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Young & Rubicam Inc.
to
The Bank of New York,
as Trustee
-----------
Indenture
Dated as of January 20, 2000
3% Convertible Subordinated Notes due 2005
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions..................................................1
Section 1.02 Other Definitions............................................9
Section 1.03 Incorporation by Reference of Trust Indenture Act...........10
Section 1.04 Rules of Construction.......................................11
ARTICLE II
THE SECURITIES
Section 2.01 Form and Dating.............................................11
Section 2.02 Execution, Authentication and Delivery......................14
Section 2.03 Registrar, Paying Agent and Conversion Agent................14
Section 2.04 Paying Agent to Hold Money in Trust.........................15
Section 2.05 Noteholder Lists............................................15
Section 2.06 Transfer and Exchange.......................................15
Section 2.07 Replacement Securities......................................20
Section 2.08 Outstanding Securities......................................21
Section 2.09 Treasury Securities.........................................21
Section 2.10 Temporary Securities; Exchange of Global Security
for Definitive Securities...................................22
Section 2.11 Cancellation................................................23
Section 2.12 Payment of Interest: Interest Rights........................23
Section 2.13 Computation of Interest.....................................25
Section 2.14 CUSIP Number................................................25
Section 2.15 RegulationS.................................................25
Section 2.16 Persons Deemed Owners.......................................25
ARTICLE III
REDEMPTION
Section 3.01 Notices to Trustee..........................................26
Section 3.02 Selection of Securities to be...............................26
Section 3.03 Notice of Redemption........................................27
Section 3.04 Effect of Notice of Redemption..............................28
Section 3.05 Deposit of Redemption Price.................................28
Section 3.06 Securities Redeemed in Part.................................29
Section 3.07 Optional Redemption.........................................29
Section 3.08 Designated Event Offer......................................29
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ARTICLE IV
COVENANTS
Section 4.01 Payment of Securities.......................................33
Section 4.02 SEC Reports.................................................33
Section 4.03 Compliance Certificate......................................34
Section 4.04 Stay, Extension and Usury Law...............................35
Section 4.05 Corporate Existence.........................................35
Section 4.06 Taxes.......................................................36
Section 4.07 Designated Event............................................36
ARTICLE V
CONVERSION
Section 5.01 Conversion Privilege........................................36
Section 5.02 Conversion Procedure........................................37
Section 5.03 Fractional Shares...........................................38
Section 5.04 Taxes on Conversion.........................................38
Section 5.05 Company to Provide..........................................39
Section 5.06 Adjustment of Conversion Price..............................39
Section 5.07 No Adjustment...............................................45
Section 5.08 Other Adjustments...........................................45
Section 5.09 Adjustments for Tax.........................................45
Section 5.10 Adjustments by the Company..................................46
Section 5.11 Notice of Adjustment........................................46
Section 5.12 Notice of Certain Transactions..............................46
Section 5.13 Effect of Reclassifications, Consolidations, Mergers,
Continuances or Sales on Conversion Privilege...............46
Section 5.14 Trustee's Disclaimer........................................48
Section 5.15 Cancellation of Converted Securities........................48
Section 5.16 Restriction on Common Stock Issuable Upon
Conversion..................................................48
ARTICLE VI
SUBORDINATION
Section 6.01 Agreement to Subordinate....................................49
Section 6.02 No Payment on Securities if Senior Debt in Default..........50
Section 6.03 Distribution on Acceleration of Securities; Dissolution ....
and Reorganization; Subrogation of Securities...............51
Section 6.04 Reliance by Senior Debt on Subordination....................55
Section 6.05 No Waiver of Subordination..................................55
Section 6.06 Trustee's Relation to Senior................................56
Section 6.07 Other Provisions Subject Hereto.............................57
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ARTICLE VII
SUCCESSORS
Section 7.01 Merger, Consolidation or Sale of Assets.....................57
Section 7.02 Successor Corporation.......................................58
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01 Events of Default...........................................59
Section 8.02 Acceleration................................................61
Section 8.03 Other Remedies..............................................61
Section 8.04 Waiver of Defaults..........................................62
Section 8.05 Control by Majority.........................................62
Section 8.06 Limitation on Suits.........................................62
Section 8.07 Rights of Noteholders to Receive Payment....................63
Section 8.08 Collection Suit by Trustee..................................63
Section 8.09 Trustee May File Proofs of Claim............................63
Section 8.10 Priorities..................................................65
Section 8.11 Undertaking for Costs.......................................65
Section 8.12 Restoration of Rights and Remedies..........................66
Section 8.13 Rights and Remedies Cumulative..............................66
Section 8.14 Delay or Omission Not Waiver................................66
ARTICLE IX
TRUSTEE
Section 9.01 Duties of Trustee...........................................66
Section 9.02 Rights of Trustee...........................................68
Section 9.03 Individual Rights of Trustee................................69
Section 9.04 Trustee's Disclaimer........................................69
Section 9.05 Notice of Defaults..........................................70
Section 9.06 Reports by Trustee to Noteholders...........................70
Section 9.07 Compensation and Indemnity..................................70
Section 9.08 Replacement of Trustee......................................71
Section 9.09 Successor Trustee by Merger, Etc............................73
Section 9.10 Eligibility; Disqualification...............................73
Section 9.11 Preferential Collection of Claims Against Company...........73
ARTICLE X
DISCHARGE OF INDENTURE
Section 10.01 Termination of the Company's Obligations....................73
Section 10.02 Repayment to Company........................................75
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Section 10.03 Reinstatement...............................................76
ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.01 Without Consent of Noteholders..............................76
Section 11.02 With Consent of Noteholders.................................77
Section 11.03 Compliance with Trust Indenture Act.........................79
Section 11.04 Revocation and Effect of Consents...........................79
Section 11.05 Notation on or Exchange of Securities.......................80
Section 11.06 Trustee Protected...........................................80
Section 11.07 Trustee to Sign Supplemental Indentures.....................80
Section 11.08 Payment for Consent.........................................81
ARTICLE XII
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls................................82
Section 12.02 Notices.....................................................82
Section 12.04 Certificate and Opinion as to Conditions Precedent..........83
Section 12.05 Statements Required in Certificate or Opinion...............84
Section 12.06 Rules by Trustee and Agents.................................85
Section 12.07 Legal Holidays..............................................85
Section 12.08 No Recourse Against Others..................................85
Section 12.09 Counterparts................................................85
Section 12.10 Variable Provisions.........................................85
Section 12.11 GOVERNING LAW...............................................87
Section 12.12 No Adverse Interpretation of Other Agreements...............87
Section 12.13 Successors..................................................87
Section 12.14 Severability................................................87
Section 12.15 Table of Contents, Headings, Etc............................88
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INDENTURE dated as of January 20, 2000 between Young & Rubicam Inc., a
Delaware corporation (the "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 3% Convertible
Subordinated Notes due 2005 (the "Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"Additional Amounts" has the meaning specified in paragraph 11 of the form
of Security which is attached as Exhibit A hereto.
"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" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person,
whether through the ownership of voting securities or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means the board of directors of the Company or any
authorized committee of such board of directors.
"Board Resolution" means a copy of a resolution of the Board of Directors
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification and delivery to the Trustee.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of equity interests in any entity,
including, without limitation, corporate stock and partnership interests.
1
"Change of Control" means any event where: (i) any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares representing more than 50% of the combined voting power
of the then outstanding securities entitled to vote generally in elections of
directors of the Company ("Voting Stock"), (ii) the Company consolidates with or
merges into any other person, or any other person merges into the Company, and,
in the case of any such transaction, the outstanding Common Stock of the Company
is reclassified into or exchanged for any other property or securities, unless
the stockholders of the Company immediately before such transaction own,
directly or indirectly immediately following such transaction, at least a
majority of the combined voting power of the then outstanding voting securities
entitled to vote generally in elections of directors of the corporation
resulting from such transaction in substantially the same respective proportions
as their ownership of the Voting Stock immediately before such transaction,
(iii) the Company or the Company and its Subsidiaries, taken as a whole, sells,
assigns, conveys, transfers or leases all or substantially all the assets of the
Company or of the Company and its Subsidiaries, taken as a whole, as applicable,
(other than to one or more whollyowned Subsidiaries of the Company) or (iv) any
time the Continuing Directors do not constitute a majority of the board of
directors of the Company (or, if applicable, a successor corporation to the
Company); provided, however, that (a) a Change of Control under clause (i), (ii)
or (iii) above shall not be deemed to have occurred if the Daily Market Price
per share of Common Stock for any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the later of the Change of
Control or the public announcement of the Change of Control (in the case of a
Change of Control under clause (i) above) or the period of 10 consecutive
Trading Days ending immediately before the Change of Control (in the case of a
Change of Control under clause (ii) or (iii) above) shall equal or exceed 105%
of the Conversion Price of the Securities in effect on the date of such Change
of Control or the public announcement of such Change of Control, as applicable,
or (b) a Change of Control under clause (i), (ii) or (iii) above shall not be
deemed to have occurred if at least 90% of the consideration in the Change of
Control transaction consists of shares of capital stock traded on a U.S.
national securities exchange or quoted on the NNM, and as a result of such
transaction, the Securities become convertible solely into such capital stock.
"Closing Date" means January 20, 2000.
2
"Common Stock" means the common stock of the Company as the same exists at
the date of this Indenture or as such stock may be constituted from time to
time.
"Company" means the party named as such above until a successor replaces it
in accordance with Article VII and thereafter means the successor.
"Continuing Directors" means, as of any date of determination, any member
of the board of directors of the Company who (i) was a member of such board of
directors on the date of this Indenture or (ii) was nominated for election or
elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination or election.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at 000
Xxxxxxx Xxxxxx, Xxxxx 21 West, New York, New York 10286, Attention: Corporate
Trust Trustee Administration.
"Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined (a) on the basis of the last reported sale price
regular way of the Common Stock as reported on the New York Stock Exchange (the
"NYSE"), or if the Common Stock is not then listed on the NYSE, as reported on
the principal national securities exchange upon which the Common Stock is
listed, or (b) if there is no such reported sale on the day in question, on the
basis of the average of the closing bid and asked quotations regular way as so
reported, or (c) if the Common Stock is not listed on the NYSE or on any
national securities exchange, on the basis of the average of the high bid and
low asked quotations regular way on the day in question in the overthecounter
market as reported by the National Association of Securities Dealers Automated
Quotation System, or if not so quoted, as reported by National Quotation Bureau,
Incorporated, or a similar organization.
"Damages Payment Date" has the meaning set forth in the Registration
Agreement.
"Default" means any event that is or, with the passage of time or the
giving of notice or both, would be an Event of Default.
3
"Depositary" means The Depository Trust Company, its nominees and their
respective successors.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Designated Senior Debt" means any Senior Debt which, at the date of
determination, has an aggregate principal amount outstanding of, or commitments
to lend up to, at least $15,000,000 and is specifically designated by the
Company in the instrument evidencing or governing such Senior Debt as
"Designated Senior Debt" for purposes of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
of the United States, which are in effect from time to time.
"Global Securities Legend" means the legend labeled as such and that is set
forth in Exhibit A hereto.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness; and such term, when used as a verb, shall have correlative
meaning.
"Indebtedness" means, with respect to any Person, all Obligations, whether
or not contingent, of such Person (i)(a) for borrowed money (including, but not
limited to, any indebtedness secured by a security interest, mortgage or other
lien on the assets of such Person which is (1) given to secure all or part of
the purchase price of property subject thereto, whether given to the vendor of
such property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note, debenture, bond or other written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the lessee under GAAP or under any lease or related document (including a
purchase agreement) which provides that such Person is contractually obligated
to purchase or to cause a third party to purchase such leased
4
property, (d) in respect of letters of credit, bank guarantees or bankers'
acceptances (including reimbursement obligations with respect to any of the
foregoing), (e) with respect to Indebtedness secured by a mortgage, pledge,
lien, encumbrance, charge or adverse claim affecting title or resulting in an
encumbrance to which the property or assets of such Person are subject, whether
or not the Obligation secured thereby shall have been assumed or Guaranteed by
or shall otherwise be such Person's legal liability, (f) in respect of the
balance of the deferred and unpaid purchase price of any property or assets, and
(g) under interest rate or currency swap agreements, cap, floor and collar
agreements, spot and forward contracts and similar agreements and arrangements;
(ii) with respect to any Obligation of others of the type described in the
preceding clause (i) or under clause (iii) below assumed by or Guaranteed in any
manner by such Person or in effect Guaranteed by such Person through an
agreement to purchase (including, without limitation, "take or pay" and similar
arrangements), contingent or otherwise (and the Obligations of such Person under
any such assumptions, Guarantees or other such arrangements); and (iii) any and
all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any of the foregoing.
