---------------------------------
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JACOR COMMUNICATIONS, INC.
LIQUID YIELD OPTION-TM- NOTES DUE 20[ ]
(ZERO COUPON -- SENIOR)
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INDENTURE
Dated as of January [ ], 1998
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The Bank of New York,
Trustee
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TABLE OF CONTENTS
NOTE: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.02. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. . . . . . . .6
SECTION 1.04. Rules of Construction. . . . . . . . . . . . . . . . . . . . . .7
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating. . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . .8
SECTION 2.03. Registrar, Paying Agent and Conversion Agent . . . . . . . . . .9
SECTION 2.04. Paying Agent To Hold Money and Securities in Trust . . . . . . .9
SECTION 2.05. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.06. Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.08. Outstanding Securities; Determinations
of Holders' Action . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.09. Temporary Securities . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.10. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.11. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. Right to Redeem; Notices to Trustee. . . . . . . . . . . . . . 16
SECTION 3.02. Selection of Securities to Be Redeemed . . . . . . . . . . . . 16
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . 17
SECTION 3.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 18
SECTION 3.06. Securities Redeemed in Part. . . . . . . . . . . . . . . . . . 18
SECTION 3.07. Conversion Arrangement on Call for Redemption. . . . . . . . . 18
SECTION 3.08. Purchase of Securities at the Option of the Holder . . . . . . 19
SECTION 3.09. Purchase of Securities at Option of the Holder upon
Change in Control. . . . . . . . . . . . . . . . . . . . . . . 25
ii
SECTION 3.10. Effect of Purchase Notice or Change in Control Purchase
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.11. Deposit of Purchase Price or Change in Control Purchase
Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.12. Securities Purchased in Part . . . . . . . . . . . . . . . . . 30
SECTION 3.13. Covenant to Comply with Securities Laws upon Purchase
of Securities. . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.14. Repayment to the Company . . . . . . . . . . . . . . . . . . . 30
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities. . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.02. SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.03. Compliance Certificate; Notice of Defaults . . . . . . . . . . 32
SECTION 4.04. Further Instruments and Acts . . . . . . . . . . . . . . . . . 32
SECTION 4.05. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 32
SECTION 4.06. Calculation of Original Issue Discount . . . . . . . . . . . . 33
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge or Transfer Assets. . . . . . . . . . . 33
SECTION 5.02. Successor Company Substituted. . . . . . . . . . . . . . . . . 34
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.04. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 37
SECTION 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.07. Rights of Holders to Receive Payment . . . . . . . . . . . . . 38
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . 38
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 38
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.12. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.13. Waiver of Stay, Extension or Usury Laws. . . . . . . . . . . . 40
iii
ARTICLE 7
TRUSTEE
SECTION 7.01. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.02. Individual Rights of Trustee . . . . . . . . . . . . . . . . . 42
SECTION 7.03. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.04. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.05. Reports by Trustee to Holders. . . . . . . . . . . . . . . . . 42
SECTION 7.06. Compensation and Indemnity . . . . . . . . . . . . . . . . . . 43
SECTION 7.07. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.08. Successor Trustee by Merger. . . . . . . . . . . . . . . . . . 44
SECTION 7.09. Eligibility; Disqualification. . . . . . . . . . . . . . . . . 44
SECTION 7.10. Preferential Collection of Claims Against Company. . . . . . . 44
SECTION 7.11. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Securities . . . . . . . . . . . . . 45
SECTION 8.02. Repayment to the Company . . . . . . . . . . . . . . . . . . . 45
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . 46
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . . . . . . . 46
SECTION 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . 47
SECTION 9.04. Revocation and Effect of Consents, Waivers and Actions . . . . 47
SECTION 9.05. Notation on or Exchange of Securities. . . . . . . . . . . . . 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 Privilege . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.02. Conversion Procedure . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.03. Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.04. Taxes on Conversion. . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.05. Company to Provide Stock . . . . . . . . . . . . . . . . . . . 51
SECTION 10.06. Adjustment for Change in Capital Stock . . . . . . . . . . . . 52
SECTION 10.07. Adjustment for Rights Issue. . . . . . . . . . . . . . . . . . 52
SECTION 10.08. Adjustment for Other Distributions . . . . . . . . . . . . . . 54
SECTION 10.09. When Adjustment May Be Deferred. . . . . . . . . . . . . . . . 56
SECTION 10.10. When No Adjustment Required. . . . . . . . . . . . . . . . . . 56
iv
SECTION 10.11. Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . 57
SECTION 10.12. Voluntary Increase . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 10.13. Notice of Certain Transactions . . . . . . . . . . . . . . . . 57
SECTION 10.14. Reorganization of Company; Special Distributions . . . . . . . 58
SECTION 10.15. Company Determination Final. . . . . . . . . . . . . . . . . . 59
SECTION 10.16. Trustee's Adjustment Disclaimer. . . . . . . . . . . . . . . . 59
SECTION 10.17. Simultaneous Adjustments . . . . . . . . . . . . . . . . . . . 59
SECTION 10.18. Successive Adjustments . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . 59
SECTION 11.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.03 Communication by Holders with Other Holders. . . . . . . . . . 60
SECTION 11.04 Certificate and Opinion as to Conditions Precedent . . . . . . 61
SECTION 11.05 Statements Required in Certificate or Opinion. . . . . . . . . 61
SECTION 11.06 Separability Clause. . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.07 Rules By Trustee, Paying Agent, Conversion Agent and
Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.08 Legal Holiday. . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.09 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.10 No Recourse Against Others . . . . . . . . . . . . . . . . . . 62
SECTION 11.11 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.12 Multiple Originals . . . . . . . . . . . . . . . . . . . . . . 62
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT A FORM OF FACE OF LYON. . . . . . . . . . . . . . . . . . . . . . . . . .A-1
v
CROSS-REFERENCE TABLE*
TIA Indenture
Section Section
------- ---------
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.09
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.07; 7.09
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.02; 11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.04; 11.02
[(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01]
[(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01]
(e) . . . . . . . . . . . . . . . . . . . .6.11 316(a)(last sentence) 2.08
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.01
_____________________
* Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
N.A. means Not Applicable
INDENTURE, dated as of January [ ], 1998, between JACOR
COMMUNICATIONS, INC., a Delaware corporation ("COMPANY"), and The Bank of New
York, a New York banking corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's Liquid Yield
Option-TM- Notes due [ ] (Zero Coupon -- Senior) (the "SECURITIES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"CONTROL", when used with respect to any specified person, means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"AUTHORIZED NEWSPAPER" means a newspaper, printed in the English
language or in an official language of the country of publication,
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and of general circulation in each place in
connection with which the term is used or in the financial community of each
such place. Whenever successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same or
in different Authorized Newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"BANKRUPTCY LAW" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" or "BOARD" means, with respect to any matter,
either the board of directors of the Company or any committee of such board
duly authorized, with respect to such matter, to exercise the powers of such
board.
"BUSINESS DAY" means each day of the year on which banking institutions
in The City of New York are not required or authorized to close.
"CAPITALIZED LEASE OBLIGATIONS" of any person means the obligations of
such person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes
1
in accordance with GAAP, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"CAPITAL STOCK" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) capital stock issued by that corporation.
"CASH" or "CASH" means such coin or currency of The United States of
America as at any time of payment is legal tender for the payment of public
and private debts.
"COMMON STOCK" means the Common Stock, no par value per share, of the
Company as it exists on the date of this Indenture or any other shares of
capital stock of the Company into which such common stock shall be
reclassified or changed.
"COMPANY" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by either of its Chairman or Vice Chairman
of the Board, its President, any Vice President, its Treasurer, or any
Assistant Treasurer, and by its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"CONSOLIDATED NET ASSETS" means the total amount of assets of the
Company and its Subsidiaries (less applicable depreciation, amortization and
other valuation reserves), after deducting therefrom all current liabilities
of the Company and its Subsidiaries (other than intercompany liabilities and
the current portion of long-term debt and Capitalized Lease Obligations), all
as set forth on the latest consolidated balance sheet of the Company prepared
in accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" means, at any date, any Subsidiary the
accounts of which are consolidated with those of the Company as of such date
for public financial reporting purposes.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator, custodian
or similar official under any Bankruptcy Law.
"DEFAULT" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
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TM Trademark of Merrill Lynch & Co., Inc.
2
"DEFINITIVE SECURITIES" means Securities that are in the form of
Security attached hereto as Exhibit A that does not include the paragraph and
schedule referred to in footnotes 1 and 2, respectively.
"DEPOSITARY" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"GAAP" means generally accepted accounting principles in the United
States as in effect on the date hereof.
"GLOBAL SECURITY" means a Security that contains the paragraph and the
schedule referred to in footnotes 1 and 2, respectively, in the form of
Security attached hereto as Exhibit A.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDENTURE" means this Indenture as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"ISSUE PRICE" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is
sold as set forth on the face of the Security.
"OFFICER" means either Chairman or Vice Chairman of the Board, the
President, any Vice President, the Treasurer, the Secretary, 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, (i) signed in the name of
the Company by either its Chairman of the Board, Vice Chairman of the Board,
President, any Vice President, Treasurer, any Assistant Treasurer,
Controller, or any Assistant Controller, and (ii) attested to by its
Secretary or any Assistant Secretary, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 11.04 and 11.05, if applicable, rendered by legal
counsel who may be (i) an employee of, or counsel to, the Company or (ii)
other counsel designated by the Company and reasonably acceptable to the
Trustee.
3
"ORIGINAL ISSUE DISCOUNT" of any Security means the difference between
the Issue Price and the Principal Amount of the Security as set forth on the
face of the Security.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PRINCIPAL" or "PRINCIPAL AMOUNT" of a Security means the principal
amount due at the Stated Maturity of the Security as set forth on the face of
the Security.
"PRINCIPAL PROPERTY" means (i) a parcel of improved or unimproved real
estate or other physical facility or depreciable asset of the Company or a
Subsidiary, the net book value of which on the date of determination exceeds
2% of Consolidated Net Assets and (ii) any group of parcels of real estate,
other physical facilities, and/or depreciable assets of the Company and/or
its Subsidiaries, the net book value of which, when sold in one or a series
of related Sale and Lease-Back Transactions or securing debt issued in
respect of such Principal Properties, on the date of determination exceeds 2%
of the Consolidated Net Assets. For purposes of the foregoing, "related Sale
and Lease-back Transactions" refers to any two or more such contemporaneous
transactions which are on substantially similar terms with substantially the
same parties.
"REDEMPTION DATE" or "REDEMPTION DATE" shall mean the date specified for
redemption of any of the Securities in accordance with the terms of the
Securities and this Indenture.
"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning set
forth in paragraph 5 of the Securities.
