[FORM OF FACE OF NOTE]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO
EACH $1,000 OF PRINCIPAL AMOUNT OF THIS SECURITY IS $500.60. THE ISSUE
DATE IS AUGUST 19, 1997, AND THE YIELD TO STATED MATURITY IS 3.50% PER
ANNUM (COMPUTED ON A SEMIANNUAL BOND EQUIVALENT BASIS).
"THIS NOTE (OR ITS PREDECESSOR)HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT IS NOT A U.S.
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT
THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY,
(B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE, AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY), (E) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (F) TO AN INSTITUTIONAL INVESTOR THAT
IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),(2),(3)
OR (7) UNDER THE SECURITIES ACT WHICH DELIVERS A CERTIFICATE IN THE FORM
OF EXHIBIT B TO THE INDENTURE TO THE INDENTURE TRUSTEE UNDER THE INDENTURE
DATED AS OF AUGUST 19, 1997, BETWEEN THE COMPANY AND FIRSTAR BANK OF
MINNESOTA, N.A., AS INDENTURE TRUSTEE, OR (G) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) AND, IN EACH
CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING RESTRICTIONS.
COSTCO COMPANIES, INC.
ZERO COUPON CONVERTIBLE SUBORDINATED NOTE DUE 2017
No. Q-1
Issue Date: August 19, 1997 CUSIP No. 22160QAAO
Issue Price: $499.60
Original Issue Discount: $500.40
(for each $1,000 Principal amount)
Costco Companies, Inc., a Delaware corporation, promises to pay to
Cede & Co., or registered assigns, the Principal Amount of $200,000,000.00
Dollars on August 19, 2017.
This Security shall not bear interest except as specified on the other
side of this Security. Original Issue Discount will accrue as specified
on the other side of this Security. This Security is convertible as
specified on the other side of this Security. All capitalized terms used
herein without definition shall have the respective meanings assigned
thereto in the Indenture referred to on the other side of this Security.
Additional provisions of this Security are set forth on the other
side of this Security.
COSTCO COMPANIES, INC.
By: ________________________
Title:
ATTEST:
_______________________________
Date: ________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
________________________________
as Trustee, certifies that this Security
is one of the Securities referred to
in the within-mentioned Indenture.
By: __________________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF NOTE]
ZERO COUPON CONVERTIBLE SUBORDINATED NOTE DUE 2017
Unless and until it is exchanged in whole or in part for
Securities in definitive form, this Security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary. Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the Company or its agent
for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest therein.
1. INTEREST
This Security shall not bear interest except as specified in this
paragraph. If the Principal Amount hereof or any portion of such
Principal Amount is not paid when due (whether upon acceleration pursuant
to Section 6.02 of the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 5 hereof, upon the date set for
payment of a Purchase Price or Change of Control Purchase Price pursuant
to paragraph 6 hereof or upon the Stated Maturity of this Security) or if
shares of Common Stock (or cash in lieu of fractional shares) in respect
of a conversion of this Security in accordance with the terms of Article
10 of the Indenture is not delivered when due, then in each such case the
overdue amount shall bear interest at the rate of 3.50% per annum,
compounded semiannually (to the extent that the payment of such interest
shall be legally enforceable), which interest shall accrue from the date
such overdue amount was 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.
Original Issue Discount (the difference between the Issue Price and
the Principal Amount of the Security), in the period during which a
Security remains outstanding, shall accrue at 3.50% per annum, on a
semiannual bond equivalent basis using a 360-day year composed of twelve
30-day months, commencing on the Issue Date of this Security, and cease to
accrue on the earlier of (a) the date on which the Principal Amount at
Stated Maturity hereof or any portion of such
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Include if Global certificate.
Principal Amount at Stated Maturity becomes due and payable and (b) any
Redemption Date, Conversion Date, Change of Control Purchase Date, Purchase
Date or other date on which such Original Issue Discount shall cease to
accrue in accordance with Section 2.08 of the Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Costco
Companies, Inc. (the "Company") will make payments in respect of the
Securities to the persons who are registered Holders of Securities at the
close of business on the Business Day preceding the Redemption Date or
Stated Maturity, as the case may be, or at the close of business on a
Purchase Date, Change of Control Purchase Date or Conversion Date, as the
case may be. Holders must surrender Securities to a Paying Agent to
collect such payments in respect of the Securities. The Company will pay
cash amounts in money of The United States of America that at the time of
payment is legal tender for payment of public and private debts. However,
the Company may make such cash payments in respect of a certificated
Security, if applicable, by check payable in such money; provided that
payment by wire transfer of immediately available funds will be required
with respect to payments in respect of all Global Securities and all other
Securities the Holders of which shall have provided written wire transfer
instructions to the Company or the Paying Agent five days before the
payment date.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR
Initially, Firstar Bank of Minnesota, N.A., as trustee (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, upon notice to the Trustee and the Holders.