"Indenture" means this Indenture, as amended or supplemented from time to
time by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including for all purposes of this Indenture any
supplemental indenture and the provisions of the TIA that are deemed to be a
part of and govern this Indenture and any supplemental indenture.
"Initial Purchasers" means Xxxxxxx Xxxxx Xxxxxx Inc., Bear, Xxxxxxx & Co.
Inc, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxx Xxxxxx
Partners LLC.
"interest payment date" means, when used with respect to the Securities,
each January 15 and July 15.
"Issuance Date" means January 20, 2000.
"Junior Securities" means securities of the Company as reorganized or
readjusted or any other corporation provided for by a plan or reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided for in this Indenture with respect to Securities, to the payment in
full without diminution or modification by such plan of all Senior Debt.
5
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open.
"Material Subsidiary" means any Subsidiary of the Company which at the date
of determination is a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act and the Exchange Act.
"maturity date" and "final maturity date" mean, when used with respect to
the Securities, January 15, 2005.
"NNM" means the electronic interdealer quotation system operated by NASDAQ,
Inc., a subsidiary of the National Association of Securities Dealers, Inc.
"Noteholder" or "holder" means a person in whose name a Security is
registered.
"NYSE" means the New York Stock Exchange.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum relating to the
Securities dated January 14, 2000.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, Senior Vice President - Tax and
Treasury, Senior Vice President - Finance or the Treasurer of the Company, and
delivered to the Trustee that meets the requirements of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee that meets the requirements of Sections 12.04 and
12.05 hereof. The counsel may be an employee of or counsel to the Company or the
Trustee unless otherwise expressly stated herein.
"Person" and "person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
limited liability company or government or any agency or political subdivision
thereof.
6
"Registration Agreement" means the Registration Agreement relating to the
Securities and Common Stock issuable upon conversion of such Securities dated
January 20, 2000, between the Company and the Initial Purchasers, as such
agreement may be amended, modified or supplemented from time to time.
"Representative" means the trustee, agent or representative (if any) for an
issue of Senior Debt.
"Restricted Common Stock Legend" means the legend labeled as such and that
is set forth in Exhibit D hereto.
"Restricted Definitive Securities Legend" means the legend labeled as such
and that is set forth in Exhibit A hereto.
"Restricted Global Securities Legend" means the legend labeled as such and
that is set forth in Exhibit A hereto.
"Restricted Securities Legend" means the Restricted Definitive Securities
Legend or the Restricted Global Securities Legend or both, as the context may
require.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described in the preamble above that are
issued, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means the principal of, premium, if any, on, interest on and
other amounts due on Indebtedness of the Company, whether outstanding on the
date of this Indenture or thereafter created, incurred, assumed or Guaranteed by
the Company (including all deferrals, renewals, extensions, refinancings and
refundings of, or amendments, modifications or supplements to, any of the
foregoing), unless, in the instrument creating or evidencing or pursuant to
which such Indebtedness is outstanding, it is expressly provided that such
Indebtedness is not senior in right of payment to, or ranks pari passu in right
of payment with, the Securities. Senior Debt includes, with respect to the
obligations described above, interest accruing, pursuant to the terms of such
Senior Debt, on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not post-filing interest is
allowed in such proceeding, at the rate specified in the instrument governing
the
7
relevant obligation. Notwithstanding anything to the contrary in the foregoing,
Senior Debt shall not include: (a) Indebtedness of or amounts owed by the
Company for compensation to employees, or for goods, services or materials
purchased in the ordinary course of business; (b) Indebtedness of the Company to
a Subsidiary of the Company; or (c) any liability for federal, state, local or
other taxes owed or owing by the Company.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Agreement.
"Subsidiary" of a Person means any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
"Termination of Trading" means an event where the Common Stock (or other
securities into which the Securities are then convertible) is neither listed for
trading on a United States national securities exchange nor approved for trading
on the NASDAQ National Market (the "NNM") or other established automated
overthecounter trading market in the United States.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb) and the rules and regulations thereunder as in effect on the date
on which this Indenture is qualified under the Trust Indenture Act of 1939
except as required by Section 11.03 hereof, provided that if the Trust Indenture
Act of 1939 or the rules and regulations thereunder are amended after such date,
"TIA" means, if so required by such amendment, the Trust Indenture Act of 1939,
as so amended.
"Trading Day" shall mean (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such other
national securities exchange is open for business, (B) if the applicable
security is quoted on the NNM, a day on which trades may be made thereon or (C)
if the applicable security is not so listed, admitted for trading or quoted, any
day other than a Legal Holiday.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
8
"Trust Officer" means any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the
persons who at the time shall be such officers, respectively, and who shall have
direct responsibility for the administration of this Indenture or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject.
Section 1.02 Other Definitions.
Term Defined in
---- Section
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"Agent Members".................................................... 2.01
"Bankruptcy Law"................................................... 8.01
"Cedel Bank"....................................................... 2.01
"Commencement Date"................................................ 3.08
"Conversion Agent"................................................. 2.03
"Conversion Date".................................................. 5.02
"Conversion Price"................................................. 5.01
"Conversion Shares"................................................ 5.06
"Current Market Price"............................................. 5.06
"Custodian"........................................................ 8.01
"Default Rate"..................................................... 2.13
"Defaulted Interest................................................ 2.12
"Definitive Securities"............................................ 2.01
"Designated Event Offer"........................................... 4.07
"Designated Event Payment"......................................... 4.07
"Designated Event Payment Date".................................... 3.08
"Distribution Date"................................................ 5.06
"Distribution Record Date"......................................... 5.06
"Excess Payment"................................................... 5.06
"Euroclear"........................................................ 2.01
"Event of Default"................................................. 8.01
"Global Security".................................................. 2.01
"Legal Holiday".................................................... 12.07
"Non-Global Purchasers"............................................ 2.01
"Officer".......................................................... 12.10
9
"Paying Agent"..................................................... 2.03
"Payment Blockage Notice".......................................... 6.02
"Payment Blockage Period".......................................... 6.02
"Payment Default".................................................. 8.01
"Purchase Agreement"............................................... 2.01
"Purchase Date".................................................... 5.06
"QIBs"............................................................. 2.01
"Registrar"........................................................ 2.03
"Regulation S"..................................................... 2.01
"Rights"........................................................... 5.06
"Rule 144A"........................................................ 2.01
"Tender Period".................................................... 3.08
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company or any other obligor on the
Securities.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 Rules of Construction. Unless the context otherwise requires:
10
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP consistently applied;
(b) "or" is not exclusive;
(d) words in the singular include the plural, and words in the plural include
the singular; and
(e) provisions apply to successive events and transactions.
ARTICLE II
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 hereby
incorporated in and expressly made a part of this Indenture.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Company shall furnish any such legend not
contained in Exhibit A to the Trustee in writing. Each Security shall be dated
the date of its authentication. The terms and provisions of the Securities set
forth in Exhibit A are part of the terms of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Global Securities. The Securities are being offered and sold by the Company
pursuant to a Purchase Agreement relating to the Securities, dated January
14, 2000, among the Company and the Initial Purchasers (the "Purchase
Agreement").
Securities offered and sold (i) in reliance on Regulation S under the
Securities Act ("Regulation S") or (ii) to "qualified institutional buyers" as
defined in Rule 144A ("QIBs") in reliance on Rule 144A under the Securities Act
("Rule 144A"), each as provided in the Purchase Agreement, shall be issued in
the form of one or more permanent global Securities in definitive, fully
registered form without interest
11
coupons with the Global Securities Legend and Restricted Global Securities
Legend set forth in Exhibit A hereto (each, a "Global Security"). Any Global
Security shall be deposited on behalf of the purchasers of the Securities
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or a nominee of the
Depositary for the accounts of participants in the Depositary (and, in the case
of Securities held in accordance with Regulation S, registered with the
Depositary for the accounts of designated agents holding on behalf of the
Euroclear System ("Euroclear") or Cedel Bank, societe anonyme ("Cedel Bank")),
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of a Global Security may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to a Global
Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(b) and the written order of the Company, authenticate and deliver
initially one or more Global Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Depositary and (ii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions or
held by the Trustee as custodian for the Depositary pursuant to a FAST Balance
Certificate Agreement between the Depositary and the Trustee.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations and Instructions to Participants" of Cedel Bank shall be applicable
to interests in any Global Securities that are held by participants through
Euroclear or
12
Cedel Bank. The Trustee shall have no obligation to notify holders of any such
procedures or to monitor or enforce compliance with the same.
(c) Definitive Securities. Except as provided in Section 2.06 and 2.10, owners
of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities in definitive form.
Purchasers of Securities who are not QIBs and did not purchase Securities
sold in reliance on Regulation S under the Securities Act (referred to
herein as the "Non-Global Purchasers") will receive certificated Securities
in definitive form bearing the Restricted Definitive Securities Legend set
forth in Exhibit A hereto ("Definitive Securities"). Definitive Securities
will bear the Restricted Definitive Securities Legend set forth on Exhibit
A unless removed in accordance with Section 2.06(b).
Section 2.02 Execution, Authentication and Delivery. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
or a facsimile thereof shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be entitled to any benefits under this Indenture or
the Registration Agreement or otherwise be valid until authenticated by the
manual signature of an authorized signatory of the Trustee. The signature shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
Upon a written order of the Company signed by two Officers, the Trustee
shall authenticate the Securities for original issue up to an aggregate
principal amount of $250,000,000 (plus up to an additional $37,500,000 aggregate
principal amount which may be issued from time to time upon exercise by the
Initial Purchasers of the over-allotment option set forth in the Purchase
Agreement) and deliver such authenticated Securities as directed in such order.
The aggregate principal amount of Securities outstanding at any time shall not
exceed such amount except as provided in Section 2.07.
The Trustee may appoint one or more authenticating agents acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
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Section 2.03 Registrar, Paying Agent and Conversion Agent. The Company shall
maintain in the Borough of Manhattan, The City of New York, State of New York
(i) an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar"), (ii) an office or agency where
Securities may be presented for payment (the "Paying Agent"), (iii) an office or
agency where Securities may be presented for conversion (the "Conversion Agent")
and (iv) an office or agency where notices to or demands upon the Company in
respect of the Securities and this Indenture may be sent. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company has initially appointed the Trustee (at 000 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxx, Xxx Xxxx, Xxx Xxxx 10286) as its Registrar, Paying Agent and Conversion
Agent in New York. The Company may appoint one or more co-registrars, one or
more additional paying agents and one or more additional conversion agents in
such other locations as it shall determine. The term "Registrar" includes any
co-registrar, the term "Paying Agent" includes any additional paying agent and
the term "Conversion Agent" includes any additional conversion agent. The
Company may change any Paying Agent, Registrar or Conversion Agent, provided
that it will give notice to the Noteholders in accordance with Section 12.02
hereof. The Company shall notify the Trustee of the name and address of any
newly-appointed Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such.
Section 2.04 Paying Agent to Hold Money in Trust. The Company shall require each
Paying Agent other than the Trustee to agree in writing that the Paying Agent
will hold in trust for the benefit of Noteholders or the Trustee all money held
by the Paying Agent for the payment of principal of, premium, if any, on,
interest and Additional Amounts, if any, on, the Securities, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any money disbursed by
it. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or an Affiliate of the Company) shall have no further liability for the
money. If the Company or an Affiliate of the Company acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the
Noteholders all money held by it as Paying Agent.
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Section 2.05 Noteholder Lists. The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of Noteholders and shall otherwise comply with TIA ss.312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Noteholders, and the Company shall otherwise comply with TIA ss.312(a).