"SALE AND LEASE-BACK TRANSACTIONS" means any arrangement with any lessor
(other than the Company), providing for the leasing to the Company for a
period of more than three years (including renewals at the option of the
lessee) of any Principal Property that has been or is to be sold or
transferred by the Company to such lessor or to any other person, to which
funds have been or are to be advanced by such lessor or other person on the
security of the leased property.
"SALE PRICE" of a single share of Common Stock on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case the
average of the average bid and the average ask prices) on such date as
reported in composite transactions for the principal United States securities
exchange on which the Common Stock is traded or, if the Common Stock is not
listed on a United States national or regional stock exchange, as reported by
the National Association of Securities Dealers Automated Quotation System.
4
"SEC" means the Securities and Exchange Commission.
"SECURITIES" or "SECURITY" means any of the Company's Liquid Yield
Option-TM- Notes due 20[ ] (Zero Coupon -- Senior), as amended or
supplemented from time to time in accordance with the terms hereof, issued
under this Indenture.
"SECURITIES CUSTODIAN" means the Registrar as custodian with respect to
the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"STATED MATURITY", when used with respect to any Security, means the
date specified in such Security as the fixed date on which the Principal of
such Security is due and payable.
"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 amended by the Trust
Indenture Reform Act of 1990, and as in effect on the date of this Indenture,
except as provided in Section 9.03.
"TRADING DAY" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for
trading or quotation.
"TRUST OFFICER" means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"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.
"ZELL/CHILMARK" means Zell/Chilmark Fund L.P. and any person who
controls, is controlled by or is under common control with Zell/Chilmark;
provided that for purposes of this definition
5
"control" means the beneficial ownership of more than 50% of the total voting
power of a person normally entitled to vote in the election of directors,
managers or trustees, as applicable, of a person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"AGENT MEMBERS". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.01(a)
"ASSOCIATE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09(a)
"AVERAGE SALE PRICE" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01
"BENEFICIAL OWNER" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09(a)
"CHANGE IN CONTROL". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09(a)
"CHANGE IN CONTROL PURCHASE DATE". . . . . . . . . . . . . . . . . . . . . . .3.09(a)
"CHANGE IN CONTROL PURCHASE NOTICE". . . . . . . . . . . . . . . . . . . . . .3.09(c)
"CHANGE IN CONTROL PURCHASE PRICE" . . . . . . . . . . . . . . . . . . . . . .3.09(a)
"COMPANY NOTICE" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(e)
"COMPANY NOTICE DATE". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(e)
"CONVERSION AGENT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"CONVERSION DATE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.02
"CONVERSION RATE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01
"DTC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"EVENT OF DEFAULT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"EXCHANGE ACT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(d)
"EX-DIVIDEND TIME" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01
"EXTRAORDINARY CASH DIVIDEND". . . . . . . . . . . . . . . . . . . . . . . . . .10.08
"LEGAL HOLIDAY". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11.08
"MARKET PRICE" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(d)
"NOTICE OF DEFAULT". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"OPTION" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
"PAYING AGENT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"PURCHASE DATE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(a)
"PURCHASE NOTICE". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(a)
"PURCHASE PRICE" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(a)
"REGISTRAR". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"SECURITIES ACT" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.08(d)
"TIME OF DETERMINATION". . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, such provision is incorporated
by reference in and made
6
a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company.
All other TIA terms used in this Indenture that are defined by the TIA
or defined by TIA reference to another statute or regulation have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time in The United States of America;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words in the plural
include the singular.
7
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit
A, which is a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage
(provided that any such notation, legend or endorsement required by usage is
in a form acceptable to the Company and the Trustee). Each Security shall be
dated the date of its authentication.
The Securities are being offered and sold by the Company pursuant to a
Purchase Agreement, dated January [ ], 1998, between the Company and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Purchase Agreement").
SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be
executed by the Company by either of its Chairman or Vice Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did
not hold such offices at the Issue Date of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue
in an aggregate Principal Amount of up to $[ ] upon a
Company Order without any further action by the Company; PROVIDED, HOWEVER,
that in the event that the Company sells any Securities pursuant to the
option (the "OPTION") granted pursuant to Section 2 of the Purchase
Agreement, then the Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount of up to
$[ ] plus up to $[ ] aggregate
Principal Amount of Securities sold pursuant to the Option upon a Company
Order. The aggregate Principal Amount of Securities
8
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, subject to the proviso set forth therein, except as provided in
Section 2.07.
The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 Principal Amount and only integral multiples
thereof.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The
Company shall maintain an office or agency where Securities may be presented
for registration of transfer or for exchange ("REGISTRAR"), an office or
agency where Securities may be presented for purchase or payment ("PAYING
AGENT") and an office or agency where Securities may be presented for
conversion ("CONVERSION AGENT"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent. The term Conversion Agent includes any additional conversion
agent.
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 and the Holders
of the name and address of any such agent and of any change in the office or
agency referred to in Section 4.05. 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 Securities.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Securities.
The Company initially appoints the Registrar to act as Securities Custodian
with respect to the Global Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST. In
accordance with Section 4.05 and except as otherwise provided herein, prior to
12:00 noon, New York City time, or on each due date of payments in respect of
any Security, the Company shall deposit with the Paying Agent a sum of money or,
if permitted by the terms hereof, securities sufficient to make such payments
when so becoming due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Securityholders or the Trustee all money and securities held by
the Paying Agent for the making of payments in respect of the Securities and
shall notify the Trustee of any default by the Company in
9
making any such payment. At any time during the continuance of any default
by the Company in making any payments in respect of the Securities, the
Paying Agent shall, upon the written request of the Trustee, forthwith pay to
the Trustee all money and securities so held in trust. If the Company, a
Subsidiary or an Affiliate of any of them acts as Paying Agent, it shall
segregate the money and securities held by it as Paying Agent and hold it as
a separate trust fund. The Company at any time may require a Paying Agent to
pay all money and securities held by it to the Trustee and to account for any
money and securities disbursed by it. Upon doing so, the Paying Agent shall
have no further liability for the money and securities.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish or cause to be furnished to the Trustee
(i) at least semiannually on June 1 and December 1 a list of the names and
addresses of Securityholders dated within 15 days of the date on which the
list is furnished and (ii) at such other times as the Trustee may request in
writing a list, in such form and as of such date as the Trustee may
reasonably require, of the names and addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. Upon surrender for
registration of transfer of any Definitive Security, together with a written
instrument of transfer satisfactory to the Trustee duly executed by the
Securityholder or such Securityholder's attorney duly authorized in writing,
at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.03 or at the office or agency referred to
in Section 4.05, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Definitive Securities of any authorized
denomination or denominations, of a like aggregate Principal Amount. The
Company shall not charge a service charge for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Definitive Securities from
the Securityholder requesting such transfer or exchange (other than any
exchange of a temporary Security for a Definitive Security not involving any
change in ownership).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of
the requirements set forth below. Upon receipt by the Registrar of a
Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Registrar, together with written
instructions of the Holder directing the Registrar to make, or to direct the
Securities Custodian to make, an endorsement on the Global Security to
reflect an increase in the aggregate principal amount of the Securities
represented by the Global Security, then the Registrar shall cancel such
Definitive Security and cause, or direct the Securities
10
Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security
to be increased accordingly. If no Global Securities are then outstanding,
the Company shall issue and the Trustee shall authenticate a new Global
Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture and the
procedures of the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Definitive Security.
Upon receipt by the Registrar of written instructions or such other form of
instructions as is customary for the Depositary from the Depositary or its
nominee on behalf of any Person having a beneficial interest in a Global
Security, and, if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially the form
set forth on the reverse of the Security)(all of which may be submitted by
facsimile), then the Registrar or the Securities Custodian, at the
direction of the Trustee, will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Securities Custodian, the aggregate principal amount of the Global Security
to be reduced and, following such reduction, the Company will execute and,
upon receipt of an authentication order in the form of an Officers'
Certificate, the Trustee or the Trustee's authenticating agent will
authenticate and deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar. The Registrar
shall deliver such Definitive Securities to the persons in whose names such
Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global
Security may not be transferred as a whole except 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.
11
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSITARY. If
at any time:
(i) the Depositary for the Securities notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Securities and a successor Depositary for the Global Securities is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Trustee and
the Registrar in writing that it elects to cause the issuance of Definitive
Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive
Securities, will, or its authenticating agent will, authenticate and deliver
Definitive Securities, in an aggregate principal amount equal to the
principal amount of the Global Securities, in exchange for such Global
Securities.
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or cancelled, such Global
Security shall be returned to or retained and cancelled by the Registrar. At
any time prior to such cancellation, if any beneficial interest in a Global
Security is exchanged for Definitive Securities, redeemed, repurchased or
cancelled, the principal amount of Securities represented by such Global
Security shall be reduced and an endorsement shall be made on such Global
Security, by the Registrar or the Securities Custodian, at the direction of
the Registrar, to reflect such reduction.
(h) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES. At the option
of the Holder, Securities may be exchanged for other Securities of any
authorized denomination or denominations, of a like aggregate Principal
Amount, upon surrender of the Securities to be exchanged, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in
writing, at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) Definitive Securities selected for
redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed), (b) any Securities in respect of which a
Purchase Notice or a Change in Control Purchase Notice has been given and not
withdrawn by the Holder thereof in accordance with the terms of this
Indenture (except, in the case of Securities to be purchased in part, the
portion thereof not to be purchased) or (c) any Securities for a period of 15
days before the mailing of a notice of redemption.
12
Successive registrations and registrations of transfers and exchanges as
aforesaid may be made from time to time as desired, and each such registration
shall be noted on the register for the Securities.
Any Registrar appointed pursuant to Section 2.03 hereof shall provide to
the Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Securities upon transfer or exchange of
Securities.
No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
SECTION 2.07. REPLACEMENT SECURITIES. If (a) any mutilated Security is
surrendered to the Company or the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of
any Security, and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a BONA FIDE purchaser, the Company shall
execute, and upon its written request the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and
Principal Amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
13
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS'
ACTION. Securities outstanding at any time are all the Securities
authenticated by the Trustee (including any Security represented by a Global
Security) except for those cancelled by it, those delivered to it for
cancellation, mutilated, destroyed, lost or stolen Securities for which the
Trustee has authenticated and delivered a new Security in lieu therefor
pursuant to Section 2.07, those paid pursuant to Section 2.07, those
reductions in the interest in a Global Security effected by the Registrar
hereunder and those described in this Section 2.08 as not outstanding. A
Security does not cease to be outstanding because the Company or an Affiliate
thereof holds the Security; PROVIDED, HOWEVER, that in determining whether
the Holders of the requisite Principal Amount of Securities have given or
concurred in any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee actually knows to be so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the
time of such determination shall be considered in any such determination
(including, without limitation, determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change
in Control Purchase Date, or on Stated Maturity, money or, if permitted by
the terms hereof including, without limitation, Section 3.08, securities
sufficient to pay the Securities payable on that date, then on and after that
date such Securities shall cease to be outstanding and Original Issue
Discount and interest, if any, on such Securities shall cease to accrue and
all other rights of the Holder shall terminate (other than the right to
receive the applicable Redemption Price, Purchase Price or Change in Control
Purchase Price, as the case may be, upon delivery of the Security in
accordance with the terms of this Indenture); PROVIDED, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee
has been made.
