to the Securities, (iii) each Holder shall use
the projected payment schedule with respect to the Securities provided by the
Company to the Holder, as provided in Treasury Regulations Section
1.1275-4(b)(4), to determine its interest accruals and adjustments as provided
in Treasury Regulations Section 1.1275-4(b)(4)(iv), and (iv) the Company
27
and each Holder will not take any position on a tax return inconsistent with
(i), (ii), or (iii), unless required by applicable law.
Section 4.08 . Liquidated Damages. If at any time Liquidated Damages
become payable by the Company pursuant to the Registration Rights Agreement, the
Company shall promptly deliver to the Trustee a certificate to that effect and
stating (i) the amount of such Liquidated Damages that are payable and (ii) the
date on which such damages are payable pursuant to the terms of the Registration
Rights Agreement. Unless and until a Responsible Officer of the Trustee receives
such a certificate, the Trustee may assume without inquiry that no Liquidated
Damages are payable. If the Company has paid Liquidated Damages directly to the
persons entitled to them, the Company shall deliver to the Trustee a certificate
setting forth the particulars of such payment.
Article 5
SUCCESSOR CORPORATION
Section 5.01 . When the Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into any other person or
convey, transfer or lease its properties and assets substantially as an entirety
to any person, unless:
(i) (1) the Company shall be the continuing corporation or (2) the
person (if other than the Company) formed by such
consolidation or into which the Company is merged or the
person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an
entirety (i) shall be a corporation organized and validly
existing under the laws of the United States or any State
thereof or the District of Columbia, and (ii) shall expressly
assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee,
all of the obligations of the Company under the Securities and
this Indenture;
(ii) immediately after giving effect to such transaction, no
Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this
Article 5 and that all conditions precedent herein provided
for relating to such transaction have been satisfied.
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.
28
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental
indenture pursuant to Section 10.12, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 9.06, 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.
Article 6
DEFAULTS AND REMEDIES
Section 6.01 . Events of Default. Subject to the provisions set forth
below in this Section 6.01, an "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of interest, if any
(including contingent interest, if any), and Liquidated
Damages, if any, payable on any Security when the same becomes
due and payable and such Default continues for a period of 30
days after receipt by the Company of a Notice of Default;
(b) the Company defaults in the payment of the Principal Amount,
Redemption Price, Purchase Price or Change in Control Purchase
Price on any Security when the same becomes due and payable at
its Stated Maturity, upon redemption, upon declaration, when
due for purchase by the Company or otherwise;
(c) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in
clauses (1) and (2) above) and such failure continues for 60
days after receipt by the Company of a Notice of Default from
the Trustee or from Holders of not less than 25% in aggregate
principal amount then outstanding;
(d) the Company fails to pay when due the principal of
indebtedness for money borrowed by the Company or its
Subsidiaries in excess of $20,000,000, or the acceleration of
that indebtedness that is not withdrawn within 15 days after
the date of written notice to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in
principal amount of the outstanding Securities;
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing
a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or for any
substantial part of its property or
29
ordering the winding up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(f) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent
to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or
similar official) of the Company or for any substantial part
of its property or make any general assignment for the benefit
of creditors.
A Default under clause (a) or (b) 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 (c)
or (d) above, as applicable, after actual receipt of such notice. Any such
notice must specify the Default, demand that it be remedied and state that such
notice is a "NOTICE OF DEFAULT."
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice or the lapse of time, or both, would become an Event of
Default under clause (c) or (d) above, its status and what action the Company is
taking or proposes to take with respect thereto.
Section 6.02 . Defaults and Remedies. If an Event of Default (other
than an Event of Default specified in Section 6.01(e) or 6.01(f)) 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 of all
the Securities plus accrued and unpaid interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, thereon, through the date of
declaration to be immediately due and payable. Upon such a declaration, such
Principal Amount plus accrued and unpaid interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, shall become and be
immediately due and payable. If an Event of Default specified in Section
6.01(e)or 6.01(f) occurs and is continuing, the Principal Amount of all the
Securities plus accrued and unpaid interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, thereon, shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholder.
The Holders of a majority in principal amount of the Securities then
outstanding by notice to the Trustee may rescind an acceleration and its
consequences if (a) all Existing Events of Default, other than the nonpayment of
the principal of and accrued and unpaid interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, on the Securities which has
become due solely by such declaration of acceleration, have been cured or
waived; (b) the Company has paid or deposited with the Trustee a sum sufficient
to pay (i) all overdue interest (including contingent interest, if any) and
Liquidated Damages, if any, on the Securities, (ii) the principal of any
Security which has become due otherwise then by such declaration of
acceleration, and (iii) to the extent the payment of such interest is lawful,
interest on overdue
30
installments of interest and Liquidated Damages, if any, and overdue principal,
which has become due otherwise than by such declaration of acceleration; (c) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (d) all payments due to the Trustee and any
predecessor Trustee under Section 7.07 have been made. No such rescission shall
affect any subsequent Default or impair any right consequent thereon.
Section 6.03 . Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Principal Amount of all the Securities plus all accrued and unpaid
interest (including contingent interest, if any) and Liquidated Damages, if any,
thereon 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 to the extent permitted by law.
Section 6.04 . Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
in writing to the Trustee (and without notice to any other Securityholder), may
waive an existing Default and its consequences, except (a) an Event of Default
described in Section 6.01(a)or 6.01(b), (b) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected or (c) a Default which constitutes a failure to convert
any Security in accordance with the terms of Article 10. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right. This Section 6.04 shall be in lieu
of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
Section 6.05 . Control by Majority. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee is offered indemnity satisfactory to
it. This Section 6.05 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 6.06 . 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;
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(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 6.07 . Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of interest installments (including contingent interest, if any),
Liquidated Damages, if any, the Principal Amount, Redemption Price, Purchase
Price, Change in Control Purchase Price or interest, if any, due on overdue
amounts in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, and to convert the Securities
in accordance with Article 10, or to bring suit for the enforcement of any such
payment on or after such respective dates or the right to convert, shall not be
impaired or affected adversely without the consent of such Holder.
Section 6.08 . Collection Suit by Trustee. If an Event of Default
described in Section 6.01(a) or 6.01(b)occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.07.
Section 6.09 . 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 interest installments (including contingent
interest, if any), Liquidated Damages, if any, the Principal Amount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if any, due
on overdue amounts 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 any accrued and unpaid interest
installments (including contingent interest, if any),
Liquidated Damages, if any, the whole amount of the Principal
Amount, Redemption Price, Purchase Price, Change in Control
Purchase Price or interest, if any, due on overdue amounts in
respect of the Securities, 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
32
the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel or any other
amounts due the Trustee under Section 7.07) 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 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10 . Priorities. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for any accrued and unpaid interest installments
(including contingent interest, if any), the Principal Amount,
Redemption Price, Purchase Price, Change in Control Purchase
Price or interest, if any, due on overdue amounts in respect
of the Securities, 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.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 6.11 . Priorities. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate Principal Amount of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of
Section 315(e) of the
33
TIA and such Section 315(e) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 6.12 . Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any 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 any interest installment
(including contingent interest, if any), Liquidated Damages, if any, the
Principal Amount, Redemption Price, Purchase Price, Change in Control Purchase
Price or interest, if any, due on overdue amounts in respect of the securities,
as contemplated herein, or which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
Article 7
TRUSTEE
Section 7.01 . Duties of Trustee. If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(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 case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture, but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein.
This Section 7.01(b) shall be in lieu of Section 3.15(a) of the TIA and
such Section 315(a) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.01;
34
(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 6.05.
Section 7.01(c)(i), (ii) and (iii) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315 (d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315 (d) (3) are hereby expressly excluded from this Indenture, as permitted by
the TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Section 7.01(a), (b), (c) and (e).
(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.