Section 2.06 Transfer and Exchange. Where Securities are presented to the
Registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of other denominations, such Registrar shall
register the transfer or make the exchange if the requirements set forth in this
Indenture and as otherwise may be reasonably required by the Registrar with
respect to such transactions are met. To permit registrations of transfers and
exchanges, the Company shall issue and the Trustee shall authenticate Securities
at the Registrar's request. No service charge shall be made for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.10, 3.06, 3.08, 5.02 or 11.05 hereof not involving any transfer of
the Securities).
The Company shall not be required (i) to issue, register the transfer of,
or exchange Securities during a period beginning at the opening of business 15
days before the day of mailing of notice of redemption of Securities under
Section 3.03 hereof and ending at the close of business on the day of such
mailing, or (ii) to exchange or register the transfer of any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(a) Notwithstanding any provision to the contrary herein, so long as a Global
Security remains outstanding and is held by or on behalf of the Depositary,
transfers of a Global Security, in whole or in part, or of any beneficial
interest therein, shall only be made in accordance with Sections 2.01(b)
and 2.10 and this Section 2.06(a); provided, however, that beneficial
interests in a Global Security may be transferred to persons who take
delivery thereof in the form of a beneficial interest in the Global
Security in accordance with the transfer restrictions set forth under the
heading "Notice to Investors" in the Offering Memorandum and, if
applicable, in the Restricted Global Securities Legend.
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(i) Except for transfers or exchanges made in accordance with any of clauses
(ii) through (v) of this Section 2.06(a) and Section 2.10, transfers of a
Global Security shall be limited to transfers of such Global Security in
whole, but not in part, to nominees of the Depositary or to a successor of
the Depositary or such successor's nominee.
(ii) Global Security to Definitive Security. If an owner of a beneficial
interest in a Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary wishes at any time to transfer its
interest in such Global Security to a Person who is required to take
delivery thereof in the form of a Definitive Security, such owner may,
subject to the rules and procedures of Euroclear or Cedel Bank, if
applicable, and the Depositary, cause the exchange of such interest for one
or more Definitive Securities of any authorized denomination or
denominations and of the same aggregate principal amount. Upon receipt by
the Registrar of (1) instructions from Euroclear or Cedel Bank, if
applicable, and the Depositary directing the Trustee to authenticate and
deliver one or more Definitive Securities of the same aggregate principal
amount as the beneficial interest in the Global Security to be exchanged,
such instructions to contain the name or names of the designated transferee
or transferees, the authorized denomination or denominations of the
Definitive Securities to be so issued and appropriate delivery
instructions, (2) a certificate substantially in the form of Exhibit B
attached hereto given by the owner of such beneficial interest, (3) a
certificate substantially in the form of Exhibit C attached hereto given by
the person acquiring the Definitive Securities for which such interest is
being exchanged, to the effect set forth therein, and (4) such other
certifications or other information and, in the case of transfers pursuant
to Rule 144 under the Securities Act, legal opinions as the Company may
reasonably require to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, then Euroclear or Cedel Bank, if
applicable, or the Registrar, as the case may be, will instruct the
Depositary to reduce or cause to be reduced such Global Security by the
aggregate principal amount of the beneficial interest therein to be
exchanged and to debit or cause to be debited from the account of the
Person making such transfer the beneficial interest in the Global Security
that is being transferred, and concurrently with such reduction and debit
the Company shall execute, and the Trustee shall authenticate and deliver,
one or more Definitive Securities of the same aggregate principal amount in
accordance with the instructions referred to above.
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(iii)Definitive Security to Definitive Security. If a holder of a Definitive
Security wishes at any time to transfer such Definitive Security (or
portion thereof) to a Person who is required to take delivery thereof in
the form of a Definitive Security, such holder may, subject to the
restrictions on transfer set forth herein and in such Definitive Security,
cause the transfer of such Definitive Security (or any portion thereof in a
principal amount equal to an authorized denomination) to such transferee.
Upon receipt by the Registrar of (1) such Definitive Security, duly
endorsed as provided herein, (2) instructions from such holder directing
the Trustee to authenticate and deliver one or more Definitive Securities
of the same aggregate principal amount as the Definitive Security (or
portion thereof) to be transferred, such instructions to contain the name
or names of the designated transferee or transferees, the authorized
denomination or denominations of the Definitive Securities to be so issued
and appropriate delivery instructions, (3) a certificate from the holder of
the Definitive Security to be transferred in substantially the form of
Exhibit B attached hereto, (4) a certificate substantially in the form of
Exhibit C attached hereto given by the person acquiring the Definitive
Securities (or portion thereof), to the effect set forth therein, and (5)
such other certifications or other information and, in the case of
transfers pursuant to Rule 144 under the Securities Act, legal opinions as
the Company may reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then the Registrar, shall
cancel or cause to be canceled such Definitive Security and concurrently
therewith, the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Definitive Securities in the appropriate aggregate
principal amount, in accordance with the instructions referred to above
and, if only a portion of a Definitive Security is transferred as
aforesaid, concurrently therewith Company shall execute and the Trustee
shall execute and deliver to the transferor a Definitive Security in a
principal amount equal to the principal amount which has not been
transferred. A holder of a Definitive Security may at any time exchange
such Definitive Security for one or more Definitive Securities of other
authorized denominations and in the same aggregate principal amount and
registered in the same name by delivering such Definitive Security, duly
endorsed as provided herein, to the Registrar together with instructions
directing the Trustee to authenticate and deliver one or more Definitive
Securities in the same aggregate principal amount and registered in the
same name as the Definitive Security to be exchanged, and the Registrar
thereupon shall cancel or caused to be cancelled such Definitive Security
and concurrently therewith
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the Company shall execute and Trustee shall authenticate and deliver, one
or more Definitive Securities in the same aggregate principal amount and
registered in the same name as the Definitive Security being exchanged.
(iv) Definitive Security to Global Security. If a holder of a Definitive
Security wishes at any time to transfer such Definitive Security (or
portion thereof) to a Person who is not required to take delivery thereof
in the form of a Definitive Security, such holder shall, subject to the
restrictions on transfer set forth herein and in such Definitive Security
and the rules of the Depositary and Euroclear and Cedel Bank, as
applicable, cause the exchange of such Definitive Security for a beneficial
interest in the Global Security. Upon receipt by the Registrar of (1) such
Definitive Security, duly endorsed as provided herein, (2) instructions
from such holder directing the Trustee to increase the aggregate principal
amount of the Global Security deposited with the Depository or with the
Trustee as custodian for the Depository by the same aggregate principal
amount at maturity as the Definitive Security to be exchanged, such
instructions to contain the name or names of a member of, or participant
in, the Depository that is designated as the transferee, the account of
such member or participant and other appropriate delivery instructions, (3)
the assignment form on the back of the Definitive Security completed in
full (certifying in effect that such transfer complies with Rule 144A or
Regulation S under the Securities Act or is otherwise being made to a
Person who is not required to take delivery of such Security in the form of
a Definitive Security) and (4) such other certifications or other
information and, in the case of transfers pursuant to Rule 144 under the
Securities Act, legal opinions as the Company may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the
Securities Act, then the Registrar, shall cancel or cause to be canceled
such Definitive Security and concurrently therewith shall increase the
aggregate principal amount of the Global Security by the same aggregate
principal amount as the Definitive Security canceled.
(v) Other Exchanges. In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.10, prior to
the effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of clauses
(ii) and (iii) above (including the certification requirements intended to
ensure that such transfers comply with Rule 144A or Regulation S under the
Securities Act, as the case
18
may be) and such other procedures as may from time to time be adopted by
the Company.
(b) Except in connection with a Shelf Registration Statement contemplated by
and in accordance with the terms of the Registration Agreement, if
Securities are issued upon the registration of transfer, exchange or
replacement of Securities bearing a Restricted Securities Legend, or if a
request is made to remove such a Definitive Securities Legend on
Securities, the Securities so issued shall bear the Restricted Securities
Legend, or a Restricted Securities Legend shall not be removed, as the case
may be, unless there is delivered to the Company such satisfactory
evidence, which, in the case of a transfer made pursuant to Rule 144 under
the Securities Act, may include an opinion of counsel licensed to practice
law in the State of New York, as may be reasonably required by the Company,
that neither the legend nor the restrictions on transfer set forth therein
are required to ensure that transfers thereof comply with the provisions of
Rule 144A, Rule 144 or Regulation S under the Securities Act or that such
Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision to the Company of such satisfactory
evidence, the Trustee, at the written direction of the Company, shall
authenticate and deliver Securities that do not bear the legend. The
Company shall not otherwise be entitled to require the delivery of a legal
opinion in connection with any transfer or exchange of Securities.
(c) Neither the Trustee nor any Agent shall have any responsibility for any
actions taken or not taken by the Depositary.
(d) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under
this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among
Depositary's participants or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation as is expressly required by, and to do so if and when
expressly required by, the terms of this Indenture and to examine the same
to determine substantial compliance as to form with the express
requirements hereof.
Section 2.07 Replacement Securities. If the holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken or if such Security is
mutilated and is surrendered to the Registrar, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's and the
19
Company's requirements (as shall have been previously communicated to the
Trustee in a written letter of standing instruction) are met. An indemnity bond
must be sufficient in the judgment of the Trustee, the Registrar and the Company
to protect the Company, the Trustee, any Agent or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be redeemed or purchased
by the Company pursuant to Article III hereof or converted into shares of Common
Stock pursuant to Article V hereof, the Company in its discretion may, instead
of issuing a new Security, pay, redeem or convert such Security, as the case may
be.
Every replacement Security is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder. The provisions
of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement of mutilated,
destroyed, lost or stolen Securities.
Section 2.08 Outstanding Securities. The Securities outstanding at any time are
all the Securities authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those paid pursuant to Section 2.07 and
those described in this Section as not outstanding.
If a Security is replaced, paid, redeemed or converted, it ceases to be
outstanding unless, in the case of a replaced Security, the Trustee receives
proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.
If Securities are considered paid under Section 4.01 hereof, they cease to
be outstanding and interest (and Additional Amounts, if any) on them ceases to
accrue.
Except as set forth in Section 2.09 hereof, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
Section 2.09 Treasury Securities. In determining whether the Noteholders of the
required principal amount of Securities have concurred in any direction, waiver
or consent, Securities owned by the Company or an Affiliate of the Company shall
be considered as though they are not outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on
20
any such direction, waiver or consent, only Securities which a Trust Officer
actually knows are so owned shall be so disregarded.
Section 2.10 Temporary Securities; Exchange of Global Security for Definitive
Securities.
(a) Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but
may have variations that the Company considers appropriate for temporary
Securities and shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.
(b) Except for transfers made in accordance with Section 2.06 (a), a Global
Security deposited with the Depositary or with the Trustee as custodian for
the Depositary pursuant to Section 2.01 shall be transferred to the
beneficial owners thereof in the form of certificated Securities in
definitive form only if such transfer complies with Section 2.06 and (i)
the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange
Act and a successor Depositary is not appointed by the Company within 90
days of such notice, or (ii) an Event of Default has occurred and is
continuing.
(c) Any Global Security or interest thereon that is transferable to the
beneficial owners thereof in the form of certificated Securities in
definitive form shall, if held by the Depository, be surrendered by the
Depositary to the Trustee, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Security, an equal aggregate principal amount of Securities of authorized
denominations in the form of certificated Securities in definitive form.
Any portion of a Global Security transferred pursuant to this Section shall
be executed, authenticated and delivered only in denominations of $1,000
and any integral multiple thereof and registered in such names as the
Depositary shall direct. Any Securities in the form of certificated
Securities in definitive form delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.06(b),
bear the Restricted Definitive Securities Legend set forth in Exhibit A
hereto.
21
(d) Prior to any transfer pursuant to Section 2.10(b), the registered holder of
a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Indenture or the Securities.
(e) The Company will make available to the Trustee a reasonable supply of
certificated Securities in definitive form without interest coupons.
Section 2.11 Cancellation. The Company at any time may deliver Securities to the
Registrar for cancellation. The Registrar, Paying Agent and Conversion Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, redemption, conversion, exchange or payment. The Trustee shall
promptly cancel all Securities surrendered for registration of transfer,
redemption, conversion, exchange, payment, replacement or cancellation and shall
dispose of all such canceled Securities in accordance with its customary
procedures. The Company may not issue new Securities to replace Securities that
it has paid or that have been delivered to the Registrar for cancellation or
that any holder has converted.