If a Security is converted in accordance with Article 10, then from and
after the Conversion Date such Security shall cease to be outstanding and
Original Issue Discount and interest, if any, shall cease to accrue on such
Security.
SECTION 2.09. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other
14
variations as the Officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation
of definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the
office or agency of the Company designated for such purpose pursuant to
Section 2.03 or 4.05, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like Principal Amount of definitive Securities of authorized denominations.
Until so exchanged the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities.
SECTION 2.10. CANCELLATION. All Securities surrendered for payment,
redemption or purchase by the Company pursuant to Article 3, conversion
pursuant to Article 10, registration of transfer or exchange shall, if
surrendered to any person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by
the Trustee. The Company may not issue new Securities to replace Securities
it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article 10. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be delivered to the Company.
SECTION 2.11. CUSIP NUMBERS. The Company in issuing the Securities 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 Securities or as
contained in any notice of a redemption and that reliance may be placed only
on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change in the
CUSIP numbers.
15
ARTICLE 3
REDEMPTION AND PURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company, at its
option, may redeem the Securities for cash in accordance with the provisions
set forth in paragraphs 5 and 7 of the Securities. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify
the Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 at least 45 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee). If
fewer than all the Securities are to be redeemed, the record date relating to
such redemption shall be selected by the Company and given to the Trustee,
which record date shall not be less than ten days after the date of notice to
the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to
be redeemed 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 Securities are then listed). The Trustee shall
make the selection at least 30 but not more than 60 days before the
Redemption Date from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the Principal
Amount of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in Principal Amounts of
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
If any Security selected for partial redemption is thereafter
surrendered for conversion in part before termination of the conversion right
with respect to the portion of the Security so selected, the converted
portion of such Security shall be deemed (so far as may be), solely for
purposes of determining the aggregate Principal Amount of Securities to be
redeemed by the Company, to be the portion selected for redemption.
Securities that have been converted during a selection of Securities to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection. Nothing in this Section 3.02 shall affect the right of any Holder
to convert any Security pursuant to Article 10 before the termination of the
conversion right with respect thereto.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a Redemption Date, the Trustee, in the name and at the expense
of the Company, shall cause notice of redemption to be mailed, first-class
postage prepaid, to each Holder of Securities to be redeemed
16
at his address as it appears on the list of Securityholders maintained
pursuant to Section 2.05. At the Company's written request, the Trustee
shall, in the name and at the expense of the Company, cause a similar notice
to be published at least once in an Authorized Newspaper in each place of
payment.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date (upon which the Redemption Price shall be
paid);
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent and
of the office or agency referred to in Section 4.05;
(5) that Securities called for redemption may be converted at any time
before the close of business on the Redemption Date;
(6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;
(7) that Securities called for redemption must be surrendered to the
Paying Agent or at the office or agency referred to in Section 4.05 to
collect the Redemption Price;
(8) the CUSIP number of the Securities;
(9) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and Principal Amounts of the particular Securities
to be redeemed; and
(10) that, unless the Company defaults in payment of the Redemption
Price, Original Issue Discount on Securities called for redemption and
interest, if any, will cease to accrue on and after the Redemption Date.
At the Company's written 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 such
notice of redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date stated in the notice and at the Redemption Price therefor except
for Securities that are converted in accordance
17
with the terms of this Indenture. Upon the later of the Redemption Date and
the date such Securities are surrendered to the Paying Agent or at the office
or agency referred to in Section 4.05, such Securities called for redemption
shall be paid at the Redemption Price therefor.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to or on the
Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of either of them is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which prior
thereto have been delivered by the Company to the Trustee for cancellation.
The Paying Agent shall as promptly as practicable return to the Company any
money, with interest, if any, thereon (subject to the provisions of Section
7.01(f)), not required for that purpose because of conversion of Securities
pursuant to Article 10. If such money is then held by the Company or a
Subsidiary or an Affiliate of the Company in trust and is not required for
such purpose it shall be discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder, a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the
Security surrendered.
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Securities, the Company may arrange, in
lieu of redemption, for the purchase and conversion of any Securities called
for redemption by an agreement with one or more investment bankers or other
purchasers to purchase all or a portion of such Securities by paying to the
Trustee in trust for the Securityholders whose Securities are to be so
purchased, on or before the close of business on the Redemption Date, an
amount that, together with any amounts deposited with the Trustee by the
Company for redemption of such Securities, is not less than the Redemption
Price, together with interest, if any, accrued to the Redemption Date, of
such Securities. Notwithstanding anything to the contrary contained in this
Article 3, the obligation of the Company to pay the Redemption Price of such
Securities, including all accrued interest, if any, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers, but no such agreement shall relieve the Company of its obligation
to pay such Redemption Price and interest, if any. If such an agreement is
entered into, any Securities 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, 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
Securities 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 Company for the redemption of Securities. Without the Trustee's
prior written consent, no arrangement between the Company and such purchasers
for the
18
purchase and conversion of any Securities 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 Securities 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. PURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER.
(a) GENERAL. Securities shall be purchased by the Company pursuant to
paragraph 6 of the Securities as of [ ] and [ ]
(each, a "PURCHASE DATE"), at the purchase price specified therein (each, a
"PURCHASE PRICE"), at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent or to the office or agency referred
to in Section 4.05 by the Holder of a written notice of purchase (a
"PURCHASE NOTICE") at any time from the opening of business on the date
that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Security that the Holder will
deliver to be purchased;
(B) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or
an integral multiple thereof;
(C) that such Security shall be purchased on the Purchase Date
pursuant to the terms and conditions specified in this Indenture and
in paragraph 6 of the Securities; and
(D) if the Company elects pursuant to Section 3.08(b) to pay the
Purchase Price on such Purchase Date, in whole or in part, in shares
of Common Stock, but such portion of the Purchase Price to be paid in
Common Stock is ultimately to be paid in cash because any condition in
Section 3.08(d) is not satisfied, such Holder elects (i) to withdraw
such Purchase Notice as to some or all of the Securities to which it
relates (stating the Principal Amount and certificate numbers of the
Securities as to which such withdrawal shall relate), or (ii) to
receive cash in respect of the Purchase Price for all Securities
subject to such Purchase Notice; and
(2) delivery of such Security prior to, on or after the Purchase Date
(together with all necessary endorsements) to the Paying Agent at the
offices of the Paying Agent or to the office or agency referred to in
Section 4.05, such delivery being a condition to receipt by the
19
Holder of the Purchase Price therefor; PROVIDED, HOWEVER, that such
Purchase Price shall be so paid pursuant to this Section 3.08 only if the
Security so delivered conforms in all respects to the description thereof
in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 3.10, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.08(a)(1) above, such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price otherwise payable in
Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions hereof
shall be consummated by the delivery of the consideration to be received by the
Holder promptly following the later of the Purchase Date and the time of
delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or the office or agency referred to in Section 4.05 the
Purchase Notice contemplated by this Section 3.08(a) shall have the right to
withdraw at any time prior to the close of business on the Purchase Date such
Purchase Notice by delivery of a written notice of withdrawal to the Paying
Agent or such office or agency in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE. The
Securities to be purchased pursuant to Section 3.08(a) may be paid for, at the
election of the Company, in cash or Common Stock, or in any combination of cash
and Common Stock, subject to the conditions set forth in this Section 3.08. The
Company shall designate, in the notice from the Company delivered pursuant to
Section 3.08(e), whether the Company will purchase the Securities for cash or
Common Stock, and, if a combination thereof, the percentages of the Purchase
Price of Securities in respect of which it will pay in cash or Common Stock;
PROVIDED that the Company will pay cash for fractional interests in Common
Stock. For purposes of determining the existence of potential fractional
interests, all Securities subject to purchase by the Company held by a Holder
shall be considered together (no matter how many separate certificates are to be
presented). Each Holder whose Securities are purchased pursuant to this Section
3.08 shall receive the same percentage of cash or Common Stock in payment of the
Purchase Price for such Securities, except (i) as provided in Section 3.08(d)
with regard to the payment of cash in lieu of fractional shares of Common Stock
20
and (ii) in the event that the Company is unable to purchase the Securities
of a Holder or Holders for Common Stock because any necessary qualifications
or registrations of the Common Stock under applicable state securities laws
cannot be obtained, the Company may purchase the Securities of such Holder or
Holders for cash. The Company may not change its election with respect to
the consideration (or components or percentages of components thereof) to be
paid once the Company has given notice thereof to Securityholders except
pursuant to this Section 3.08(b) or Section 3.08(d).
At least five Business Days before the Company Notice Date (as defined
below), the Company shall deliver an Officers' Certificate to the Trustee
specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 3.08(e);
(iii) that the conditions to such manner of payment set forth in
Section 3.08(d) have or will be complied with; and
(iv) whether the Company desires the Trustee to give the notice
required by Section 3.08(e).
(c) PURCHASE WITH CASH. On each Purchase Date, at the option of the
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be purchased by the Company with cash equal to the aggregate
Purchase Price of such Securities.
(d) PAYMENT BY COMMON STOCK. On each Purchase Date, at the option of the
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be purchased by the Company by the issuance of a number of shares
of Common Stock equal to the quotient obtained by dividing (i) the amount of
cash to which the Securityholders would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Purchase Price of such Securities in cash by (ii) the Market Price (as defined
below) of a share of Common Stock, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay cash for the current market
value of the fractional share. The current market value of a fraction of a
share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent, with one-half cent being rounded
upward. It is understood that if a Holder elects to have more than one Security
purchased, the
21
number of shares of Common Stock shall be based on the aggregate amount of
Securities to be purchased.
The Company's right to exercise its election to purchase the Securities
pursuant to this Section through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given notice of an election to pay
entirely in cash and its giving of timely notice of election to
purchase all or a specified percentage of the Securities with Common
Stock as provided herein;
(ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price under the Securities Act
of 1933, as amended (the "SECURITIES ACT") and the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), in each case if required
for the initial issuance thereof;
(iii)any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of
the Common Stock are in conformity with this Indenture and (B) the
shares of Common Stock to be issued by the Company in payment of the
Purchase Price in respect of Securities have been duly authorized and,
when issued and delivered pursuant to the terms of this Indenture in
payment of the Purchase Price in respect of the Securities, will be
validly issued, fully paid and nonassessable and shall be free of any
preemptive rights and any lien or adverse claim (provided that such
Opinion of Counsel may state that, insofar as it relates to the
absence of such preemptive rights, liens and adverse claims, it is
given upon the best knowledge of such counsel), and, in the case of
such Officers' Certificate, that conditions (i), (ii) and (iii) above
have been satisfied and, in the case of such Opinion of Counsel, that
conditions (ii) and (iii) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount of Securities and the
Sale Price of a share of Common Stock on each of the seven Business Days prior
to the Purchase Date. The Company may elect to pay in Common Stock only if the
information necessary to calculate the Market Price is reported in THE WALL
STREET JOURNAL or another daily newspaper of national circulation. If such
conditions are not satisfied prior to or on the Purchase Date and the Company
elected to purchase the Securities pursuant to this Section 3.08 through the
issuance of shares of Common Stock, the Company shall pay, without further
notice, the Purchase Price in cash.
