OHIO CASUALTY CORPORATION
5.00% Convertible Notes
due 2022
---------------------------------------------
INDENTURE
Dated as of March 25, 2005
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HSBC BANK USA, NATIONAL ASSOCIATION
TRUSTEE
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CROSS REFERENCE TABLE*
TIA Section................................................. Indenture Section
310(a)(1)................................................... N.A.
(a)(2)................................................. N.A.
(a)(3)................................................. N.A.
(a)(4)................................................. N.A.
(b).................................................... N.A.
(c).................................................... N.A.
311(a)...................................................... N.A.
(b).................................................... N.A.
(c).................................................... N.A.
312(a)...................................................... 2.05
(b).................................................... 11.03
(c).................................................... 11.03
313(a)...................................................... N.A.
(b)(1)................................................. N.A.
(b)(2)................................................. N.A.
(c).................................................... N.A.
(d).................................................... N.A.
314(a)...................................................... 4.02
(b).................................................... N.A.
(c)(1)................................................. N.A.
(c)(2)................................................. N.A.
(c)(3)................................................. N.A.
(d).................................................... N.A.
(e).................................................... N.A.
(f).................................................... N.A.
315(a)...................................................... N.A.
(b).................................................... N.A.
(c).................................................... N.A.
(d).................................................... N.A.
(e).................................................... 6.11
316(a)...................................................... 6.04, 6.05
(a)(1)(A).............................................. N.A.
(a)(1)(B).............................................. N.A.
(a)(2)................................................. N.A.
(b).................................................... N.A.
317(a)(1)................................................... N.A.
(a)(2)................................................. N.A.
(b).................................................... N.A.
318(a)...................................................... N.A.
N.A. means Not Applicable.
- --------
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture. * Note: This Table of Contents shall not, for any
purpose, be deemed to be part of the Indenture.
TABLE OF CONTENTS*
Page
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions...................................................1
SECTION 1.02 Other Definitions.............................................8
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.............9
SECTION 1.04 Rules of Construction.........................................9
SECTION 1.05 Acts of Holders...............................................9
ARTICLE 2 THE NOTES
SECTION 2.01 Form and Dating..............................................10
SECTION 2.02 Execution and Authentication.................................12
SECTION 2.03 Registrar, Paying Agent and Conversion Agent.................12
SECTION 2.04 Paying Agent to Hold Money and Notes in Trust................13
SECTION 2.05 Noteholder Lists.............................................13
SECTION 2.06 Transfer and Exchange........................................13
SECTION 2.07 Replacement Notes............................................14
SECTION 2.08 Outstanding Notes; Determinations of Holders' Action.........15
SECTION 2.09 Temporary Notes..............................................16
SECTION 2.10 Cancellation.................................................16
SECTION 2.11 Persons Deemed Owners........................................17
SECTION 2.12 Global Notes.................................................17
SECTION 2.13 CUSIP Numbers................................................20
SECTION 2.14 Defaulted Interest...........................................20
ARTICLE 3 REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee..........................20
SECTION 3.02 Selection of Notes to Be Redeemed............................20
SECTION 3.03 Notice of Redemption.........................................21
SECTION 3.04 Effect of Notice of Redemption...............................22
SECTION 3.05 Deposit of Redemption Price..................................22
SECTION 3.06 Notes Redeemed in Part.......................................22
SECTION 3.07 Conversion Arrangement on Call for Redemption................22
SECTION 3.08 Repurchase of Notes at the Option of the Holder..............23
SECTION 3.09 Repurchase of Notes at Option of the Holder upon Change in
Control......................................................25
SECTION 3.10 Effect of Repurchase Notice or Change in Control Repurchase
Notice.......................................................28
SECTION 3.11 Deposit of Repurchase Price or Change in Control Repurchase
Price........................................................29
i
SECTION 3.12 Notes Purchased in Part......................................29
SECTION 3.13 Covenant to Comply with Securities Laws upon Purchase of
Notes........................................................29
SECTION 3.14 Repayment to the Company.....................................30
ARTICLE 4 COVENANTS
SECTION 4.01 Payment of Principal, Premium, Interest on the Notes.........30
SECTION 4.02 SEC and Other Reports........................................30
SECTION 4.03 Compliance Certificate.......................................31
SECTION 4.04 Further Instruments and Acts.................................31
SECTION 4.05 Maintenance of Office or Agency..............................31
ARTICLE 5 SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets....................31
ARTICLE 6 DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default............................................32
SECTION 6.02 Acceleration.................................................34
SECTION 6.03 Other Remedies...............................................35
SECTION 6.04 Waiver of Past Defaults......................................35
SECTION 6.05 Control by Majority..........................................35
SECTION 6.06 Limitation on Suits..........................................36
SECTION 6.07 Rights of Holders to Receive Payment.........................36
SECTION 6.08 Collection Suit by Trustee...................................36
SECTION 6.09 Trustee May File Proofs of Claim.............................37
SECTION 6.10 Priorities...................................................37
SECTION 6.11 Undertaking for Costs........................................38
SECTION 6.12 Waiver of Stay, Extension or Usury Laws......................38
ARTICLE 7 TRUSTEE
SECTION 7.01 Duties and Responsibilities of the Trustee; During Default;
Prior to Default.............................................38
SECTION 7.02 Certain Rights of the Trustee................................40
SECTION 7.03 Trustee Not Responsible for Recitals, Disposition of Notes
or Application of Proceeds Thereof...........................41
SECTION 7.04 Trustee and Agents May Hold Notes; Collections, etc..........41
SECTION 7.05 Moneys Held by Trustee.......................................41
SECTION 7.06 Compensation and Indemnification of Trustee and Its Prior
Claim........................................................41
SECTION 7.07 Right of Trustee to Rely on Officers' Certificate, etc.......42
SECTION 7.08 Conflicting Interests........................................42
SECTION 7.09 Persons Eligible for Appointment as Trustee..................42
SECTION 7.10 Resignation and Removal; Appointment of Successor Trustee....42
SECTION 7.11 Acceptance of Appointment by Successor Trustee...............43
SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business
of Trustee...................................................44
SECTION 7.13 Preferential Collection of Claims Against the Company........45
ii
SECTION 7.14 Reports by the Trustee.......................................45
SECTION 7.15 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances........................................45
ARTICLE 8 DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Notes..............................45
SECTION 8.02 Repayment of the Company.....................................46
ARTICLE 9 AMENDMENTS
SECTION 9.01 Without Consent of Holders...................................46
SECTION 9.02 With Consent of Holders......................................47
SECTION 9.03 Compliance with Trust Indenture Act..........................48
SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.......48
SECTION 9.05 Notation on or Exchange of Notes.............................48
SECTION 9.06 Trustee to Sign Supplemental Indentures......................48
SECTION 9.07 Effect of Supplemental Indentures............................48
ARTICLE 10 CONVERSION
SECTION 10.01 Conversion Right and Conversion Price........................49
SECTION 10.02 Exercise of Conversion Right.................................50
SECTION 10.03 Fractions of Shares..........................................51
SECTION 10.04 Adjustment of Conversion Price...............................51
SECTION 10.05 Notice of Adjustments of Conversion Price....................61
SECTION 10.06 Notice Prior to Certain Actions..............................61
SECTION 10.07 Company to Reserve Common Shares.............................62
SECTION 10.08 Taxes on Conversions.........................................63
SECTION 10.09 Covenant as to Common Shares.................................63
SECTION 10.10 Cancellation of Converted Notes..............................63
SECTION 10.11 Effect of Reclassification, Consolidation, Merger or Sale....63
SECTION 10.12 Responsibility of Trustee for Conversion Provisions..........64
ARTICLE 11 MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.................................65
SECTION 11.02 Notices......................................................65
SECTION 11.03 Communication by Holders with Other Holders..................66
SECTION 11.04 Certificate and Opinion as to Conditions Precedent...........66
SECTION 11.05 Statements Required in Certificate or Opinion................66
SECTION 11.06 Separability Clause..........................................67
SECTION 11.07 Rules by Trustee, Paying Agent, Conversion Agent and
Registrar....................................................67
SECTION 11.08 Legal Holidays...............................................67
SECTION 11.09 Governing Law................................................67
SECTION 11.10 No Recourse Against Others...................................67
SECTION 11.11 Successors...................................................68
SECTION 11.12 Multiple Originals...........................................68
SECTION 11.13 Stated Capital...............................................68
iii
EXHIBITS
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Exhibit A-1 Form of Global Note
Exhibit A-2 Form of Face of Certificated Note
iv
INDENTURE dated as of March 25, 2005 between OHIO CASUALTY
CORPORATION, an Ohio corporation (the "Company"), and HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association duly organized and existing under
the laws of the United States of America, as Trustee hereunder (the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5.00%
Convertible Notes due 2022 (herein called the "Notes") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company
has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when the Notes are executed
by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of
the Company, in accordance with their and its terms, have been done. Further,
all things necessary to duly authorize the issuance of the Common Shares of
the Company issuable upon the conversion of the Notes, and to duly reserve for
issuance the number of Common Shares issuable upon such conversion, have been
done.
This Indenture is subject to, and shall be governed by, the
provisions of the Trust Indenture Act of 1939, as amended, that are required
to be a part of and to govern indentures qualified under the Trust Indenture
Act of 1939, as amended.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires the terms defined in this
Article have the meanings assigned to them in this Article.
"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 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.
1
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Note or beneficial interest therein, the rules
and procedures of the Depositary for such Note, 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, as applicable.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant
Secretary of the Company to be in full force and effect on the date of such
certification, shall have been delivered to the Trustee.
"Business Day" means each day of the year other than a Saturday or a
Sunday on which banking institutions are not required or authorized to close
in the City of New York.
"Capital Stock" of any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) shares issued by that
corporation.
"Certificated Notes" means Notes that are in the form of the Note
attached hereto as Exhibit A-2.
"Common Shares" means the Common Shares, par value $0.125 per share,
of the Company authorized at the date of this Indenture as originally
executed. Subject to the provisions of Section 10.11, shares issuable on
conversion shall include only Common Shares or shares of any class or classes
of common shares resulting from any reclassification or reclassifications
thereof; provided, however, that if at any time there shall be more than one
such resulting class, the shares so issuable on conversion of Notes shall
include shares of all such classes, and the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"common shares" means any shares of any class of Capital Stock which
has no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
issuer.
"Company" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any two Officers.
"Conversion Agent" means any person authorized by the Company to
convert Notes in accordance with Article 10.
2
"Corporate Trust Office" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at HSBC Bank USA, National Association,
452 Fifth Avenue, New York, New York 10018, 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.
"Distributed Security" means any Capital Stock or similar security
that is distributed in a distribution to which Section 10.04(g) applies.
"Dollar" or "U.S. $" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Global Notes" means Notes that are in the form of the Note attached
hereto as Exhibit A-1.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Holder" or "Noteholder" means a person in whose name a Note is
registered on the Registrar's books.
"Indebtedness" means, with respect to any person, without
duplication:
(a) all liabilities of such person for borrowed money (including
overdrafts) or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current liabilities
incurred in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such person in
connection with any letters of credit and acceptances issued under letter
of credit facilities, acceptance facilities or other similar facilities;
(b) all obligations of such person evidenced by bonds, notes,
debentures or other similar instruments;
(c) indebtedness of such person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such person (even if the rights and remedies of the
seller or lender under such agreement in the event of
3
default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business;
(d) all capitalized lease obligations of such person;
(e) all obligations of such person under or in respect of interest
rate agreements or currency agreements;
(f) all indebtedness referred to in (but not excluded from) the
preceding clauses of other persons and all dividends of other persons,
the payment of which is secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien or with respect to property (including, without
limitation, accounts and contract rights) owned by such person, even
though such person has not assumed or become liable for the payment of
such indebtedness (the amount of such obligation being deemed to be the
lesser of the value of such property or asset or the amount of the
obligation so secured);
(g) all Guarantees by such person of indebtedness referred to in this
definition or of any other person;
(h) all Redeemable Capital Stock of such person valued at the greater
of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends; and
(i) the present value of the obligation of such person as lessee for
net rental payments (excluding all amounts required to be paid on account
of maintenance and repairs, insurance, taxes, assessments, water,
utilities and similar charges to the extent included in such rental
payments). Such present value shall be calculated using a discount rate
equal to the rate of interest implicit in such transaction, determined in
accordance with GAAP.
"Indenture" means this Indenture dated as of March 25, 2005, 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.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Issue Date" of any Note means the date on which the Note was
originally issued or deemed issued as set forth on the face of the Note.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
given to secure Indebtedness, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code
(or equivalent statutes) of any jurisdiction with respect to any such lien,
pledge, charge or security interest).
4
"Notes" has the meaning ascribed to it in the first paragraph under
the caption "Recitals of the Company."
"Officer" means the Chairman of the Board, the Vice Chairman, the
Chief Executive Officer, the President, any Executive Vice President, any
Senior Vice President, any Vice President, the Treasurer or the Secretary or
any Assistant Treasurer or Assistant Secretary 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, at least one of whom shall be either the
principal executive or principal financial officer of the Company, and
delivered to the Trustee. An Officers' Certificate given pursuant to Section
4.03 shall be signed by an authorized financial or accounting 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 Sections 11.04 and 11.05, from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of, or
counsel to, the Company or the Trustee.
"person" or "Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof.
"principal" of a Note means the principal amount due on the Stated
Maturity as set forth on the face of the Note.
"Qualifying Quarter" means a calendar quarter (beginning with the
quarter ending on March 31, 2005) if, as of the last day of such calendar
quarter, the Sale Price of the Common Shares for at least 20 Trading Days in a
period of 30 consecutive Trading Days ending on the last Trading Day of such
quarter is more than 110% of the Conversion Price on the last day of such
quarter.
"Redeemable Capital Stock" means any class of the Company's Capital
Stock that, either by its terms, by the terms of any securities into which it
is convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed
(whether by sinking fund or otherwise) prior to the date that is 91 days after
the final scheduled maturity of the Notes or is redeemable at the option of
the Holder thereof at any time prior to such date, or is convertible into or
exchangeable for debt securities at any time prior to such date (unless it is
convertible or exchangeable solely at the Company's option).
"Redemption Date" or "redemption date" means the date specified for
redemption of the Notes in accordance with the terms of the Notes and this
Indenture.
"Redemption Price" or "redemption price" shall have the meaning set
forth in paragraph 5 of the Notes.
5
"Regular Record Date" means, with respect to the interest payable on
any Interest Payment Date, the close of business on March 4 and September 4
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Responsible Officer" means, when used with respect to the Trustee,
any officer within the Issuer Services office of the Trustee (or any successor
group of the Trustee) 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.