All Securities which are redeemed, purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates prior to the final maturity
date of the Securities shall be delivered to the Trustee for cancellation and
the Company may not hold or resell any such Securities or issue any new
Securities to replace any such Securities or any Securities that any holder has
converted pursuant to this Indenture.
Section 2.12 Payment of Interest: Interest Rights. Interest (including
Additional Amounts, if any) on any Security which is payable, and is punctually
paid or duly provided for on any January 15 or July 15 shall be paid to the
Person in whose name such Security (or one or more predecessor Securities) is
registered at the close of business on the record date for such interest
payment, which shall be the January 1 or July 1 (whether or not a Business Day)
immediately preceding such interest payment date.
Any interest and Additional Amounts, if any, on any Security which is
payable, but is not punctually paid or duly provided for, on any interest
payment date (herein collectively called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant record date, and,
except as hereinafter provided, such Defaulted Interest and any interest payable
on such Defaulted Interest may be paid by the Company, at its election, as
provided in subsection (a) or (b) below:
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(a) The Company may elect to make payment of any Defaulted Interest, and any
interest payable on such Defaulted Interest, to the Persons in whose names
the Securities are registered at the close of business on a special record
date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on the Securities and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest (including
Additional Amounts, if any) or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as provided in this subsection (a).
Thereupon, the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall be not more than 15 calendar days and
not less than 10 calendar days prior to the date of the proposed payment
and not less than 10 calendar days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be sent, first class mail,
postage prepaid, to each holder at such holder's address as it appears in
the register for the Securities, not less than 10 calendar days prior to
such special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities are registered at the close of business on such
special record date and shall no longer be payable pursuant to the
following subsection (b).
(b) The Company may make payment of any Defaulted Interest and any interest
payable on such Defaulted Interest, on the Securities in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each Security
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, or in substitution for, any other Security, shall carry the
rights to interest
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(and Additional Amounts, if any) accrued and unpaid, and to accrue, which were
carried by such other Security.
Section 2.13 Computation of Interest. Interest on the Securities shall be
computed on the basis of a 360day year consisting of twelve 30-day months. In
the event that any principal of or premium, if any, or interest or Additional
Amounts, if any, on the Securities is not paid when due, then except to the
extent permitted by law, such overdue principal, premium, if any, interest and
Additional Amounts, if any, shall bear interest until paid at the Default Rate,
compounded semi-annually. As used herein, the term "Default Rate" means, as of
any date and whether or not any Securities are outstanding on such date, a rate
per annum equal to (i) 3% per annum plus (ii) if a Registration Default (as
defined in the Registration Agreement) has occurred and is continuing on such
date, the per annum rate of interest at which Additional Amounts on the
Securities are being computed on such date or, if no Securities are outstanding
on such date, the per annum rate of interest at which Additional Amounts on the
Securities would have been computed on such date if the Securities were
outstanding.
Section 2.14 CUSIP Number. The Company in issuing the Securities may use a
"CUSIP" number in notices of redemption or exchange as a convenience to holders;
provided that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Securities and that reliance may be placed only on the other identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
of any change in the CUSIP number.
Section 2.15 Regulation S. The Company agrees that it will refuse to register
any transfer of Securities or any shares of Common Stock issued upon conversion
of Securities that is not made in accordance with the provisions of Regulation S
under the Securities Act, pursuant to a registration statement which has been
declared effective under the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act; provided
that the provisions of this paragraph shall not be applicable to any Securities
which do not bear a Restricted Securities Legend or to any shares of Common
Stock evidenced by certificates which do not bear a Restricted Common Stock
Legend.
Section 2.16 Persons Deemed Owners. Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any Agent of the Company
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of
24
and premium, if any, and (subject to Sections 2.06 and 2.13 above) interest and
Additional Amounts, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any Agent shall be affected by notice to the contrary.
ARTICLE III
REDEMPTION
Section 3.01 Notices to Trustee. If the Company elects to redeem Securities
pursuant to Section 3.07 hereof, it shall notify the Trustee in writing of the
redemption date and the principal amount of Securities to be redeemed. The
Company shall give each notice provided for in this Section 3.01 at least 45
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee).
Section 3.02 Selection of Securities to be. If less than all the Securities are
to be redeemed, the Trustee shall select the Securities to be redeemed by a
method that complies with the requirements of the principal national securities
exchange, if any, on which the Securities are listed, or, if the Securities are
not so listed, on a pro rata basis, by lot or by such other method as the
Trustee considers fair and appropriate. The Trustee shall make the selection not
more than 60 days and not less than 30 days before the redemption date from
Securities outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them it selects
shall be in principal amounts of $1,000 or integral multiples 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 called
for redemption.
If any Security selected for partial redemption is converted in part after
such selection, the converted portion of such Security shall be deemed (so far
as may be) to be the portion to be selected for redemption. The Securities (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Security is converted in
whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Securities, the Company and the Trustee may
treat as outstanding any Securities surrendered for conversion during the period
15 days next preceding the mailing of a notice of redemption and need not treat
as outstanding any Security authenticated and
25
delivered during such period in exchange for the unconverted portion of any
Security converted in part during such period.
Section 3.03 Notice of Redemption. At least 30 days but not more than 60 days
before a redemption date, the Company shall mail a notice of redemption to each
holder whose Securities are to be redeemed at such holder's registered address.
The notice shall identify the Securities to be redeemed (including the
CUSIP number) and shall state:
(a) the redemption date;
(b) the redemption price and the amount accrued and unpaid interest and
Additional Amounts, if any, to be paid;
(c) if any Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the redemption date,
upon cancellation of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion will be issued in the name
of the holder thereof;
(d) the name and address of the Paying Agent;
(e) that Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price plus accrued interest and Additional
Amounts, if any;
(f) that, unless the Company defaults in making such redemption payment or the
Paying Agent is prohibited from making such payment pursuant to the terms
of this Indenture, by law or otherwise, interest and Additional Amounts, if
applicable, on Securities called for redemption cease to accrue on and
after the redemption date;
(g) the paragraph of the Securities pursuant to which the Securities called for
redemption are being redeemed; and
(h) any other information necessary to enable holders to comply with the notice
of redemption.
26
Such notice shall also state the current Conversion Price and the date on
which the right to convert such Securities or portions thereof into Common Stock
of the Company will expire.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section 3.03 in
a timely manner; provided that the Company shall give the Trustee not less than
60 days' written notice unless the Trustee consents to a shorter period.
Section 3.04 Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date at the price set forth in the Security plus interest and
Additional Amounts, if any, accrued and unpaid to the redemption date; provided
that accrued interest and Additional Amounts which are due and payable on any
interest payment date which is on or prior to the redemption date shall be
payable to the holders of such Securities, or one or more predecessor
Securities, registered as such at the close of business on the relevant record
date; and provided, further, that if a redemption date is not a Business Day,
payment shall be made on that next succeeding Business Day and no interest shall
accrue for the period from such redemption date to such succeeding Business Day
unless the Company shall default in the payment due on such Business Day. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in such notice. Failure to give notice or any defect in the notice
to any holder shall not affect the validity of the notice to any other holder.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given. In any case, failure to give such notice to any
holder or any defect in the notice to any holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Securities.
Section 3.05 Deposit of Redemption Price. Prior to 10:00 a.m. (New York City
time) on the redemption date, the Company shall deposit with the Trustee or the
Paying Agent in immediately available funds, money sufficient to pay the
redemption price of and accrued and unpaid interest and Additional Amounts, if
applicable, to but not including the redemption date on all Securities to be
redeemed on that date (subject to the right of holders of record on the relevant
record date to receive interest (and Additional Amounts, if applicable) due on
an interest payment date) unless theretofore converted into Common Stock
pursuant
27
to the provisions hereof. The Trustee or such Paying Agent shall return to the
Company any money not required for that purpose.
So long as the Company complies with the preceding paragraph and the other
provisions of this Article III and unless the Paying Agent is prohibited from
making such payment pursuant to the terms of this Indenture, by law or
otherwise, interest (and Additional Amounts, if any) on the Securities to be
redeemed on the applicable redemption date shall cease to accrue from and after
such redemption date and such Securities or portions thereof shall be deemed not
to be entitled to any benefit under this Indenture except to receive payment on
the redemption date of the redemption price plus interest and Additional
Amounts, if any, accrued and unpaid to the redemption date. If any Security
called for redemption shall not be so paid upon surrender for redemption, then,
from the redemption date until such redemption price (including, without
limitation, accrued interest and Additional Amounts, if any) is paid in full,
the Company shall pay interest, to the extent permitted by law, on the unpaid
principal of and premium, if any, interest and Additional Amounts, if any, on
such Security at the Default Rate, compounded semiannually.
Section 3.06 Securities Redeemed in Part. Upon surrender of a Security that is
redeemed in part, the Company shall issue and the Trustee shall authenticate for
the holder at the expense of the Company a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
Section 3.07 Optional Redemption. The Company may redeem all or any portion of
the Securities, upon the terms and at he redemption prices set forth in each of
the Securities. Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Designated Event Offer.
(a) In the event that, pursuant to Section 4.07 hereof, the Company shall
commence a Designated Event Offer, the Company shall follow the procedures
in this Section 3.08.
(b) The Designated Event Offer shall remain open for a period specified by the
Company which shall be no less than 30 days and no more than 60 days from
and including the date of the mailing of notice in accordance with Section
3.08(d) hereof (the "Commencement Date"), except to the extent that a
longer period is required by applicable law (the "Tender Period"). On the
day (the "Designated Event Payment Date") immediately following the last
day of the
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Tender Period, the Company shall purchase the principal amount of
Securities duly surrendered for repurchase and not withdrawn.
(c) If a Designated Event Payment Date is after a record date and before the
related interest payment date, accrued interest and Additional Amounts, if
any, to the related interest payment date will be paid to the persons in
whose names the Securities (or one or more predecessor Securities) are
registered at the close of business on such record date, notwithstanding
the repurchase of any such Securities on such Designated Event Payment
Date, and no additional interest or Additional Amounts, if any, will be
payable to Noteholders who tender Securities for purchase on such
Designated Event Payment Date.
(d) The Company shall provide the Trustee with written notice of the Designated
Event Offer at least 10 Business Days before the Commencement Date.
(e) Within 30 days following any Designated Event, unless the Company is
entitled to and has previously elected to redeem all of the outstanding
Securities at its option and has previously given holders notice of its
intention to redeem all of the outstanding Securities in accordance with
Article III of this Indenture, the Company or the Trustee (at the request
and expense of the Company) shall send, by first class mail, a notice to
each of the Noteholders, which shall govern the terms of the Designated
Event Offer and shall state:
(i) that the Designated Event Offer is being made pursuant to this Section
3.08 and Section 4.07 hereof and that all Securities validly tendered
will be accepted for payment;
(ii) the purchase price (as determined in accordance with Section 4.07
hereof, subject to Section 3.08(c) hereof), the length of time the
Designated Event Offer will remain open and the Designated Event
Payment Date;
(iii)that any Security or portion thereof not validly tendered or accepted
for payment will continue to accrue interest and Additional Amounts,
if applicable, and will continue to have conversion rights;
(iv) that, unless the Company defaults in the payment of the Designated
Event Payment, any Security or portion thereof accepted for payment
pursuant to the Designated Event Offer shall cease to accrue interest
and Additional Amounts, if applicable, from and after the Designated
Event Payment Date
29
and will cease to have conversion rights after the Designated Event
Payment Date;
(v) that Noteholders electing to have a Security or portion thereof
purchased pursuant to any Designated Event Offer will be required to
surrender the Security, with the form entitled "Option of Noteholder
To Elect Purchase", that is set forth in Exhibit A hereto, on the
reverse of the Security completed, to a Paying Agent at the address
specified in the notice (which shall include an address in the Borough
of Manhattan, The City of New York) prior to the close of business on
the third Business Day preceding the Designated Event Payment Date;
(vi) that Noteholders will be entitled to withdraw their election if a
Paying Agent receives, not later than the close of business on the
second Business Day preceding the Designated Event Payment Date, a
letter or facsimile transmission setting forth the name of the
Noteholder, the principal amount of the Securities or portion thereof
delivered for purchase and a statement that such Noteholder is
withdrawing his election to have such Securities or portions thereof
purchased; and
(vii)that Noteholders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered, which unpurchased
portion must be equal to $1,000 in principal amount or an integral
multiple thereof.