22
The "MARKET PRICE" means the average of the Sale Price of the Common Stock
for the five Trading Day period ending on the third Trading Day prior to the
related Purchase Date, appropriately adjusted to take into account the actual
occurrence, during the seven Trading Days preceding such Purchase Date, of any
event described in Section 10.06, 10.07 or 10.08; SUBJECT, HOWEVER, to the
conditions set forth in Sections 10.09 and 10.10.
(e) NOTICE OF ELECTION. The Company shall send notices of its election
(the "COMPANY NOTICE") to purchase with cash or Common Stock or any combination
thereof to the Holders (and to beneficial owners as required by applicable law)
in the manner provided in Section 3.03. The Company Notice shall be sent to
Holders (and to beneficial owners as required by applicable law) on a date not
less than 20 Business Days prior to the Purchase Date (such date not less than
20 Business Days prior to the Purchase Date being herein referred to as the
"COMPANY NOTICE DATE"). Such notices shall state the manner of payment elected
and shall contain the following information:
In the event the Company has elected to pay the Purchase Price (or any
specified percentage thereof) with Common Stock, the notice shall:
(1) state that each Holder will receive Common Stock with a Market
Price determined as of a specified date prior to the Purchase Date equal to
such specified percentage of the Purchase Price of the Securities held by
such Holder (except for any cash amount to be paid in lieu of fractional
shares);
(2) set forth the method of calculating the Market Price of the
Common Stock; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market risk
with respect to the value of the Common Stock to be received from the date
such Market Price is determined to the Purchase Date.
In any case, each notice shall include a form of Purchase Notice to be
completed by the Securityholder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion Agent
and of the office or agency referred to in Section 4.05;
(iii) that Securities as to which a Purchase Notice has been given may
be converted into Common Stock at any time prior to the close of
business on the applicable Purchase Date only if the applicable
Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;
23
(iv) that Securities must be surrendered to the Paying Agent or to the
office or agency referred to in Section 4.05 to collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly
following the later of the Purchase Date and the time of surrender of
such Security as described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities and that
Holders who want to convert Securities must satisfy the requirements
set forth in paragraph 8 of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms
of Section 3.08(a)(1)(D) or Section 3.10).
At the Company's written request, the Trustee shall give such notice in the
Company's name and at the Company's expense;
PROVIDED, HOWEVER, that, in all cases, the text of such notice shall be prepared
by the Company.
Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount of Securities, the Company will
publish such determination in THE WALL STREET JOURNAL or another daily
newspaper of national circulation and furnish the Trustee with an affidavit
of publication.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered
upon purchase of the Securities shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien
or adverse claim.
The Company shall use its best efforts to list or cause to have quoted
any shares of Common Stock to be issued to purchase Securities on the
principal national securities exchange or over-the-counter or other domestic
market on which any other shares of the Common Stock are then listed or
quoted. The Company will promptly inform the Trustee in writing of any such
listing.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in
respect of a cash purchase under Section 3.08(c) or for fractional interests,
as applicable) or shares of Common Stock, or any combination thereof, as
applicable, at the time and in the manner as provided in Section 3.11,
sufficient to pay the aggregate Purchase Price of all Securities to be
purchased pursuant to this
24
Section 3.08. As soon as practicable after the later of the Purchase Date
and the date such Securities are surrendered to the Paying Agent or at the
office or agency referred to in Section 4.05, the Company shall deliver to
each Holder entitled to receive Common Stock through the Paying Agent a
certificate for the number of full shares of Common Stock issuable in payment
of the Purchase Price and cash in lieu of any fractional interests. The
person in whose name the certificate for Common Stock is registered shall be
treated as a holder of record of such Common Stock on the Business Day
following the related Purchase Date. Subject to Section 3.08(d), no payment
or adjustment will be made for dividends on the Common Stock the record date
for which occurred prior to the Purchase Date.
(h) TAXES. If a Holder of a Security is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax due
on such issue of shares of Common Stock. However, the Holder shall pay any
such tax which is due because the Holder requests the shares of Common Stock
to be issued in a name other than the Holder's name. The Paying Agent may
refuse to deliver the certificates representing the Common Stock being issued
in a name other than the Holder's name until the Paying Agent receives a sum
sufficient to pay any tax which will be due, as set forth in an Officers'
Certificate, because the shares of Common Stock are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
SECTION 3.09. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON CHANGE
IN CONTROL.
(a) If on or prior to June 12, 2001 there shall have occurred a Change
in Control, Securities shall be purchased, at the option of the Holder
thereof, by the Company at the purchase price specified in paragraph 6 of the
Securities (the "CHANGE IN CONTROL PURCHASE PRICE"), on the date that is 35
Business Days after the occurrence of the Change of Control (the "CHANGE IN
CONTROL PURCHASE DATE"), subject to satisfaction by or on behalf of the
Holder of the requirements set forth in Section 3.09(c).
A "CHANGE IN CONTROL" shall be deemed to have occurred at such time
after the original issuance of the Securities as either of the following
events shall occur:
(i) There shall be consummated any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation
or pursuant to which the Common Stock would be converted into cash,
securities or other property, other than a consolidation or merger of the
Company in which the holders of Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority
of the Common Stock of the continuing or surviving corporation immediately
after such consolidation or merger; or
25
(ii) There is a report filed by any person, including its Affiliates
and Associates, other than Zell/Chilmark, the Company, any Subsidiary of
the Company, or any employee benefit plan of either the Company or any
Subsidiary of the Company, on Schedule 13D or 14D-1 (or any successor
schedule, form or report) pursuant to the Exchange Act, disclosing that
such person (for the purposes of this Section 3.09 only, the term "person"
shall include a "person" within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing) has become the beneficial owner (as the term "BENEFICIAL OWNER"
is defined under Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of 50% or more of the voting power of the Company's
Common Stock then outstanding; PROVIDED, HOWEVER, that a person shall not
be deemed beneficial owner of, or to own beneficially, (A) any securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such person or any of such person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange thereunder, or
(B) any securities if such beneficial ownership (1) arises solely as a
result of a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Exchange Act, and (2) is not also then reportable
on Schedule 13D (or any successor schedule, form or report) under the
Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change
in Control shall not be deemed to have occurred if at any time the Company,
any Subsidiary, any employee stock ownership plan or any other employee
benefit plan of the Company or any Subsidiary, or any person holding Common
Stock for or pursuant to the terms of any such employee benefit plan files or
becomes obligated to file a report under or in response to Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report) under the Exchange
Act disclosing beneficial ownership by it of shares of Common Stock, whether
in excess of 50% or otherwise.
"ASSOCIATE" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on
the date hereof.
(b) Within 15 Business Days after the occurrence of a Change in
Control, (i) the Company shall mail a written notice of such Change in
Control by first-class mail to the Trustee and to each Holder (and to
beneficial owners if required by applicable law) and (ii) the Company shall
cause a copy of such notice to be published in THE WALL STREET JOURNAL or
another daily newspaper of national circulation. The notice shall include a
form of Change in Control Purchase Notice to be completed by the
Securityholder and shall state:
(1) the events causing a Change in Control and the date such Change
in Control is deemed to have occurred for purposes of this Section 3.09;
26
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent
and the office or agency referred to in Section 4.05;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock (or, in lieu thereof,
cash, if the Company shall so elect) at any time prior to the close of
business on the Change of Control Purchase Date only if the Change in
Control Purchase Notice has been withdrawn by the Holder in accordance with
the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent or the
office or agency referred to in Section 4.05 to collect payment;
(9) that the Change in Control Purchase Price for any Security as to
which a Purchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Change in Control Purchase Date and the
time of surrender of such Security as described in (8);
(10) 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 Securities; and
(12) the procedures for withdrawing a Change in Control Purchase
Notice.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "CHANGE IN CONTROL PURCHASE
NOTICE") to the Paying Agent or to the office or agency referred to in
Section 4.05 at any time prior to the close of business on the Change in
Control Purchase Date, stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
27
(2) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof; and
(3) that such Security shall be purchased on the Change in Control
Purchase Date pursuant to the terms and conditions specified in paragraph 6
of the Securities.
Receipt of the Security by the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements),
at the offices of the Paying Agent or to the office or agency referred to in
Section 4.05 shall be a condition to the receipt by the Holder of the Change
in Control Purchase Price therefor; PROVIDED, HOWEVER, that such Change in
Control Purchase Price shall be so paid pursuant to this Section 3.09 only if
the Security so delivered to the Paying Agent or such office or agency shall
conform in all respects to the description thereof set forth in the related
Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture
that apply to the purchase of all of a Security also apply to the purchase of
such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration
to be received by the Holder promptly following the later of the Change in
Control Purchase Date and the date such Securities are surrendered to the
Paying Agent or at the office or agency referred to in Section 4.05.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent or to the office or agency referred to in Section 4.05
the Change in Control Purchase Notice contemplated by this Section 3.09(c)
shall have the right to withdraw such Change in Control Purchase Notice at
any time prior to or on the Change in Control Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent or to such office or agency
in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 3.10. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL PURCHASE
NOTICE. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08(a) or Section 3.09(c), as
applicable, the Holder of the Security in respect of which such Purchase
Notice or Change in Control Purchase Notice, as the case may be, was given
shall (unless such Purchase Notice or Change in Control Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Security. Such Purchase
Price
28
or Change in Control Purchase Price shall be paid to such Holder promptly
following the later of (x) the Business Day following the Purchase Date or
the Change in Control Purchase Date, as the case may be, with respect to such
Security (provided the conditions in Section 3.08(a) or Section 3.09(c), as
applicable, have been satisfied) and (y) the time of delivery of such
Security to the Paying Agent or to the office or agency referred to in
Section 4.05 by the Holder thereof in the manner required by Section 3.08(a)
and (g) or Section 3.09(c), as applicable. Securities in respect of which a
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted into shares of Common
Stock on or after the date of the delivery of such Purchase Notice or Change
in Control Purchase Notice, as the case may be, unless such Purchase Notice
or Change in Control Purchase Notice, as the case may be, has first been
validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent or to the office or agency referred to in
Section 4.05 at any time on or prior to the Purchase Date or the Change in
Control Purchase Date, as the case may be, specifying:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the Principal Amount of the Security with respect to which such
notice of withdrawal is being submitted; and
(3) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Change in Control Purchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form
set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the terms
of Section 3.08(a)(1)(D) or (ii) a conditional withdrawal containing the
information set forth in Section 3.08(a)(1)(D) and the preceding paragraph
and contained in a written notice of withdrawal delivered to the Paying Agent
as set forth in the preceding paragraph.