Section 7.02 . Rights of Trustee. Subject to its duties and
responsibilities 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 reasonably
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
obtain and, in the absence of bad faith or negligence
on its part, conclusively rely upon an Officers'
Certificate and/or an Opinion of Counsel;
(c) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either
directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be
responsible for any misconduct or negligence on the
part of any agent, attorney, custodian or nominee
appointed with due care by it hereunder;
35
(d) The Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith which it
reasonably 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 such counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion of such 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 Order and any
resolution of the Board of Directors be sufficiently evidenced
by a Board Resolution;
(h) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, during normal
business hours, 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 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'
36
Certificate, including any person specified as so authorized
in any such certificate previously delivered and not
superseded.
(l) Neither the Trustee nor any of its officers, directors,
employees or agents shall be liable for any action taken or
omitted under this Indenture or in connection therewith except
to the extent caused by the Trustee's gross negligence, bad
faith or willful misconduct, as determined by the final
judgment of a court of competent jurisdiction, no longer
subject to appeal or review. Anything in this Indenture to the
contrary notwithstanding, in no event shall the Trustee be
liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but no limited to lost
profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form
of action.
Section 7.03 . Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
Section 7.04 . 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, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.
Section 7.05 . Notice of Defaults. If a Default occurs and if it is known
to the Trustee, the Trustee shall give to each Securityholder notice of all
current Defaults known to it within 90 days after any such Default 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 Sections 6.01(a) and 6.01(b), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The second sentence of this Section 7.05 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 7.06 . Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 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
37
agrees to notify the Trustee promptly whenever the securities become listed on
any Securities exchange and of any delisting thereof.
Section 7.07 . Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as the Company and
the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation
shall not be limited (to the extent permitted by law) by
any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of
this Indenture or any documents executed in connection
herewith (including the reasonable compensation and the
expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance
as may be attributable to its negligence, bad faith or
willful misconduct; and
(c) to indemnify the Trustee or any predecessor Trustee and
their agents, officers, directors and employees for, and to
hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorneys' fees and
expenses and taxes (other than taxes based upon, measured
by or determined by the income of the Trustee)) incurred
without negligence, misconduct or bad faith on its part,
arising out of or in connection with the acceptance or
administration of this trust, including the costs and
expenses of defending itself against any claim (whether
asserted by the Company or any Holder or any other Person)
or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, 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 interest
installments (including contingent interest, if any), Liquidated Damages, if
any, the Principal Amount, Redemption Price, Purchase Price, Change in Control
Purchase Price or interest, if any, due on overdue amounts, as the case may be,
in respect of any particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture or the earlier termination or
resignation of the Trustee. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(e) or Section 6.01(f), the
expenses, including the reasonable charges and expenses of its counsel, are
intended to constitute expenses of administration under any bankruptcy law.
Section 7.08 . 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 7.08. The Holders of a majority in
38
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 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the Trustee or
its property; or
(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 7.07.
If a successor Trustee does not take office within 30 days after the
retiring Trustee gives its notice of resignation or is removed, the retiring
Trustee, the Company or the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Section 7.09 . 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 (including the administration of the trust
created by this Indenture) to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
Section 7.10 . Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1). The Trustee (or its
parent holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the SEC the application referred to in the penultimate paragraph of TIA Section
310(b). The Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
39
Section 7.11 . Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Article 8
DISCHARGE OF INDENTURE
Section 8.01 . Discharge of Liability on Securities. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
cash sufficient to pay all amounts due and owing on all outstanding Securities
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 7.07, 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 at the cost
and expense of the Company and accompanied by an Officers' Certificate and
Opinion of Counsel.
Section 8.02 . Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any money 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, as applicable, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person and the Trustee and the Paying Agent shall have no
further liability to the Securityholders with respect to such money or
securities for that period commencing after the return thereof.
Article 9
AMENDMENTS
Section 9.01 . Without Consent of Holders. The Company and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Securityholder:
(a) to comply with Article 5 or Section 10.12;
(b) to cure any ambiguity, omission, defect or inconsistency, or
to make any other change that does not adversely affect the
rights of any Securityholder;
(c) to make provisions with respect to the conversion right of the
Holders pursuant to the requirements of Section 10.12 and
Section 10.01;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the
Securities; or
40
(e) to comply with the provisions of the TIA, or with any
requirement of the SEC arising as a result of the
qualification of this Indenture under the TIA.
Section 9.02 . With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities without notice to any Securityholder but with the written consent of
the Holders of a majority in aggregate principal amount of the Securities then
outstanding. The Holders of a majority in aggregate principal amount of the
Securities then outstanding may waive compliance by the Company with restrictive
provisions of this Indenture other than as set forth in this Section 9.02 below,
and waive any past Default under this Indenture and its consequences, except a
Default in the payment of the principal of or interest on any Security or in
respect of a provision which under this Indenture cannot be modified or amended
without the consent of the Holder of each outstanding Security affected.
Subject to Section 9.04, without the written consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, may not:
(a) change the Stated Maturity of the principal of, or any payment
date of any installment of interest (including contingent
interest, if any) or Liquidated Damages, if any, on, any
Security;
(b) reduce the principal amount of, or the rate of interest
(including contingent interest, if any) or Liquidated Damages,
if any, on, any Security, whether upon acceleration,
redemption or otherwise, or alter the manner of calculation of
interest or Liquidated Damages, if any, or the rate of accrual
thereof on any Security;
(c) change the currency for payment of principal of, or interest
(including contingent interest, if any) or Liquidated Damages,
if any, on any Security;
(d) impair the right to institute suit for the enforcement of any
payment of principal of, or interest (including contingent
interest, if any) or Liquidated Damages, if any, on, any
Security when due;
(e) adversely affect the conversion rights provided in Article 10;
(f) modify the provisions of this Indenture requiring the Company
to make an offer to repurchase Securities upon a Change in
Control or to repurchase the Securities at the option of the
Holders pursuant to Section 3.08 in any case in a manner
adverse to the Holders of the Securities;
(g) reduce the percentage of principal amount of the outstanding
Securities necessary to modify or amend this Indenture or to
consent to any waiver provided for in this Indenture;
41
(h) waive a Default in the payment of the principal amount of, or
interest (including contingent interest, if any) or Liquidated
Damages, if any, on, any Security (except as provided in
Section 6.02); or
(i) make any changes in Section 6.04, Section 6.07 or this
paragraph.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment. Failure to
mail the notice or a defect in the notice shall not effect the validity of the
amendment.
Section 9.03 . Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.04 . Revocation and Effect of Consents. Until an amendment,
waiver or other action by Holders becomes effective, a consent thereto by a
Holder of a Security hereunder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same obligation as the consenting Holder's Security, even if notation of the
consent, waiver or action is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent, waiver or action as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment, waiver or action becomes effective.
After an amendment, waiver or action becomes effective, it shall bind every
Securityholder.
Section 9.05 . Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 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
of the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 9.06 . Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign such supplemental indenture. In signing such supplemental indenture
the Trustee shall receive, and (subject to the provisions of Section 7.01) 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 9.07 . Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article 9, 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.