In addition, the notice shall contain all instructions, other information
and materials that the Company shall reasonably deem necessary to enable such
Noteholders to tender Securities pursuant to the Designated Event Offer or to
withdraw tendered Securities. If the Company is not required to mail such notice
because, as provided above, it has previously given notice of its intention to
redeem the Securities in whole but the Company thereafter defaults in the
payment of the redemption price (including accrued interest and Additional
Amounts, if any) on any of the Securities on the relevant redemption date, then
the Company shall be required to give notice pursuant to this Section 3.08(e) no
later than the second Business Day following such redemption date, in which case
the Tender Period shall be 30 days except to the extent that a longer period is
required by applicable law. In the event that the Company is required by
applicable law to extend the Tender Period beyond the Designated Event Payment
Date set forth in such notice, the Company will, as promptly as possible, issue
a press release and send notice to holders announcing such
30
extension and the new Designated Event Payment Date, which press release and
notice shall state the new deadlines for surrendering and withdrawing
Securities.
(f) Prior to 10:00 A.M. (New York City Time) on the Designated Event Payment
Date, the Company shall irrevocably deposit with the Trustee or the Paying
Agent in immediately available funds an amount equal to the Designated
Event Payment in respect of all Securities or portions thereof validly
tendered and not withdrawn, such funds to be held for payment in accordance
with the terms of this Section 3.08. On the Designated Event Payment Date,
the Company shall, to the extent lawful, (i) accept for payment the
Securities or portions thereof validly tendered pursuant to the Designated
Event Offer, (ii) deliver or cause to be delivered to the Trustee the
Securities so accepted and (iii) deliver to the Trustee an Officers'
Certificate identifying the Securities or portions thereof tendered and not
withdrawn to the Company and stating that such Securities have been
accepted for payment by the Company in accordance with the terms of this
Section 3.08. The Paying Agent shall promptly (but in any case not later
than five calendar days after the Designated Event Payment Date) mail or
deliver to each holder of Notes so accepted for payment an amount equal to
the Designated Event Payment for such Securities, and the Trustee shall
promptly authenticate and mail or otherwise deliver to each such Noteholder
a new Security equal in principal amount to any unpurchased portion of the
Security surrendered; provided that each new Security shall be in a
principal amount of $1,000 or an integral multiple thereof. Any Securities
not so accepted shall be promptly mailed or otherwise delivered by or on
behalf of the Company to the holders thereof. The Company will publicly
announce the results of the Designated Event Offer on, or as soon as
practicable after, the Designated Event Payment Date.
(g) The Designated Event Offer shall be made by the Company in compliance with
all applicable provisions of the Exchange Act and any other securities laws
and regulations (including, without limitation, Rules 13e-4 and 14e-1 under
the Exchange Act) to the extent such laws and regulations are applicable in
connection with the repurchase of the Securities in connection with a
Designated Event.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Securities. The Company shall pay the principal of,
premium, if any, and interest (and Additional Amounts, if applicable) on the
31
Securities on the dates and in the manner provided in the Securities and this
Indenture. Principal, premium, if any, and interest (and Additional Amounts, if
applicable) shall be considered paid on the date due if the Paying Agent (other
than the Company or an Affiliate of the Company) holds on that date money
designated for and sufficient to pay all principal, premium, if any and interest
(and Additional Amounts, if any) then due and such Paying Agent is not
prohibited from paying such money to the Noteholders on that date pursuant to
the terms of this Indenture. To the extent lawful, the Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (and on overdue principal,
premium, if any, and Additional Amounts, if applicable (in each case without
regard to any applicable grace period)), at the Default Rate, compounded
semiannually.
Section 4.02 SEC Reports. The Company will comply with the requirements of TIA
Section 314(a). In addition, whether or not required by the rules and
regulations of the SEC, so long as any Securities are outstanding, the Company
will file with the SEC and furnish (without exhibits) to the Trustee and to the
holders of Securities all quarterly and annual financial information required to
be contained in a filing with the SEC on Forms 10-Q and 10-K, including a
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" and, with respect to annual consolidated financial statements only,
a report on the annual consolidated financial statements by the Company's
independent accountants. The Company shall not be required to file any report or
other information with the SEC if the SEC does not permit such filing. Delivery
of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee's receipt thereof shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder.
In addition, if the Company at any time is not subject to either Section 13
or 15(d) of the Exchange Act, the Company will provide to each holder and
beneficial owner of Securities and shares of Common Stock issued upon conversion
of Securities, and to any prospective purchaser designated by any such holder or
beneficial owner, upon request, the information required pursuant to Rule
144A(d)(4) of the Securities Act.
Section 4.03 Compliance Certificate. The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Company, an Officers'
Certificate stating that a review of the activities of the Company and its
32
subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under, and
complied with the covenants and conditions contained in, this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of such Officer's knowledge the Company has kept, observed, performed and
fulfilled each and every covenant, and complied with the covenants and
conditions contained in this Indenture and is not in default (without regard to
periods of grace or notice requirements) in the performance or observance of any
of the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge) and that to the best of such Officer's
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, or premium, if any, interest or
Additional Amounts, if any, on, the Securities are prohibited.
One of the Officers signing such Officers' Certificate shall be either the
Company's principal executive officer, principal financial officer or principal
accounting officer.
The Company will, so long as any of the Securities are outstanding, deliver
to the Trustee, forthwith upon, but in any event within five Business Days
after, becoming aware of:
(a) any Default, Event of Default or default in the performance of any
covenant, agreement or condition contained in this Indenture; or
(b) any default under any other mortgage, indenture or instrument of the nature
described in Section 8.01(e),
an Officers' Certificate specifying such Default, Event of Default or default
and what action the Company is taking or proposing to take with respect thereto.
Immediately upon the occurrence of any event giving rise to an obligation
of the Company to pay Additional Amounts with respect to the Securities in
accordance with paragraph 11 of the form thereof and the Registration Agreement
or the termination of any such obligation, the Company shall give the Trustee
notice of such commencement or termination, of the obligation to pay Additional
Amounts with regard to the Securities and the amount thereof and of the event
giving rise to such commencement or termination (such notice to be contained in
an Officers'
33
Certificate), and prior to receipt of such Officers' Certificate the Trustee
shall be entitled to assume that no such commencement or termination has
occurred, as the case may be.
Section 4.04 Stay, Extension and Usury Law. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of this Indenture; and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, 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 has been enacted.
Section 4.05 Corporate Existence. Except as provided in Article VII hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any Subsidiary, if the Board
of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material
respect to the Noteholders.
Section 4.06 Taxes. The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all taxes, assessments and
governmental levies, the non-payment of which would have a material adverse
effect on the business, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole, except such as are contested in
good faith and by appropriate proceedings and for which adequate reserves in
accordance with GAAP or other appropriate provisions have been made.
Section 4.07 Designated Event. Upon the occurrence of a Designated Event, each
holder of Securities shall have the right, in accordance with this Section 4.07
and Section 3.08 hereof, to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such holder's Securities
pursuant to the terms of an offer made as provided in Section 3.08 (the
"Designated Event Offer") at a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid interest and Additional Amounts, if any,
34
thereon to the Designated Event Payment Date (the "Designated Event Payment").
ARTICLE V
CONVERSION
Section 5.01 Conversion Privilege. A holder of any Security may convert the
principal amount thereof (or any portion thereof that is an integral multiple of
$1,000) into fully paid and nonassessable shares of Common Stock of the Company
at any time after 90 days following the Issuance Date and prior to the close of
business on the Business Day immediately preceding the final maturity date of
the Security at the Conversion Price then in effect, except that, with respect
to any Security called for redemption, such conversion right shall terminate at
the close of business on the Business Day immediately preceding the redemption
date (unless the Company shall default in making the redemption payment when it
becomes due, in which case the conversion right shall terminate at the close of
business on the date on which such default is cured). The number of shares of
Common Stock issuable upon conversion of a Security is determined by dividing
the principal amount of the Security converted by the Conversion Price in effect
on the Conversion Date.
"Conversion Price" means $73.36, as the same may be adjusted from time to
time as provided in this Article V.
Provisions of this Indenture that apply to conversion of all of a Security
also apply to conversion of a portion of it. A holder of Securities is not
entitled to any rights of a holder of Common Stock until such holder of
Securities has converted such Securities into Common Stock, and only to the
extent that such Securities are deemed to have been converted into Common Stock
under this Article V.
Section 5.02 Conversion Procedure. To convert a Security, a holder must satisfy
the requirements in paragraph 10 of the Securities. The date on which the holder
satisfies all of those requirements is the conversion date (the "Conversion
Date"). As promptly as practicable on or after the Conversion Date, the Company
shall issue and deliver to the Trustee a certificate or certificates for the
number of whole shares of Common Stock issuable upon the conversion and a check
or other payment for any fractional share in an amount determined pursuant to
Section 5.03. Such certificate or certificates will be sent by the Trustee to
the Conversion Agent for delivery to the holder. The Person in whose name the
certificate is
35
registered shall become the stockholder of record on the Conversion Date and, as
of such date, such Person's rights as a Noteholder with respect to the converted
Security shall cease; provided, however, that, except as otherwise provided in
this Section 5.02, 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 entitled to receive the shares of Common Stock upon such conversion
as the stockholder of record of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the Person entitled to receive
such shares of Common Stock as the stockholder of record thereof for all
purposes at the close of business on the next succeeding day on which such stock
transfer books are open; provided, further, however, that such conversion shall
be at the Conversion Price in effect on the date that such Security shall have
been surrendered for conversion, as if the stock transfer books of the Company
had not been closed.
No payment or adjustment will be made for accrued and unpaid interest or
Additional Amounts on a converted Security or for dividends or distributions on,
or Additional Amounts, if any, attributable to, shares of Common Stock issued
upon conversion of a Security, except that, if any holder surrenders a Security
for conversion after the close of business on any record date for the payment of
an installment of interest and prior to the opening of business on the next
succeeding interest payment date, then, notwithstanding such conversion, accrued
and unpaid interest and Additional Amounts, if applicable, payable on such
Security on such interest payment date shall be paid on such interest payment
date to the person who was the holder of such Security (or one or more
predecessor Securities) at the close of business on such record date. In the
case of any Security surrendered for conversion after the close of business on a
record date for the payment of an installment of interest and prior to the
opening of business on the next succeeding interest payment date, then, unless
such Security has been called for redemption on a redemption date or is to be
repurchased on a Designated Event Payment Date after such record date and prior
to such interest payment date, such Security, when surrendered for conversion,
must be accompanied by payment in an amount equal to the interest and Additional
Amounts, if any, payable on such interest payment date on the principal amount
of such Security so converted. Holders of Common Stock issued upon conversion
will not be entitled to receive any dividends payable to holders of Common Stock
as of any record time before the close of business on the Conversion Date.
36
If a holder converts more than one Security at the same time, the number of
whole shares of Common Stock issuable upon the conversion shall be based on the
total principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Trustee shall
authenticate for the holder a new Security equal in principal amount to the
unconverted portion of the Security surrendered.
Section 5.03 Fractional Shares. The Company will not issue fractional shares of
Common Stock upon conversion of a Security. In lieu thereof, the Company will
pay an amount in cash based upon the Daily Market Price of the Common Stock on
the Trading Day prior to the Conversion Date.
Section 5.04 Taxes on Conversion. The issuance of certificates for shares of
Common Stock upon the conversion of any Security shall be made without charge to
the converting Noteholder for such certificates or for any tax in respect of the
issuance of such certificates, and such certificates shall be issued in the
respective names of, or in such names as may be directed by, the holder or
holders of the converted Security; provided, however, that in the event that
certificates for shares of Common Stock are to be issued in a name other than
the name of the holder of the Security converted, such Security, when
surrendered for conversion, shall be accompanied by an instrument of assignment
or transfer, in form satisfactory to the Company, duly executed by the
registered holder thereof or his duly authorized attorney; and provided,
further, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificates in a name other than that of the holder of the
converted Security, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or is
not applicable.
Section 5.05 Company to Provide. The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, solely for the purpose of issuance upon conversion of Securities
as herein provided, a sufficient number of shares of Common Stock to permit the
conversion of all outstanding Securities for shares of Common Stock.