The Company or any of its Subsidiaries or any of their Affiliates may act
as Paying Agent, Conversion Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture, dated as of
August 19, 1997 (the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, and, as in
effect on the date of the Indenture (the "TIA"), except as provided in
Section 9.03 of the Indenture. Capitalized terms used herein or on the
face hereof and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement
of those terms.
The Securities are general, unsecured obligations of the Company
limited to the aggregate Principal Amount specified in Section 2.02 of the
Indenture (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
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the
option of the Company at the Redemption Prices set forth below, PROVIDED,
that the Securities are not redeemable prior to August 19, 2002.
The table below shows the Redemption Prices of a Security per $1,000
Principal Amount on the dates shown below and at Stated Maturity, which
prices reflect accrued Original Issue Discount calculated to each such
date. The Redemption Price of a Security redeemed between such dates
would include an additional amount reflecting the additional Original
Issue Discount accrued from and including the next preceding date in the
table through the actual Redemption Date.
REDEMPTION
REDEMPTION DATE PRICE
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August 19, 2002.................. $594.25
August 19, 2003.................. 615.23
August 19, 2004.................. 636.95
August 19, 2005.................. 659.44
August 19, 2006.................. 682.72
August 19, 2007.................. 706.82
August 19, 2008.................. 731.78
August 19, 2009.................. 757.62
August 19, 2010.................. 784.36
August 19, 2011.................. 812.06
August 19, 2012.................. 840.73
August 19, 2013.................. 870.41
August 19, 2014.................. 901.14
August 19, 2015.................. 932.96
August 19, 2016.................. 965.90
At maturity..................... 1,000.00
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the
Securities held by such Holder on the following Purchase Dates and at the
following Purchase Prices per $1,000 Principal Amount at Stated Maturity
of such Securities, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, at any time from the opening of
business on the date that is 20 Business Days prior to
such Purchase Date until the close of business on such Purchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in
the Indenture. Such Purchase Price (equal to the Issue Price plus accrued
Original Issue Discount through such Purchase Date) may be paid, at the
option of the Company, in cash or by the issuance and delivery of shares of
Common Stock of the Company, or in any combination thereof.
Purchase Date Purchase Price
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August 19, 2002 $594.25
August 19, 2007 $706.82
August 19, 2012 $840.73
Subject to the terms and conditions of the Indenture, if any Change of
Control occurs on or prior to August 19, 2002, the Company shall, at the
option of the Holder, purchase all Securities for which a Change of Control
Purchase Notice shall have been delivered as provided in the Indenture and
not withdrawn, on the date that is 35 Business Days after the occurrence of
such Change of Control, for a Change of Control Purchase Price equal to the
Issue Price, plus accrued Original Issue Discount through the Change of
Control Purchase Date, which Change of Control Purchase Price shall be paid
in cash.
Holders have the right to withdraw any Purchase Notice or Change of
Control Purchase Notice, as the case may be, by delivering to the Paying
Agent a written notice of withdrawal in accordance with the provisions of the
Indenture prior to the close of business on the Purchase Date or Change of
Control Purchase Date, as the case may be.
If cash sufficient to pay the Purchase Price or Change of Control
Purchase Price of all Securities or portions thereof to be purchased as of
the Purchase Date or the Change of Control Purchase Date, as the case may be,
is deposited with the Paying Agent on the Business Day following the Purchase
Date or the Change of Control Purchase Date, as the case may be, Original
Issue Discount ceases to accrue on such Securities (or portions thereof) on
and after such date, and the Holders thereof shall have no other rights as
such (other than the right to receive the Purchase Price or Change of Control
Purchase Price, as the case may be, upon surrender of such Security).
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 20 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder's registered address. If money sufficient to pay
the Redemption Price of all Securities (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, on and after such date Original Issue
Discount ceases to accrue on such Securities or portions thereof.
Securities in denominations larger than $1,000 of Principal Amount may
be redeemed in part but only in integral multiples of $1,000 of Principal
Amount.
8. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security may
convert it into Common Stock of the Company at any time before the close of
business on August 19, 2017; PROVIDED, HOWEVER, that if a Security is called
for redemption, the Holder may convert it at any time before the close of
business on the date that is seven days prior to the Redemption Date. The
number of shares of Common Stock to be delivered upon conversion of a
Security into Common Stock per $1,000 of Principal Amount shall be equal to
the Conversion Rate. A Security in respect of which a Holder has delivered a
Purchase Notice or Change of Control Purchase Notice exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if the notice of exercise is withdrawn in accordance with the terms of
the Indenture.
The initial Conversion Rate is 11.3545 shares of Common Stock per $1,000
Principal Amount, subject to adjustment in certain events described in the
Indenture. The Company will deliver cash or a check in lieu of any
fractional share of Common Stock.
To convert a Security a Holder must (i) complete and manually sign the
conversion notice on the back of the Security (or complete and manually sign
a facsimile of such notice) and deliver such notice to the Conversion Agent
(or the office or agency referred to in Section 4.05 of the Indenture), (ii)
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Company or the Trustee and (iii) pay any transfer or
similar tax, if required.
If the Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based
on the total Principal Amount of the Securities converted.
A Holder may convert a portion of a Security if the Principal Amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Common Stock, except as provided
in the Indenture. On conversion of a Security, that portion of accrued
Original Issue Discount attributable to the period from the Issue Date to the
Conversion Date with respect to the converted Security shall not be
cancelled, extinguished or forfeited, but rather shall be deemed paid in full
to the Holder thereof through the delivery of the Common Stock in exchange
for the Security being converted pursuant to the terms hereof, and the fair
market value of such Common Stock (together with any cash payment in lieu of
fractional shares of Common Stock) shall be treated as issued, to the extent
thereof, first in exchange for Original Issue Discount accrued through the
Conversion Date, and the balance, if any, of such fair market value of such
shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to
all holders of Common Stock of certain rights to purchase Common Stock for a
period expiring within 60 days at less than the Market Price at the Time of
Determination; and distributions to such holders of assets or debt securities
of the Company or certain rights to purchase securities of the Company
(excluding certain cash dividends or distributions). However, no adjustment
need be made if Securityholders may participate in the transaction or in
certain other cases. The Company from time to time may voluntarily increase
the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange of the type specified in the Indenture, or certain transfers of all
or substantially all of its assets to another person, or in certain other
circumstances described in the Indenture, the right to convert a Security
into Common Stock may be changed into a right to convert it into securities,
cash or other assets of the Company or another person.
9. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for conversion
before the Redemption Date, may be deemed to be purchased from the Holders of
such Securities at an amount not less than the Redemption Price, together
with accrued interest if any, to the Redemption Date, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders and to make payment for such
Securities to the Trustee in trust for such Holders.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount and integral multiples of $1,000.
A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need
not transfer or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security
not to be redeemed) or any Securities in respect of which a Purchase Notice
or Change of Control Purchase Notice has been given and not withdrawn
(except, in the case of a Security to be purchased in part, the portion of
the Security not to be purchased) or any Securities for a period of 15 days
before a selection of Securities to be redeemed.
11. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
12. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
PROVIDED, HOWEVER, that at the Company's request, the Trustee or such Paying
Agent, before being required to make any such return, shall at the expense of
the Company cause to be published once in THE WALL STREET JOURNAL or another
newspaper of national circulation or mail to each such Holder notice that
such money or securities remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed money or securities then remaining will
be returned to the Company. 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
with respect to such money or securities for that period commencing after the
return thereof.
13. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the
Securities at the time outstanding and (ii) certain defaults or noncompliance
with certain provisions may be waived with the written consent of the Holders
of a majority in aggregate Principal Amount of the Securities at the time
outstanding. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may
amend the Indenture or the Securities to cure any ambiguity, defect or
inconsistency, or to comply with Article 5 or Section 10.14 of the Indenture
or to make any change that does not adversely affect the rights of any
Securityholder.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in payment of
the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price or Change of Control Purchase Price, as the
case may be, in respect of the Securities when the same becomes due and
payable; (ii) failure either to deliver shares of Common Stock (or cash in
lieu of fractional shares) in accordance with the terms of the Indenture when
such Common Stock (or cash in lieu of fractional shares) is required to be
delivered following conversion of a Security and such failure is not remedied
for a period of 10 days; (iii) failure by the Company to comply with other
agreements in the Indenture or the Securities, subject to notice and lapse of
time; (iv) default (A) in the payment of any principal on any debt for
borrowed money of the Company, in an aggregate principal amount in excess of
$10 million when due at its final maturity, or (B) in the performance of any
term or provision of any debt for borrowed money of the Company in an
aggregate principal amount in excess of $10 million that results in such debt
becoming or being declared due and payable prior to the date on which it
would otherwise become due and payable; or (v) certain events of bankruptcy
or insolvency. If an Event of Default occurs and is continuing, the Trustee,
or the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding, may declare all the Securities to be due
and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default that will result in the Securities becoming due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities, except
as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment
of amounts specified in clause (i) above) if it determines that withholding
notice is in their interests.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with 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 stockholder, as such, of the Company
shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
18. SUBORDINATION
The Securities are subordinated to Senior Indebtedness (as defined in
the Indenture), and all obligations of the Company with respect to the Senior
Indebtedness. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Holder by accepting a Security consents and agrees, to the subordination
provided in the Indenture and authorizes the Trustee to give it effect.
19. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Certificate of Authentication on the other side of
this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common) and CUST (=custodian), and UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
21. GOVERNING LAW
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK OR
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This certificate shall be included only for the Transfer Restricted
Securities.
ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
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The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this
Security in larger type. Requests may be made to:
Costco Companies, Inc.
999 Lake Drive
Issaquah, Washington 98027
Attn: Treasurer
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill To convert this Security into
in the form below: Common Stock of the Company,
check the box:
----
I or we assign and transfer : :
this Security to : :
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------------------------
(Insert assignee's soc.
sec. or tax ID no.) To convert only part of this
Security, state the Principal
- ------------------------------ Amount to be converted (which
must be $1,000 or an integral
- ------------------------------ multiple of $1,000):
----------
- ------------------------------ :$ :
----------
- ------------------------------
(Print or type assignee's
name, address and zip code) If you want the stock
certificate made out in
and irrevocably appoint another person's name, fill
____________________ agent in the form below:
to transfer this Security on
the books of the Company. The ----------
agent may substitute another : :
to act for him. ----------
(Insert person's soc.
EXCHANGE FORM sec. or tax ID no.)
To exchange its beneficial ------------------------------
interest in Global Security
held by the Depositary for a ------------------------------
Security or Securities in
definitive, registered form of ------------------------------
authorized denominations and an
aggregate principal amount equal ------------------------------
to its beneficial interest in (Print or type person's name,
such Global Security, a Holder address and zip code)
should check the box
-----
: :
: :
-----
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Date: Your Signature: *
---------------- ------------------------
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(Sign exactly as your name appears on the other side of this Security)
* Your signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES***
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount
decrease in increase in at Maturity Signature of
Principal Amount Principal Amount of this Global authorized
at Maturity at Maturity of Security following signatory of
Date of of this Global this Global such decrease (or Trustee or
Exchange Security Security increase) Securities
Custodian
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*** This schedule should only be added if the Security is issued in
global form.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES
Re: ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE 2017 OF COSTCO
COMPANIES, INC.
This Certificate relates to $______ principal amount of Securities held
in (check applicable box) _____ book-entry or ______ definitive form by
_____ (the "Transferor").
The Transferor (check applicable box):
/ / has requested the Registrar by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
/ / has requested the Registrar by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.06 of such Indenture, the transfer of this Security does not
require registration under the Securities Act (as defined below) because:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (within the meaning of Rule 144A promulgated under the Securities
Act), that is aware that any sale of Securities to it will be made in
reliance on Rule 144A under the Securities Act and that is acquiring such
Transfer Restricted Security for its own account, or for the account of
another such "qualified institutional buyer" (in satisfaction of Section
2.06(a)(ii)(B) or Section 2.06 (d)(i)(B) of the Indenture).
/ / Such Security is being transferred pursuant to an exemption from
registration in accordance with Rule 144, or Regulation S under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.06(a)(ii)(C) or Section
2.06(d)(i)(C) of the Indenture).
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/ / Such Security is being transferred to an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Securities Act, that is purchasing such Security for its own
account or for the account of such an institutional "accredited investor" in
each case in a minimum principal amount of $250,000, not with a view to or
for offer for sale in connection with any distribution in violation of the
Securities Act. A signed transferee letter of representation accompanies
this Certificate (in satisfaction of Section 2.06(a)(ii)(D) or Section
2.06(d)(i)(D) of the Indenture)
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[INSERT NAME OF TRANSFEROR]
By:
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Date:
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