"Sale Price" of Common Shares or shares of Capital Stock on any date
means the closing sale price per share (or, if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and average ask prices) on such date on
the Nasdaq National Market or such other principal United States securities
exchange on which the Common Shares or such shares of Capital Stock, as the
case may be, are traded or, if the Common Shares or such shares of Capital
Stock, as the case may be, are not listed on a United States inter-dealer
automated quotation system or national or regional securities exchange, as
reported by the National Quotation Bureau Incorporated.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the United States Securities Act of 1933 (or
any successor statute), as amended from time to time.
"Significant Subsidiary" means a Subsidiary of the Company, including
its Subsidiaries, which meets any of the following conditions:
(a) the Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10 percent of the total assets of the
Company and its Subsidiaries consolidated as of the end of any two of the
three most recently completed fiscal years; or
(b) the Company's and its other Subsidiaries' proportionate share of
the total assets of the Subsidiary exceeds 10 percent of the total assets
of the Company and its Subsidiaries consolidated as of the end of any two
of the three most recently completed fiscal years; or
(c) the Company's and its other Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated as of the end of any two of the three most recently
completed fiscal years.
"Stated Maturity", when used with respect to any Note or any
installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest
is due and payable.
6
"Subsidiary" means (i) a corporation, a majority of whose Capital
Stock with voting power, under ordinary circumstances, to elect directors is,
at the date of determination, directly or indirectly owned by the Company, by
one or more Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership in which the Company or a
Subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a
corporation) in which the Company, a Subsidiary of the Company or the Company
and one or more Subsidiaries of the Company, directly or indirectly, at the
date of determination, has (x) at least a majority ownership interest or (y)
the power to elect or direct the election of a majority of the directors or
other governing body of such person.
"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 Nasdaq National Market or, if the Common Shares are
not listed on the Nasdaq National Market, on the New York Stock Exchange or
principal other national or regional securities exchange on which the Common
Shares are then listed or, if the Common Shares are not listed on a national
or regional securities exchange, on the principal other market on which the
Common Shares are 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.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction (its "possessions" including Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands).
"Value Distributed Per Share" means, with respect to the Distributed
Securities that are distributed with respect to one Common Share, the product
of (1) the average of the Sales Prices for such Distributed Securities during
the ten (10) Trading Days commencing on and including the fifth Trading Day
after the date on which trading in such securities commences multiplied by (2)
the number of such Distributed Securities that are distributed with respect to
one Common Share; provided, that if more than one kind of Distributed Security
is distributed in respect of one Common Share, the "Value Distributed Per
Share" shall be the sum of such products for each such kind of Distributed
Security.
7
SECTION 1.02 Other Definitions
-----------------
Defined in
Term Section
- ---- -------
"Act"....................................................................1.05(a)
"Agent Members"..........................................................2.12(f)
"Applicable Conversion Reference Period" ..............................10.01
"Bankruptcy Law"........................................................6.01
"Change in Control"......................................................3.09(a)
"Change in Control Repurchase Date"......................................3.09(a)
"Change in Control Repurchase Notice"....................................3.09(c)
"Change in Control Repurchase Price".....................................3.09(a)
"Conversion Agent".......................................................2.03
"Conversion Date".......................................................10.02
"Conversion Price"......................................................10.01
"Conversion Rate".......................................................10.01
"Conversion Value"......................................................10.01
"Current Market Price"..................................................10.04(h)
"Custodian"..............................................................6.01
"Daily Share Amount"....................................................10.01
"Depositary".............................................................2.01(a)
"DTC"....................................................................2.01(a)
"Event of Default".......................................................6.01
"Exchange Act"...........................................................3.09(a)
"excluded securities"...................................................10.04(d)
"Expiration Time".......................................................10.04(f)
"fair market value".....................................................10.04(h)
"Legal Holiday".........................................................11.08
"Net Shares"............................................................10.01
"Non-Electing Share"....................................................10.11
"Notice of Default"......................................................6.01
"Paying Agent"...........................................................2.03
"Principal Return"......................................................10.01
"Purchased Shares"......................................................10.04(f)
"Record Date"..........................................................10.04(g)
"Reference Period"......................................................10.04(d)
"Registrar"..............................................................2.03
"Repurchase Date"........................................................3.08(a)
"Repurchase Notice"......................................................3.08(a)
"Repurchase Price".......................................................3.08(a)
"Trigger Event"........................................................10.04(d)
8
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 a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture Notes" means the Notes.
"indenture Note holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" means the Trustee.
"obligor" on the indenture Notes means the Company.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04 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 GAAP;
(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
---------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by their 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
9
of this Indenture and conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to such officer the execution
thereof. Where such execution is by a signer acting in a capacity other than
such signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
The ownership of Notes shall be proved by the register for the Notes
or by a certificate of the Registrar.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder
of the same Note and the holder of every Note 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
Note.
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 resolution of the Board of Directors,
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 purposes of determining whether Holders of
the requisite proportion of outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding Notes 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 NOTES
SECTION 2.01 Form and Dating
---------------
The Notes and the Trustee's certificate of authentication to be borne
by such Notes shall be substantially in the form annexed hereto as Exhibits
A-1 and A-2, which are incorporated in and made a part of this Indenture. The
terms and provisions contained in the form of Note shall constitute, and are
hereby expressly made, a part of this Indenture and to the
10
extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby. To the extent that any provision of any Note conflicts
with the express provisions of this Indenture, the provisions of this
Indenture shall govern and be controlling.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed or designated for issuance, or to conform to usage.
(a) Global Notes in General. Each Global Note 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. Each Global Note shall
represent such of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon and that the aggregate amount of
outstanding Notes 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 Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 and shall
be made on the records of the Trustee and the Depositary.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to
Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b), authenticate and deliver initially one or more Global
Notes 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 THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
11
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 NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
OF THIS GLOBAL NOTE 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."
(c) Certificated Notes. Notes not issued as interests in the Global
Notes will be issued in certificated form substantially in the form of Exhibit
A-2 attached hereto.
SECTION 2.02 Execution and Authentication
----------------------------
The Notes shall be executed on behalf of the Company by any Officer.
The signature of the Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at the time of the execution of the Notes 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 Notes or did not hold such offices at the date of
authentication of such Notes.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note 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 Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
The Trustee shall authenticate and deliver Notes for original issue
in an aggregate principal amount of up to $65,557,000 upon a Company Order
without any further action by the Company. The aggregate principal amount of
Notes outstanding at any time may not exceed the amount set forth in the
foregoing sentence, except as provided in Section 2.07.
The Notes shall be issued only in registered form without coupons and
only in denominations of $1,000 in 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 Notes may be
presented for registration of transfer or for exchange ("Registrar"), an
office or agency where Notes may be presented for purchase or payment
("Paying Agent") and an office or agency where Notes may be presented for
conversion ("Conversion Agent"). The Registrar shall keep a register of the
Notes and of their transfer and exchange. The Company, upon written notice
to and approval of the Trustee, may have one or more co-registrars, one or
more additional paying agents and one or
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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 to appropriate compensation therefor pursuant to Section 7.06. 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 Notes and the Trustee hereby
accepts such appointment.
SECTION 2.04 Paying Agent to Hold Money and Notes in Trust
---------------------------------------------
Except as otherwise provided herein, on or prior to each due date of
payments in respect of any Note, 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 Noteholders or the
Trustee all money held by the Paying Agent for the making of payments in
respect of the Notes 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 Noteholder 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
Noteholders. If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee at least semiannually not later than 5 days after
each Regular Record Date a listing of Noteholders 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 Noteholders, and the Company
shall otherwise comply with TIA Section 312(a).
SECTION 2.06 Transfer and Exchange
---------------------
(a) Subject to Section 2.12, upon surrender for registration of
transfer of any Note, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Noteholder or such
Noteholder's attorney duly authorized in writing, at the office or agency
13
of the Company maintained 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 Notes of any authorized
denomination or denominations, of a like aggregate principal amount. The
Registrar or any co-registrar may require a Holder to furnish appropriate
endorsements and transfer documents. 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 Notes from the Noteholder requesting such transfer or
exchange.
At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denomination or denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder's attorney duly authorized in writing, at such
office or agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Notes which the Holder making the exchange is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Notes selected for redemption (except, in
the case of Notes to be redeemed in part, the portion thereof not to be
redeemed) or any Notes in respect of which a Repurchase Notice (as defined in
Section 3.08(a)) or a Change in Control Repurchase Notice (as defined in
Section 3.09(c)) has been given and not withdrawn by the Holder thereof in
accordance with the terms of this Indenture (except, in the case of Notes to
be purchased in part, the portion thereof not to be purchased) or any Notes
for a period of 15 days before the mailing of a notice of redemption of Notes
to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as
a Global Note remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Note, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Note shall be limited to transfers of such Global Note 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 Notes.
(d) Any Registrar or co-registrar appointed pursuant to Section 2.03
shall provide to the Trustee such information as the Trustee may reasonably
require in connection with the delivery by such Registrar of Notes upon
transfer or exchange of Notes.
(e) No Registrar or co-registrar shall be required to make
registrations of transfer or exchange of Notes during any periods designated
in the text of the Notes or in this Indenture as periods during which such
registration of transfers and exchanges need not be made.
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SECTION 2.07 Replacement Notes
-----------------
If (a) any mutilated Note is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such mutilated Note 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 Note has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Note or in lieu
of any such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3, the Company in its discretion may, instead of
issuing a new Note, so pay or purchase such Note, as the case may be.
Upon the issuance of any new Notes under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Note 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 Notes duly issued hereunder.
The provisions of this Section 2.07 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 Notes.
SECTION 2.08 Outstanding Notes; Determinations of Holders'
---------------------------------------------
Action
------
Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it or delivered to it for cancellation,
those paid pursuant to Section 2.07 and those described in this Section 2.08
as not outstanding. A Note does not cease to be outstanding because the
Company or an Affiliate thereof holds the Note; provided, however, that in
determining whether the Holders of the requisite principal amount of the
outstanding Notes have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes 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 Notes which a Responsible Officer of the
Trustee knows to be so owned shall be so disregarded. Subject to the
foregoing, only Notes outstanding at the time of such determination shall be
considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).
15
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, a Repurchase Date, a Change in Control Repurchase Date, or on
Stated Maturity, money or securities, if permitted hereunder, sufficient to
pay Notes payable on that date, then on and after such Redemption Date,
Repurchase Date, Change in Control Repurchase Date or Stated Maturity, as the
case may be, such Notes shall cease to be outstanding and interest on such
Notes shall cease to accrue; provided that, if such Notes 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 Note is converted in accordance with Article 10, then from and
after the time of conversion on the Conversion Date, such Note shall cease to
be outstanding and interest shall cease to accrue on such Note.
SECTION 2.09 Temporary Notes
---------------
Pending the preparation of definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers
executing such Notes may determine, as conclusively evidenced by their
execution of such Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes 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
Notes the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.10 Cancellation
------------
All Notes surrendered for payment, purchase by the Company
pursuant to Article 3, conversion, redemption or registration of transfer
or exchange shall, if surrendered to any person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Trustee. The Company may not issue new Notes to
replace Notes it has paid or delivered to the Trustee for cancellation or
that any Holder has converted pursuant to Article 10. No Notes shall be
16
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 2.10, except as expressly permitted by this Indenture. All
cancelled Notes held by the Trustee shall be destroyed by the Trustee and the
Trustee shall deliver a certificate of destruction to the Company.
SECTION 2.11 Persons Deemed Owners
---------------------
Prior to due presentment of a Note 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 Note is registered as the owner of such Note for the
purpose of receiving payment of principal of the Note or the payment of any
Redemption Price, Repurchase Price or Change in Control Repurchase Price in
respect thereof, and interest thereon, for the purpose of conversion and for
all other purposes whatsoever, whether or not such Note 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 Notes
(a) Notwithstanding any other provisions of this Indenture or the
Notes, (A) transfers of a Global Note, in whole or in part, shall be made only
in accordance with Section 2.06 and Section 2.12(a)(i), (B) transfer of a
beneficial interest in a Global Note for a Certificated Note shall comply with
Section 2.06 and Section 2.12(a)(ii) below, and (C) transfers of a
Certificated Note shall comply with Section 2.06 and Section 2.12(a)(iii) and
(iv) below.
(i) Transfer of Global Note. A Global Note 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 this clause (i) shall not prohibit any
transfer of a Note that is issued in exchange for a Global Note but is
not itself a Global Note. No transfer of a Note to any Person shall be
effective under this Indenture or the Notes unless and until such Note
has been registered in the name of such Person. Nothing in this Section
2.12(a)(i) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Note effected in accordance with the
other provisions of this Section 2.12(a).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Note for a Certificated Note. A beneficial interest in a Global Note may
not be exchanged upon transfer for a Certificated Note except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a request for transfer of a beneficial interest in a Global
Note in accordance with Applicable Procedures for a Certificated Note in
the form satisfactory to the Trustee, together with written instructions
to the Trustee to make, or direct the Registrar to make, an adjustment on
its books and records with respect to such Global Note to reflect a
decrease in the aggregate principal amount of the Notes represented by
the Global Note, such instructions to contain information regarding the
Depositary account to be credited with such decrease, then the Trustee
shall cause, or direct the Registrar to cause, in accordance with the
standing instructions and procedures existing between the Depositary and
the Registrar, the aggregate principal amount of Notes represented by the
Global Note to be decreased by the aggregate principal amount
17
of the Certificated Note to be issued, shall issue such Certificated Note
and shall debit or cause to be debited to the account of the Person
specified in such instructions a beneficial interest in the Global Note
equal to the principal amount of the Certificated Note so issued.
(iii) Transfer and Exchange of Certificated Notes. When Certificated
Notes are presented to the Registrar with a request:
(x) to register the transfer of such Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Certificated Notes surrendered for transfer
or exchange shall be duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.
(iv) Restrictions on Transfer of a Certificated Note for a Beneficial
Interest in a Global Note. A Certificated Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below.
Upon receipt by the Trustee of a Certificated Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory
to the Trustee, together with written instructions directing the Trustee
to make, or to direct the Registrar to make, an adjustment on its books
and records with respect to such Global Note to reflect an increase in
the aggregate principal amount of the Notes represented by the Global
Note, such instructions to contain information regarding the Depositary
account to be credited with such increase, then the Trustee shall cancel
such Certificated Note and cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Registrar, the aggregate principal amount of Notes
represented by the Global Note to be increased by the aggregate principal
amount of the Certificated Note to be exchanged, and shall credit or
cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Global Note equal to the
principal amount of the Certificated Note so cancelled. If no Global
Notes are then outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Note in the appropriate principal
amount.