There shall be no purchase of any Securities pursuant to Sections 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares of Common Stock) or 3.09
if there has occurred (prior to, on or after, as the case may be, the giving,
by the Holders of such Securities, of the required Purchase Notice or Change
in Control Purchase Notice, as the case may be) and is continuing an Event of
Default (other than a default in the payment of the Purchase Price or Change
in Control Purchase Price, as the case may be, with respect to such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Purchase Notice or Change
in Control Purchase Notice,
29
as the case may be, has been withdrawn in compliance with this Indenture, or
(y) held by it during the continuance of an Event of Default (other than a
default in the payment of the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Securities) in which case,
upon such return, the Purchase Notice or Change in Control Purchase Notice
with respect thereto shall be deemed to have been withdrawn.
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL PURCHASE
PRICE. Prior to 3:00 p.m. (local time in The City of New York) on the
Business Day following the Purchase Date or the Change in Control Purchase
Date, as the case may be, the Company shall deposit with the Trustee or with
the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of
either of them is acting as Paying Agent, shall segregate and hold in trust
as provided in Section 2.04) an amount of cash in immediately available funds
or securities, if expressly permitted hereunder, sufficient to pay the
aggregate Purchase Price or Change in Control Purchase Price, as the case may
be, of all the Securities or portions thereof which are to be purchased as of
the Purchase Date or Change in Control Purchase Date, as the case may be.
SECTION 3.12. SECURITIES PURCHASED IN PART. Any Security which is to be
purchased only in part shall be surrendered at the office of the Paying Agent
or the office or agency referred to in Section 4.05 (with, if the Company or
the Trustee so requires, due endorsement, or a written instrument of transfer
in form satisfactory to the Company and the Trustee executed by the Holder or
such Holder's attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of
the Security so surrendered which is not purchased.
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES. In connection with any offer to purchase or purchase of
Securities under Section 3.08 or 3.09 hereof, the Company shall (i) comply
with Rule 13e-4 and Rule 14e-1 under the Exchange Act, if applicable, (ii)
file the related Schedule 13E-4 (or any successor schedule, form or report)
under the Exchange Act, if applicable, and (iii) otherwise comply with all
Federal and state securities laws regulating the offer and delivery of shares
of Common Stock upon purchase of the Securities (including positions of the
SEC under applicable no-action letters) so as to permit the rights and
obligations under Sections 3.08 and 3.09 to be exercised in the time and in
the manner specified in Sections 3.08 and 3.09.
SECTION 3.14. REPAYMENT TO THE COMPANY. The Trustee and the Paying
Agent shall return to the Company, upon written request, any cash or shares
of Common Stock, together with interest on such cash as hereinafter provided
and dividends on such shares of Common Stock, if any, (subject to the
provisions of Section 7.01(f)) held by them for the payment of a Purchase
Price or Change in Control Purchase Price, as the case may be, of the
Securities that remain unclaimed as
30
provided in paragraph 12 of the Securities; PROVIDED, HOWEVER, that to the
extent that the aggregate amount of cash or shares of Common Stock deposited
by the Company pursuant to Section 3.11 exceeds the aggregate Purchase Price
or Change in Control Purchase Price, as the case may be, of the Securities or
portions thereof to be purchased, then promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest as hereinafter provided or dividends, if any, thereon (subject to
the provisions of Section 7.01(f)). Any cash deposited with the Trustee or
with the Paying Agent pursuant to Section 3.11 hereof, shall be invested by
the Trustee or Paying Agent, as applicable, in short term obligations of, or
fully guaranteed by, the United States of America, or commercial paper rated
A-1 or better by Standard and Poor's Corporation or P-1 or better by Moody's
Investors Service, Inc. or the Dreyfus Cash Management Fund or the American
AAdvantage Money Market Fund, as specifically directed in writing by the
Company. Interest earned on such investments shall be repaid to the Company
pursuant to this Section 3.14. Except as provided for in this Section 3.14,
the Trustee shall be under no liability for interest on any money received by
it pursuant to this Indenture.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase
Price, Change in Control Purchase Price and interest, if any, 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, cash or securities, if
expressly permitted hereunder, sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the per annum rate of interest set forth in paragraph 1 of
the Securities, compounded semi-annually, which interest on overdue amounts
(to the extent payment of such interest shall be legally enforceable) shall
accrue from the date such overdue amounts were originally due and payable.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual 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 (or any such successor provisions
thereto). In the event the Company is at any
31
time no longer subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act (or any such successor provisions), it shall continue to
provide the Trustee with reports containing substantially the same
information as would have been required to be filed with the SEC had the
Company continued to have been subject to such reporting requirements, and
the Trustee shall make any such reports available to Securityholders upon
request. In such event, such reports shall be provided at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. The Company also shall comply
with the other provisions of TIA Section 314(a), to the extent such
provisions are applicable.
SECTION 4.03. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULTS.
(a) 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, 1996) a certificate of the principal executive officer, the
principal financial officer, or principal accounting officer of the Company
stating whether or not, to the knowledge of the signer, the Company has
complied with all conditions and covenants on its part contained in this
Indenture and, if the signer has obtained knowledge of any default by the
Company in the performance, observance or fulfillment of any such condition
or covenant, specifying each such default and the nature thereof. For the
purpose of this Section 4.03, compliance shall be determined without regard
to any grace period or requirement of notice provided pursuant to the terms
of this Indenture.
(b) The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default within five Business Days of
its becoming aware of such Default or Event of Default.
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, in such location
as may be required by the rules of any securities exchange or quotation
system on which the Securities may from time to time be listed, an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer, exchange,
purchase, redemption or conversion and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served.
The office of the Trustee in The City of New York, at which at any particular
time its corporate trust business shall be principally administered, which
office on the date hereof is located at 101 Barclay Street, Floor 21 West,
New York, New York 10286, shall be such office or agency for all of the
aforesaid purposes unless the Company shall maintain some other office or
agency for such purposes and shall give prompt written notice to the Trustee
of the location, and any change of location, of such other office or agency.
If at any time the Company shall fail to maintain
32
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may
be made or served at the address of the Trustee set forth in Section 11.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in The
Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.06. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company
shall file with the Trustee promptly following the end of each calendar year
a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on outstanding Securities as of the
end of such year.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. So long as
any Securities shall be outstanding, the Company shall not consolidate with
or merge into any other corporation or other person or convey, transfer or
lease its properties and assets substantially as an entirety to any person
(such successor corporation or person, as the case may be, shall in this
Article 5 be referred to as the "Successor Company"), unless
(1) either (x) the Company shall be the continuing corporation or
(y) the Successor Company (if other than the Company) shall be organized
and existing under the laws of the United States of America or any State
or the District of Columbia, and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of and premium, if any, and interest, if any, on all the
Securities and the performance of every covenant of this Indenture and
in the Securities on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event that, after notice or lapse of time, or both,
would become an Event of Default, shall have happened and be continuing;
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and
33
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 5.02. SUCCESSOR COMPANY SUBSTITUTED. Upon any consolidation
with or merger into any other corporation or other person, or any conveyance,
transfer or lease of the properties and assets of the Company substantially
as an entirety in accordance with Section 5.01, the Successor Company or
person formed by such consolidation or into which the Company is merged or 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 Company or person
had been named as the Company herein, and thereafter, except in the case of a
lease and obligations the Company may have under a supplemental indenture
pursuant to Section 10.14, the predecessor corporation shall be relieved of
all obligations and covenants under this Indenture and the Securities.
Subject to Section 9.06, the Company, the Trustee and the successor person
shall enter into a supplemental indenture to evidence the succession and
substitution of such successor person and such discharge and release of the
Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in the payment of the Principal Amount, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price or
Change in Control Purchase Price on any Security when the same becomes due
and payable at its Stated Maturity, upon redemption, upon declaration, when
due for purchase by the Company or otherwise, whether or not such payment
shall be prohibited by this Indenture;
(2) the Company fails to comply with any of its agreements in the
Securities or this Indenture and such failure continues for 60 days after
receipt by the Company of a Notice of Default;
(3) the Company pursuant to 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;
34
(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 seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment of
or taking possession by a Custodian;
(4) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt;
(B) appoints a Custodian of the Company or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days;
(5) the Company fails to deliver shares of Common Stock or pay cash in
lieu of fractional shares in accordance with the terms hereof when such
Common Stock or cash in lieu of fractional shares is required to be
delivered, upon conversion of a Security and such failure is not remedied
for a period of 10 days; or
(6) (a) default shall occur (i) in the payment of any principal on any
debt for borrowed money of the Company (excluding any non-recourse debt),
in an aggregate principal amount in excess of $10.0 million, when due at
its final maturity after giving effect to any applicable grace period and
the holder thereof shall have taken affirmative action to enforce the
payment thereof, or (ii) in the performance of any term or provision of any
debt for borrowed money of the Company (excluding any non-recourse debt) in
an aggregate principal amount in excess of $10.0 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, unless, in the case of
either clause (i) or (ii) above, (x) such acceleration or action to enforce
payment, as the case may be, has been rescinded or annulled, (y) such debt
has been discharged or (z) a sum sufficient to discharge in full such debt
has been deposited in trust by or on behalf of the Company, in each case,
within a period of 10 days after there has
35
been given, by registered or certified mail, 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 Securities at the time outstanding,
a written notice specifying such default or defaults and stating that
such notice is a "Notice of Default" hereunder.
A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (2) above after receipt of such notice.
Any such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which
with the giving of notice and the lapse of time or both would become an Event
of Default under clause (2) or clause (6), its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(3) or (4)) occurs and is
continuing, unless the Principal Amount of all the Securities shall have
already become due and payable, either the Trustee by notice to the Company,
or the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding by notice to the Company and the Trustee,
may declare the Issue Price and accrued Original Issue Discount through the
date of declaration on all the Securities to be immediately due and payable,
whereupon such Issue Price and accrued Original Issue Discount shall be due
and payable immediately; provided that, if an Event of Default specified in
Section 6.01(3) or (4) occurs and is continuing, the Issue Price and accrued
Original Issue Discount on all the Securities through the date of the
occurrence of such Event of Default shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
any Securityholders. The Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding, by notice to the Trustee (and
without notice to any other Securityholder) may rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of the Issue Price and accrued Original Issue Discount 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 Issue Price and accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
36
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by
notice to the Trustee (and without notice to any other Securityholder), may
waive an existing Default and its consequences except (a) an Event of Default
described in Section 6.01(1), (b) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each
Securityholder affected or (c) a Default under Article 10. When a Default is
waived, it is deemed cured and shall cease to exist, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability unless the Trustee shall have been
provided with reasonable security or indemnity against such liability
satisfactory to the Trustee.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense satisfactory to the
Trustee;
(4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity;
and
(5) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
37
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price
or interest, if any, in respect of the Securities held by such Holder, on or
after the respective due dates expressed in the Securities or any Redemption
Date, and to convert the Securities in accordance with Article 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 each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
described in Section 6.01(1) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.06.