42
Article 10
CONVERSIONS
Section 10.01 . Conversion Privilege. Subject to the provisions of this Article
10, a Holder of a Security may convert such Security into Class A Common Stock
(the shares of Class A Common Stock issuable upon such conversion, the
"CONVERSION SHARES"), at the Conversion Price then in effect, together with
those rights, warrants or options specified in Section 10.06(f) hereof, to the
extent applicable, if any of the following conditions is satisfied:
(a) during any calendar quarter (the "QUARTER") commencing after
June 30, 2002, if the Closing Price (as defined hereinafter)
per share of Class A Common Stock for at least 20 Trading Days
in the period of 30 consecutive Trading Days ending on the
last Trading Day of the Quarter preceding the Quarter in which
the conversion of such Security occurs is more than 110% of
the Conversion Price on such thirtieth Trading Day;
(b) the Security has been called for redemption by the Company
pursuant to Section 3.01;
(c) the conversion of such Security occurs during the five Trading
Day period immediately following a period of nine consecutive
Trading Days in which the Security Trading Price (as
determined following a request by a Holder of the Securities
in accordance with the procedures set forth below in this
Section 10.01) for each Trading Day in such period was less
than 95% of the product of the Closing Price per share of
Class A Common Stock on such Trading Day multiplied by the
number of shares of Class A Common Stock issuable (assuming
satisfaction of conditions to conversion) upon conversion of
$1,000 in principal amount of the Securities (the condition
specified in this clause (e) being the "95% TRADING
CONDITION");
(d) (i) an issuance of rights, warrants or options referred to in
Section 10.06(b) occurs or (ii) a distribution referred to in
Section 10.06(c) occurs where the fair market value of such
distribution per share of Class A Common Stock (as determined
by the Board of Directors of the Company, which determination
shall be conclusive evidence of such fair market value)
exceeds 10% of the Closing Price per share of Class A Common
Stock on the Trading Day immediately preceding the date of
declaration of such distribution; or
(e) (x) the Company is party to a consolidation, merger, share
exchange, sale of all or substantially all of its assets or
other similar transaction pursuant to which the Class A Common
Stock is subject to conversion into shares of stock, other
securities or property (including cash) pursuant to Section
10.12 and (y) the conversion of such Security occurs at any
time from and after the date that is 15 days prior to the date
of the anticipated effective time of such transaction until
and including the date that is 15 days after the actual
effective date of such transaction.
43
In the case of the foregoing clauses (d)(i) and (ii), the Company must
notify the Holders at least 20 days prior to the ex-dividend date for such
issuance or distribution. Once the Company has given such notice, Holders may
surrender their Securities for conversion at any time thereafter until the
earlier of the close of business on the Business Day prior to the ex-dividend
date or the Company's announcement that such issuance or distribution will not
take place. This provision shall not apply if the Holder of a Security otherwise
participates in the distribution without conversion.
The "EX-DIVIDEND DATE" for any such issuance or distribution means the
date immediately prior to the commencement of "ex-dividend" trading for such
issuance or distribution on The New York Stock Exchange or such other national
securities exchange or The Nasdaq Stock Market or similar system of automated
dissemination of quotations of securities prices on which the Class A Common
Stock is then listed or quoted.
The number of shares of Class A Common Stock issuable upon conversion of a
Security shall be determined by dividing the principal amount of the Security or
portion thereof surrendered for conversion by the Conversion Price in effect on
the Conversion Date. The initial Conversion Price is set forth in paragraph 8 of
the Securities and is subject to adjustment as provided in this Article 10.
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of a Security.
If a Security is called for redemption pursuant to Article 3, the right to
convert such Security shall terminate at the close of business on the second
Business Day before the redemption date for such Security (unless the Company
shall default in making the redemption payment then due, in which case the
conversion right shall terminate on the date such Default is cured and such
Security is redeemed). A Security in respect of which a Holder has delivered a
Purchase Notice pursuant to Section 3.08 or a Change in Control Purchase Notice
pursuant to Section 3.09 exercising the option of such Holder to require the
Company to repurchase such Security may be converted only if such Purchase
Notice or Change in Control Purchase Notice, as the case may be, is withdrawn by
a written notice of withdrawal delivered to the Paying Agent prior to the close
of business on the Business Day prior to the Purchase Date or prior to the close
of business on the Change in Control Purchase Date, as the case may be, in
accordance with Section 3.10.
A Holder of Securities is not entitled to any rights of a holder of Class
A Common Stock until such Holder has converted its Securities into Class A
Common Stock and, upon such conversion, only to the extent such Securities are
deemed to have been converted into Class A Common Stock pursuant to this Article
10.
The "SECURITY TRADING PRICE" per $1,000 in principal amount of Securities
on any date of determination means the average of the secondary market bid
quotations per $1,000 in principal amount of Securities obtained by the
Conversion Agent for $5,000,000 in principal amount of Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company;
44
provided that if at least three such bids cannot reasonably be obtained by the
Conversion Agent, but two such bids are obtained, then the average of the two
bids shall be used, and if only one such bid can reasonably be obtained by the
Conversion Agent, such one bid shall be used. If the Conversion Agent cannot
reasonably obtain at least one bid for $5,000,000 in principal amount of
Securities from a nationally recognized securities dealer or, in the reasonable
judgment of the Company, the bid quotations are not indicative of the secondary
market value of the Securities, then the Security Trading Price will be
determined in good faith by the calculation agent (which shall initially be the
Trustee unless the Trustee shall have appointed a calculation agent, which may
be any investment bank with a national or international reputation with
experience in such matters, including the Initial Purchaser or its successors)
taking into account in such determination such factors as it, in its sole
discretion after consultation with the Company, deems appropriate. Other than in
connection with a determination of whether contingent interest shall be payable,
the Conversion Agent shall have no obligation to determine the Security Trading
Price unless the Company has requested such determination; and the Company shall
have no obligation to make such request unless a Holder of the Securities
provides the Company with reasonable evidence that the Security Trading Price
would be less than 95% of the product of the Closing Price per share of the
Class A Common Stock and the number of shares of Class A Common Stock issuable
upon conversion of $1,000 in principal amount of Securities (assuming
satisfaction of conditions to such conversion); at which time the Company shall
instruct the Conversion Agent to determine the Security Trading Price beginning
on the next Trading Day and on each successive Trading Day until the Security
Trading Price is greater than or equal to 95% of the product of the Closing
Price per share of Class A Common Stock and the number of shares of Class A
Common Stock issuable upon conversion of $1,000 in principal amount of
Securities (assuming satisfaction of conditions to such conversion).
Section 10.02 . Conversion Procedure. To convert a Security, a Holder must
satisfy the requirements in paragraph 8 of the Securities and (i) complete and
manually sign the conversion notice on the back of the Security and deliver such
notice to the Conversion Agent, (ii) surrender the Security to the Conversion
Agent, (iii) furnish appropriate endorsements and transfer documents if required
by the Registrar or the Conversion Agent, (iv) pay any transfer or other tax, if
required by Section 10.04 and (v) if the Security is held in book-entry form,
complete and deliver to the Depositary appropriate instructions pursuant to the
Depositary's book-entry conversion programs. The date on which the Holder
satisfies all of the foregoing requirements is the "Conversion Date". As soon as
practicable after the Conversion Date, the Company shall deliver to the Holder
through the Conversion Agent either (i) a certificate for or (ii) a book-entry
notation of the number of whole shares of Class A Common Stock issuable upon the
conversion and cash in lieu of any fractional shares pursuant to Section 10.05;
provided, however, that in the event of a Principal Value Conversion referred to
below in this Section 10.02, the Company shall deliver to the Holder through the
Conversion Agent such cash and/or Class A Common Stock as shall be specified in
the Principal Value Conversion Notice pertaining to such Principal Value
Conversion.
The person in whose name the certificate is registered shall be deemed to
be a stockholder of record on the Conversion Date; provided, however, that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of Class A Common Stock upon such conversion as the record
holder or holders of such shares of Class A Common Stock on
45
such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of Class A Common Stock as the record
holder or holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; provided, further,
that such conversion shall be at the Conversion Price in effect on the date that
such Security shall have been surrendered for conversion, as if the stock
transfer books of the Company had not been closed. Upon conversion of a
Security, such person shall no longer be a Holder of such Security.