(b) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Notes:
(1) Notwithstanding any other provisions of this Indenture or the
Notes, except as provided in Section 2.12(a)(ii), a Global Note shall not
be exchanged in whole or in part for a Note registered in the name of any
Person other than the Depositary or one or more nominees thereof,
provided that a Global Note may be exchanged for Notes registered in
18
the name of any person designated by the Depositary in the event that (i)
the Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Note 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 of
either event or (ii) an Event of Default has occurred and is continuing
with respect to the Notes. Any Global Note exchanged pursuant to clause
(i) above shall be so exchanged in whole and not in part, and any Global
Note exchanged pursuant to clause (ii) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Note issued
in exchange for a Global Note or any portion thereof shall be a Global
Note; provided that any such Note so issued that is registered in the
name of a Person other than the Depositary or a nominee thereof shall not
be a Global Note.
(2) Notes issued in exchange for a Global Note 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 Note or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary
shall designate. Any Global Note to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Registrar. With regard
to any Global Note to be exchanged in part, either such Global Note 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 Note, 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 Note issuable
on such exchange to or upon the order of the Depositary or an authorized
representative thereof.
(3) Subject to the provisions of clause (5) below, the Holder may
grant proxies and otherwise authorize any Person, including Agent Members
(as defined below) and persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the Trustee
a reasonable supply of Certificated Notes in definitive, fully registered
form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary
(collectively, the "Agent Members") nor any other Persons on whose
behalf Agent Members may act shall have any rights under this
Indenture with respect to any Global Note registered in the name of
the Depositary or any nominee thereof, or under any such Global Note,
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 Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall (i) 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 (ii) impair, as between the Depositary, its Agent
Members and any other Person on whose behalf an
19
Agent Member may act, the operation of customary practices of such
Persons governing the exercise of the rights of a Holder of any Note.
SECTION 2.13 CUSIP Numbers
-------------
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
SECTION 2.14 Defaulted Interest
------------------
If the Company defaults in a payment of interest on the Notes, it
shall pay, or shall deposit with the Paying Agent money in immediately
available funds sufficient to pay, the defaulted interest, plus (to the extent
lawful) any interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date. A special record date, as used in
this Section 2.14 with respect to the payment of any defaulted interest, shall
mean the 15th day next preceding the date fixed by the Company for the payment
of defaulted interest, whether or not such day is a Business Day. At least 15
days before the subsequent special record date, the Company shall mail to each
Holder and to the Trustee a notice that states the subsequent special record
date, the payment date and the amount of defaulted interest to be paid.
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01 Right to Redeem; Notices to Trustee
-----------------------------------
The Company, at its option, may redeem the Notes in accordance with
the provisions of paragraphs 5 and 7 of the Notes. If the Company elects to
redeem Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee
in writing of the Redemption Date, the principal amount of Notes to be
redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 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 Notes to Be Redeemed
---------------------------------
If less than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed pro rata or by lot or by any other method
the Trustee considers fair and appropriate (so long as such method is not
prohibited by the rules of any stock exchange on which the Notes are then
listed). The Trustee shall make the selection at least 15 days but not more
than 60 days before the Redemption Date from outstanding Notes not
previously called for redemption. The
20
Trustee may select for redemption portions of the principal amount of Notes
that have denominations equal to or larger than $1,000.
Notes and portions of Notes 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 Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed.
If any Note selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Note so selected, the converted portion of such Note shall be deemed (so far
as may be) to be the portion selected for redemption. Notes which have been
converted during a selection of Notes 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 Notes to be redeemed at the Holder's registered
address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Price;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Notes called for redemption may be surrendered for
conversion at any time before the close of business on the Business Day
immediately preceding the Redemption Date;
(6) that Holders who want to convert Notes must satisfy the
requirements set forth in paragraph 8 of the Notes;
(7) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Notes are to be redeemed, the
certificate number and principal amounts of the particular Notes to be
redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, any interest on Notes called for redemption will cease
to accrue on and after the Redemption Date; and
(10) the CUSIP number of the Notes.
21
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that
the Company makes such request at least three Business Days prior to the date
of such notice of redemption.
SECTION 3.04 Effect of Notice of Redemption
-------------------------------
Once notice of redemption is given, the Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price
stated in the notice, except for Notes which are converted in accordance with
the terms of this Indenture. Upon surrender to the Paying Agent, the Notes
called for redemption shall be paid at the Redemption Price stated in the
notice.
SECTION 3.05 Deposit of Redemption Price
---------------------------
Prior to 10:00 a.m. (New York City time) on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the Redemption Price of all Notes to be
redeemed on that date other than Notes or portions of Notes called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted. The Paying Agent shall as
promptly as practicable return to the Company any money, with interest, if
any, thereon, not required for that purpose because of conversion of Notes
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 Notes Redeemed in Part
----------------------
Upon surrender of a Note that is redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder a new
Note in an authorized denomination equal in principal amount to the unredeemed
portion of the Note surrendered.
SECTION 3.07 Conversion Arrangement on Call for Redemption
---------------------------------------------
In connection with any redemption of Notes, the Company may arrange
for the purchase and conversion of any Notes called for redemption by an
agreement with one or more investment banks or other purchasers to purchase
such Notes by paying to the Trustee in trust for the Noteholders, on or prior
to 10:00 a.m. New York City time on the Redemption Date, an amount that,
together with any amounts deposited with the Trustee by the Company for the
redemption of such Notes, is not less than the Redemption Price of such
Notes. Notwithstanding anything to the contrary contained in this Article 3,
the obligation of the Company to pay the Redemption Price of such Notes shall
be deemed to be satisfied and discharged to the extent such amount is so paid
by such purchasers. If such an agreement is entered into, any Notes not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, to be acquired by
such purchasers from such Holders and (notwithstanding anything to the
contrary contained in Article 10) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date, subject to payment of the above amount as aforesaid. The
Trustee shall hold and pay to the Holders whose Notes are selected for
redemption any such amount paid to it for purchase and conversion in the same
manner as it would moneys deposited with it by the
22
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Notes between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
SECTION 3.08 Repurchase of Notes at the Option of the Holder
-----------------------------------------------
(a) If a Holder exercises its right to require the Company to
repurchase the Notes, the Notes shall be repurchased by the Company on March
19, 2007, March 19, 2012, and March 19, 2017 (each, a "Repurchase Date"), at
the purchase price of 100% of the principal amount of the Notes to be
repurchased, together with interest accrued and unpaid to, but excluding, the
Repurchase Date (the "Repurchase Price"), at the option of the Holder thereof,
upon:
(1) (i) delivery to the Paying Agent, by the Holder, of a written
notice of repurchase (a "Repurchase Notice") at any time from the opening
of business on the date that is 20 Business Days prior to a Repurchase
Date until the close of business on the Business Day immediately
preceding such Repurchase Date stating:
(A) the certificate number of the Note which the Holder will
deliver to be repurchased,
(B) the portion of the principal amount of the Note which the
Holder will deliver to be repurchased, which portion must be a
principal amount of $1,000 or an integral multiple thereof,
(C) that such Note shall be purchased as of the Repurchase Date
pursuant to the terms and conditions specified in the Notes; and
(2) delivery of such Note to the Paying Agent prior to, on or after
the Repurchase 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 Repurchase Price therefor; provided, however, that
such Repurchase Price shall be so paid pursuant to this Section 3.08 only
if the Note so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Repurchase Notice.
Whenever in this Indenture (including Sections 2.01, 6.01(1) and
6.07) or Exhibit A-1 annexed hereto there is a reference, in any context, to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in respect to such Note to
the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Indenture shall not be construed as excluding the Repurchase Price in those
provisions of this Indenture when such express mention is not made.
23
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Note 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 Note also apply to the purchase of such
portion of such Note.
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 as promptly as practicable following the later of
the Purchase Date and the time of delivery of the Note.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Repurchase Notice contemplated by this
Section 3.08(a) shall have the right to withdraw such Repurchase Notice at any
time prior to the close of business on the Repurchase 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 Repurchase Notice or written notice of withdrawal thereof.
(b) Not less than 20 Business Days prior to the applicable Repurchase
Date (the "Company Notice Date"), the Company shall send a notice (the
"Company Notice") to Holders (and to beneficial owners as required by
applicable law). The Company Notice shall include a form of Purchase Notice to
be completed by a Noteholder that wishes to exercise its option to have the
Company repurchase the Notes and shall state:
(i) the Repurchase Price and the Conversion Price;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Notes as to which a Repurchase Notice has been given may
be converted pursuant to Article 10 only if any applicable Repurchase
Notice has been withdrawn in accordance with the terms of the Indenture;
(iv) that Notes must be surrendered to the Paying Agent to collect
payment of the Repurchase Price;
(v) that the Repurchase Price for any Note as to which a Repurchase
Notice has been given and not withdrawn will be paid as promptly as
practicable following the later of the Repurchase Date and the time of
surrender of such Note as described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
this Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Notes and that Holders
who want to convert Notes must satisfy the requirements set forth in
paragraph 8 in the Notes;
(viii) the procedures for withdrawing a Repurchase Notice; and
24
(ix) the CUSIP number of the Notes.
At the Company's request and upon being provided with a copy of such
Company Notice, the Trustee shall give such Company Notice in the Company's
name and at the Company's expense, provided that the Company makes such
request at least 15 days (unless a shorter period shall be acceptable to the
Trustee) prior to the date such Company Notice must be mailed; and provided,
further, that, in all cases, the text of such Company Notice shall be prepared
by the Company.
SECTION 3.09 Repurchase of Notes at Option of the Holder upon
------------------------------------------------
Change in Control
- -----------------
(a) If there shall have occurred a Change in Control, all or any
portion of the Notes of any Holder equal to $1,000 or a whole multiple of
$1,000, not previously called for redemption, shall be repurchased by the
Company, at the option of such Holder, at a repurchase price equal to 100% of
the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the repurchase date (the "Change in
Control Repurchase Price"), on the date (the "Change in Control Repurchase
Date") that is 45 days after the date of delivery by the Company of the notice
described in Section 3.09(b); provided, however, that installments of interest
on Notes whose Stated Maturity is prior to or on the Change in Control
Repurchase Date shall be payable to the Holders of such Notes, or one or more
predecessor Notes, registered as such on the relevant Regular Record Date
according to their terms.
Whenever in this Indenture (including Sections 2.01, 6.01(1) and
6.07) or Exhibit A-1 annexed hereto there is a reference, in any context, to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Change in Control Repurchase Price payable in respect
to such Note to the extent that such Change in Control Repurchase Price is,
was or would be so payable at such time, and express mention of the Change in
Control Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Change in Control Repurchase Price in those
provisions of this Indenture when such express mention is not made.
A "Change in Control" of the Company shall be deemed to have occurred
at such time as any of the following events shall occur:
(i) the acquisition by any person, including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions of shares of the Capital Stock of
the Company entitling that person to exercise 50% or more of the total
voting power of all shares of such Capital Stock entitled to vote
generally in elections of directors, other than any acquisition by the
Company, any of its subsidiaries or any of the employee benefit plans;
25
(ii) the Company's Common Shares (1) cease to be listed, traded or
quoted on a national securities exchange, the Nasdaq National Market, any
other quotation system or over-the-counter market or (2) cease to be
registered under the Exchange Act; or
(iii) any consolidation or merger of the Company with or into any
other person, any merger of another person into the Company, or any
conveyance, transfer, sale, lease or other disposition of all or
substantially all of the Company's properties and assets to another
person, other than:
(A) any transaction (1) that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of the Company's Capital Stock and (2) pursuant to which
holders of the Capital Stock immediately prior to the transaction
have the entitlement to exercise, directly or indirectly, 50% or more
of the total voting power of all shares of the Capital Stock entitled
to vote generally in the election of directors of the continuing or
surviving person immediately after the transaction; and
(B) any merger solely for the purpose of changing the Company's
jurisdiction of incorporation and resulting in a reclassification,
conversion or exchange of outstanding Common Shares solely into
common shares of the surviving entity.
(b) Unless the Company shall have theretofore called for redemption
all of the outstanding Notes, prior to or on the 30th day after the occurrence
of a Change in Control, the Company, or, at the written request and expense of
the Company prior to or on the 30th day after such occurrence, the Trustee,
shall give to all Noteholders, in the manner provided in Section 11.02, notice
of the occurrence of the Change in Control and of the repurchase right set
forth herein arising as a result thereof. The Company shall also deliver a
copy of such notice of a repurchase right to the Trustee. The notice shall
include a form of Change in Control Repurchase Notice to be completed by the
Noteholder and shall state:
(1) briefly, the events causing a Change in Control and the date of
such Change in Control;
(2) the date by which the Change in Control Repurchase Notice
pursuant to this Section 3.09 must be given;
(3) the Change in Control Repurchase Date;
(4) the Change in Control Repurchase Price;
(5) the name and address of the Paying Agent and the Conversion
Agent;
(6) the Conversion Price and any adjustments thereto;
(7) that Notes as to which a Change in Control Repurchase Notice has
been given may be converted pursuant to Article 10 only if the Change in
Control Repurchase Notice has been withdrawn in accordance with the terms
of this Indenture;
26
(8) that Notes must be surrendered to the Paying Agent to collect
payment;
(9) that the Change in Control Repurchase Price for any Note as to
which a Change in Control Repurchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Repurchase Date and the time of surrender of such Note as
described in (8) above;
(10) briefly, the procedures the Holder must follow to exercise
rights under this Section 3.09 and a brief description of those rights;
(11) briefly, the conversion rights of the Notes and that Holders who
want to convert Notes must satisfy the requirements set forth in
paragraph 8 in the Notes;
(12) the procedures for withdrawing a Change in Control Repurchase
Notice;
(13) that, unless the Company defaults in making payment of such
Redemption Price, interest on Notes called for redemption will cease to
accrue on and after the Redemption Date; and
(14) the CUSIP number of the Notes.
(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 Repurchase
Notice") to the Paying Agent at any time prior to the close of business on the
Business Day immediately preceding the Change in Control Repurchase Date,
stating:
(1) the certificate number of the Note which the Holder will deliver
to be purchased;
(2) the portion of the principal amount of the Note which the Holder
will deliver to be purchased, which portion must be $1,000 or an integral
multiple thereof; and
(3) that such Note shall be purchased pursuant to the terms and
conditions specified in paragraph 6 of the Notes.
The delivery of such Note to the Paying Agent prior to, on or after
the Change in Control Repurchase 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 Repurchase Price therefor;
provided, however, that such Change in Control Repurchase Price shall be so
paid pursuant to this Section 3.09 only if the Note so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in
the related Change in Control Repurchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Note 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 Note also apply to the purchase of such
portion of such Note.
27
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 Repurchase Date and the time of delivery of the Note 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 Repurchase Notice
contemplated by this Section 3.09(c) shall have the right to withdraw such
Change in Control Repurchase Notice at any time prior to the close of business
on the Change in Control Repurchase 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 Repurchase Notice or written withdrawal thereof.