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 Securities
or the property of the Company or of such other obligor or their creditors,
the Trustee (irrespective of whether the Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change in
Control Purchase Price or interest, if any, in respect of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of any such amount) shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Change in Control Purchase Price or interest, if any, and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) 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,
38
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 Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.06;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price or
interest, if any, as the case may be, ratably, without preference or priority of
any kind, according to such amounts due and payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and 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 initiated by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in aggregate Principal Amount of the Securities at the time
outstanding.
SECTION 6.12. NOTICE OF DEFAULTS. The Trustee shall, within 90 days
after the occurrence of any Default, mail to all Holders of Securities, as
the names and addresses of such Holders appear on the books of registry of
the Company, notice of all Defaults of which the Trustee shall be aware,
unless such Defaults shall have been cured or waived before the giving of
such notice; PROVIDED that, except in the case of a Default described in
Section 6.01(1), the Trustee shall be protected in
39
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors or Trust Officers of
the Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders of Securities.
SECTION 6.13. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent it may lawfully do so) that it shall 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, that would prohibit
or forgive the Company from paying all or any portion of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price or Change in Control Purchase Price in respect of the
Securities, or any interest on any such amounts, as contemplated herein, or
that may affect the covenants or the performance of this Indenture or the
Securities; 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. RIGHTS OF TRUSTEE.
(a) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(b) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(c) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(d) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(e) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. Except as provided in
Section 3.14 hereof, the Trustee (acting
40
in any capacity hereunder) shall be under no liability for interest on any
money received by it hereunder.
(f) The Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
(g) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions that 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 (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).
(h) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
(i) 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 of a majority in principal amount of the outstanding Securities
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 with respect to the Securities.
(j) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(k) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee reasonably believes that a default may exist, it shall be entitled to
examine the books, records and premises of the Company, personally or by
agent or attorney at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.
(l) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
41
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(m) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties.
SECTION 7.02. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, Conversion Agent or co-registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.09 and 7.10.
SECTION 7.03. TRUSTEE'S DISCLAIMER. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, it shall not be responsible for any statement in the
registration statement for the Securities under the Securities Act or in the
Indenture or the Securities (other than its certificate of authentication),
or the determination as to which beneficial owners are entitled to receive
any notices hereunder.
SECTION 7.04. NOTICE OF DEFAULTS. The Trustee shall, within 90 days
after the occurrence of any Default, mail to all Holders of Securities, as
the names and addresses of such Holders appear on the books of registry of
the Company, notice of all Defaults of which the Trustee shall be aware,
unless such Defaults shall have been cured or waived before the giving of
such notice. Except in the case of a Default described in Section 6.01(1),
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 Trust Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities.
SECTION 7.05. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
June 1 beginning with the June 1, 1998 following the date of this Indenture,
the Trustee shall mail to each Securityholder a brief report dated as of such
June 1 that complies with TIA Section 313(a), if required by said Section.
The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be provided to the Company and shall be filed with the SEC and each
stock exchange on which the Securities are listed. The Company agrees
promptly to notify the Trustee whenever the Securities become listed on any
stock exchange and of any delisting thereof.
42
SECTION 7.06. COMPENSATION AND INDEMNITY. The Company agrees:
(a) to pay to the Trustee from time to time such compensation (in
accordance with a fee schedule agreed upon from time to time) for all
services rendered by it hereunder (which compensation shall not (to the
extent permitted by law) be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee (in accordance with a fee schedule agreed
upon from time to time) upon its request and, if required by the Company,
submission of reasonable documentation for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and
the expenses, advances and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify each of the Trustee or any predecessor Trustee for,
and to hold it harmless against, any and all loss, liability, damage, claim
or expense, including taxes (other than taxes based upon, measured or
determined by the income of the Trustee), incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The Trustee shall give the Company notice of any claim or liability for
which the Trustee might be entitled to indemnification under subparagraph (c)
of this Section 7.06, within a reasonable amount of time after a Trust
Officer of the Trustee actually becomes aware of such claim or liability. To
secure the Company's payment obligations in this Section 7.06, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee.
The Company's payment obligations pursuant to this Section 7.06 shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(3) or (4), the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law. The provisions of this Section shall survive the termination
of this Indenture.
SECTION 7.07. REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; PROVIDED, HOWEVER, no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.07. The Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee (subject to the
consent of the Company, such consent not to be unreasonably withheld). The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.09;
43
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject
to the lien provided for in Section 7.06.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in aggregate Principal Amount of the Securities at
the time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.09, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 7.08. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
SECTION 7.09. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee shall have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition. In
determining whether the Trustee has conflicting interests as defined in TIA
Section 310(b)(1), the provisions contained in the proviso to TIA Section
310(b)(1) shall be deemed incorporated herein.
SECTION 7.10. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
44
SECTION 7.11. MONEY HELD IN TRUST. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits
with the Trustee cash or, if expressly permitted by the terms hereof,
securities sufficient to pay at Stated Maturity the Principal Amount of all
outstanding Securities (other than Securities replaced pursuant to Section
2.07), and if in either case the Company pays all other sums payable
hereunder by the Company (including, without limitation, sums payable by
delivery of shares of Common Stock pursuant to Section 3.08), then this
Indenture shall, subject to Section 7.06, 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 TO THE COMPANY. The Trustee and the Paying
Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years; PROVIDED, HOWEVER, that at
the Company's written 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 daily 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 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.
45
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
PROVIDED, HOWEVER, that such amendment does not materially adversely affect
the rights of any Securityholder;
(2) to comply with Article 5 or Section 10.14;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986,
as amended;
(4) to make any change that does not adversely affect the rights of
any Securityholder;
(5) to add to the covenants or obligations of the Company hereunder,
for the benefit of the Securityholders, or to surrender any right, power or
option herein conferred upon the Company; or
(6) to make any change to comply with the TIA.
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
Securities at the time outstanding, the Company and the Trustee may amend
this Indenture or the Securities. However, without the consent of each
Securityholder affected, an amendment or supplement to this Indenture or the
Securities may not:
(1) make any change to the Principal Amount of Securities whose
Holders must consent to an amendment;
(2) make any change to the rate of accrual in connection with Original
Issue Discount, reduce the rate of interest referred to in paragraph 1 of
the Securities or extend the time for payment of accrued Original Issue
Discount or interest, if any, on any Security;
(3) reduce the Principal Amount or the Issue Price of or extend the
Stated Maturity of any Security;
46
(4) reduce the amount of cash payable in respect of conversion upon
the Company's election to pay cash with respect thereto, the Redemption
Price, Purchase Price or Change in Control Purchase Price of any Security
or extend the date on which the Purchase Price or Change in Control
Purchase Price of any Security is payable;
(5) make any Security payable in money or securities other than that
stated in the Security;
(6) make any change in Section 6.04 or this Section 9.02, except to
increase any percentage referred to therein, or make any change in Section
6.07;
(7) make any change that adversely affects the right to convert any
Security (including the right to receive cash in lieu of Common Stock
except as set forth in Section 9.01(4));
(8) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms thereof and
this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase);
(9) make any change to the provisions of this Indenture relating to
the purchase of Securities at the option of the Holder pursuant to Section
3.08 or 3.09 which change would result in a violation of applicable federal
or state securities laws (including positions of the SEC under applicable
no-action letters), whether as a result of the exercise or performance of
any rights or obligations under such provisions or otherwise; or
(10) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities.
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.
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 as then
in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment or waiver becomes effective, a consent to it or any other
action by a Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or
47
portion of the Security that evidences the same obligation as the consenting
Holder's Security, even if notation of the consent, waiver or action is not
made on the Security. However, any such Holder or subsequent Holder may
revoke the consent, waiver or action as to such Holder's Security or portion
of the Security if the Trustee receives the notice of revocation before the
date the amendment, waiver or action becomes effective. After an amendment,
waiver or action becomes effective, it shall bind every Securityholder,
except as provided in Section 9.02.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee
shall sign any supplemental indenture authorized pursuant to this Article 9
if the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing such amendment 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, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
ARTICLE 10
CONVERSION
SECTION 10.01. CONVERSION PRIVILEGE. A Holder of a Security may
convert such Security into Common Stock at any time during the period stated
in paragraph 8 of the Securities. The number of shares of Common Stock
issuable upon conversion of a Security per $1,000 of Principal Amount thereof
(the "CONVERSION RATE") shall be that set forth in paragraph 8 in the
Securities, subject to adjustment as herein set forth.
48
A Holder may convert a portion of the Principal Amount of a Security if
the portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.
"AVERAGE SALE PRICE" means the average of the Sale Prices of the Common
Stock for the shorter of
(i) 30 consecutive Trading Days ending on the last full Trading Day
prior to the Time of Determination with respect to the rights,
options, warrants or distribution in respect of which the Average
Sale Price is being calculated, or
(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, options or warrants
or (b) the distribution, in each case, in respect of which the Average
Sale Price is being calculated and (y) proceeding through the last
full trading day prior to the Time of Determination with respect to
the rights, warrants or distribution in respect of which the Average
Sale Price is being calculated, or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance
of rights, warrants, or options or (b) distribution, in each case, for
which an adjustment is required by the provisions of Section 10.06(4),
10.07 or 10.08 and (y) proceeding through the last full Trading Day
prior to the Time of Determination with respect to the rights,
warrants, or options or distribution in respect of which the Average
Sale Price is being calculated.
If the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section
10.06(1), (2), (3) or (5) applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a
manner determined by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the Sale Price of
the Common Stock during such period.
"TIME OF DETERMINATION" means the time and date of the earlier of (i)
the determination of stockholders entitled to receive rights, warrants, or
options or a distribution, in each case, to which Sections 10.07 and 10.08
apply and (ii) the time ("EX-DIVIDEND TIME") immediately prior to the
commencement of "ex-dividend" trading for such rights, options, warrants or
distribution on the New York Stock Exchange or such other national or
regional exchange or market on which the Common Stock is then listed or
quoted.