No payment or adjustment will be made for accrued interest, if any
(including contingent interest, if any), or Liquidated Damages, if any, on a
converted Security or for dividends or distributions on shares of Class A Common
Stock issued upon conversion of a Security (provided that the shares of Class A
Common Stock received upon conversion of Securities shall continue to accrue
Liquidated Damages, as applicable, in accordance with the Registration Rights
Agreement and shall be entitled to receive, at the next interest payment date,
any accrued and unpaid Liquidated Damages with respect to the converted
Securities), but if any Holder surrenders a Security for conversion between the
record date for the payment of an installment of interest and the next interest
payment date, then, notwithstanding such conversion, the interest (including
contingent interest, if any) or Liquidated Damages, if any, payable on such
interest payment date shall be paid to the Holder of such Security on such
record date. In such event, such Security, when surrendered for conversion, must
be accompanied by delivery of a check payable to the Conversion Agent in an
amount equal to the interest (including contingent interest, if any) or
Liquidated Damages, if any, payable on such interest payment date on the portion
so converted. If such payment does not accompany such Security, the Security
shall not be converted; provided, however, that no such check shall be required
if such Security has been called for redemption on a redemption date within the
period between and including such record date and such interest payment date, or
if such Security is surrendered for conversion on the interest payment date. If
the Company defaults in the payment of interest (including contingent interest,
if any) or Liquidated Damages, if any, payable on the interest payment date, the
Conversion Agent shall repay such funds to the Holder.
If a Holder converts more than one Security at the same time, the number
of shares of Class A Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security equal in principal amount to the unconverted portion of the Security
surrendered.
If on the date of conversion of a Security pursuant to the 95% Trading
Condition the Closing Price per share of Class A Common Stock is greater than
the Conversion Price, the Company may elect to pay to the Holder of such
Security, in lieu of issuance of Conversion Shares based on the Conversion
Price, cash or Class A Common Stock or a combination of cash and Class A Common
Stock, at the Company's option, with a value equal to the principal amount of
the Security surrendered for conversion as of such Conversion Date (a "PRINCIPAL
VALUE CONVERSION"). The Company shall notify the surrendering Holder of any
Security whose conversion is a Principal Value Conversion and the Trustee (such
notice being a "PRINCIPAL VALUE CONVERSION NOTICE") of such Principal Value
Conversion by the second Trading Day
46
following the Conversion Date for such conversion whether the Company shall pay
to such Holder all or a portion of the principal amount of such Security in
cash, Class A Common Stock or a combination of cash and Class A Common Stock
and, if a combination, the percentages of the principal amount in respect of
which it will pay in cash or Class A Common Stock. The Company may not change
its election with respect to the consideration (or components or percentages of
components thereof) to be paid upon a Principal Value Conversion once the
Company has given its Principal Value Conversion Notice to the Holder
surrendering such Security whose conversion is a Principal Value Conversion. Any
Class A Common Stock to be delivered upon a Principal Value Conversion shall be
valued at the greater of (x) the Conversion Price on the Conversion Date for
such conversion and (y) the Closing Price per share of Class A Common Stock on
the third Trading Day after such Conversion Date. The Company shall pay any
portion of the principal amount to be paid in cash in a Principal Value
Conversion on the third Trading Day after the Conversion Date for such
conversion. With respect to any portion of the principal amount to be paid in
Class A Common Stock in a Principal Value Conversion, the Company shall deliver
the Class A Common Stock to the Holder of the Security surrendered for
conversion in such Principal Value Conversion on the fourth Trading Day
following the Conversion Date for such conversion.
Section 10.03 . Adjustments Below Par Value. Before taking any action
which would cause an adjustment decreasing the Conversion Price so that the
shares of Class A Common Stock issuable upon conversion of the Securities would
be issued for less than the par value of such Class A Common Stock, the Company
will take all corporate action which may be necessary in order that the Company
may validly and legally issue fully paid and nonassessable shares of such Class
A Common Stock at such adjusted Conversion Price.
Section 10.04 . Taxes on Conversion. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Class A Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Class A Common Stock
being issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any tax withholding required by law or regulations.
Section 10.05 . Company to Provide Stock.
The Company shall, prior to issuance of any Securities hereunder, and from
time to time as may be necessary, reserve, out of its authorized but unissued
Class A Common Stock a sufficient number of shares of Class A Common Stock to
permit the conversion of all outstanding Securities for shares of Class A Common
Stock. The shares of Class A Common Stock or other securities issued upon
conversion of Securities bearing a Legend as provided in Section 2.06(f) shall
bear a legend substantially in the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS
47
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
No fractional shares of Class A Common Stock shall be issued upon
conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of Class A Common
Stock would be issuable upon the conversion of any Security or Securities, the
Company shall make an adjustment thereof in cash at the current market value
thereof. For these purposes, the current market value of a share of Class A
Common Stock shall be the Closing Price per share of Class A Common Stock on the
first Business Day immediately preceding the day on which the Securities (or
specified portions thereof) are deemed to have been converted.
The Company covenants that all shares of Class A Common Stock delivered
upon conversion of the Securities shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and non-assessable
and shall be free from preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Class A Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Class A Common Stock on each national securities exchange
or in the over-the-counter market or such other market on which the Class A
Common Stock is then listed or quoted.
Section 10.06 . Adjustment of Conversion Price. The conversion price (the
"Conversion Price") shall be that price set forth in paragraph 8 of the form of
Security attached hereto as Exhibit A and shall be adjusted from time to time by
the Company as follows:
48
(a) In case the Company shall (i) pay a dividend or other distribution
in shares of Class A Common Stock or other Capital Stock to all
holders of Common Stock, (ii) subdivide its outstanding Common
Stock into a greater number of shares, (iii) combine its
outstanding Common Stock into a smaller number of shares or (iv)
reclassify its outstanding Common Stock, the Conversion Price in
effect immediately prior thereto shall be adjusted so that the
Holder of any Security thereafter surrendered for conversion shall
be entitled to receive the number of shares of Capital Stock which
it would have owned or have been entitled to receive had such
Security been converted immediately prior to the happening of such
event. An adjustment made pursuant to this subsection (a) shall
become effective immediately after the record date in the case of
a dividend or distribution and shall become effective immediately
after the effective date in the case of subdivision, combination
or reclassification.
(b) In case the Company shall issue to all holders of its Class A
Common Stock, rights, warrants or options entitling such holders
(for a period commencing no earlier than the record date described
below and expiring not more than 60 days after such record date)
to subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share less than the
current market price per share of Common Stock (as determined in
accordance with subsection (e) below) at the record date for the
determination of stockholders entitled to receive such rights,
warrants or options, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the Conversion Price shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of shares which
the aggregate subscription or purchase price for the total number
of shares of Common Stock offered by the rights, warrants or
options so issued (or the aggregate conversion price of the
convertible securities offered by such rights, warrants or
options) would purchase at such current market price, and the
denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional
shares of Common Stock offered by such rights, warrants or options
(or into which the convertible securities so offered by such
rights, warrants or options are convertible). Such adjustment
shall be made successively whenever any such rights, warrants or
options are issued, and shall become effective immediately after
such record date. If at the end of the period during which such
rights, warrants or options are exercisable not all rights,
warrants or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would
have been upon application of the foregoing adjustment
substituting the number of additional shares of Common Stock
actually issued (or the number of shares of Common Stock issuable
upon conversion of convertible securities actually issued) for the
total number of shares of Common Stock offered (or the convertible
securities offered).