SECTION 3.10 Effect of Repurchase Notice or Change in Control
------------------------------------------------
Repurchase Notice
- -----------------
Upon receipt by the Paying Agent of the Repurchase Notice specified
in Section 3.08 or the Change in Control Repurchase Notice specified in
Section 3.09(c), the Holder of the Note in respect of which such Repurchase
Notice or Change in Control Repurchase Notice was given shall (unless such
Repurchase Notice or Change in Control Repurchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Repurchase Price or Change in Control Repurchase Price with respect
to such Note. Such Repurchase Price or Change in Control Repurchase Price
shall be paid to such Holder, subject to receipt of funds and/or such Note by
the Paying Agent, promptly following the later of (x) the Repurchase Date or
Change in Control Repurchase Date, as the case may be, with respect to such
Note (provided the conditions in Section 3.08 or 3.09(c), as applicable, have
been satisfied) and (y) the time of delivery of such Note to the Paying Agent
by the Holder thereof in the manner required by Section 3.08 or 3.09(c), as
applicable. Notes in respect of which a Repurchase Notice or Change in Control
Repurchase Notice has been given by the Holder thereof may not be converted
pursuant to Article 10 on or after the date of the delivery of such Repurchase
Notice or Change in Control Repurchase Notice unless such Repurchase Notice or
Change in Control Repurchase Notice has first been validly withdrawn as
specified in the following two paragraphs.
A Repurchase Notice or Change in Control Repurchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office
of the Paying Agent in accordance with the Repurchase Notice or Change in
Control Repurchase Notice, as the case may be, at any time prior to the close
of business on the Repurchase Date or Change in Control Repurchase Date, as
the case may be, specifying:
(1) the certificate number of the Note in respect of which such
notice of withdrawal is being submitted,
(2) the principal amount of the Note with respect to which such
notice of withdrawal is being submitted,
28
(3) the principal amount, if any, of such Note which remains subject
to the original Repurchase Notice or Change in Control Repurchase Notice,
as the case may be, and which has been or will be delivered for purchase
by the Company; and
(4) that such Repurchase Notice or Change in Control Repurchase
Notice is being withdrawn.
There shall be no repurchase of any Notes pursuant to Section 3.08 or
Section 3.09 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Notes, of the required Repurchase Notice or
Change in Control Repurchase Notice) and is continuing an Event of Default
(other than a default in the payment of the Repurchase Price or Change in
Control Repurchase Price, as the case may be, with respect to such Notes). The
Paying Agent will promptly return to the respective Holders thereof any Notes
(x) with respect to which a Repurchase Notice or Change in Control Repurchase
Notice, as the case may be, has been withdrawn in compliance with this
Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Repurchase Price or Change in
Control Repurchase Price, as the case may be, with respect to such Notes) in
which case, upon such return, the Repurchase Notice or Change in Control
Repurchase Notice, as the case may be, with respect thereto shall be deemed to
have been withdrawn.
SECTION 3.11 Deposit of Repurchase Price or Change in Control
------------------------------------------------
Repurchase Price
- ----------------
Prior to 10:00 a.m. (New York City time) on the Repurchase Date or
Change in Control Repurchase 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 Repurchase Price or Change in Control
Repurchase Price of all the Notes or portions thereof which are to be
purchased as of the Repurchase Date or Change in Control Repurchase Date, as
the case may be.
SECTION 3.12 Notes Purchased in Part
-----------------------
Any Note which is to be purchased only in part shall be surrendered
at the office of the Paying Agent (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without service charge, a new Note or Notes, 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 Note so
surrendered which is not purchased.
SECTION 3.13 Covenant to Comply with Securities Laws upon Purchase
-----------------------------------------------------
of Notes
- --------
In connection with any offer to purchase or repurchase of Notes under
Section 3.08 or Section 3.09 (provided that such offer or purchase constitutes
an "issuer tender offer" for
29
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply with Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act which may then be applicable,
(ii) file the related Schedule TO (or any successor schedule, form or report)
or any other schedule required under the Exchange Act, and (iii) otherwise
comply with all federal and state securities laws so as to permit the rights
and obligations under Section 3.08 or Section 3.09, as the case may be, to be
exercised in the time and in the manner specified in Section 3.08 or Section
3.09, as applicable.
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 12 of the Notes, together with
interest, if any, thereon, held by them for the payment of the Repurchase
Price or Change in Control Repurchase Price; provided, however, that to the
extent that the aggregate amount of cash deposited by the Company pursuant to
Section 3.11 exceeds the aggregate Repurchase Price or Change in Control
Repurchase Price of the Notes or portions thereof which the Company is
obligated to purchase as of the Repurchase Date or Change in Control
Repurchase Date (as the case may be) then promptly after the Business Day
following the Repurchase Date or Change in Control Repurchase Date (as
applicable) the Trustee shall return any such excess to the Company together
with interest, if any, thereon.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Principal, Premium, Interest on the Notes
----------------------------------------------------
The Company will duly and punctually pay the principal of and
premium, if any, and interest on the Notes in accordance with the terms of the
Notes and this Indenture. The Company will deposit or cause to be deposited
with the Trustee as directed by the Trustee, no later than one Business Day
prior to the Stated Maturity of any Note, all payments so due. Principal
amount, Redemption Price, Repurchase Price, Change in Control Repurchase
Price, and cash interest shall be considered paid on the applicable date due
if on such date the Trustee or the Paying Agent holds, in accordance with this
Indenture, money or Notes, if permitted hereunder, sufficient to pay all such
amounts then due.
The Company shall, to the extent permitted by law, pay cash interest
on overdue amounts at the rate per annum set forth in paragraph 1 of the
Notes, 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.
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
30
annual and quarterly reports 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. The Company also
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 December 31, 2005) an Officers' Certificate, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and if the Company shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.
SECTION 4.04 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 Notes may be presented or surrendered for payment,
where Notes 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 Notes and this Indenture may be served. The
office of HSBC Bank USA, National Association, 452 Fifth Avenue, New York, New
York, 10018, Attention: Issuer Services, shall initially be such office or
agency for all of the aforesaid purposes. The Company shall give prompt
written notice to the Trustee 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 Notes 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.
31
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When Company May Merge or Transfer Assets
-----------------------------------------
The Company shall not consolidate with, merge with or into any other
person or convey, transfer or lease its properties and assets substantially as
an entirety to any person, unless:
(a) either (1) the Company shall be the continuing corporation or (2)
the person (if other than the Company) formed by such consolidation or
into which the Company is merged or the person which acquires by
conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety (i) shall be 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 Notes and
this Indenture;
(b) at the time of such transaction, no Event of Default and no event
which, after notice or lapse of time, would become an Event of Default,
shall have happened and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article 5 and that all
conditions precedent herein provided for relating to such transaction
have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of the properties and assets of one or more Subsidiaries
(other than to the Company or another Subsidiary), which, if such assets were
owned by the Company, would constitute all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer
or lease is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same
effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease and obligations the Company may have
under a supplemental indenture pursuant to Section 10.11, the Company shall be
discharged from all obligations and covenants under this Indenture and the
Notes. 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
-----------------
An "Event of Default" occurs if:
32
(1) the Company fails to pay when due the principal of or premium, if
any, on any of the Notes at maturity, upon redemption or exercise of a
repurchase right or otherwise;
(2) the Company fails to pay an installment of interest (including
liquidated damages, if any) on any of the Notes that continues for 30
days after the date when due;
(3) the Company fails to deliver the Principal Return, cash in lieu
of fractional Common Shares and Net Shares, if any, when such Principal
Return, such cash in lieu of fractional Common Shares and such Net
Shares, if any, are required to be delivered upon conversion of a Note
and such failure continues for 10 days after the required delivery date;
(4) the Company fails to perform or observe any other term, covenant
or agreement contained in the Notes or this Indenture for a period of 60
days after receipt by the Company of a Notice of Default (as defined in
this Section 6.01);
(5) (A) one or more defaults in the payment of principal of or
premium, if any, on any of the Company's Indebtedness aggregating $10
million or more, when the same becomes due and payable at the scheduled
maturity thereof, and such default or defaults shall have continued after
any applicable grace period and shall not have been cured or waived
within a 30-day period after the date of such default or (B) any of the
Company's Indebtedness aggregating $10 million or more shall have been
accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than by regularly scheduled required
prepayment) prior to the scheduled maturity thereof and such acceleration
is not rescinded or annulled within a 30-day period after the date of
such acceleration;
(6) a failure to provide timely notice of a Change in Control;
(7) the Company, or any Significant Subsidiary, or any Subsidiaries
of the Company which in the aggregate would constitute a Significant
Subsidiary, pursuant to or under or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding or the commencement of any case
against it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
(E) files a petition in bankruptcy or answer or consent or
similar pleading or document seeking reorganization or relief; or
33
(F) consents to the filing of such a petition or the
appointment of or taking possession by a Custodian; and
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief in an involuntary case or proceeding against
the Company or any Significant Subsidiary or any Subsidiaries of the
Company which in aggregate would constitute a Significant Subsidiary
or adjudicates the Company or any Significant Subsidiary or any
Subsidiaries of the Company which in the aggregate would constitute a
Significant Subsidiary insolvent or bankrupt;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary or for any substantial part
of its or their properties; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary or any Subsidiaries of the Company which in
the aggregate would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means Title 11, United States Code, or any similar
federal or state law for the relief of debtors, including without limitation
state laws relating to insolvency, liquidation, rehabilitation or receivership
of insurance companies.
"Custodian" means any receiver, trustee, assignee, liquidator,
rehabilitator, custodian or similar official under any Bankruptcy Law.
A Default under clause (4) 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 Notes at the time outstanding notify the Company and
the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in clause (4) above
after actual receipt of such notice. Any such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of
Default".
The Company will deliver to the Trustee, within five Business Days of
becoming aware of the occurrence of an Event of Default, written notice
thereof. In addition, 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 lapse of time would become an Event of Default under clause (4)
above, its status and what action the Company is taking or proposes to take
with respect thereto.
34
SECTION 6.02 Acceleration
------------
If an Event of Default (other than an Event of Default specified in
Section 6.01(7) or (8)) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding by notice to the Company and the Trustee, may
declare all of the outstanding Notes immediately due and payable at their
principal amount together with accrued interest. Upon such declaration of
acceleration, such principal and accrued and unpaid interest to the date of
payment shall be immediately due and payable.
If an Event of Default specified in Section 6.01(7) or (8) above
occurs and is continuing, then the principal and the interest on all the Notes
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Noteholders.
The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding, by written notice to the Trustee (and without notice
to any other Noteholder) may rescind or annul an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of the principal and any accrued cash interest that have become due
solely as a result of acceleration and if all amounts due to the Trustee under
Section 7.06 have been paid. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
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, the
premium, if any, and any accrued cash interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Notes or produce any of the Notes in the proceeding. A
delay or omission by the Trustee or any Noteholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of, or acquiescence in, the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults
-----------------------
The Holders of a majority in aggregate principal amount of the Notes
at the time outstanding through their written consent, by notice to the
Trustee (and without notice to any other Noteholder), may waive an existing
Default and its consequences except (1) an Event of Default described in
Section 6.01(1) or (2), (2) a Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Noteholder affected
or (3) a Default which constitutes a failure to convert any Note 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.
35
SECTION 6.05 Control by Majority
-------------------
The Holders of a majority in aggregate principal amount of the Notes
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
Noteholders or would involve the Trustee in personal liability unless the
Trustee is offered indemnity satisfactory to it against loss, liability or
expense. 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 Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and
(5) the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights of
any other Noteholder or to obtain a preference or priority over any other
Noteholder, except in the manner provided in this Indenture.
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 the principal amount, premium, if any, plus
Redemption Price, Repurchase Price, Change in Control Repurchase Price or any
accrued cash interest in respect of the Notes held by such Holder, on or after
the respective due dates expressed in the Notes or any Redemption Date, and to
convert the Notes 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.
36
SECTION 6.08 Collection Suit by Trustee
--------------------------
If an Event of Default described in Section 6.01(1) or (2) 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 Notes and the amounts provided for in Section 7.06.
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
Notes or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal amount,
Repurchase Price, Redemption Price, Change in Control Repurchase Price or any
accrued cash interest in respect of the Notes shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of any
such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of the principal
amount, Repurchase Price, Redemption Price, Change in Control Repurchase Price
or any accrued cash interest and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel or any other amounts due
the Trustee under Section 7.06) 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 7.06.
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 Notes 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:
(1) to the Trustee for amounts due under Section 7.06;
(2) to Noteholders for amounts due and unpaid on the Notes for the
principal amount, Redemption Price, Repurchase Price, Change in Control
Purchase Price or any
37
accrued cash interest as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Notes; and
(3) the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that
states the record date, the payment date and the amount to be paid.
SECTION 6.11 Undertaking for Costs
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant (other than the Trustee) in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or
a suit by Holders of more than 10% in aggregate principal amount of the Notes
at the time outstanding. This Section 6.11 shall be in lieu of Section 315(e)
of the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
SECTION 6.12 Waiver of Stay, Extension or Usury Laws
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company from paying all or any portion of
the principal amount, Redemption Price, Repurchase Price, Change in Control
Repurchase Price or any accrued cash interest in respect of Notes, or any
interest on such amounts, as contemplated herein, or which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties and Responsibilities of the Trustee; During
--------------------------------------------------
Default; Prior to Default
- -------------------------
The Trustee, prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all such Events of Default
which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an
38
Event of Default hereunder has occurred (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 6.05 relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
the repayment of such funds or adequate indemnity against such liability is
not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01.
The provisions of this Section 7.01 are in furtherance of and subject
to Sections 315 and 316 of the TIA.
39
SECTION 7.02 Certain Rights of the Trustee
-----------------------------
In furtherance of and subject to the TIA and subject to Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any other
certificate, statement, instrument, opinion, report, direction, notice,
request, consent, order, bond, debenture, note, coupon, Note or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or an Officers'
Certificate (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the secretary or an assistant
secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by
it hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights, trusts or powers vested in it by this Indenture with the request,
order or direction of any of the Noteholders pursuant to the provisions of
this Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all such Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing to do so by
the Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding; provided that, if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to proceeding; the reasonable
costs, expenses and liabilities of every such investigation shall be paid by
the Company or, if paid by the Trustee or any predecessor trustee, shall be
repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys not regularly in
40
its employ and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with due care
by it hereunder.
SECTION 7.03 Trustee Not Responsible for Recitals, Disposition of
----------------------------------------------------
Notes or Application of Proceeds Thereof
- ----------------------------------------
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representation as to the validity or sufficiency of
this Indenture or of the Notes. The Trustee shall not be accountable for the
use or application by the Company of any of the Notes or of the proceeds
thereof.
SECTION 7.04 Trustee and Agents May Hold Notes; Collections, etc.
----------------------------------------------------
The Trustee or any agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not the Trustee or such agent
and, subject to Sections 7.08 and 7.13, if operative, may otherwise deal with
the Company and receive, collect, hold and retain collections from the Company
with the same rights it would have if it were not the Trustee or such agent.