49
SECTION 10.02. CONVERSION PROCEDURE. To convert a Security a Holder
must satisfy the requirements in paragraph 8 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date (the
"CONVERSION DATE"). The Company shall deliver to the Holder no later than
the seventh Business Day following the Conversion Date, through the
Conversion Agent, a certificate for the number of full shares of Common Stock
issuable upon the conversion and cash in lieu of any fractional share
determined pursuant to Section 10.03.
The person in whose name the certificate is registered shall be treated
as a stockholder of record on and after the Conversion Date; PROVIDED,
HOWEVER, that no surrender of a Security on any date when the stock transfer
books of the Company shall be closed shall be effective to constitute the
person or persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of Common Stock as the record holder
or holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; PROVIDED,
FURTHER, that such conversion shall be at the Conversion Rate in effect on
the date that such Security shall have been surrendered for conversion, as if
the stock transfer books of the Company had not been closed. Upon conversion
of a Security, such person shall no longer be a Holder of such Security.
Holders may surrender a Security for conversion by means of book entry
delivery in accordance with paragraph 8 of the Securities and the regulations
of the applicable book entry facility.
No payment or adjustment will be made for dividends on any Common Stock
except as provided in this Article 10. 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
to be paid in full to the Holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof;
and the fair market value of such shares of Common Stock (together with any
such cash payment in lieu of any 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.
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
computed based on the total Principal Amount of the Securities converted.
50
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder,
a new Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where the Conversion Agent is located, the Security may be
surrendered to such Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 10.03. FRACTIONAL SHARES. The Company will not issue a
fractional share of Common Stock upon conversion of a Security. Instead, the
Company will deliver cash for the current market value of the fractional
share. The current market value of a fractional share shall be determined to
the nearest 1/1,000th of a share by multiplying the Sale Price, on the last
Trading Day prior to the Conversion Date, of a full share by the fractional
amount and rounding the product to the nearest whole cent.
SECTION 10.04. TAXES ON CONVERSION. If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon such conversion. However,
the Holder shall pay any such tax which is due because the Holder requests
the shares to be issued in a name other than the Holder's name. The
Conversion Agent may refuse to deliver the certificates representing the
Common Stock being issued in a name other than the Holder's name until the
Conversion Agent receives a sum sufficient to pay any tax which will be due,
as set forth in an Officers' Certificate, because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any
tax withholding required by law or regulations.
SECTION 10.05. COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be
necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Securities for shares of Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive
rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock
upon conversion of Securities, if any, and will list or cause to have quoted
such shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is
then listed or quoted.
51
SECTION 10.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, after the
Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital
Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares or other units of
Capital Stock of the Company which such Holder would have owned immediately
following such action if such Holder had converted the Security immediately
prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares or other units of two or more classes or series
of Capital Stock of the Company, the Conversion Rate shall thereafter be
subject to adjustment upon the occurrence of an action taken with respect to
any such class or series of Capital Stock as is contemplated by this Article
10 with respect to the Common Stock, on terms comparable to those applicable
to Common Stock in this Article 10.
SECTION 10.07. ADJUSTMENT FOR RIGHTS ISSUE. If, after the Issue Date,
the Company distributes any rights, warrants or options to all holders of its
Common Stock entitling them, for a period expiring within 60 days after the
record date for such distribution, to purchase shares of Common Stock at a
price per share less than the Sale Price as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:
52
(0 + N)
-----------
R' = R x 0 + (N X P)
-----
M
where:
R'= the adjusted Conversion Rate.
R = the current Conversion Rate.
0 = the number of shares of Common Stock outstanding on the record date
for the distribution.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, MINUS, in the case of (i) a distribution to
which Section 10.06(4) applies or (ii) a distribution to which Section
10.08 applies, for which, in each case, (x) the record date shall
occur on or before the record date for the distribution to which this
Section 10.07 applies and (y) the Ex-Dividend Time shall occur on or
after the date of the Time of Determination for the distribution to
which this Section 10.07 applies, the fair market value (on the record
date for the distribution to which this Section 10.07 applies) of:
(1) the Capital Stock of the Company distributed in
respect of each share of Common Stock in such Section
10.06(4) distribution, and
(2) the assets of the Company or debt securities or
any rights, warrants or options to purchase securities of
the Company distributed in respect of each share of Common
Stock in such Section 10.08 distribution.
The Board of Directors shall determine fair market values for the purposes of
this Section 10.07.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights,
warrants or options to which this Section 10.07 applies.
53
No adjustment shall be made under this Section 10.07 if the application
of the formula stated above in this Section 10.07 would result in value of R'
that is equal to or less than the value of R.
SECTION 10.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. If, after the Issue
Date, the Company distributes to all holders of its Common Stock any of its
assets or debt securities or any rights, warrants or options to purchase
securities of the Company (including securities or cash, but excluding (x)
distributions of Capital Stock referred to in Section 10.06 and distributions
of rights, warrants or options referred to in Section 10.07 and (y) cash
dividends or other cash distributions that are paid out of consolidated
current net income or earnings retained in the business as shown on the books
of the Company unless such cash dividends or other cash distributions are
Extraordinary Cash Dividends (as defined below)), the Conversion Rate shall
be adjusted, subject to the provisions of the last paragraph of this Section
10.08, in accordance with the formula:
M
---
R' = R x M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, MINUS, in the case of a distribution to which
Section 10.06(4) applies for which (i) the record date shall occur on
or before the record date for the distribution to which this Section
10.08 applies and (ii) the Ex-Dividend Time shall occur on or after
the date of the Time of Determination for the distribution to which
this Section 10.08 applies, the fair market value (on the record date
for the distribution to which this Section 10.08 applies) of any
Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 10.06(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 10.08 applies) of the assets, securities, rights,
warrants or options to be distributed in respect of each share of
Common Stock in the distribution to which this Section 10.08 is being
applied (including, in the case of cash dividends or other cash
distributions giving rise to an adjustment, all such cash distributed
concurrently).
The Board of Directors shall determine fair market values for the purpose of
this Section 10.08.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the distribution to
which this Section 10.08 applies.
54
For purposes of this Section 10.08, the term "EXTRAORDINARY CASH DIVIDEND"
shall mean any cash dividend with respect to the Common Stock the amount of
which, together with the aggregate amount of cash dividends on the Common Stock
to be aggregated with such cash dividend in accordance with the provisions of
this paragraph, equals or exceeds the threshold percentages set forth in items
(i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with respect to a
cash dividend on the Common Stock, the aggregate amount of such cash
dividend together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the eighty-five (85)
consecutive day period ending on the date prior to the Ex-Dividend
Time with respect to the cash dividend to which this provision is
being applied equals or exceeds 12.5% of the average of the Sale
Prices during the period beginning on the date after the first such
Ex-Dividend Time in such period and ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied (except that if no other cash dividend has
had an Ex-Dividend Time occurring in such period, the period for
calculating the average of the Sale Prices shall be the period
commencing 85 days prior to the date prior to the Ex-Dividend Time
with respect to the cash dividend to which this provision is being
applied), such cash dividend together with each other cash dividend
with an Ex-Dividend Time occurring in such 85-day period shall be
deemed to be an Extraordinary Cash Dividend and for purposes of
applying the formula set forth above in this Section 10.08, the value
of "F" shall be equal to (w) the aggregate amount of such cash
dividend together with the amounts of the other cash dividends with
Ex-Dividend Times occurring in such period MINUS (x) the aggregate
amount of such other cash dividends with Ex-Dividend Times occurring
in such period for which a prior adjustment in the Conversion Rate was
previously made under this Section 10.08.
(ii) If upon the date prior to the Ex-Dividend Time with respect to a
cash dividend on the Common Stock, the aggregate amount of such cash
dividend, together with the amounts of all cash dividends on the
Common Stock with Ex-Dividend Times occurring in the 365-consecutive-
day period ending on the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied
equals or exceeds 25% of the average of the Sale Prices during the
period beginning on the date after the first such Ex-Dividend Time in
such period and ending on the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied
(except that if no other cash dividend has had an Ex-Dividend Time
occurring in such period, the period for calculating the average of
the Sale Prices shall be the period commencing 365 days prior to the
date prior to the Ex-Dividend Time with respect to the cash dividend
to which this provision is being applied), such cash dividend together
with each other cash dividend
55
with an Ex-Dividend Time occurring in such 365-day period shall
be deemed to be an Extraordinary Cash Dividend and for purposes
of applying the formula set forth above in this Section 10.08,
the value of "F" shall be equal to (y) the aggregate amount of
such cash dividend together with amounts of the other cash
dividends with Ex-Dividend Times occurring in such period MINUS
(z) the aggregate amount of such other cash dividends with
Ex-Dividend Times occurring in such period for which a prior
adjustment in the Conversion Rate was previously made under
this Section 10.08.
In making the determinations required by items (i) and (ii) above, the
amount of cash dividends paid on a per share basis and the average of the
Sale Prices, in each case during the period specified in items (i) and (ii)
above, as applicable, shall be appropriately adjusted to reflect the
occurrence during such period of any event described in Section 10.06
In the event that, with respect to any distribution to which this
Section 10.08 would otherwise apply, the difference "M-F" as defined in the
above formula is less than $1.00 or "F" is greater than "M", then the
adjustment provided by this Section 10.08 shall not be made and in lieu
thereof the provisions of Section 10.14 shall apply to such distribution.
SECTION 10.09. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase
or decrease of at least 1% (E.G., if the Conversion Rate is 4, an increase or
decrease of .04 (1% of 4)) in the Conversion Rate. Any adjustments that are
not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 10 shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be, with one-half of
a cent and 5/10,000ths of a share being rounded upwards.
SECTION 10.10. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made
for a transaction referred to in Section 10.06, 10.07, 10.08 or 10.14 if
Securityholders are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction.
No adjustment need be made for rights to purchase Common Stock pursuant
to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value
of the Common Stock.
56
No adjustment need be made unless such adjustment, together with any
other adjustments similarly deferred equals at least 1% of the then current
Conversion Rate.
To the extent the Securities become convertible into cash pursuant to
the terms of Section 10.08 or 10.14, no adjustment need be made thereafter as
to the cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to
the extent, such adjustment results in the following quotient being less than
the par value of the Common Stock: (i) the Issue Price plus accrued Original
Issue Discount as of the date such adjustment would otherwise be effective
divided by (ii) the Conversion Rate as so adjusted.
SECTION 10.11. NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall file with the Trustee and the Conversion Agent a
notice of such adjustment and a certificate from the Company's independent
public accountants briefly stating the facts requiring the adjustment and the
manner of computing it. The Conversion Agent will promptly mail such notice
to Securityholders at the Company's expense. The certificate shall be
conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect
to any such certificate except to exhibit the same to any Holder desiring
inspection thereof.