49
(c) In case the Company shall distribute to all holders of its Class A
Common Stock any shares of Capital Stock of the Company (other
than Common Stock) or evidences of its indebtedness, cash, other
securities or other assets, or shall distribute to all holders of
its Class A Common Stock, rights, warrants or options to subscribe
for or purchase any of its securities (excluding (i) rights,
options and warrants referred to in Section 10.06(b) above; (ii)
those dividends, distributions, subdivisions and combinations
referred to in Section 10.06(a) above; and (iii) dividends and
distributions paid in cash in an aggregate amount that, combined
together with (A) all other such cash distributions made within
the preceding 12 months in respect of which no adjustment has been
made under this 0 and (B) the fair market value of consideration
payable in respect of any repurchases (including by way of tender
offers) by the Company or any of its Subsidiaries or Affiliates,
of Common Stock concluded within the preceding 12 months, in each
case in respect of which no adjustment has been made under this
Section 10.06, does not exceed 5% of Market Capitalization as of
the record date for such distribution), then in each such case the
Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction,
the numerator of which shall be the current market price per share
(as defined in Section 10.06(e) below) of the Common Stock on the
record date mentioned below less the fair market value on such
record date (as determined by the Board of Directors of the
Company, whose determination shall be conclusive evidence of such
fair market value) of the portion of the Capital Stock or
evidences of indebtedness, securities or assets so distributed or
of such rights, warrants or options, in each case as applicable,
to one share of Common Stock, and the denominator of which shall
be the current market price per share (as defined in Section
10.06(e) below) of the Common Stock on such record date. Such
adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive
such distribution.
(d) In case the Company or any of its Subsidiaries shall repurchase
(including by way of tender offer, but excluding shares purchased
in connection with the initial offering of the Securities) shares
of Common Stock, and the fair market value of the sum of (i) the
aggregate consideration paid for such Common Stock, (ii) the
aggregate fair market value of cash dividends and distributions of
the type described in clause (iii) of the preceding paragraph (c)
paid within the twelve (12) months preceding the date of purchase
of such shares of Common Stock in respect of which no adjustment
pursuant to this Section 10.06 previously has been made, and (iii)
the aggregate fair market value of any amounts previously paid for
the repurchase of Common Stock of a type described in this
paragraph (d) within the twelve (12) months preceding the date of
purchase of such shares of Common Stock in respect of which no
adjustment pursuant to this Section 10.06 previously has been
made, exceeds 5% of Market Capitalization on the date of, and
after giving effect to, such repurchase, then the Conversion Price
shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect
50
immediately prior to the date of such purchase by a fraction, the
numerator of which shall be the current market price per share (as
defined in Section 10.06(e) below) of the Class A Common Stock on
the date of such repurchase, less the quotient obtained by
dividing the Aggregate Market Premium involved in such repurchase
(as defined hereinafter) by the difference between the number of
shares of Common Stock outstanding before such repurchase and the
number of shares of Common Stock the subject of such repurchase,
and the denominator of which shall be the current market price per
share (as defined in Section 10.06(e) below) of the Common Stock
on the date of such repurchase. Such adjustment shall become
effective immediately after the date of such repurchase. For
purposes of this subsection (d), the "AGGREGATE MARKET PREMIUM" is
the excess, if any, of the aggregate repurchase price paid for all
such Common Stock over the aggregate current market value per
share (as defined in subsection (e) below) of all such repurchased
stock, determined with respect to each share involved in each such
repurchase as of the date of repurchase with respect to such
share.
(e) In case someone other than the Company or one of its subsidiaries
makes a payment in respect of a tender offer or exchange offer for
shares of Class A Common Stock in which, as of the closing date of
the offer, the Company's board of directors is not recommending
rejection of the offer, the Conversion Price will be adjusted as
provided in subsection (d) above. The adjustment referred to in
this clause will only be made if:
(i) the tender offer or exchange offer is for an amount that
increases the offeror's ownership of common stock to more than
25% of the total shares of the Company's Common Stock
outstanding; and
(ii)cash and value of any other consideration included in the
payment per share of Common Stock exceeds the current market
price per share of Common Stock on the Business Day next
succeeding the last date on which tenders or exchanges may be
made pursuant to the tender or exchange offer.
However, the adjustment referred to in this subsection (e) will
not be made if as of the closing of the offer, the offering documents
disclose a plan or an intention to cause the Company to engage in a
consolidation or merger of the Company or a sale of all or
substantially all of the Company's assets.
For the purpose of any computation under Section 10.06(b), (c)
and (d) above and this Section 10.06(e) above, the current market
price per share of Common Stock on any date shall be deemed to be the
average of the Closing Prices per share of Class A Common Stock for 20
consecutive Trading Days commencing 30 Trading Days before the record
date with respect to any distribution, issuance or other event
requiring such computation. The "CLOSING PRICE" with respect to the
Class A Common Stock for any day shall mean the closing sale price,
regular way, per share of Class A Common Stock on such day or, in case
no such sale of Class A
51
Common Stock takes place on such day, the average of the reported
closing bid and asked prices, regular way, per share of Class A
Common Stock in each case on the New York Stock Exchange, the
Nasdaq Stock Market or principal national security exchange or
other quotation system on which the Class A Common Stock is
quoted or listed or admitted to trading on such day, or, if the
Class A Common Stock is not so quoted or listed or admitted to
trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices per share of
Class A Common Stock on the over-the-counter market on the day in
question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service,
or, if such average is not so available, determined in such
manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that
purpose, or if not so determinable as provided under any
applicable alternative above, a price per share of Class A Common
Stock determined in good faith by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized
committee thereof, whose determination shall be conclusive.
"MARKET CAPITALIZATION" means, as of any date of calculation, the
Closing Price of the Class A Common Stock on the Trading Day
immediately prior to such date of calculation multiplied by the
aggregate number of shares of Class A Common Stock and Class B
Common Stock outstanding on the Trading Day immediately prior to
such date of calculation.
(f) If the rights provided for in the Company's rights agreement dated
as of August 17, 1995, as amended, (the "STOCKHOLDER RIGHTS PLAN")
have separated from the Company's Class A Common Stock in
accordance with the provisions of the Stockholder Rights Plan so
that the Holders of the Securities would not be entitled to
receive any rights in respect of Class A Common Stock issuable
upon conversion of the Securities, the Conversion Price will be
adjusted as provided in paragraph (c) above, subject to
readjustment in the event of the expiration, termination or
redemption of the rights. In lieu of any such adjustment, the
Company may amend its Stockholder Rights Plan to provide that upon
conversion of the Securities the Holders will receive, in addition
to Class A Common Stock issuable upon such conversion, the rights
which would have attached to such shares of Class A Common Stock
if the rights had not become separated from the Class A Common
Stock under the Company's Stockholder Rights Plan. To the extent
that the Company adopts any future rights plan, upon conversion of
the Securities into Class A Common Stock, Securityholders will
receive, in addition to Class A Common Stock, the rights under the
future rights plan whether or not the rights have separated from
the Class A Common Stock at the time of conversion and no
adjustment to the Conversion Price will be made in accordance with
paragraph (c).
In any case in which this Section 10.06 shall require that an adjustment
be made immediately following a record date established for purposes of Section
10.06, the Company may elect to defer (but only until five Business Days
following the filing by the Company with the Trustee of the certificate
described in Section 10.06 issuing to the holder of any Security converted after
such record date the shares of Class A Common Stock and other Capital Stock of
the Company issuable upon such conversion over and above the shares of Class A
Common
52
Stock and other Capital Stock of the Company issuable upon such conversion only
on the basis of the Conversion Price prior to adjustment; and, in lieu of the
shares the issuance of which is so deferred, the Company shall issue or cause
its transfer agents to issue due bills or other appropriate evidence of the
right to receive such shares.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares of two or more classes of Capital Stock of the
Company, the Conversion Price shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article 10 with respect to the Class A Common Stock, on
terms comparable to those applicable to Class A Common Stock in this Article 10.
Section 10.07 . No Adjustment. No adjustment in the Conversion Price shall
be required unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Price as last adjusted; provided, however, that any
adjustments which by reason of this Section 10.07 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Article 10 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section 10.06
if Holders are to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Class A Common Stock participate in the
transaction. Such participation by Holders may include participation upon
conversion; provided that an adjustment shall be made at such time as the
Holders are no longer entitled to participate.
No adjustment need be made for rights to purchase Class A Common Stock or
issuances of Class A Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or a change to no
par value of the Class A Common Stock.