SECTION 7.05 Moneys Held by Trustee
----------------------
Subject to the provisions of Section 8.02, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from
other funds except to the extent specifically required by this Indenture or by
mandatory provisions of law. Neither the Trustee nor any agent of the Company
or the Trustee shall be under any liability for interest on any moneys
received by it hereunder.
SECTION 7.06 Compensation and Indemnification of Trustee and Its
---------------------------------------------------
Prior Claim
- -----------
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee
of an express trust) to be agreed to in writing by the Trustee and the Company,
and the Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including (i) the reasonable compensation and
the expenses and disbursements of its counsel and of all agents and other
persons not regularly in its employ and (ii) interest at the prime rate on any
disbursements and advances made by the Trustee and not paid by the Company
within 15 days after receipt of an invoice for such disbursement or advance)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of
liability in the premises. As security for the performance of
41
the obligations of the Company under this Section, the Trustee shall have a
lien prior to the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders of
particular Notes, and the Notes are hereby effectively subordinated to such
senior claim to such extent. The provisions of this Section 7.06 shall survive
the termination of this Indenture.
SECTION 7.07 Right of Trustee to Rely on Officers' Certificate,
--------------------------------------------------
etc.
- ----
Subject to Sections 7.01 and 7.02, whenever in the administration of
the trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence
or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Indenture upon the faith
thereof.
SECTION 7.08 Conflicting Interests
---------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the TIA, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the TIA.
SECTION 7.09 Persons Eligible for Appointment as Trustee
-------------------------------------------
The Trustee shall at all times be a corporation or banking
association having a combined capital and surplus of at least $50,000,000 and
otherwise meeting the requirements for eligibility as a trustee in the TIA. If
such corporation or banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority, then, for the purposes of this Section 7.09, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.09, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10 Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee
- -------
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to the Notes by giving written notice
of resignation to the Company and by mailing notice thereof by first class
mail to the Holders of Notes at their last addresses as they shall appear
on the Note register. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee or trustees by written
instrument in duplicate, executed by authority of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee
and one copy to the successor trustee or trustees. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days
after the mailing of such notice of resignation, the resigning trustee may
petition any court of competent jurisdiction for
42
the appointment of a successor trustee, or any Noteholder who has been a bona
fide Holder of a Note for at least six months may, subject to the provisions
of Section 7.11, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
7.08 with respect to any Notes after written request therefor by the
Company or by any Noteholder who has been a bona fide Holder of a Note
for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any Noteholder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation; or
(iv) the Company shall determine in good faith that the Trustee has
failed to perform its obligations under this Indenture in any material
respect;
then, in any such case, the Company by Board Resolution may remove the Trustee
and appoint a successor trustee by written instrument, in duplicate, executed
by order of the Board of Directors of the Company, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 7.11, any
Noteholder who has been a bona fide Holder of a Note for at least six months
may on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee. If no successor trustee shall have been appointed and have
accepted appointment within 30 days after a notice of removal has been given,
the removed trustee may petition a court of competent jurisdiction for the
appointment of a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and appoint a
successor trustee by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Company the evidence provided for in Section
1.05 of the action in that regard taken by the Noteholders.
(d) Any resignation or removal of the Trustee and any appointment of
a successor trustee pursuant to any of the provisions of this Section 7.10
shall become effective upon acceptance of appointment by the successor trustee
as provided in Section 7.11.
43
SECTION 7.11 Acceptance of Appointment by Successor Trustee
----------------------------------------------
Any successor trustee appointed as provided in Section 7.10 shall
execute and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as trustee hereunder; but,
nevertheless, on the written request of the Company or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall duly assign, transfer and deliver to the successor trustee all property
and moneys at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor trustee all such rights, powers,
duties and obligations held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 7.06. Upon request
of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers. Any trustee ceasing to
act shall, nevertheless, retain a prior claim upon all property or funds held
or collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this
Section 7.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 7.08 and eligible under the
provisions of Section 7.09.
Upon acceptance of appointment by any successor trustee as provided
in this Section 7.11, the Company shall mail notice thereof by first class
mail to the Holders of Notes at their last addresses as they shall appear in
the register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 7.10.
If the Company fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 7.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business of Trustee
- -------------------
Any corporation or banking association into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation
or banking association resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation or banking
association succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation or banking association shall be qualified under
the provisions of Section 7.08 and eligible under the provisions of Section
7.09, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Notes shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Notes so authenticated; and, in case at that time any of the Notes shall
not have been authenticated, any successor to the Trustee may authenticate
such Notes either in the name of any predecessor hereunder or in the name of
the successor Trustee; and in all such cases such certificate shall have the
full force and effect that this Indenture provides for the
44
certificate of authentication of the Trustee; provided, that the right to
adopt the certificate of authentication of any predecessor Trustee or to
authenticate Notes in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
SECTION 7.13 Preferential Collection of Claims Against the Company
-----------------------------------------------------
The Trustee shall comply with the provisions of Section 311 of the
TIA.
SECTION 7.14 Reports by the Trustee
----------------------
(a) The Trustee shall transmit to Holders and other persons such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the TIA at such times as any such report may be required
by the TIA on or before July 15 in each year that such report is required,
such reports to be dated as of the immediately preceding May 15. The Trustee
also shall comply with TIA Section 313, as applicable.
(b) A copy of each such report shall, at the time of such
transmission to Noteholders, be furnished to the Company and be filed by the
Trustee with each stock exchange upon which the Notes are listed and also with
the SEC. The Company agrees to notify the Trustee when and as the Notes become
admitted to trading on any national securities exchange or automated
inter-dealer quotation system.
SECTION 7.15 Trustee to Give Notice of Default, But May Withhold
---------------------------------------------------
in Certain Circumstances
- ------------------------
The Trustee shall transmit to the Noteholders, as the names and
addresses of such Holders appear on the Note register, notice by mail of all
Defaults which have occurred, such notice to be transmitted within 90 days
after the occurrence thereof, unless such Defaults shall have been cured
before the giving of such notice; provided that, except in the case of Default
in the payment of the principal of, interest on, or other similar obligation
with respect to, any of the Notes, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors or trustees and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Noteholders.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Discharge of Liability on Notes
-------------------------------
If (i) all outstanding Notes will become due and payable at their
Stated Maturity within one year; or (ii) all outstanding Notes are
scheduled for redemption within one year; and, in either case, the Company
deposits with the Trustee cash sufficient to pay and discharge all amounts
due and owing on all outstanding Notes (other than Notes replaced pursuant
to Section 2.07) on the date of their Stated Maturity or on the date of
their scheduled redemption, and if in
45
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 7.06 and provided that the
Company shall remain obligated to deliver the Principal Return and Net Shares,
if any, upon conversion of the Notes as provided in Article 10 of this
Indenture, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an
Officers' Certificate and Opinion of Counsel and at the cost and expense of
the Company.
SECTION 8.02 Repayment of the Company
------------------------
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Notes that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person and the Trustee and the Paying Agent shall have no further
liability to the Noteholders 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 this Indenture or the Notes
without the consent of any Noteholder for the purposes of, among other things:
(1) adding to the Company's covenants for the benefit of the Holders;
(2) surrendering any right or power conferred upon the Company;
(3) providing for conversion rights of Holders if any
reclassification or change of Common Shares or any consolidation, merger
or sale of all or substantially all of the Company's assets occurs;
(4) providing for the assumption of the Company's obligations to the
Holders in the case of a merger, consolidation, conveyance, transfer or
lease;
(5) reducing the Conversion Price, provided that the reduction will
not adversely affect the interests of Holders in any material respect;
(6) complying with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(7) curing any ambiguity or correcting or supplementing any defective
provision contained in this Indenture; provided that such modification or
amendment does not adversely affect the interests of the Holders in any
material respect;
46
(8) adding or modifying any other provisions which the Company deems
necessary or desirable and which will not adversely affect the interests
of the Holders in any material respect;
(9) complying with Article 5;
(10) providing for uncertificated Notes in addition to the
Certificated Notes so long as such uncertificated Notes are in registered
form for purposes of the Internal Revenue Code of 1986, as amended; or
(11) adding to the Company's covenants or obligations under this
Indenture for the protection of the Holders or surrendering any right,
power or option conferred by this Indenture on the Company.
SECTION 9.02 With Consent of Holders
-----------------------
With the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes at the time outstanding, the Company
and the Trustee may amend this Indenture or the Notes. However, without the
consent of each Noteholder affected, an amendment to this Indenture or the
Notes may not:
(1) change the maturity of the principal of or any installment of
interest on any Note (including any payment of liquidated damages);
(2) reduce the principal amount of, or any premium or interest on
(including any payment of liquidated damages), or the Redemption Price,
Repurchase Price or Change in Control Repurchase Price with respect to
any Note;
(3) change the currency of payment of such Note or interest thereon;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any Note;
(5) modify the Company's obligations to maintain an office or agency
in New York City;
(6) except as otherwise permitted or contemplated by provisions
concerning corporate reorganizations, adversely affect the repurchase
options of Holders or the conversion rights of Holders; or
(7) reduce the percentage in aggregate principal amount of Notes
outstanding necessary to modify or amend this Indenture or to waive any
past default.
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, but it
shall be sufficient if such consent approves the substance thereof.
47
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing 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, Waivers and
----------------------------------------------
Actions
- -------
Until an amendment, waiver or other action by Holders becomes
effective, a consent thereto by a Holder of a Note hereunder is a continuing
consent by the Holder and every subsequent Holder of that Note or portion of
the Note that evidences the same obligation as the consenting Holder's Note,
even if notation of the consent, waiver or action is not made on the Note.
However, any such Holder or subsequent Holder may revoke the consent, waiver
or action as to such Holder's Note or portion of the Note 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 Noteholder.
SECTION 9.05 Notation on or Exchange of Notes
--------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any such supplemental indenture may be prepared
and executed by the Company and authenticated and delivered by the Trustee in
exchange for outstanding Notes.
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 be entitled to 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 Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
48
ARTICLE 10
CONVERSION
SECTION 10.01 Conversion Right and Conversion Price
-------------------------------------
Subject to and upon compliance with the provisions of this Article
10, at the option of the Holder thereof, any Note or any portion of the
principal amount thereof which is $1,000 or an integral multiple of $1,000 may
be converted at any time during the periods and subject to the conditions
stated in paragraph 8 of the Notes at the principal amount thereof, or of such
portion thereof, at the Conversion Price determined as hereinafter provided,
in effect at the time of conversion, into (a) cash in an amount (the
"Principal Return") equal to the lesser of (1) the principal amount of such
Note or (2) the Conversion Value (as described below); and (b) a number of
duly authorized, fully paid and nonassessable Common Shares (the "Net Shares")
equal to the sum of the Daily Share Amounts (calculated as described below)
for each of the thirty consecutive trading days in the Applicable Conversion
Reference Period (as defined below), provided, however, that cash will be paid
in lieu of fractional shares otherwise issuable upon conversion of a Note.
The "Conversion Value" is equal to (1) the Conversion Rate,
multiplied by (2) the average of the Sale Prices of Common Shares on each of
the thirty consecutive Trading Days in the Applicable Conversion Reference
Period. The "Conversion Rate" shall be, at any time of determination, $1,000
divided by the Conversion Price in effect at such time of determination,
rounded to four decimal places. The Conversion Rate shall be initially equal
to 44.2112 Common Shares. The "Conversion Price" shall be initially equal to
$22.6187 per Common Share. The Conversion Price shall be adjusted in certain
instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (g) and (i)
of Section 10.04.
The "Daily Share Amount" for each day in the Applicable Conversion
Reference Period is equal to the greater of:
o Zero; or
o A number of Common Shares determined by the following formula:
(Sale Price on that Trading Day x Conversion Rate) - $1,000
30 x Sale Price on that Trading Day
The daily share amount for each day shall be rounded to four decimal places.
The "Applicable Conversion Reference Period" means:
o For a Note that is converted after a redemption notice has been
mailed by the Company pursuant to Section 3.03 and paragraph 7
of the Notes, the thirty consecutive trading days beginning on
the Trading Day following the Redemption Date (in the case of a
partial redemption, this clause applies only to those Notes
which would be actually redeemed); or
49
o In all other cases, the thirty consecutive Trading Days
beginning on the Trading Day following the Conversion Date.
The cash in respect of the Principal Return and cash in lieu of
fractional shares shall be paid, and a certificate or certificates for the
number of full Net Shares issuable upon conversion, if any, shall be delivered
as promptly as practicable after the Applicable Conversion Reference Period,
but in no event later than five Business Days thereafter.
In case a Note or portion thereof is called for redemption, such
conversion right in respect of the Note or the portion so called, shall expire
at the close of business on the Business Day preceding the Redemption Date,
unless the Company defaults in making the payment due upon redemption. In the
case of a Change in Control for which the Holder exercises its repurchase
right with respect to a Note or portion thereof, such conversion right in
respect of the Note or portion thereof shall expire at the close of business
on the Business Day immediately preceding the Change in Control Repurchase
Date.
Upon a determination that Holders are or will be entitled to convert
their Notes into the Principal Return and Net Shares, if any, in accordance
with the provisions of this Article 10, the Company shall issue a press
release and publish such information on its website.
SECTION 10.02 Exercise of Conversion Right
----------------------------
To exercise the conversion right, the Holder of any Note to be
converted shall comply with the procedures required by paragraph 8 of the
Notes.
Notes surrendered for conversion (other than Notes called for
redemption) during the period from the close of business on any Regular Record
Date to the opening of business on the next succeeding Interest Payment Date
shall be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest to be
received on such Interest Payment Date on the principal amount of Notes being
surrendered for conversion. No payment will be required from a Holder if the
Company elects to redeem the Notes.
Notes shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Notes for conversion in
accordance with the foregoing provisions (the "Conversion Date"), and at such
time the rights of the Holders of such Notes as Holders shall cease, and the
Person or Persons entitled to receive the Principal Return and Net Shares
issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Net Shares at such time.
The delivery by the Company to the Holder of the Principal Return and
Net Shares, if any, into which such Holder's Notes are convertible, together
with any cash payment for the Holder's fractional Common Shares, will be
deemed to satisfy the Company's obligation to pay the principal amount at the
Stated Maturity of such Holder's Notes. Holders will not receive any cash
payment representing accrued and unpaid interest, if any, upon conversion of a
Note. Accrued and unpaid interest, if any, will be deemed canceled,
extinguished or forfeited rather than paid in full.
50
In the case of any Note which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Note or
Notes of authorized denominations in aggregate principal amount equal to the
unconverted portion of the principal amount of the Notes submitted for
conversion.
If the Holder converts more than one Note at the same time, the
Principal Return and Net Shares, if any, deliverable upon the conversion shall
be based on the total principal amount of the Notes converted.