All shares of Common Stock which may be issued upon conversion of the
Securities shall be duly authorized, validly issued, fully paid and
nonassessable when
37
so issued. The Company shall take such action from time to time as shall be
necessary so that par value of the Common Stock shall at all times be equal to
or less than the Conversion Price then in effect.
The Company shall from time to time take all action necessary so that the
Common Stock which may be issued upon conversion of Securities, immediately upon
their issuance (or, if such Common Stock is subject to restrictions on transfer
under the Securities Act, upon their resale pursuant to an effective Shelf
Registration Statement or in a transaction pursuant to which the certificate
evidencing such Common Stock shall no longer bear the Restricted Common Stock
Legend), will be listed on the principal securities exchanges, interdealer
quotation systems (including the NNM) and markets, if any, on which other shares
of Common Stock of the Company are then listed or quoted.
Section 5.06 Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend in shares of Common Stock to
holders of Common Stock, (2) make a distribution in shares of Common Stock
to holders of Common Stock, (3) subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, the Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock which he would have owned immediately following such
action had such Securities been converted immediately prior thereto. Any
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case
of a subdivision or combination. In the event such dividend or distribution
is not paid or made, or such subdivision or combination is not effected,
the Conversion Price shall be adjusted immediately to be the Conversion
Price which would then be in effect if such dividend, distribution,
subdivision or combination had not occurred.
(b) In case the Company shall issue rights or warrants to all holders of Common
Stock entitling them to subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at a price per share (or
having a conversion price per share) less than the Current Market Price per
share (as determined pursuant to subsection (f) below) of the Common Stock
on the
38
record date for determining the holders of the Common Stock entitled to
receive such rights or warrants, the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding as of the close of business on such record date plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so offered for subscription or
purchase (or the aggregate conversion price of the convertible securities
so offered) would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on
such record date plus the number of additional shares of Common Stock so
offered for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustments shall become
effective immediately after such record date. For the purposes of this
subsection (b), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of such Common Stock. The Company shall not
issue any rights, options or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(c) In case the Company shall distribute to all holders of Common Stock shares
of Capital Stock of the Company (other than Common Stock), evidences of
indebtedness, cash, rights or warrants entitling the holders thereof to
subscribe for or purchase securities (other than rights or warrants
described in subsection (b) above) or other assets (including securities of
Persons other than the Company but excluding (i) dividends or distributions
paid exclusively in cash, (ii) dividends and distributions described in
subsection (b) above and (iii) distributions in connection with the
consolidation, merger or transfer of assets covered by Section 5.13), then
in each such case the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the record date for the determination of the
holders of Common Stock entitled to receive such distribution by a fraction
of which the numerator shall be the Current Market Price (determined as
provided in subsection (f) below) of the Common Stock on the record date
mentioned below less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and described in a Board
Resolution delivered to the Trustee) of the portion of the evidences of
indebtedness, shares of Capital Stock, cash, rights, warrants or other
assets so distributed applicable to one share of Common Stock (determined
39
on the basis of the number of shares of the Common Stock outstanding on the
record date), and of which the denominator shall be such Current Market
Price of the Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of the holders of
Common Stock entitled to receive such distribution. In the event such
distribution is not paid or made, the Conversion Price shall be adjusted
immediately to be the Conversion Price which would then be in effect if
such distribution had not occured. Notwithstanding the foregoing, in case
the Company shall distribute rights or warrants to subscribe for additional
shares of the Company's Capital Stock (other than rights or warrants
referred to in subsection (b) above) ("Rights") to all holders of Common
Stock, the Company may, in lieu of making any adjustment pursuant to the
foregoing provisions of this Section 5.06(c), make proper provision so that
each holder of a Security who converts such Security (or any portion
thereof) after the record date for such distribution and prior to the
expiration or redemption of the Rights shall be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable upon
such conversion (the "Conversion Shares"), a number of Rights to be
determined as follows: (i) if such conversion occurs on or prior to the
date for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights
to which a holder of a number of shares of Common Stock equal to the number
of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of the Rights; and (ii) if such
conversion occurs after the Distribution Date, the same number of Rights to
which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately
prior to the Distribution Date would have been entitled on the Distribution
Date in accordance with the terms and provisions of the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time make a
distribution to all holders of its Common Stock exclusively in cash
(including any distributions of cash out of current or retained earnings of
the Company but excluding any cash that is distributed as part of a
distribution requiring a Conversion Price adjustment pursuant to paragraph
(c) of this Section) in an aggregate amount that, together with the sum of
(x) the aggregate amount of any other distributions made exclusively in
cash to all holders of Common Stock within the 12 months preceding the date
fixed for determining the stockholders entitled to such distribution (the
"Distribution Record Date") and in respect of which no Conversion Price
adjustment pursuant to paragraph (c) or (e) of this Section or this
paragraph (d) has been made plus (y) the aggregate amount of all
40
Excess Payments in respect of any tender offers or other negotiated
transactions by the Company or any of its Subsidiaries for Common Stock
concluded within the 12 months preceding the Distribution Record Date and
in respect of which no Conversion Price adjustment pursuant to paragraphs
(c) or (e) of this Section or this paragraph (d) has been made, exceeds 12
1/2% of the product of the Current Market Price per share (determined as
provided in paragraph (f) of this Section) of the Common Stock on the
Distribution Record Date multiplied by the number of shares of Common Stock
outstanding on the Distribution Record Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying such Conversion Price
in effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this paragraph (d) by a fraction of which the
numerator shall be the Current Market Price per share (determined as
provided in paragraph (f) of this Section) of the Common Stock on the
Distribution Record Date less the sum of the aggregate amount of cash and
the aggregate Excess Payments so distributed or paid within such 12 month
period (including, without limitation, the distribution in respect of which
such adjustment is being made) applicable to one share of Common Stock
(which shall be determined by dividing the sum of the aggregate amount of
cash and the aggregate Excess Payments so distributed or paid within such
12 months (including, without limitation, the distribution in respect of
which such adjustment is being made) by the number of shares of Common
Stock outstanding on the Distribution Record Date) and the denominator
shall be such Current Market Price per share (determined as provided in
paragraph (f) of this Section) of the Common Stock on the Distribution
Record Date, such reduction to become effective immediately prior to the
opening of business on the day following the Distribution Record Date. In
the event such distribution is not paid or made, the Conversion Price shall
be adjusted immediately to be the Conversion Price which would then be in
effect if such distribution had not occurred.
(e) In case a tender offer or other negotiated transaction made by the Company
or any Subsidiary of the Company for all or any portion of the Common Stock
shall be consummated, if an Excess Payment is made in respect of such
tender offer or other negotiated transaction and the aggregate amount of
such Excess Payment, together with the sum of (x) the aggregate amount of
any distributions, by dividend or otherwise, to all holders of the Common
Stock made in cash (including any distributions of cash out of current or
retained earnings of the Company, but excluding any cash that is
distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to paragraph (c) of this Section)
41
within the 12 months preceding the date of payment of such current
negotiated transaction consideration or expiration of such current tender
offer, as the case may be (the "Purchase Date"), and as to which no
adjustment in the Conversion Price pursuant to paragraph (c) or paragraph
(d) of this Section or this paragraph (e) has been made plus (y) the
aggregate amount of all Excess Payments in respect of any other tender
offers or other negotiated transactions by the Company or any of its
Subsidiaries for Common Stock concluded within the 12 months preceding the
Purchase Date and in respect of which no adjustment in the Conversion Price
pursuant to paragraph (c) or (d) of this Section or this paragraph (e) has
been made, exceeds 12 1/2% of the product of the Current Market Price per
share (determined as provided in paragraph (f) of this Section) of the
Common Stock on the Purchase Date multiplied by the number of shares of
Common Stock outstanding on the Purchase Date (including any tendered
shares but excluding any shares held in the treasury of the Company), the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying such Conversion Price in effect immediately prior
to the effectiveness of the Conversion Price reduction contemplated by this
paragraph (e) by a fraction of which the numerator shall be the Current
Market Price per share (determined as provided in paragraph (f) of this
Section) of the Common Stock on the Purchase Date less the sum of the
aggregate amount of cash and the aggregate Excess Payments so distributed
or paid within such 12 month period (including, without limitation, the
Excess Payment in respect of which such adjustment is being made)
applicable to one share of Common Stock (which shall be determined by
dividing the sum of the aggregate amount of cash and the aggregate Excess
Payments so distributed or paid within such 12 months (including, without
limitation, the Excess Payment in respect of which such adjustment is being
made) by the number of shares of Common Stock outstanding on the Purchase
Date and the denominator shall be such Current Market Price per share
(determined as provided in paragraph (f) of this Section) of the Common
Stock on the Purchase Date, such reduction to become effective immediately
prior to the opening of business on the day following the Purchase Date.
(f) The "Current Market Price" per share of Common Stock on any date shall be
deemed to be the average of the Daily Market Prices for the shorter of (i)
30 consecutive Business Days ending on the last full Trading Day on the
exchange or market referred to in determining such Daily Market Prices
prior to the time of determination or (ii) the period commencing on the
date next succeeding the first public announcement of the issuance of such
rights or such warrants or such other distribution or such tender offer or
other negotiated
42
transaction through such last full Trading Day on the exchange or market
referred to in determining such Daily Market Prices prior to the time of
determination.
(g) "Excess Payment" means the excess of (A) the aggregate of the cash and fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and described in a
Board Resolution delivered to the Trustee) of other consideration paid by
the Company or any of its Subsidiaries with respect to the shares of Common
Stock acquired in a tender offer or other negotiated transaction over (B)
the Daily Market Price on the Trading Day immediately following the
completion of the tender offer or other negotiated transaction multiplied
by the number of acquired shares of Common Stock.
(h) In any case in which this Section 5.06 shall require that an adjustment be
made immediately following a record date for an event, the Company may
elect to defer, until such event, issuing to the holder of any Security
converted after such record date the shares of Common Stock and other
Capital Stock of the Company issuable upon such conversion over and above
the shares of Common Stock and other Capital Stock of the Company issuable
upon such conversion on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so
deferred, the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence of the right to receive such shares.
Section 5.07 No Adjustment. No adjustment in the Conversion Price shall be
required until cumulative adjustments amount to 1% or more of the Conversion
Price as last adjusted; provided, however, that any adjustments which by reason
of this Section 5.07 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article V shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. No adjustment need be made for 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.
Section 5.08 Other Adjustments.
(a) In the event that, as a result of an adjustment made pursuant to Section
5.06 above, the holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of Capital Stock of
the Company other than
43
shares of its Common Stock, thereafter the Conversion Price of such other
shares so receivable upon conversion of any Securities shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to Common Stock contained in
this Article V.
(b) In the event that any shares of Common Stock (or securities convertible
into Common Stock) issuable upon exercise of any of the rights, options or
warrants referred to in Section 5.06(b) and Section 5.06(c) hereof are not
delivered prior to the expiration of such rights, options, or warrants, the
Conversion Price shall be readjusted to the Conversion Price which would
otherwise have been in effect had the adjustment made upon the issuance of
such rights, options or warrants been made on the basis of delivery of only
the number of such rights, options and warrants which were actually
exercised.
Section 5.09 Adjustments for Tax. The Company may, at its option, make such
reductions in the Conversion Price, in addition to those required by Section
5.06 above, as the Board of Directors deems advisable to avoid or diminish any
income tax to holders of Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for federal income tax purposes.
Section 5.10 Adjustments by the Company. The Company from time to time may, to
the extent permitted by law, reduce the Conversion Price by any amount for any
period of at least 20 days, in which case the Company shall give at least 15
days' notice of such reduction in accordance with Section 5.11, if the Board of
Directors has made a determination that such reduction would be in the best
interests of the Company, which determination shall be conclusive.
Section 5.11 Notice of Adjustment. Whenever the Conversion Price is adjusted,
the Company shall promptly mail to Noteholders at the addresses appearing on the
Registrar's books a notice of the adjustment and file with the Trustee an
Officers' Certificate briefly stating the facts requiring the adjustment and the
manner of computing it.