To the extent that the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
Section 10.08 . Equivalent Adjustments. In the event that, as a result of
an adjustment made pursuant to Section 10.06 above, the holder of any Security
thereafter surrendered for conversion shall become entitled to receive any
shares of Capital Stock of the Company other than shares of its Class A Common
Stock, thereafter the Conversion Price of such other shares so receivable upon
conversion of any Securities 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 Class A Common Stock contained in this Article 10.
Section 10.09 . Adjustment for Tax Purposes. The Company shall be entitled
to make such reductions in the Conversion Price, in addition to those required
by Section 10.06, as it in its discretion shall determine to be advisable in
order that any stock dividends, subdivision of shares, distribution of rights to
purchase stock or securities, or a distribution or securities
53
convertible into or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
Section 10.10 . Notice of Adjustment. Whenever the Conversion Price is
adjusted, or Securityholders become entitled to other securities or due bills,
the Company shall promptly mail to Securityholders a notice of the adjustment
and file with the Trustee an Officers' Certificate briefly stating the facts
requiring the adjustment and the manner of computing it. The certificate shall
be conclusive evidence of the correctness of such adjustment and the Trustee may
conclusively assume that, unless and until such certificate is received by it,
no such adjustment is required.
Section 10.11. Notice of Certain Transactions. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Class A Common Stock (other than in cash out of retained
earnings); or
(b) the Company shall authorize the granting to the holders of its
Class A Common Stock of rights, warrants or options to subscribe
for or purchase any share of any class or any other rights,
warrants or options; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock,
or a change in par value, or from par value to no par value, or
from no par value to par value, or a conversion or
reclassification of its Class B Common Stock solely into Class A
Common Stock), or of any consolidation, merger, or share exchange
to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the Company;
or
(d) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall cause to be filed with the Trustee and the Conversion Agent
and to be mailed to each Holder of Securities at its address appearing on the
list provided for in Section 2.05, as promptly as possible but in any event at
least ten days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights, warrants or options, or, if a record is not to
be taken, the date as of which the holders of Class A Common Stock of record to
be entitled to such dividend, distribution or rights are to be determined, or
(y) the date on which such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective or occur, and the date as of which it is expected that holders
of Class A Common Stock of record shall be entitled to exchange their Class A
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, share exchange,
transfer, dissolution, liquidation or winding-up.
54
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale on Conversion Privilege.
If any of the following shall occur, namely: (i) any reclassification or
change of outstanding shares of 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, or a conversion or reclassification of
its Class B Common Stock solely into Class A Common Stock); (ii) any
consolidation, combination, merger or share exchange to which the Company is a
party other than a merger in which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a change
in name, or 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, or a conversion or
reclassification of its Class B Common Stock solely into Class A Common Stock)
in, outstanding shares of Class A Common Stock; or (iii) any sale or conveyance
of all or substantially all of the assets of the Company, then the Company, or
such successor or purchasing corporation, as the case may be, shall, as a
condition precedent to such reclassification, change, consolidation, merger,
share exchange, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
outstanding shall have the right to convert such Security into the kind and
amount of shares of Capital Stock and other securities and property (including
cash) receivable upon such reclassification, change, consolidation, merger,
share exchange, sale or conveyance by a holder of the number of shares of Class
A Common Stock deliverable upon conversion of such Security immediately prior to
such reclassification, change, consolidation, merger, share exchange, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article 10. If, in
the case of any such consolidation, merger, share exchange, sale or conveyance,
the stock or other securities and property (including cash) receivable thereupon
by a holder of Class A Common Stock includes shares of Capital Stock or other
securities and property of a corporation other than the successor or purchasing
corporation, as the case may be, in such consolidation, merger, share exchange,
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 of the
Company shall reasonably consider necessary by reason of the foregoing. The
provision of this Section 10.12 shall similarly apply to successive
consolidations, mergers, share exchanges, sales or conveyances. Notwithstanding
the foregoing, a distribution by the Company to all or substantially all holders
of its Class A Common Stock for which an adjustment to the Conversion Price or
provision for conversion of the Securities may be made pursuant to Section 10.06
shall not be deemed to be a sale or conveyance of all or substantially all of
the assets of the Company for purposes of this Section 10.12.
In the event the Company shall execute a supplemental indenture pursuant
to this Section 10.12, the Company shall promptly file with the Trustee an
Opinion of Counsel stating that such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate briefly stating the
reasons therefor, the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders of the Securities upon the
conversion of their Securities after any such reclassification, change,
consolidation, merger, share exchange, sale or conveyance, any adjustment to be
made with respect thereto and that all conditions precedent have been complied
with.
55
Section 10.13. Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under this Article
10 should be made, how it should be made or what such adjustment should be made,
but may accept as conclusive evidence of the correctness of any such adjustment,
and shall be protected in relying upon, the Officers' Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 10.10. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article 10. Each
Conversion Agent (other than the Company or an Affiliate of the Company) shall
have the same protection under this Section 10.13 as the Trustee.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 10.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 10.12.
Section 10.14. Voluntary Reduction.
The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 Trading Days or such
longer period as may be required by law and if the reduction is irrevocable
during the period; provided that in no event may the Conversion Price be less
than the par value of a share of Class A Common Stock.
Section 10.15. Simultaneous Adjustments.
In the event that this Article 10 requires adjustments to the Conversion
Price under more than one of Sections 10.06(c), (d) and (e), and the record
dates for the distributions giving rise to such adjustments shall occur on the
same date, then such adjustments shall be made by applying, first, the
provisions of Section 10.06(d) or (e), as applicable, and, second, the
provisions of Section 10.06(c). If more than one event requiring adjustment
pursuant to Section 10.06 shall occur before completing the determination of the
Conversion Price for the first event requiring such adjustment, then the Board
of Directors (whose determination shall, if made in good faith, be conclusive)
shall make such adjustments to the Conversion Price (and the calculation
thereof) after giving effect to all such events as shall preserve for
Securityholders the Conversion Price protection provided in Section 10.06.
Article 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
56
Section 11.02. 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 orally) to the following facsimile numbers:
if to the Company, to:
Medicis Pharmaceutical Corporation
8125 North Hayden Road
Scottsdale, Arizona 85258-2463
Attention: Chief Financial Officer
Facsimile No.: (602) 808-3888
in either case, with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
Attention Stephen Older, Esq.
Facsimile No.: (212) 872-1002
if to the Trustee, to:
Deutsche Bank Trust Company Americas
c/o DB Services New Jersey, Inc.
100 Plaza One
MS JCY03-0603
Jersey City, New Jersey 07311
Attention: Corporate Trust and Agency Services
Facsimile No.: (201) 593-6443
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be mailed to
the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
57
Section 11.03. Communication by Holders with Other
Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
Section 11.04. 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:
(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.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such mattes be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such eligible and qualified Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable case should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate or opinion of counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating the
information on which counsel is relying unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 11.05. 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;
58
(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.
Section 11.06. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.07. Rules by Trustee, Paying Agent,
Conversion Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 11.08. Legal Holidays.
A "Legal Holiday" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action shall
be taken on the next succeeding day that is not a Legal Holiday, and, if the
action to be taken on such date is a payment in respect of the Securities, no
interest (including contingent interest, if any) or Liquidated Damages, if any,
shall accrue for the intervening period.
Section 11.09. Governing Law.
THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 11.10. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
Section 11.11. Successors.
59
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 11.12. Multiple Originals.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
60
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.
MEDICIS PHARMACEUTICAL
CORPORATION
By: /s/ Mark A. Prygocki, Sr.
-------------------------------------
Name: Mark A. Prygocki, Sr.