A Note surrendered for conversion based on (a) the Common Share
price, as more fully described in paragraph 8 in the Note, may be surrendered
for conversion until the close of business on the final Business Day of any
calendar quarter immediately following a Qualifying Quarter (but in no event
later than the close of business on the Business Day immediately preceding the
Stated Maturity of the principal of the Note), (b) a credit downgrade or the
absence, suspension or withdrawal of a credit rating, may be surrendered for
conversion until the close of business on any Business Day during the period
of the credit downgrade or the absence, suspension or withdrawal of the credit
rating, as more fully described in paragraph 8 in the Note, (c) the Note being
called for redemption, may be surrendered for conversion at any time prior to
the close of business on the Business Day immediately preceding the Redemption
Date, even if it is not otherwise convertible at such time, and (d) upon the
occurrence of certain corporate transactions more fully described in paragraph
8 in the Note, may be surrendered for conversion at any time from and after
the date which is 15 days prior to the anticipated effective date of such
transaction until 15 days after the actual date of such transaction, and if
such day is not a Business Day, the next occurring Business Day following such
day.
SECTION 10.03 Fractions of Shares
-------------------
No fractional Common Shares shall be issued upon conversion of any
Note or Notes. If more than one Note shall be surrendered for conversion at
one time by the same Holder, the Principal Return and number of Net Shares, if
any, which shall be delivered upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Notes (or specified portions
thereof) so surrendered. Instead of any fractional Common Shares which would
otherwise be issued upon conversion of any Note or Notes (or specified
portions thereof), the Company shall pay a cash adjustment in respect of such
fraction (rounded to four decimal places) in an amount equal to the same
fraction of value of such fractional share based on the average of the Sale
Prices of the Company's Common Shares on each of the thirty consecutive
Trading Days in the Applicable Conversion Reference period.
SECTION 10.04 Adjustment of Conversion Price
------------------------------
The Conversion Price shall be subject to adjustments, calculated by
the Company, from time to time as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution in Common Shares to all holders of the outstanding Common
Shares, the Conversion Price in effect at the opening of business on the
date following the date fixed for the determination of
51
shareholders entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be the number of Common Shares
outstanding at the close of business on the Record Date (as defined
in Section 10.04(h)) fixed for such determination, and
(2) the denominator of which shall be the sum of such number of
Common Shares and the total number of Common Shares constituting such
dividend or other distribution.
Such reduction shall become effective immediately after the opening of
business on the day following the Record Date. If any dividend or
distribution of the type described in this Section 10.04(a) is declared
but not so paid or made, the Conversion Price shall again be adjusted to
the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the outstanding Common Shares shall be subdivided into a
greater number of Common Shares, the Conversion Price in effect at the
opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding Common Shares shall be combined into a
smaller number of Common Shares, the Conversion Price in effect at the
opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(c) In case the Company shall issue rights or warrants (other than
any rights or warrants referred to in Section 10.04(d)) to all holders of
its outstanding Common Shares entitling them to subscribe for or purchase
Common Shares (or securities convertible into Common Shares) at a price
per Common Share (or having a conversion price per share) less than the
Current Market Price (as defined in Section 10.04(h)) on the Record Date
fixed for the determination of shareholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price
in effect at the opening of business on the date after such Record Date
by a fraction:
(1) the numerator of which shall be the number of Common Shares
outstanding at the close of business on the Record Date plus the
number of Common Shares which the aggregate offering price of the
total number of Common Shares so offered for subscription or purchase
(or the aggregate conversion price of the convertible securities so
offered) would purchase at such Current Market Price, and
(2) the denominator of which shall be the number of Common
Shares outstanding on the close of business on the Record Date plus
the total number of
52
additional Common Shares so offered for subscription or purchase (or
into which the convertible securities so offered are convertible).
Such adjustment shall become effective immediately after the opening of
business on the day following the Record Date fixed for determination of
shareholders entitled to receive such rights or warrants. To the extent
that Common Shares (or securities convertible into Common Shares) are not
delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made
on the basis of the delivery of only the number of Common Shares (or
securities convertible into Common Shares) actually delivered. In the
event that such rights or warrants are not so issued, the Conversion
Price shall again be adjusted to be the Conversion Price which would then
be in effect if such date fixed for the determination of shareholders
entitled to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase Common Shares at less than such Current Market
Price, and in determining the aggregate offering price of such Common
Shares, there shall be taken into account any consideration received for
such rights or warrants, the value of such consideration if other than
cash, to be determined by the Board of Directors.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Shares shares of any class of Capital Stock
of the Company (other than any dividends or distributions to which
Section 10.04(a) applies) or evidences of its indebtedness or other
assets, including securities (other than any dividends or distributions
to which Section 10.04(g) applies), but excluding (1) any rights or
warrants referred to in Section 10.04(c), (2) any distributions in
connection with a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 10.11 applies and (3)
dividends and distributions paid exclusively in cash (the securities
described in foregoing clauses (1), (2) and (3) hereinafter in this
Section 10.04(d) called the "excluded securities"), then, in each such
case, subject to the second succeeding paragraph of this Section
10.04(d), the Conversion Price shall be adjusted so that the same shall
be equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record Date (as
defined in Section 10.04(h)) with respect to such distribution by a
fraction:
(1) the numerator of which shall be the Current Market Price
(determined as provided in Section 10.04(h)) on such date less the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board
Resolution) on such date of the portion of the securities so
distributed (other than excluded securities) applicable to one Common
Share (determined on the basis of the number of Common Shares
outstanding on the Record Date), and
(2) the denominator of which shall be such Current Market Price.
53
Such reduction shall become effective immediately prior to the
opening of business on the day following the Record Date. However, in
the event that the then fair market value (as so determined) of the
portion of the securities so distributed (other than excluded
securities) applicable to one Common Share is equal to or greater
than the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion of a Note (or
any portion thereof) the amount of securities so distributed (other
than excluded securities) such Holder would have received had such
Holder converted such Note (or portion thereof) immediately prior to
such Record Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to
be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
If the Board of Directors determines the fair market value
of any distribution for purposes of this Section 10.04(d) by
reference to the actual or when issued trading market for any
securities comprising all or part of such distribution (other than
excluded securities), it must, in doing so, consider the prices in
such market over the same period (the "Reference Period") used in
computing the Current Market Price pursuant to Section 10.04(h) to
the extent possible, unless the Board of Directors in a Board
Resolution determines in good faith that determining the fair market
value during the Reference Period would not be in the best interest
of the Holder.
Rights or warrants distributed by the Company to all holders
of Common Shares entitling the holders thereof to subscribe for or
purchase shares of the Company's Capital Stock (either initially or
under certain circumstances), which rights or warrants, until the
occurrence of a specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such Common Shares;
(ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common
Shares,
shall be deemed not to have been distributed for purposes of this
Section 10.04(d) (and no adjustment to the Conversion Price under
this Section 10.04(d) will be required) until the occurrence of the
earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant
shall become exercisable to purchase different securities, evidences
of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the
foregoing at a different purchase price, then the occurrence of each
such event shall be deemed to be the date of issuance and record date
with respect to a new right or warrant (and a termination or
expiration of the existing right or warrant without exercise by the
holder thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event or
other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion
Price under this Section 10.04(d):
54
(1) in the case of any such rights or warrants which shall all
have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price
received by a holder of Common Shares with respect to such rights or
warrant (assuming such holder had retained such rights or warrants),
made to all holders of Common Shares as of the date of such
redemption or repurchase, and
(2) in the case of such rights or warrants all of which shall
have expired or been terminated without exercise, the Conversion
Price shall be readjusted as if such rights and warrants had never
been issued.
For purposes of this Section 10.04(d) and Sections 10.04(a), 10.04(b)
and 10.04(c), any dividend or distribution to which this Section 10.04(d)
is applicable that also includes Common Shares, a subdivision or
combination of Common Shares to which Section 10.04(b) applies, or rights
or warrants to subscribe for or purchase Common Shares to which Section
10.04(c) applies (or any combination thereof), shall be deemed instead to
be:
(1) a dividend or distribution of the evidences of
indebtedness, assets, shares of Capital Stock, rights or warrants
other than Common Shares, such subdivision or combination or such
rights or warrants to which Sections 10.04(a), 10.04(b) and 10.04(c)
apply, respectively (and any Conversion Price reduction required by
this Section 10.04(d) with respect to such dividend or distribution
shall then be made), immediately followed by
(2) a dividend or distribution of such Common Shares, such
subdivision or combination or such rights or warrants (and any
further Conversion Price reduction required by Sections 10.04(a),
10.04(b) and 10.04(c) with respect to such dividend or distribution
shall then be made), except:
(A) the Record Date of such dividend or distribution shall
be substituted as (x) "the date fixed for the determination of
shareholders entitled to receive such dividend or other
distribution", "Record Date fixed for such determinations" and
"Record Date" within the meaning of Section 10.04(a), (y) "the
day upon which such subdivision becomes effective" and "the day
upon which such combination becomes effective" within the
meaning of Section 10.04(b), and (z) as "the date fixed for the
determination of shareholders entitled to receive such rights
or warrants", "the Record Date fixed for the determination of
the shareholders entitled to receive such rights or warrants"
and such "Record Date" within the meaning of Section 10.04(c),
and
(B) any Common Shares included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the
meaning of Section 10.04(a)
55
and any reduction or increase in the number of Common Shares
resulting from such subdivision or combination shall be
disregarded in connection with such dividend or
distribution.
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Shares cash, in an aggregate amount that,
combined together with: (1) the aggregate amount of any other such
distributions to all holders of Common Shares made exclusively in cash
within the 12 months preceding the date of payment of such distribution,
and in respect of which no adjustment pursuant to this Section 10.04(e)
has been made, and (2) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive and set forth in a Board Resolution) of consideration
payable in respect of any tender offer by the Company or any of its
subsidiaries for all or any portion of the Common Shares concluded within
the 12 months preceding the date of such distribution, and in respect of
which no adjustment pursuant to Section 10.04(f) has been made, exceeds
10% of the product of the Current Market Price (determined as provided in
Section 10.04(h)) on the Record Date with respect to such distribution
times the number of Common Shares outstanding on such date, then and in
each such case, immediately after the close of business on such date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Record Date by a fraction:
(i) the numerator of which shall be equal to the Current Market
Price on the Record Date less an amount equal to the quotient of (x)
the excess of such combined amount over such 10% and (y) the number
of Common Shares outstanding on the Record Date, and
(ii) the denominator of which shall be equal to the Current
Market Price on such date.
However, in the event that the then fair market value (as so determined)
of the portion of the securities so distributed (other than excluded
securities) applicable to one Common Share is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion of a Note (or any portion
thereof) the amount of cash such Holder would have received had such
Holder converted such Note (or portion thereof) immediately prior to such
Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(f) In case a tender offer made by the Company or any of its
Subsidiaries for all or any portion of the Common Shares shall expire and
such tender offer (as amended upon the expiration thereof) shall require
the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as
defined below)) of an aggregate consideration having a fair market value
(as
56
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution) that combined together
with:
(1) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its Subsidiaries for
all or any portion of the Common Shares expiring within the 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to this Section 10.04(f) has been made, and
(2) the aggregate amount of any distributions to all holders of
the Company's Common Shares made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to Section 10.04(e) has been made, exceeds 10%
of the product of the Current Market Price (determined as provided in
Section 10.04(h)) as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender offer (as it may be
amended) multiplied by the number of Common Shares outstanding
(including any Common Shares tendered) as of the Expiration Time,
then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, 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 close of business on the date of the Expiration
Time by a fraction:
(i) the numerator of which shall be the number of Common
Shares outstanding (including any Common Shares tendered) at
the Expiration Time multiplied by the Current Market Price of
the Common Shares on the Trading Day next succeeding the
Expiration Time, and
(ii) the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance
(up to any maximum specified in the terms of the tender offer)
of all Common Shares validly tendered and not withdrawn as of
the Expiration Time (the Common Shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of Common Shares
outstanding (less any Purchased Shares) at the Expiration Time
and the Current Market Price of the Common Shares on the
Trading Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately prior to the
opening of business on the day following the Expiration Time. In the
event that the Company is obligated to purchase Common Shares pursuant to
any such tender offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases
are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender offer had
not been made.
57
If the application of this Section 10.04(f) to any tender offer would
result in an increase in the Conversion Price, no adjustment shall be
made for such tender offer under this Section 10.04(f).
(g) If, after the Issue Date, the Company pays a dividend or makes a
distribution to all holders of its Common Shares consisting of Capital
Stock of, or similar equity interests in, a Subsidiary or other business
unit of the Company, then and 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
on which Common Shares first trade regular way without the right to
receive such dividend or distribution by an amount equal to one (1) minus
a fraction:
(1) the numerator of which shall be the Value Distributed Per
Share, and
(2) the denominator of which shall be the sum of (x) the
average of the Sale Prices of the Common Shares during the ten (10)
Trading Days commencing on and including the fifth Trading Day after
the date on which Common Shares trade regular way on the relevant
exchange or in the relevant market from which the Sale Price was
obtained without the right to receive such dividend or distribution
plus (y) the Value Distributed Per Share.
Such reduction (if any) shall become effective as of the opening of
business on the day on which Common Shares first trade regular way
without the right to receive such dividend or distribution. If any
dividend or distribution of the type described in this Section 10.04(g)
is declared but not so paid or made, the Conversion Price shall again be
adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(h) For purposes of this Section 10.04, the following terms shall
have the meanings indicated:
(1) "Current Market Price" shall mean the average of the daily
Sale Prices per Common Share for the ten consecutive Trading Days
immediately prior to the date in question; provided, however, that
if:
(i) the "ex" date (as hereinafter defined) for any event
(other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion
Price pursuant to Section 10.04(a), (b), (c), (d), (e) or (f)
occurs during such ten consecutive Trading Days, the Sale Price
for each Trading Day prior to the "ex" date for such other
event shall be adjusted by multiplying such Sale Price by the
same fraction by which the Conversion Price is so required to
be adjusted as a result of such other event;
58
(ii) the "ex" date for any event (other than the issuance
or distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section
10.04(a), (b), (c), (d), (e) or (f) occurs on or after the "ex"
date for the issuance or distribution requiring such
computation and prior to the day in question, the Sale Price
for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Sale Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event; and
(iii) the "ex" date for the issuance or distribution
requiring such computation is prior to the day in question,
after taking into account any adjustment required pursuant to
clause (i) or (ii) of this proviso, the Sale Price for each
Trading Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market value
(as determined by the Board of Directors in a manner consistent
with any determination of such value for purposes of Section
10.04(d) or (f), whose determination shall be conclusive and
set forth in a Board Resolution) of the evidences of
indebtedness, shares of Capital Stock or assets being
distributed applicable to one Common Share as of the close of
business on the day before such "ex" date.