Section 5.12 Notice of Certain Transactions. In the event that:
(a) the Company takes any action which would require an adjustment in the
Conversion Price;
44
(b) the Company takes any action that would require a supplemental indenture
pursuant to Section 5.13; or
(c) there is a dissolution or liquidation of the Company;
the Company shall mail to Noteholders at the addresses appearing on the
Registrar's books and the Trustee a notice stating the proposed record or
effective date, as the case may be. The Company shall mail the notice at least
15 days before such date; however, failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in clause
(a), (b), (c), (d) or (e) of this Section 5.12.
Section 5.13 Effect of Reclassifications, Consolidations, Mergers, Continuances
or Sales on Conversion Privilege. If any of the following shall occur, namely:
(i) any reclassification or change of outstanding shares of Common Stock
issuable upon conversion of Securities (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation or merger to
which the Company is a party other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than a change in name, or par value, or from par value to no par
value, or from no par value to par value or as a result of a subdivision or
combination) in, outstanding shares of Common Stock, (iii) any continuance in a
new jurisdiction which results in a reclassification of, or change (other than a
change in name, or par value, or from par value to no par value, or from no par
value to par value) in, outstanding shares of Common Stock, or (iv) any sale or
conveyance of all or substantially all of the property of the Company
(determined on a consolidated basis), then the Company, or such successor or
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, continuance, sale or
conveyance, execute and deliver to the Trustee a supplemental indenture in form
reasonably satisfactory to the Trustee providing that the holder of each
Security then outstanding shall have the right to convert such Security into the
kind and amount of shares of stock and other securities and property (including
cash) receivable upon such reclassification, change, consolidation, merger,
continuance, sale or conveyance by a holder of the number of shares of Common
Stock deliverable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, continuance, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article V. The
foregoing, however, shall
45
not in any way affect the right a holder of a Security may otherwise have,
pursuant to clause (ii) of the last sentence of subsection (c) of Section 5.06,
to receive Rights upon conversion of a Security. If, in the case of any such
consolidation, merger, continuance, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of stock or other securities and property of a
corporation or other business entity other than the successor or purchasing
corporation, as the case may be, in such consolidation, merger, continuance,
sale or conveyance, then such supplemental indenture shall also be executed by
such other corporation or other business entity and shall contain such
additional provisions to protect the interests of the holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provision of this Section 5.13 shall similarly
apply to successive consolidations, mergers, continuances, sales or conveyances.
In the event the Company shall execute a supplemental indenture pursuant to this
Section 5.13, the Company shall promptly file with the Trustee (x) an Officers'
Certificate briefly stating the reasons therefor, the kind or amount of shares
of stock or securities or property (including cash) receivable by holders of the
Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, continuance, sale or conveyance
and any adjustment to be made with respect thereto and (y) an Opinion of Counsel
stating that all conditions precedent relating to such transaction have been
complied with, and shall promptly mail notice thereof to all holders.
Section 5.14 Trustee's Disclaimer. The Trustee has no duty to determine when an
adjustment under this Article V should be made, how it should be made or what
such adjustment should be or whether a supplemental indenture is required by
this Article V, but may accept as conclusive evidence of the correctness of any
such adjustment, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.11. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the Company's failure
to comply with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 5.13, but may accept as conclusive evidence of the
correctness thereof, and
46
shall be protected in relying upon, the Officers' Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 5.13.
Section 5.15 Cancellation of Converted Securities. All Securities delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.11.
Section 5.16 Restriction on Common Stock Issuable Upon Conversion.
(a) Shares of Common Stock to be issued upon conversion of Securities prior to
the effectiveness of a Shelf Registration Statement shall be physically
delivered in certificated form to the holders converting such Securities
and the certificate representing such shares of Common Stock shall bear the
Restricted Common Stock Legend unless removed in accordance with Section
5.16(c).
(b) If (i) shares of Common Stock to be issued upon conversion of a Security
prior to the effectiveness of a Shelf Registration Statement are to be
registered in a name other than that of the holder of such Security or (ii)
shares of Common Stock represented by a certificate bearing the Restricted
Common Stock Legend are transferred subsequently by such holder, then,
unless the Shelf Registration Statement has become effective and such
shares are being transferred pursuant to the Shelf Registration Statement,
the holder must deliver to the transfer agent for the Common Stock a
certificate in substantially the form of Exhibit E as to compliance with
the restrictions on transfer applicable to such shares of Common Stock and
neither the transfer agent nor the registrar for the Common Stock shall be
required to register any transfer of such Common Stock not so accompanied
by a properly completed certificate.
(c) Except in connection with a Shelf Registration Statement, if certificates
representing shares of Common Stock are issued upon the registration of
transfer, exchange or replacement of any other certificate representing
shares of Common Stock bearing the Restricted Common Stock Legend, or if a
request is made to remove such Restricted Common Stock Legend from
certificates representing shares of Common Stock, the certificates so
issued shall bear the Restricted Common Stock Legend, or the Restricted
Common Stock Legend shall not be removed, as the case may be, unless there
is delivered to the Company such satisfactory evidence, which, in the case
of a transfer made pursuant to Rule 144 under the Securities Act, may
include an opinion of counsel licensed to practice law in the State of New
York, as may be reasonably required by the Company, that neither the legend
nor the restrictions on transfer set forth therein
47
are required to ensure that transfers thereof comply with the provisions of
Rule 144A, Rule 144 or Regulation S under the Securities Act or that such
shares of Common Stock are securities that are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon provision to the Company
of such reasonably satisfactory evidence, the Company shall cause the
transfer agent for the Common Stock to countersign and deliver certificates
representing shares of Common Stock that do not bear the legend.
ARTICLE VI
SUBORDINATION
Section 6.01 Agreement to Subordinate. The Company, for itself and its
successors, and each Noteholder, by his acceptance of Securities, agree that the
payment of the principal of and premium, if any, interest, Additional Amounts,
if any, and any other amounts due on the Securities is subordinated in right of
payment, to the extent and in the manner stated in this Article VI, to the prior
payment in full of all existing and future Senior Debt.
Section 6.02 No Payment on Securities if Senior Debt in Default. Anything in
this Indenture to the contrary notwithstanding, no payment on account of
principal of or premium, if any, interest or Additional Amounts, if any on or
other amounts due on the Securities (including the making of a deposit pursuant
to Section 3.05 or 3.08(f)), and no redemption, purchase, or other acquisition
of the Securities, shall be made by or on behalf of the Company unless (i) full
payment of all amounts then due for principal of and interest on, and of all
other amounts then due on, all Senior Debt has been made or duly provided for
pursuant to the terms of the instruments governing such Senior Debt and (ii) at
the time for, and immediately after giving effect to, such payment, redemption,
purchase or other acquisition, there shall not exist under any Senior Debt, or
any agreement pursuant to which any Senior Debt is issued, any default which
shall not have been cured or waived and which default shall have resulted in the
full amount of such Senior Debt being declared due and payable. In addition, if
the Trustee shall receive written notice from any of the holders of any
Designated Senior Debt or their Representative (a "Payment Blockage Notice")
that there has occurred and is continuing under such Designated Senior Debt, or
any agreement pursuant to which such Designated Senior Debt is issued, any
default, which default shall not have been cured or waived, giving the holders
of such Designated Senior Debt the right to declare such Designated Senior Debt
immediately due and payable, then, anything in this Indenture to the contrary
notwithstanding, no payment on account
48
of the principal of or premium, if any, interest or Additional Amounts, if any,
on or any other amounts due on the Securities (including, without limitation,
the making of a deposit pursuant to Section 3.05 or 3.08(f)), and no redemption,
purchase or other acquisition of the Securities, shall be made by or on behalf
of the Company during the period (the "Payment Blockage Period") commencing on
the date of receipt of the Payment Blockage Notice and ending (unless earlier
terminated by notice given to the Trustee by the holders or the Representative
of the holders of such Designated Senior Debt) on the earlier of (a) the date on
which such default shall have been cured or waived or (b) 180 days from the
receipt of the Payment Blockage Notice. Notwithstanding the provisions described
in the immediately preceding sentence (but subject to the provisions contained
in Section 6.01 and the first sentence of this Section 6.02), unless the holders
of such Designated Senior Debt or the Representative of such holders shall have
accelerated the maturity of such Designated Senior Debt, the Company may resume
payments on the Securities after the end of such Payment Blockage Period. Not
more than one Payment Blockage Notice may be given in any consecutive 365-day
period, irrespective of the number of defaults with respect to Senior Debt
during such period.
In the event that, notwithstanding the provisions of this Section 6.02,
payments are made by or on behalf of the Company in contravention of the
provisions of this Section 6.02, such payments shall be held by the Trustee, any
Paying Agent or the holders, as applicable, in trust for the benefit of, and
shall be paid over to and delivered to, the Representative of the holders of
Senior Debt or the trustee under the indenture or other agreement (if any),
pursuant to which any instruments evidencing any Senior Debt may have been
issued for application to the payment of all Senior Debt ratably according to
the aggregate amounts remaining unpaid to the extent necessary to pay all Senior
Debt in full in accordance with the terms of such Senior Debt, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
The Company shall give prompt written notice to the Trustee and any Paying
Agent of any default or event of default under any Senior Debt or under any
agreement pursuant to which any Senior Debt may have been issued.
Section 6.03 Distribution on Acceleration of Securities; Dissolution and
Reorganization; Subrogation of Securities.
(a) If the Securities are declared due and payable because of the occurrence of
an Event of Default, the Company shall give prompt written notice
49
to the holders of all Senior Debt or to the trustee(s) for such Senior Debt
of such acceleration. The Company may not pay the principal of, or premium,
if any, interest or Additional Amounts, if any, on, or any other amounts
due on, the Securities until five Business Days after such holders or
trustee(s) of Senior Debt receive such notice and, thereafter, the Company
may pay the principal of, and premium, if any, interest and Additional
Amounts, if any, on, and any other amounts due on, the Securities only if
the provisions of this Article VI permit such payment.
(b) Upon (i) any acceleration of the principal amount due on the Securities
because of an Event of Default or (ii) any direct or indirect distribution
of assets of the Company upon any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors
or any other dissolution, winding up, liquidation or reorganization of the
Company):
(1) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof, the interest thereon
and any other amounts due thereon before the holders are entitled to
receive payment on account of the principal of, or premium, if any,
interest or Additional Amounts, if any, on, or any other amounts due
on, the Securities (other than payments in the form of Junior
Securities);
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than
Junior Securities), to which the holders or the Trustee would be
entitled (other than in respect of amounts payable to the Trustee
pursuant to Section 9.07) except for the provisions of this Article,
shall be paid by the liquidating trustee or agent or other Person
making such a payment or distribution, directly to the holders of
Senior Debt (or their representative(s) or trustee(s) acting on their
behalf), ratably according to the aggregate amounts remaining unpaid
on account of the principal of and interest on and all other amounts
due on the Senior Debt held or represented by each, to the extent
necessary to make payment in full of all Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Debt; and
(3) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than Junior
Securities), shall be received by the Trustee (other than in respect
of amounts payable to the Trustee pursuant
50
to Section 9.07) or the holders before all Senior Debt is paid in
full, such payment or distribution shall be held in trust for the
benefit of, and be paid over to upon request by a holder of Senior
Debt, to the holders of the Senior Debt remaining unpaid or their
representatives or trustee(s) acting on their behalf, ratably as
aforesaid, for application to the payment of such Senior Debt until
all such Senior Debt shall have been paid in full, after giving effect
to any concurrent payment or distribution to the holders of such
Senior Debt.
Subject to the payment in full of all Senior Debt, the holders shall be
subrogated to the rights of the holders of Senior Debt to receive payments and
distributions of cash, property or securities of the Company applicable to the
Senior Debt until the principal of, and premium, if any, interest and Additional
Amounts, if any on, and all other amounts payable in respect of the Securities
shall be paid in full and, for purposes of such subrogation, no such payments or
distributions to the holders of Senior Debt of cash, property or securities
which otherwise would have been payable or distributable to holders shall, as
between the Company, its creditors other than the holders of Senior Debt, and
the holders, be deemed to be a payment by the Company to or on account of the
Senior Debt, it being understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the holders,
on the one hand, and the holders of Senior Debt, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (i) impair, as between the Company and its
creditors other than the holders of Senior Debt, the obligation of the Company,
which is absolute and unconditional, to pay to the holders the principal of,
premium, if any, on, and interest and Additional Amounts, if any, on, the
Securities as and when the same shall become due and payable in accordance with
the terms of the Securities, (ii) affect the relative rights of the holders and
creditors of the Company other than holders of Senior Debt or, as between the
Company and the Trustee, the obligations of the Company to the Trustee, or (iii)
prevent the Trustee or the holders from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Debt in respect of
cash, property and securities of the Company received upon the exercise of any
such remedy.