Title: Executive Vice President, Chief
Financial Officer and Treasurer
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By: /s/ Wanda Camacho
-------------------------------------
Name: Wanda Camacho
Title: Vice President
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER $1000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS JUNE 4, 2002 AND THE COMPARABLE YIELD IS 9.5% PER
ANNUM. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE
FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO:
MEDICIS PHARMACEUTICAL CORPORATION, 8125 NORTH HAYDEN ROAD, SCOTTSDALE, ARIZONA
85258-2463, ATTN.: EXECUTIVE DIRECTOR OF FINANCE, SUCH INFORMATION TO BE MADE
AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON
REQUEST.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO MEDICIS PHARMACEUTICAL CORPORATION (THE
"COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY, AND THE CLASS A COMMON STOCK
DELIVERABLE UPON CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE
COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
A-1-1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-1-2
MEDICIS PHARMACEUTICAL CORPORATION
2.5% Contingent Convertible Senior Notes Due 2032
No.: CUSIP:
Issue Date: Principal
Amount:
MEDICIS PHARMACEUTICAL CORPORATION, a Delaware corporation, promises to
pay to Cede & Co. or registered assigns, the Principal Amount as set forth on
Schedule I hereto, on June 4, 2032, subject to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place. This Security is
convertible as specified on the other side of this Security.
Interest Payment Dates: June 4 and December 4, commencing
December 4, 2002,
Record Dates: May 19 and November 19, commencing November
19, 2002
Dated: MEDICIS PHARMACEUTICAL
CORPORATION
By:
--------------------------------------
Name:
Title:
A-1-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Deutsche Bank Trust Company Americas, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By:
------------------------------
Authorized Signatory
Dated:
A-1-4
[FORM OF REVERSE SIDE OF NOTE]
MEDICIS PHARMACEUTICAL CORPORATION
2.5% Contingent Convertible Senior Notes Due 2032
1. Interest.
This Security shall accrue interest at an initial rate of 2.5% per annum.
The Company promises to pay interest on the Securities in cash semiannually on
each June 4 and December 4, commencing December 4, 2002, to Holders of record on
the immediately preceding May 19 and November 19, respectively. Interest on the
Securities will accrue from the most recent date to which interest has been
paid, or if no interest has been paid, from June 4, 2002, until the Principal
Amount is paid or duly made available for payment. The Company will pay interest
on any overdue Principal Amount at the interest rate borne by the Securities at
the time such interest on the overdue Principal Amount accrues, compounded
semiannually, and it shall pay interest on overdue installments of interest and
Liquidated Damages, if any (without regard to any applicable grace period), at
the same interest rate compounded semiannually. Interest (including contingent
interest, if any) on the Securities will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Company shall pay contingent interest to the Holders during any
six-month period (a "CONTINGENT INTEREST PERIOD") from June 4 to December 3 and
from December 4 to June 3, commencing June 4, 2007, if the average Security
Trading Price for the five Trading Day period ending on the third Trading Day
immediately preceding the first day of the applicable Contingent Interest Period
equals $1,200 or more. The amount of contingent interest payable per $1,000
principal amount of Notes in respect of any Contingent Interest Period shall
equal 0.5% per annum. The Company will pay contingent interest, if any, in the
same manner as it will pay interest as described above.
2. Method of Payment.
The Company will pay interest (including contingent interest, if any) and
Liquidated Damages, if any, on this Security (except defaulted interest) to the
Person who is the registered Holder of this Security at the close of business on
May 19 or November 19, as the case may be, next preceding the related interest
payment date. Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of the Redemption Price, Purchase Price, Change in
Control Purchase Price and the Principal Amount at Stated Maturity, as the case
may be, to the Holder who surrenders a Security to a Paying Agent to collect
such payments in respect of the Security. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay interest
(including contingent interest, if any), Liquidated Damages, if any, the
Redemption Price, Purchase Price, Change in Control Purchase Price and the
Principal Amount at Stated Maturity, as the case may be, by check or wire
payable in such money; provided, however, that a Holder holding Securities with
an aggregate Principal Amount in excess of $1,000,000 will be paid by wire
transfer in immediately available funds at the election
A-1-5
of such Holder. The Company may mail an interest check to the Holder's
registered address. Notwithstanding the foregoing, so long as this Security is
registered in the name of a Depositary or its nominee, all payments hereon shall
be made by wire transfer of immediately available funds to the account of the
Depositary or its nominee.
3. Paying Agent, Conversion Agent and Registrar.
Initially, Deutsche Bank Trust Company Americas (the "Trustee") will act
as Paying Agent, Conversion Agent and Registrar. The Company may appoint and
change any Paying Agent, Conversion Agent or Registrar without notice, other
than notice to the Trustee; provided that the Company will maintain at least one
Paying Agent in the State of New York, City of New York, Borough of Manhattan,
which shall initially be an office or agency of the Trustee. The Company or any
of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent or Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of June 4,
2002 (the "INDENTURE"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.
The Securities are general unsecured obligations of the Company limited to
up to $400,000,000 aggregate Principal Amount (which shall include the Initial
Purchaser's option to purchase $50,000,000 of additional Securities) (subject to
Section 2.7 of the Indenture). The Indenture does not limit other indebtedness
of the Company, secured or unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are not
redeemable prior to June 11, 2007. Beginning on June 11, 2007 and during the
periods thereafter to maturity, the Securities are redeemable as a whole, or
from time to time in part, in any integral multiple of $1,000, at any time at
the option of the Company at a Redemption Price equal to 100% of the Principal
Amount), together with accrued and unpaid interest (including contingent
interest, if any) and Liquidated Damages, if any, thereon, up to but not
including the Redemption Date; provided that, if the Redemption Date is on or
after an interest record date but on or prior to the related interest payment
date, interest and Liquidated Damages, if any, will be payable to the Holders in
whose names the Securities are registered at the close of business on the
relevant record date.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Securities held by such Holder, in any integral multiple of $1,000, on June
4, 2007, June 4, 2012 and June 4, 2017
A-1-6
(each, a "PURCHASE DATE") at a purchase price per Security equal to 100% of the
aggregate Principal Amount of the Security (the "PURCHASE PRICE"), together with
accrued and unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, thereon, up to but not including the Purchase Date
(provided that, if the Purchase Date is on or after an interest record date but
on or prior to the related interest payment date, accrued and unpaid interest,
if any (including contingent interest, if any), and Liquidated Damages, if any,
will be payable to the Holders in whose names the Securities are registered at
the close of business on the relevant record date) upon delivery of a Purchase
Notice containing the information set forth in the Indenture, together with the
Securities subject thereto, at any time from the opening of business on the date
that is 20 Business Days prior to such Purchase Date until the close of business
on the Business Day prior to such Purchase Date, and upon delivery of the
Securities to the Paying Agent by the Holder as set forth in the Indenture.
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase the Securities held by
such Holder after the occurrence of a Change in Control of the Company for a
Change in Control Purchase Price equal to 100% of the Principal Amount thereof
plus accrued and unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, thereon, up to but not including the Change in
Control Purchase Date which Change in Control Purchase Price shall be paid in
cash. Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay the Purchase Price or Change in Control Purchase
Price, as the case may be, and accrued and unpaid interest (including contingent
interest, if any) and Liquidated Damages, if any, of all Securities or portions
thereof to be purchased as of the Purchase Date or the Change in Control
Purchase Date, as the case may be, is deposited with the Paying Agent on the
Business Day following the Purchase Date or the Change in Control Purchase Date,
interest (including contingent interest, if any) and Liquidated Damages, if any,
cease to accrue on such Securities (or portions thereof) immediately after such
Purchase Date or Change in Control Purchase Date, and the Holder thereof shall
have no other rights as such other than the right to receive the Purchase Price
or Change in Control Purchase Price, as the case may be, upon surrender of such
Security.
7. Notice of Redemption.
Notice of redemption pursuant to paragraph 5 of this Security will be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, immediately after such Redemption Date
interest (including contingent interest, if any) and Liquidated Damages, 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.