For purposes of any computation under Section 10.04(f), the Current
Market Price of the Common Shares on any date shall be deemed to be the
average of the daily Sale Prices per Common Share for such day and the
next two succeeding Trading Days; provided, however, that if the "ex"
date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant
to Section 10.04(a), (b), (c), (d), (e) or (f) occurs on or after the
Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Sale Price for each
Trading Day on and after the "ex" date for such other event shall be
adjusted by multiplying such Sale Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result
of such other event. For purposes of this paragraph, the term "ex" date,
when used:
(A) with respect to any issuance or distribution, means the first
date on which the Common Shares trade regular way on the relevant
exchange or in the relevant market from which the Sale Price was obtained
without the right to receive such issuance or distribution;
(B) with respect to any subdivision or combination of Common Shares,
means the first date on which the Common Shares trade regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and
(C) with respect to any tender or exchange offer, means the first
date on which the Common Shares trade regular way on such exchange or in
such market after the Expiration Time of such offer.
59
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 10.04, such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 10.04 and to
avoid unjust or inequitable results as determined in good faith by the
Board of Directors.
(2) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(3) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Shares have the right to receive any cash, securities or other
property or in which the Common Shares (or other applicable security)
is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 10.04(a), (b), (c), (d), (e), (f)
or (g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Shares or rights to purchase
Common Shares resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, 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 days and the reduction is irrevocable during
the period and the Board of Directors determines in good faith that such
reduction would be in the best interests of the Company, which
determination shall be conclusive and set forth in a Board Resolution.
Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to the Trustee and each Holder at the
address of such Holder as it appears in the Register a notice of the
reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price
and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of
this Section 10.04(j) 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 by the Company and 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 change in the par
value or no par value of the Common Shares.
(k) In any case in which this Section 10.04 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer
60
until the occurrence of such event (i) issuing to the Holder of any Note
converted after such Record Date and before the occurrence of such event
the additional Common Shares issuable upon such conversion by reason of
the adjustment required by such event over and above the Common Shares
issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction
pursuant to Section 10.03.
(l) For purposes of this Section 10.04, the number of Common Shares
at any time outstanding shall not include Common Shares held in the
treasury of the Company but shall include Common Shares issuable in
respect of scrip certificates issued in lieu of fractions of Common
Shares. The Company will not pay any dividend or make any distribution on
Common Shares held in the treasury of the Company.
(m) If the distribution date for the rights provided in the Company's
rights agreement, if any, occurs prior to the date a Note is converted,
the Holder of the Note who converts such Note after the distribution date
is not entitled to receive the rights that would otherwise be attached
(but for the date of conversion) to the Common Shares received upon such
conversion; provided, however, that an adjustment shall be made to the
Conversion Price pursuant to Section 10.04(b) as if the rights were being
distributed to the common shareholders of the Company immediately prior
to such conversion. If such an adjustment is made and the rights are
later redeemed, invalidated or terminated, then a corresponding reversing
adjustment shall be made to the Conversion Price, on an equitable basis,
to take account of such event.
SECTION 10.05 Notice of Adjustments of Conversion Price
-----------------------------------------
Whenever the Conversion Price is adjusted as herein provided (other
than in the case of an adjustment pursuant to the second paragraph of Section
10.04(i) for which the notice required by such paragraph has been provided),
the Company shall promptly file with the Trustee and any Conversion Agent
other than the Trustee an Officers' Certificate setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based. Promptly after delivery of such Officers' Certificate,
the Company shall prepare a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective, and shall mail such notice to each Holder
at the address of such Holder as it appears in the Register within 20 days of
the effective date of such adjustment. Failure to deliver such notice shall
not effect the legality or validity of any such adjustment.
SECTION 10.06 Notice Prior to Certain Actions
-------------------------------
In case at any time after the date hereof:
(1) the Company shall declare a dividend (or any other distribution)
on its Common Shares payable otherwise than in cash out of its capital
surplus or its consolidated retained earnings;
(2) the Company shall authorize the granting to the holders of its
Common Shares of rights or warrants to subscribe for or purchase any
shares of Capital Stock of
61
any class (or of securities convertible into shares of capital stock of
any class) or of any other rights;
(3) there shall occur any reclassification of the Common Shares of
the Company (other than a subdivision or combination of its outstanding
Common Shares, a change in par value, a change from par value to no par
value or a change from no par value to par value), or any merger or
combination to which the Company is a party and for which approval of any
shareholders of the Company is required, or the sale, transfer or
conveyance of all or substantially all of the assets of the Company; or
(4) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Notes pursuant to Section 4.05, and shall cause
to be provided to the Trustee and all Holders in accordance with Section
11.02, at least 20 days (or 10 days in any case specified in clause (1) or (2)
above) prior to the applicable record or effective date hereinafter specified,
a notice stating:
(A) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Shares
of record to be entitled to such dividend, distribution, rights or
warrants are to be determined, or
(B) the date on which such reclassification, merger,
combination, sale, transfer, conveyance, dissolution, liquidation or
winding up is expected to become effective, and the date as of which
it is expected that holders of Common Shares of record shall be
entitled to exchange their Common Shares for securities, cash or
other property deliverable upon such reclassification, merger, sale,
transfer, dissolution, liquidation or winding up.
Neither the failure to give such notice nor any defect therein shall
affect the legality or validity of the proceedings or actions described
in clauses (1) through (4) of this Section 10.06.
SECTION 10.07 Company to Reserve Common Shares
--------------------------------
The Company shall at all times use its best efforts to reserve and
keep available, free from preemptive rights, out of its authorized but
unissued Common Shares, for the purpose of effecting the conversion of Notes,
the full number of shares of fully paid and nonassessable Common Shares then
issuable upon the conversion of all Notes outstanding.
The Company will endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of Common Shares
upon conversion of Notes, if any, and will list or cause to have quoted
such Common Shares on each national securities
62
exchange or in the over-the-counter market or such other market on which the
Common Shares are then listed or quoted.
SECTION 10.08 Taxes on Conversions
--------------------
Except as provided in the next sentence, the Company will pay any and
all taxes (other than taxes on income) and duties that may be payable in
respect of the issue or delivery of Principal Return and Net Shares, if any,
on conversion of Notes pursuant hereto. A Holder delivering a Note for
conversion shall be liable for and will be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and
delivery of Principal Return and Net Shares, if any, in a name other than that
of the Holder of the Note or Notes to be converted, and no such issue or
delivery shall be made unless the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.
SECTION 10.09 Covenant as to Common Shares
----------------------------
The Company covenants that all Common Shares which may be issued upon
conversion of Notes shall be newly issued shares or treasury shares and will
upon issue be duly and validly issued and fully paid and nonassessable, free
from preemptive rights and free of any Lien or adverse claim, except as
provided in Section 10.08, the Company will pay all taxes, liens and charges
with respect to the issue thereof.
SECTION 10.10 Cancellation of Converted Notes
-------------------------------
All Notes delivered for conversion shall be delivered to the Trustee
to be canceled by or at the direction of the Trustee, which shall dispose of
the same as provided in Section 2.10.
SECTION 10.11 Effect of Reclassification, Consolidation, Merger or
----------------------------------------------------
Sale
- ----
If any of following events occur, namely:
(1) any reclassification or change of the outstanding Common Shares
(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),
(2) any merger, consolidation or combination of the Company with
another corporation as a result of which holders of Common Shares shall
be entitled to receive stock, securities or other property or assets
(including cash or any combination thereof) with respect to or in
exchange for such Common Shares, or
(3) any sale or conveyance of the properties and assets of the
Company as, or substantially as, an entirety to any other corporation as
a result of which holders of Common Shares shall be entitled to receive
stock, securities or other property or assets (including cash or any
combination thereof) with respect to or in exchange for such Common
Shares,
63
the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply
with the TIA as in force at the date of execution of such supplemental
indenture if such supplemental indenture is then required to so comply)
providing that such Note shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash or
any combination thereof) which such Holder would have been entitled to receive
upon such reclassification, change, merger, combination, sale or conveyance
had such Notes been converted into Principal Return and Net Shares, if any,
immediately prior to such reclassification, change, merger, combination, sale
or conveyance assuming such holder of Common Shares did not exercise its
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon such reclassification, change, merger,
combination, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, merger, combination, sale or conveyance is not the same for each
Common Share in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this Section 10.11
the kind and amount of securities, cash or other property receivable upon such
reclassification, change, merger, combination, sale or conveyance for each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 10. If, in the
case of any such reclassification, change, merger, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of Common Shares includes shares of stock or other securities and
assets of a corporation other than the successor or purchasing corporation, as
the case may be, in such reclassification, change, merger, combination, sale
or conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Notes as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the repurchase rights set
forth in Section 3.09.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section 10.11 shall similarly apply to
successive reclassifications, mergers, combinations, sales and conveyances.
The Company shall not become a party to any of the transactions
described in clauses (1), (2) and (3) of this Section 10.11, unless the terms
of the transaction are consistent with the provisions of this Section 10.11.
If this Section 10.11 applies to any event or occurrence, Section
10.04 shall not apply.
64
SECTION 10.12 Responsibility of Trustee for Conversion Provisions
---------------------------------------------------
The Trustee, subject to the provisions of Section 7.01, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or intent of
any such adjustments when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee, subject to the provisions of Section 7.01, nor any
Conversion Agent shall be accountable with respect to the validity or value
(of the kind or amount) of any Common Shares, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 7.01, nor any
Conversion Agent shall be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of stock or share
certificates or other securities or property upon the surrender of any Note
for the purpose of conversion; and the Trustee, subject to the provisions of
Section 7.01, and any Conversion Agent shall not be responsible or liable for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article.
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.
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 by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
Ohio Casualty Corporation
9450 Seward Road
Fairfield, Ohio 45014
Attention: General Counsel
Telephone No. (513) 603-2213
Facsimile No. (513) 603-2208
65
if to the Trustee:
HSBC Bank USA, National Association
10 East 40th Street
14th Floor
New York, New York 10016-0200
Attention: Corporate Trust & Loan Agency
Telephone No. (212) 525-1316
Facsimile No. (212) 525-1300
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 Noteholder shall be mailed to
the Noteholder, by first-class mail, postage prepaid, at the Noteholder'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 Noteholder or any
defect in it shall not affect its sufficiency with respect to other
Noteholders. 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 Noteholders, it
shall mail a copy to the Trustee and each Registrar or co-registrar, Paying
Agent or Conversion Agent.
SECTION 11.03 Communication by Holders with Other Holders
-------------------------------------------
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar, any co-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:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
66
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:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
SECTION 11.06 Separability Clause
-------------------
In case any provision in this Indenture or in the Notes 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 at a meeting
of, Noteholders. The Registrar, 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
Notes, no interest, if any, shall accrue for the intervening period.
SECTION 11.09 Governing Law
-------------
THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 11.10 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 Notes or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting
67
a Note, each Noteholder shall waive and release all such liability. The waiver
and release shall be part of the consideration for the issue of the Notes.
SECTION 11.11 Successors
----------
All agreements of the Company in this Indenture and the Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 11.12 Multiple Originals
------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
SECTION 11.13 Stated Capital
--------------
The stated capital of each Common Share issued upon conversion (or of
each share of any class or classes resulting from any reclassification or
reclassifications of the Common Shares issued upon conversion ) shall be
identical to the stated capital as of the Conversion Date of such Common
Shares (or such other class of shares) issued upon conversion.
68
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.
OHIO CASUALTY CORPORATION
By: /s/ Dan R. Carmichael
-----------------------------------
Name: Dan R. Carmichael
Title: President and
Chief Executive Officer
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Frank Godino
-----------------------------------
Name: Frank Godino
Title: Vice President
69
EXHIBIT A-1
[FORM OF GLOBAL NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE 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.
A-1-1
OHIO CASUALTY CORPORATION
5.00% Convertible Notes due 2022
No. CUSIP: [o]
Issue Date: [o]
OHIO CASUALTY CORPORATION, an Ohio corporation (herein called the
"Company"), promises to pay to [?], or registered assigns, the principal sum
of [?] DOLLARS ($[?]) on March 19, 2022.
This Note shall bear interest as specified on the other side of this
Note. This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: _____________ OHIO CASUALTY CORPORATION
By
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee, certifies that this
is one of the Notes referred to in the
within-mentioned Indenture (as
defined on the other side of this Note).
By
-----------------------------------
Authorized Signatory
Dated:
-----------------------------------
A-1-2
[FORM OF REVERSE SIDE OF NOTE]
5.00% Convertible Note due 2022
1. Cash Interest.
The Company promises to pay interest in cash on the principal amount
of this Note at the rate per annum of 5.00%. The Company will pay cash
interest semiannually in arrears on March 19 and September 19 of each year
(each an "Interest Payment Date") to Holders of record at the close of
business on March 4 and September 4 (whether or not a Business Day) (each a
"Regular Record Date"), as the case may be, immediately preceding such
Interest Payment Date. Cash interest on the Notes will accrue from the most
recent date to which interest has been paid or duly provided or, if no
interest has been paid, from the Issue Date. Cash interest will be computed on
the basis of a 360-day year of twelve 30-day months. The Company shall pay
cash interest on overdue principal, or if Common Shares (or cash in lieu of
fractional Common Shares) in respect of a conversion of this Note in
accordance with the terms of Article 10 of the Indenture are not delivered
when due, at the rate borne by the Notes plus 1% per annum, and it shall pay
interest in cash on overdue installments of cash interest at the same rate to
the extent lawful. All such overdue cash interest shall be payable on demand.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of the principal of, premium, if any, and cash
interest on this Note and in respect of Redemption Prices, Repurchase Prices
and Change in Control Repurchase Prices to Holders who surrender Notes to a
Paying Agent to collect such payments in respect of the Notes. The Company
will pay cash amounts in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may make such cash payments by check payable in such money. A holder
of Notes with an aggregate principal amount in excess of $5,000,000 will be
paid by wire transfer in immediately available funds at the election of such
holder. Any payment required to be made on any day that is not a Business Day
will be made on the next succeeding Business Day.
3. Paying Agent, Conversion Agent and Registrar.
Initially, HSBC Bank USA, National Association (the "Trustee"), will
act as Paying Agent, Conversion Agent and Registrar. The Company may appoint
and change any Paying Agent, Conversion Agent, Registrar or co-registrar
without notice, other than notice to the Trustee except 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, Registrar or co-registrar.
A-1-3
4. Indenture.
The Company issued the Notes under an Indenture dated as of March 25,
2005 (the Indenture"), between the Company and the Trustee. The terms of the
Notes 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 Notes are subject to
all such terms, and Noteholders are referred to the Indenture and the TIA for
a statement of those terms.