SECTION 10.12. VOLUNTARY INCREASE. The Company from time to time may
increase the Conversion Rate by any amount and for any period of time
(PROVIDED, that such period is not less than 20 Business Days). Whenever the
Conversion Rate is increased, the Company shall mail to Securityholders and
file with the Trustee and the Conversion Agent a notice of the increase. The
Company shall mail the notice at least 15 days before the date the increased
Conversion Rate takes effect. The notice shall state the increased
Conversion Rate and the period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust
the Conversion Rate otherwise in effect for purposes of Sections 10.06, 10.07
or 10.08.
SECTION 10.13. NOTICE OF CERTAIN TRANSACTIONS. If:
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 10.06, 10.07 or 10.08 (unless no
adjustment is to occur pursuant to Section 10.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.14; or
57
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the Trustee and
the Conversion Agent a notice stating the proposed record date for a dividend
or distribution of the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at
least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.
SECTION 10.14. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS. If the
Company is a party to a transaction subject to Section 5.01 (other than a
sale of all or substantially all of the assets of the Company in a
transaction in which the holders of Common Stock immediately prior to such
transaction do not receive securities, cash or other assets of the Company or
any other person) or a merger or binding share exchange which reclassifies or
changes its outstanding Common Stock, the person obligated to deliver
securities, cash or other assets upon conversion of Securities shall enter
into a supplemental indenture. If the issuer of securities deliverable upon
conversion of Securities is an Affiliate of the successor Company, that
issuer shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security
may convert it into the kind and amount of securities, cash or other assets
which such Holder would have received immediately after the consolidation,
merger, binding share exchange or transfer if such Holder had converted the
Security immediately before the effective date of the transaction, assuming
(to the extent applicable) that such Holder (i) was not a constituent person
or an Affiliate of a constituent person to such transaction; (ii) made no
election with respect thereto; and (iii) was treated alike with the plurality
of non-electing Holders. The supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Article 10. The successor Company shall
mail to Securityholders a notice briefly describing the supplemental
indenture.
If this Section applies, neither Section 10.06 nor 10.07 applies.
If the Company makes a distribution to all holders of its Common Stock
of any of its assets, or debt securities or any rights, warrants or options
to purchase securities of the Company that, but for the provisions of the
last paragraph of Section 10.08, would otherwise result in an adjustment in
the Conversion Rate pursuant to the provisions of Section 10.08, then, from
and after the record date for determining the holders of Common Stock
entitled to receive the distribution, a Holder of a Security that converts
such Security in accordance with the provisions of this Indenture shall upon
such conversion be entitled to receive, in addition to the shares of Common
Stock into which the Security is convertible, the kind and amount of
securities, cash or other assets comprising the distribution that such Holder
would have received if such Holder had converted the Security
58
immediately prior to the record date for determining the holders of Common
Stock entitled to receive the distribution.
SECTION 10.15. COMPANY DETERMINATION FINAL. Any determination that the
Company or the Board of Directors must make pursuant to this Article 10 is
conclusive.
SECTION 10.16. TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no duty
to determine when an adjustment under this Article 10 should be made, how it
should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 10.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure
to comply with this Article 10. Each Conversion Agent (other than the Company
or an Affiliate of the Company) shall have the same protection under this
Section 10.16 as the Trustee.
SECTION 10.17. SIMULTANEOUS ADJUSTMENTS. If this Article 10 requires
adjustments to the Conversion Rate under more than one of Sections 10.06(4),
10.07 or 10.08, and the record dates for the distributions giving rise to
such adjustments shall occur on the same date, then such adjustments shall be
made by applying, first, the provisions of Section 10.06, second, the
provisions of Section 10.08 and, third, the provisions of Section 10.07.
SECTION 10.18. SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article 10, any subsequent event requiring an
adjustment under this Article 10 shall cause an adjustment to the Conversion
Rate as so adjusted.
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.
59
SECTION 11.02 NOTICES. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Jacor Communications, Inc.
50 East River Center Boulevard, 12th Floor
Covington, Kentucky 41011
Attention: Treasurer
Telephone: (606) 655-2267
Telecopy: (606) 655-9345
if to the Trustee:
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street
Floor 21 West
New York, New York 10286
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Securityholder shall be mailed by
first-class mail to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders,
it shall mail a copy to the Trustee and each Registrar, Paying Agent,
Conversion Agent or co-registrar.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
60
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 Trustee may require the Company to furnish either
or both of the following:
(1) an Officers' Certificate stating that, in the opinion of the
principal signer thereof, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
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 the principal signer of 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 the principal signer, he or
she 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 Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
SECTION 11.07 RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting
of the Securityholders. The Registrar, Conversion Agent and the Paying Agent
may make reasonable rules for their functions.
SECTION 11.08 LEGAL HOLIDAY. 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 to the extent applicable no Original Issue Discount
or interest, if any, shall accrue for the intervening period.
61
SECTION 11.09 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 11.10 NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 11.11 SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 11.12 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to
prove this Indenture.
62
SIGNATURES
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.
JACOR COMMUNICATIONS, INC.
By
-----------------
Title:
THE BANK OF NEW YORK,
as Trustee
By
-----------------
Title:
EXHIBIT A
[FORM OF FACE OF LYON]
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 $[ ]. THE ISSUE
DATE IS JANUARY [ ], 1998, AND THE YIELD TO STATED MATURITY IS [ ]%
PER ANNUM (COMPUTED ON A SEMIANNUAL BOND EQUIVALENT BASIS).
A-1
JACOR COMMUNICATIONS, INC.
LIQUID YIELD OPTION-TM- NOTE DUE [ ]
(ZERO COUPON -- SENIOR)
No. 1
Issue Date: CUSIP No.
Issue Price: $
Original Issue Discount: $
(for each $1,000 Principal amount)
Jacor Communications, Inc., a Delaware corporation, promises to pay to
, or registered assigns, the Principal Amount of
Dollars on January [ ], 1998.
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.
- ------------------------
TM Trademark of Merrill Lynch & Co., Inc.
A-2
Additional provisions of this Security are set forth on the other side
of this Security.
JACOR COMMUNICATIONS, 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
A-3
[FORM OF REVERSE SIDE OF LYON]
LIQUID YIELD OPTION-TM- NOTE DUE 20 [ ]
(ZERO COUPON -- SENIOR)
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)
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 in 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 [ ]% 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 [ ]% 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 Principal Amount at Stated Maturity becomes due
and payable and (b) any Redemption Date, Conversion Date, Change in Control
Purchase Date, Purchase Date or other date on which such Original Issue
Discount shall cease to accrue in
- ---------------------------
(1) This paragraph should only be added if the Security is issued in global
form.
TM Trademark of Merrill Lynch & Co., Inc.
A-4
accordance with Section 2.08 of the Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Jacor
Communications, 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 in 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, The Bank of New York, a New York banking corporation, 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
January [ ], 1998 (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 at Stated Maturity specified in Section
2.02 of the Indenture (subject to Section 2.07 of the
- ---------------------------
(1) This paragraph should only be added if the Security is issued in global
form.
TM Trademark of Merrill Lynch & Co., Inc.
A-5
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 January [___], 20[ ].
The table below shows the Redemption Prices of a Security per $1,000
Principal Amount at Stated Maturity 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.
(2)
ACCRUED
(1) ORIGINAL (3)
LYON ISSUE REDEMPTION
ISSUE DISCOUNT PRICE
REDEMPTION DATE PRICE AT [ ]% (1) + (2)
- --------------- ----- ------------ ----------
January [ ], 20[ ]............... $__ $ $
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
January [ ], 20[ ]...............
At maturity .......................
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
- --------------------------
TM Trademark of Merrill Lynch & Co., Inc.
A-6
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
--------------------- --------------
January [ ], 20[ ] $
January [ ], 20[ ] $
Subject to the terms and conditions of the Indenture, if any Change in
Control occurs on or prior to January [ ], 20[ ], the Company shall, at the
option of the Holder, purchase all Securities for which a Change in 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 in Control, for a Change in Control Purchase Price equal to the
Issue Price plus accrued Original Issue Discount through the Change in
Control Purchase Date, which Change in Control Purchase Price shall be paid
in cash.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying
Agent a written notice of withdrawal in accordance with the provisions of the
Indenture prior to the close of business on the Purchase Date or Change in
Control Purchase Date, as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price of all Securities or portions thereof to be purchased as of
the Purchase Date or the Change in Control Purchase Date, as the case may be,
is deposited with the Paying Agent on the Business Day following the Purchase
Date or the Change in Control Purchase Date, 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 in 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 30 days but not more than
60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder's registered address. If money sufficient to pay the
Redemption Price of all Securities (or portions thereof) to be redeemed on
the Redemption Date is deposited with the Paying Agent prior to or on the
Redemption Date, 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.
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TM Trademark of Merrill Lynch & Co., Inc.
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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 January [ ], 20[ ]; 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 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 in
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 [ ] 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.
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TM Trademark of Merrill Lynch & Co., Inc.
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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 Sale 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 close of business on 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 in Control Purchase Notice has been given and not withdrawn (except,
in the case of a Security to be purchased in part, the portion of the
Security not to be purchased) or any Securities for a period of 15 days
before a selection of Securities to be redeemed.
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TM Trademark of Merrill Lynch & Co., Inc.
A-9
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 in 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
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TM Trademark of Merrill Lynch & Co., Inc.
A-10
Company (excluding any non-recourse debt), in an aggregate principal amount
in excess of $10 million when due at its final maturity after giving effect
to any applicable grace period and the holder thereof shall have taken
affirmative action to enforce the payment thereof, or (B) in the performance
of any term or provision of any debt for borrowed money of the Company
(excluding any non-recourse debt) 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,
unless, in the case of either clause (A) or (B) above, (x) such acceleration
or action to enforce payment, as the case may be, has been rescinded or
annulled, (y) such debt has been discharged or (z) a sum sufficient to
discharge in full such debt has been deposited in trust by or on behalf of
the Company, in each case, within a period of 10 days after there has been
given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal
amount of the Securities, a written notice specifying such default or
defaults and stating that such notice is a "Notice of Default" hereunder; 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.
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TM Trademark of Merrill Lynch & Co., Inc.
A-11
17. 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.
18. 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).
19. 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 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:
Jacor Communications, Inc.
50 East River Center Boulevard
12th Floor
Covington, Kentucky 41011
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TM Trademark of Merrill Lynch & Co., Inc.
A-12
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 : :
: :
------------ -----------
(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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TM Trademark of Merrill Lynch & Co., Inc.
A-13
_________________________________________________________________
Date:________________ Your Signature:___________________*
_________________________________________________________________
(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.
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TM Trademark of Merrill Lynch & Co., Inc.
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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 signatory of
at Maturity at Maturity of this Security following Trustee or
Date of of this Global Global such decrease (or Securities
Exchange Security Security increase) Custodian
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A-15
____________________
*** This schedule should only be added if the Security is issued in global
form.
A-16