A-1-7
8. Conversion.
Subject to the provisions of Article X of the Indenture, a Holder of a
Note may convert such Note into shares of Class A Common Stock of the Company if
any of the conditions specified in paragraphs (a) through (e) of Section 10.01
of the Indenture is satisfied; provided, however, that if such Note is called
for redemption, the conversion right will terminate at the close of business on
the second Business Day before the redemption date of such Note (unless the
Company shall default in making the redemption payment when due, in which case
the conversion right shall terminate at the close of business on the date such
Default is cured and such Note is redeemed). The initial conversion price is
$58.10 per share, subject to adjustment under certain circumstances as described
in the Indenture (the "CONVERSION Price"). The number of shares issuable upon
conversion of a Note is determined by dividing the principal amount converted by
the Conversion Price in effect on the Conversion Date. In the event of a
conversion of a Note in a Principal Value Conversion the Company has the option
to deliver cash and/or Class A Common Stock to the Holder of the Note
surrendered for such conversion as provided in Section 10.2 of the Indenture.
Upon conversion, no adjustment for interest, if any (including contingent
interest, if any), or dividends will be made. No fractional shares will be
issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the current market price (as defined in the Indenture) of the Common Stock
on the last Trading Day prior to the date of conversion.
To convert a Note, a Holder must (a) complete and sign the conversion
notice set forth below and deliver such notice to the Conversion Agent, (b)
surrender the Note to the Conversion Agent, (c) furnish appropriate endorsements
and transfer documents if required by the Registrar or the Conversion Agent, (d)
pay any transfer or similar tax, if required and (e) if the Note is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. If a Holder
surrenders a Note for conversion between the record date for the payment of an
installment of interest and the next interest payment date, the Note must be
accompanied by payment of an amount equal to the interest (including contingent
interest, if any) and Liquidated Damages, if any, payable on such interest
payment date on the principal amount of the Note or portion thereof then
converted; provided, however, that no such payment shall be required if such
Note has been called for redemption on a redemption date within the period
between and including such record date and such interest payment date, or if
such Note is surrendered for conversion on the interest payment date. A Holder
may convert a portion of a Note equal to $1,000 or any integral multiple
thereof.
A Note in respect of which a Holder has delivered a Purchase Notice or a
Change of Control Repurchase Notice exercising the option of such Holder to
require the Company to repurchase such Note as provided in Section 3.08 or
Section 3.09, respectively, of the Indenture may be converted only if such
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture.
9. 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
A-1-8
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not transfer or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities in respect of which a Purchase Notice or a
Change in Control Purchase Notice has been given and not withdrawn (except, in
the case of a Security to be purchased in part, the portion of the Security not
to be purchased) or any Securities for a period of 15 days before the mailing of
a notice of redemption of Securities to be redeemed.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or securities must look to the Company, for payment as general
creditors unless an applicable abandoned property law designates another person.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities so long as such changes, other
than those in clause (ii), do not adversely affect the interest of
Securityholders (i) to cure any ambiguity, omission, defect or inconsistency,
(ii) to comply with Article 5 or Section 10.01(e) or Section 10.12 of the
Indenture, (iii) to evidence and provide for the acceptance of appointment under
the Indenture by a successor Trustee, or (iv) to comply with any requirement of
the SEC in connection with the qualification of the Indenture under the TIA.
13. Defaults and Remedies.
Under the Indenture, Events of Default include, in summary form, (i)
default for 30 days in payment of any interest (including contingent interest,
if any) or Liquidated Damages, if any, on any Securities after receipt by the
Company of a Notice of Default; (ii) default in payment of the Principal Amount,
Redemption Price, Purchase Price or Change in Control Purchase Price, as the
case may be, in respect of the Securities when the same becomes due and payable;
(iii) failure by the Company to comply with other agreements in the Indenture or
the Securities, subject to notice and lapse of time; (iv) default by the Company
in the payment at the final maturity thereof, after the expiration of any
applicable grace period, of principal of indebtedness
A-1-9
for money borrowed, other than nonrecourse indebtedness, in the principal amount
then outstanding in excess of $20,000,000, or acceleration of any indebtedness
in such principal amount so that it becomes due and payable prior to the date on
which it would otherwise have become due and payable and such acceleration is
not rescinded within 15 business days after notice to the Company in accordance
with the Indenture; and (v) certain events of bankruptcy or insolvency.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(i) or (ii) above) if it determines that withholding notice is in their
interests.
14. 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.
15. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are 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. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
A-1-10
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Medicis Pharmaceutical Corporation
8125 North Hayden Road
Scottsdale, Arizona 85258-2463
Attn.: Chief Financial Officer
A-1-11
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the To convert this Security into Class A
form below: Common Stock of the Company, check the
box [ ]
I or we assign and transfer this To convert only part of this Security,
Security to state the Principal Amount to be
converted (which must be $1,000 or an
integral multiple of $1,000):
(Insert assignee's soc. sec. or tax ID
no.) If you want the stock certificate made
out in another person's name fill in
the form below:
(Print or type assignee's name, address
and zip code)
--------------------------------------
--------------------------------------
(Insert the other person's soc. sec.
and irrevocably appoint tax ID no.)
agent to transfer --------------------------------------
- -------------------- --------------------------------------
--------------------------------------
this Security on the books of the --------------------------------------
Company. The agent may substitute
another to act for him. (Print or type other person's name,
address and zip code)
- --------------------------------------------------------------------------------
Date: Your Signature:
-------- --------------------------------------
(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
A-1-12
SCHEDULE I
MEDICIS PHARMACEUTICAL CORPORATION
2.5% Contingent Convertible Senior Notes Due 2032
Date Principal Amount Notation
A-1-13
EXHIBIT A-2
[Form of Certificated Security]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER $1000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS JUNE 4, 2002 AND THE COMPARABLE YIELD IS 9.5% PER
ANNUM. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE
FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO:
MEDICIS PHARMACEUTICAL CORPORATION, 8125 NORTH HAYDEN ROAD, SCOTTSDALE, ARIZONA
85258-2463, ATTN.: EXECUTIVE DIRECTOR OF FINANCE, SUCH INFORMATION TO BE MADE
AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON
REQUEST.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE CLASS A COMMON STOCK
DELIVERABLE UPON CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE
COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-2-1
MEDICIS PHARMACEUTICAL CORPORATION
2.5% Contingent Convertible Senior Notes Due 2032
No.: CUSIP:
Issue Date: Principal Amount:
MEDICIS PHARMACEUTICAL CORPORATION, a Delaware corporation,
promises to pay to
- -----------------------------------------------------------------------
- ----------------------------------------------------------------------------
or registered assigns, the Principal Amount of ,
-------------------------------
on June 4, 2032, subject to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place. This Security is convertible as specified
on the other side of this Security.
Interest Payment Dates: June 4 and December 4, commencing
December 4, 2002,
Record Dates: May 19 and November 19, commencing November
19, 2002
Dated:
MEDICIS PHARMACEUTICAL
CORPORATION
By:
--------------------------------------
Name:
Title:
A-2-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Deutsche Bank Trust Company Americas, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By:
----------------------
Authorized Signatory
Dated:
A-2-3
[FORM OF REVERSE SIDE IS IDENTICAL TO EXHIBIT A-1]
A-2-4
EXHIBIT B
Transfer Certificate
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "SECURITIES
ACT") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $[ ] Principal Amount of the
above-captioned Securities presented or surrendered on the date hereof (the
"SURRENDERED SECURITIES") for registration of transfer, or for exchange or
conversion where the securities deliverable upon such exchange or conversion are
to be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
[_] A transfer of the Surrendered Securities is made to
the Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with Rule 144A
under the U.S. Securities Act of 1933, as amended (the "SECURITIES
ACT"); or
[_] The transfer of the Surrendered Securities is
pursuant to an effective registration statement under
the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the
Securities Act;
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"AFFILIATE").
[_] The transferee is an Affiliate of the Company.
B-1
DATE:
------------------------
Signature(s)
(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
B-2