The Notes are general unsecured obligations of the Company limited to
$65,557,000 aggregate principal amount (subject to Section 2.07 of the
Indenture). The Indenture does not limit other indebtedness of the Company,
secured or unsecured.
5. Redemption at the Option of the Company.
At any time on or after March 25, 2005, the Company may redeem as a
whole, or from time to time in part, the Notes on at least 30 but not more
than 60 days' notice, at the following prices (expressed in percentages of the
principal amount), together with accrued and unpaid interest to, but
excluding, the date fixed for redemption.
Redemption
During the Twelve Months Commencing Price
----------------------------------- -----
March 25, 2005............................................ 102%
March 19, 2006............................................ 101%
March 19, 2007 and thereafter............................. 100%
If the Company does not redeem all the Notes, the Trustee will select
the Notes to be redeemed in principal amounts of $1,000 or whole multiples of
$1,000 by lot or on a pro rata basis or by any other method the Trustee
considers fair and appropriate (so long as such method is not prohibited by
the rules of any stock exchange on which the Notes are then listed). If any
Notes are to be redeemed in part only, a new Note or Notes in principal amount
equal to the unredeemed principal portion thereof will be issued. If a portion
of a Holder's Notes is selected for partial redemption and the Holder converts
a portion of its Notes, the converted portion will be deemed to be taken from
the portion selected for redemption.
No sinking fund is provided for the Notes.
A-1-4
6. Repurchase by the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company
shall become obligated to repurchase, at the option of the Holder, the Notes
held by such Holder on March 19, 2007, March 19, 2012 and March 19, 2017 (each
a "Repurchase Date") at a Repurchase Price of 100% of the principal amount of
the Notes to be repurchased, together with interest accrued and unpaid to, but
excluding, the Repurchase Date, upon delivery of a Repurchase Notice
containing the information set forth in the Indenture, at any time from the
opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on the Business Day immediately
preceding such Repurchase Date and upon delivery of the Notes to the Paying
Agent by the Holder as set forth in the Indenture.
If a Change in Control occurs, the Holder, at the Holder's option,
shall have the right, in accordance with the provisions of the Indenture, to
require the Company to repurchase the Notes, not previously called for
redemption (or any portion of the principal amount hereof that is at least
$1,000 or an integral multiple thereof, provided that the portion of the
principal amount of this Note to be outstanding after such repurchase is at
least equal to $1,000) at the Change in Control Repurchase Price of 100% of
the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the Change in Control Repurchase Date.
No fractional Common Shares will be issued upon repurchase of any
Notes. Instead of any fractional Common Share which would otherwise be issued
upon conversion of such Notes, the Company shall pay a cash adjustment as
provided in the Indenture.
A Change in Control Repurchase Notice will be given by the Company to
the Holders as provided in the Indenture. To exercise a repurchase right, a
Holder must deliver to the Trustee a written notice as provided in the
Indenture.
Holders have the right to withdraw any Change in Control Repurchase
Notice 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 Repurchase Price or Change in Control
Repurchase Price, as the case may be, of all Notes or portions thereof to be
purchased as of the Repurchase Date or the Change in Control Repurchase Date,
as the case may be, is deposited with the Paying Agent on the Repurchase Date
or the Change in Control Repurchase Date, as the case may be, then, on and
after the Repurchase Date or Change in Control Repurchase Date, as the case
may be, the Holder thereof shall have no other rights as a Holder (other than
the right to receive the Repurchase Price or Change in Control Repurchase
Price, as the case may be, if any, upon surrender of such Note).
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Notes to be redeemed
at the Holder's registered address. If money sufficient to pay the Redemption
Price of all Notes (or portions thereof) to be redeemed
A-1-5
on the Redemption Date is deposited with the Paying Agent prior to or on the
Redemption Date, immediately after such Redemption Date interest ceases to
accrue on such Notes or portions thereof. Notes 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.
8. Conversion.
Subject to the provisions of this paragraph 8 and the terms of the
Indenture and notwithstanding the fact that any other condition to conversion
has not been satisfied, a Holder may convert Notes into the Principal Return
and Net Shares, if any, at any time during a calendar quarter that immediately
follows a Qualifying Quarter (but in no event later than the close of business
on the Business Day immediately preceding the Stated Maturity of the principal
of the Notes). A "Qualifying Quarter" means a calendar quarter (beginning with
the quarter ending on March 31, 2005) if, as of the last day of such calendar
quarter, the Sale Price of the Common Shares for at least 20 Trading Days in a
period of 30 consecutive Trading Days ending on the last Trading Day of such
quarter is more than 110% of the Conversion Price on the last day of such
quarter.
Subject to the provisions of this paragraph 8 and the Indenture and
notwithstanding the fact any other condition to conversion has not been
satisfied, a Holder may convert the Notes into the Principal Return and Net
Shares, if any, during any period in which (i) the credit rating assigned to
the Notes by a Rating Agency is reduced to or below the Applicable Rating,
(ii) the Notes are no longer rated by a Rating Agency or (iii) the credit
ratings assigned to the Notes have been suspended or withdrawn by a Rating
Agency. "Rating Agency" means (1) Moody's Investors Service, Inc. and its
successors ("Moody's") and (2) Standard & Poor's Credit Market Services, a
division of The McGraw-Hill Companies Inc., and its successors ("Standard &
Poor's"). "Applicable Rating" means (1) Ba2, in the case of Moody's (or its
equivalent under any successor ratings categories of Moody's) and (2) B+, in
the case of Standard & Poor's (or its equivalent under any successor ratings
categories of Standard & Poor's).
Subject to the provisions of this paragraph 8 and the Indenture and
notwithstanding the fact that any other condition to conversion has not been
satisfied, a Holder may convert into the Principal Return and Net Shares, if
any, a Note or portion of a Note which has been called for redemption pursuant
to paragraph 5, even if the Note, or any portion thereof, is not subject to
conversion by the Holder, provided such Notes are surrendered for conversion
prior to the close of business on the Business Day immediately preceding the
Redemption Date.
Subject to the provisions of this paragraph 8 and the Indenture and
notwithstanding the fact that any other condition to conversion has not been
satisfied, in the event the Company is a party to a consolidation, merger or
binding share exchange pursuant to which the Common Shares would be converted
into cash, securities or other property as set forth in Section 5.01 of the
Indenture, a Holder may convert the Notes at any time from and after the date
which is 15 days prior to the date of the anticipated effective date of such
transaction announced by the Company until 15 days after the actual effective
date of such transaction, and at the effective time of such transaction the
right to convert a Note into the Principal Return and Net Shares, if any, will
be deemed to have changed into a right to convert it into the kind and amount
of cash, securities or other property which the holder would have received if
the Holder had converted its Notes immediately prior to the transaction. If
the consolidation, merger or binding share
A-1-6
exchange to which the Company is a party also constitutes a Change in Control,
the Holder will be able to require the Company to repurchase all or a portion
of the Holder's Notes in accordance with Section 3.09 of the Indenture.
Subject to the provisions of this paragraph 8 and the Indenture and
notwithstanding the fact that any other condition to conversion has not been
satisfied, in the event that the Company declares a dividend or distribution
described in Section 10.04(c) of the Indenture, or a dividend or a
distribution described in Section 10.04(d) of the Indenture where the fair
market value of such dividend or distribution per Common Share, as determined
in the Indenture, exceeds 15% of the Sale Price of the Common Shares on the
Trading Day immediately preceding the date of declaration for such dividend or
distribution, a Holder may convert the Notes beginning on the date the Company
gives notice to the Holders of such right, which shall not be less than 20
days prior to the "ex" date (as defined in Section 10.04(h) of the Indenture)
for such dividend or distribution, and Notes may be surrendered for conversion
at any time thereafter until the close of business on the Business Day prior
to the "ex" date or until the Company announces that the dividend or
distribution will not take place. No adjustment to the Conversion Price or the
ability of a Holder of Notes to convert will be made if the Company provides
that Holders will participate in the transactions without conversion.
..........A Note in respect of which a Holder has delivered a Repurchase Notice
or Change in Control Repurchase Notice exercising the option of such Holder to
require the Company to purchase such Note may be converted only if such notice
of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Price shall be initially equal to $22.6187 per
Common Share, subject to adjustment in certain events described in the
Indenture. The Company shall pay a cash adjustment as provided in the
Indenture in lieu of any fractional Common Share.
To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Note to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.
A Holder may only convert a portion of a Note pursuant to the terms
of this paragraph 8 and in accordance with the Indenture if the principal
amount of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Shares except as
provided herein and in the Indenture.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a Note
into Principal Return and Net Shares, if any, may be changed into a right to
convert it into securities, cash or other assets of the Company or another
person.
9. Conversion Arrangement on Call for Redemption.
Any Notes called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such
Notes at an amount not less than the Redemption Price, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Notes from the Holders, to convert them into Principal Return
and Net Shares, if any, of the Company and to make payment for such Notes to
the Trustee in trust for such Holders.
10. Denominations; Transfer; Exchange.
The Notes 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 Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Notes selected for redemption
(except, in the case of a Note to be redeemed in part, the portion of the Note
not to be redeemed) or any Notes in respect of which a Repurchase Notice or
Change in Control Repurchase Notice has been given and not withdrawn (except,
in the case of a Note to be purchased in part, the portion of the Note not to
be purchased) or any Notes for a period of 15 days before the mailing of a
notice of redemption of Notes to be redeemed.
11. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of
this Note for all purposes.
12. Unclaimed Money or Notes.
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 Notes that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.
13. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes 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 Notes at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Noteholder, the Company
and the Trustee may amend the Indenture or the Notes for the purposes of,
among other things, (1) adding to the Company's covenants for the benefit of
the Holders; (2) surrendering any right or power conferred upon the Company;
(3) providing for conversion rights of Holders if any reclassification or
change of Common Shares or any consolidation, merger or sale of all or
substantially all of the Company's assets occurs; (4) providing for the
assumption of the Company's obligations to the Holders in the case of a
merger, consolidation, conveyance, transfer or lease; (5) reducing the
Conversion Price, provided that the reduction will not adversely affect the
interests of Holders in any material respect; (6) complying with the
requirements of the SEC in order to effect or maintain the qualification of the
A-1-8
Indenture under the TIA; (7) curing any ambiguity or correcting or
supplementing any defective provision contained in the Indenture; provided
that such modification or amendment does not adversely affect the interests of
the Holders in any material respect; (8) adding or modifying any other
provisions which the Company deems necessary or desirable and which will not
adversely affect the interests of the Holders in any material respect; (9)
complying with the provisions of the Indenture relating to when the Company
may consolidate, merge or dispose of assets; (10) providing for uncertificated
Notes in addition to Certificated Notes so long as such uncertificated Notes
are in registered form for purposes of the Internal Revenue Code of 1986, as
amended; or (11) adding to the Company's covenants or obligations under the
Indenture for the protection of Holders or surrendering any right, power or
option conferred by the Indenture on the Company.
14. Defaults and Remedies.
Under the Indenture, Events of Default include (1) the Company fails
to pay when due the principal of or premium, if any, on any of the Notes at
maturity, upon redemption or exercise of a repurchase right or otherwise; (2)
the Company fails to pay an installment of interest (including liquidated
damages, if any) on any of the Notes that continues for 30 days after the date
when due; (3) the Company fails to deliver Principal Return and Net Shares, if
any, together with cash in lieu of fractional Common Shares, when such Common
Shares or cash in lieu of fractional Common Shares is required to be delivered
upon conversion of a Note and such failure continues for 10 days after such
delivery date; (4) the Company fails to perform or observe any other term,
covenant or agreement contained in the Notes or the Indenture for a period of
60 days after written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding; (5) (A) one or more defaults in the
payment of principal of or premium, if any, on any of the Company's
Indebtedness aggregating $10 million or more, when the same becomes due and
payable at the scheduled maturity thereof, and such default or defaults shall
have continued after any applicable grace period and shall not have been cured
or waived within a 30-day period after the date of such default or (B) any of
the Company's Indebtedness aggregating $10 million or more shall have been
accelerated or otherwise declared due and payable, or required to be prepaid
or repurchased (other than by regularly scheduled required prepayment) prior
to the scheduled maturity thereof and such acceleration is not rescinded or
annulled within a 30-day period after the date of such acceleration; (6) a
failure to provide timely notice of a Change in Control; (7) certain events of
bankruptcy, insolvency or reorganization with respect to the Company or any
Significant Subsidiary or any Subsidiaries of the Company which in the
aggregate would constitute a Significant Subsidiary; and (8) the filing by the
Company of a voluntary petition seeking liquidation, reorganization
arrangement, readjustment of debts or for any other relief under the
Bankruptcy Laws. If an Event of Default (other than an Event of Default
specified in clause (7) or (8) of Section 6.01 of the Indenture) occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding, may declare all the Notes to be
due and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Notes becoming due and payable
immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Notes unless it receives
A-1-9
reasonable indemnity or security. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the Notes at the time outstanding
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default (except a Default
in payment of amounts specified in clause (1) or (2) above) if it determines
that withholding notice is in their interests.
15. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Notes 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.
16. 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
Notes or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Note, each Noteholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
17. Authentication.
This Note 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 Note.
18. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder 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).
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19. GOVERNING LAW.
THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
----------------------
The Company will furnish to any Noteholder upon written request and
without charge a copy of the Indenture which has in it the text of this Note
in larger type. Requests may be made to:
Ohio Casualty Corporation
9450 Seward Road
Fairfield, Ohio 45014
Attention: General Counsel
A-1-11
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Note, fill in the form below: To convert this Note into Common Shares
of the Company, check the box:
I or we assign and transfer this Note to [ ]
- ---------------------------------------------- To convert only part of this Note, state the
principal amount to be converted (which
- ---------------------------------------------- must be $1,000 or an integral multiple of
(Insert assignee's soc. sec. or tax ID no.) $1,000):
- ---------------------------------------------- $
----------------------------------------------
- ----------------------------------------------
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) ----------------------------------------------
----------------------------------------------
and irrevocably appoint (Insert other person's soc. sec. or tax ID
no.)
agent to transfer
this Note 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 Note)
A-1-12
EXHIBIT A-2
[FORM OF FACE OF CERTIFICATED NOTE]
OHIO CASUALTY CORPORATION
5.00% Convertible Notes due 2022
No. CUSIP: [o]
Issue Date: [o]
OHIO CASUALTY CORPORATION, an Ohio corporation (herein called the
"Company"), promises to pay to [?], or registered assigns, the principal sum
of [?] DOLLARS ($[?]) on March 19, 2022.
This Note shall bear interest as specified on the other side of this
Note. This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of
this Note.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: OHIO CASUALTY CORPORATION
----------------
By
-----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee, certifies that this is
one of the Notes referred to in the
within-mentioned Indenture (as
defined on the other side of this Note).
By
------------------------------------
Authorized Signatory
Dated:
---------------------------------
A-2