Upon distribution of assets of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 9.01 hereof, and the holders shall
be entitled to rely upon a certificate of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the holders for the
purpose of
51
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article. The Trustee, however,
shall not be deemed to owe any fiduciary duty to the holders of Senior Debt.
Nothing contained in this Article or elsewhere in this Indenture, or in any of
the Securities, shall prevent the good faith application by the Trustee of any
moneys which were deposited with it hereunder, prior to its receipt of written
notice of facts which would prohibit such application, for the purpose of the
payment of or on account of the principal of, premium, if any, on, interest or
Additional Amounts, if any, on, the Securities unless, prior to the date on
which such application is made by the Trustee, the Trustee shall be charged with
actual notice under Section 6.03(d) hereof of the facts which would prohibit the
making of such application.
(c) The provisions of this Article shall not be applicable to any cash,
properties or securities received by the Trustee or by any holder when
received as a holder of Senior Debt and nothing in Section 9.11 hereof or
elsewhere in this Indenture shall deprive the Trustee or such holder of
Senior Debt of any of its rights as such holder of Senior Debt.
(d) The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment of
money to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article. The Trustee, subject to the provisions of
Section 9.01 hereof, shall be entitled to assume that no such fact exists
unless the Company or any holder of Senior Debt or any trustee or
Representative therefor has given actual notice thereof to the Trustee.
Notwithstanding the provisions of this Article or any other provisions of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any fact which would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Securities pursuant to the
provisions in this Article, unless, and until three Business Days after,
the Trustee shall have received written notice thereof from the Company or
any holder or holders of Senior Debt or from any trustee or Representative
therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.01 hereof, shall be
entitled in all respects conclusively to assume that no such facts exist;
provided that if on a date not less than three Business Days immediately
preceding the date upon which, by the terms hereof, any such moneys may
become payable for any purpose (including, without limitation, to pay the
principal of, premium, if any, on, interest or Additional Amounts, if any,
52
on, any Security), the Trustee shall not have received with respect to such
moneys the notice provided for in this Section 6.03(d), then anything
herein contained to the contrary notwithstanding, the Trustee shall have
full power and authority to receive such moneys and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior
date.
The Trustee shall be entitled to rely conclusively on the delivery to
it of a written notice by a Person representing himself to be a holder of Senior
Debt (or a trustee or Representative on behalf of such holder) to establish that
such notice has been given by a holder of Senior Debt (or a trustee or
Representative on behalf of any such holder or holders). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Debt to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Debt held by such Person, the extent to which such person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and, if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment;
nor shall the Trustee be charged with knowledge or the curing or waiving of any
default of the character specified in Section 6.02 hereof or that any event or
any condition preventing any payment in respect of the Securities shall have
ceased to exist, unless and until the Trustee shall have received written notice
to such effect.
(e) The provisions of this Section 6.03 applicable to the Trustee shall (unless
the context requires otherwise) also apply to any Paying Agent for the
Company.
Section 6.04 Reliance by Senior Debt on Subordination. Each holder of any
Security by his acceptance thereof acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration for each holder of any Senior Debt, whether such Senior Debt was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Debt, and such holder
of Senior Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt. Notice of any default in the payment of any Senior Debt, except as
expressly stated in this Article, and notice of acceptance of the provisions
hereof are, to the extent permitted by law, hereby expressly waived. Except as
otherwise
53
expressly provided herein, no waiver, forbearance or release by any holder of
Senior Debt under such Senior Debt or under this Article shall constitute a
release of any of the obligations or liabilities of the Trustee or holders of
the Securities provided in this Article.
Section 6.05 No Waiver of Subordination. Except as otherwise expressly provided
herein, no right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt may, at any time and from time to time, without the
consent of, or notice to, the Trustee or the holders of the Securities, without
incurring responsibility to the holders of the Securities and without impairing
or releasing the subordination provided in this Article VI or the obligations
hereunder of the holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
of, or renew or alter, Senior Debt, or otherwise amend or supplement in any
manner Senior Debt or any instrument evidencing the same or any agreement under
which Senior Debt is outstanding; (ii) sell, exchange, release or otherwise
dispose of any property pledged, mortgaged or otherwise securing Senior Debt;
(iii) release any person liable in any manner for the collection of Senior Debt
and (iv) exercise or refrain from exercising any rights against the Company or
any other Person.
Section 6.06 Trustee's Relation to Senior. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article in
respect of any Senior Debt at any time held by it, to the same extent as any
holder of Senior Debt, and nothing in Section 9.11 hereof or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations, as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not owe any fiduciary duty to the holders
of Senior Debt but shall have only such obligations to such holders as are
expressly set forth in this Article.
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Each holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding up or liquidation or reorganization under any
applicable bankruptcy law of the Company (whether in bankruptcy, insolvency or
receivership proceedings or otherwise), the timely filing of a claim for the
unpaid balance of such holder's Securities in the form required in such
proceedings and the causing of such claim to be approved. If the Trustee does
not file a claim or proof of debt in the form required in such proceedings prior
to 30 days before the expiration of the time to file such claims or proofs, then
any holder or holders of Senior Debt or their Representative or Representatives
shall have the right to demand, xxx for, collect, receive and receipt for the
payments and distributions in respect of the Securities which are required to be
paid or delivered to the holders of Senior Debt as provided in this Article and
to file and prove all claims therefor and to take all such other action in the
name of the holders or otherwise, as such holders of Senior Debt or
Representative thereof may determine to be necessary or appropriate for the
enforcement of the provisions of this Article.
Section 6.07 Other Provisions Subject Hereto. Except as expressly stated in this
Article, notwithstanding anything contained in this Indenture to the contrary,
all the provisions of this Indenture and the Securities are subject to the
provisions of this Article VI. However, nothing in this Article shall apply to
or adversely affect the claims of, or payment to, the Trustee pursuant to
Section 9.07. Notwithstanding the foregoing, the failure to make a payment on
account of principal of, premium, if any, on, or interest or Additional Amounts,
if any, on, the Securities by reason of any provision of this Article VI shall
not be construed as preventing the occurrence of an Event of Default under
Section 8.01.
ARTICLE VII
SUCCESSORS
Section 7.1. Merger, Consolidation or Sale of Assets. The Company will not
consolidate or merge with or into any person (whether or not the Company is the
surviving corporation), continue in a new jurisdiction or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets unless:
55
(a) the Company is the surviving corporation (in the case of a merger) or the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets
of the Company is a corporation organized and existing under the laws of
the United States, any state thereof or the District of Columbia; provided
that in the event of the continuation of the Company in the new
jurisdiction, the Company must remain a corporation organized and existing
under the laws of the United States, any state thereof or the District of
Columbia;
(b) the corporation formed by or surviving any such consolidation or merger (if
other than the Company) or the corporation to which such sale, assignment,
transfer, lease, conveyance or other disposition will have been made
assumes all the obligations of the Company, pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee, under the
Securities, the Registration Agreement and the Indenture;
(c) such sale, assignment, transfer, lease, conveyance or other disposition of
all or substantially all of the Company's properties or assets shall be as
an entirety or virtually as an entirety to one corporation and such
corporation shall have assumed all the obligations of the Company, pursuant
to a supplemental indenture in form reasonably satisfactory to the Trustee,
under the Securities, the Registration Agreement and the Indenture;
(d) immediately after such transaction no Default or Event of Default exists;
and
(e) the Company or such corporation shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and the supplemental indenture, if required, comply with the
Indenture and that all conditions precedent in the Indenture relating to
such transaction have been satisfied.
Section 7.02 Successor Corporation. Upon any consolidation or merger or any
sale, assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company in accordance with Section 7.01
hereof, the successor corporation (if other than the Company) formed by such
consolidation or into or with which the Company is merged or the corporation to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for and may exercise every right and
56
power of, the Company under this Indenture with the same effect as if such
successor Person has been named as the Company herein.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.01 Events of Default. An "Event of Default" occurs if:
(a) the Company defaults in the payment of any interest or Additional Amounts
on any Security when the same becomes due and payable and the default
continues for a period of 30 days; or
(b) the Company defaults in the payment of any principal of or premium, if any,
on any Security when the same becomes due and payable, whether at maturity,
upon redemption or otherwise (including, without limitation, failure by the
Company to purchase Securities tendered for purchase pursuant to a
Designated Event Offer as and when required pursuant to Section 3.08 or
Section 4.07 hereof); or
(c) the Company fails to observe or perform any other covenant or agreement
contained in this Indenture or the Securities required by it to be
performed and the failure continues for a period of 60 days after the
receipt of written notice by the Company from the Trustee or by the Company
and the Trustee from the holders of at least 25% in aggregate principal
amount of the then outstanding Securities stating that such notice is a
"Notice of Default"; or
(d) a default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness
for money borrowed by the Company or any Material Subsidiary of the Company
(or the payment of which is Guaranteed by the Company or any of its
Material Subsidiaries), whether such Indebtedness or Guarantee exists on
the date of this Indenture or is created thereafter, which default (i) is
caused by a failure to pay when due any principal of or interest on such
Indebtedness within the grace period provided for in such Indebtedness
(which failure continues beyond any applicable grace period) (a "Payment
Default") or (ii) results in the acceleration of such Indebtedness prior to
its express maturity (without such acceleration being rescinded or
annulled) and, in each case, the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there is a Payment Default or the maturity of which has
57
been so accelerated, aggregates $15,000,000 or more and which Payment
Default is not cured or which acceleration is not annulled within 30 days
after receipt of written notice by the Company from the Trustee or by the
Company and the Trustee from any holder of Securities stating that such
notice is a "Notice of Default"; or
(e) a final, non-appealable judgment or final non-appealable judgments (other
than any judgment as to which a reputable insurance company has accepted
full liability) for the payment of money are entered by a court or courts
of competent jurisdiction against the Company or any Material Subsidiaries
of the Company and remain unstayed, unbonded or undischarged for a period
(during which execution shall not be effectively stayed) of 60 days,
provided that the aggregate of all such judgments exceeds $15,000,000; or
(f) the Company or any Material Subsidiary pursuant to or within the meaning of
any Bankruptcy Law:
(A) commences a voluntary case or proceeding; or
(B) consents to the entry of an order for relief against the Company or
any Material Subsidiary in an involuntary case or proceeding; or
(C) consents to the appointment of a Custodian of the Company or any
Material Subsidiary or for all or any substantial part of its
property; or
(D) makes a general assignment for the benefit of its creditors; or
(E) takes corporate or similar action in respect of any of the foregoing;
or
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary in an
involuntary case or proceeding; or
(B) appoints a Custodian of the Company or any Material Subsidiary or for
all or any substantial part of the property of the Company or any
Material Subsidiary; or
(C) orders the liquidation of the Company or any Material Subsidiary;
58
and in each case referred to in this paragraph (h) the order or decree
remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign bankruptcy, insolvency or similar law. The term "Custodian"
means any custodian, receiver, trustee, assignee, sequestor, liquidator or
similar official under any Bankruptcy Law.
Section 8.02 Acceleration. If an Event of Default (other than an Event of
Default specified in clauses (g) and (h) of Section 8.01 hereof) occurs and is
continuing, the Trustee by notice to the Company, or the Noteholders of at least
25% in aggregate principal amount of the then outstanding Securities by notice
to the Company and the Trustee, may declare all the Securities to be due and
payable. Upon such declaration, the principal of, premium, if any, on and
accrued and unpaid interest and Additional Amounts, if any , on the Securities
shall be due and payable immediately. If an Event of Default specified in clause
(g) or (h) of Section 8.01 hereof occurs, the principal of, premium, if any, on
and accrued and unpaid interest and Additional Amounts, if any, on the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Noteholder. The
Noteholders of a majority in aggregate principal amount of the then outstanding
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree,
if all amounts payable to the Trustee pursuant to Section 9.07 hereof have been
paid and if all existing Events of Default have been cured or waived as provided
for herein except nonpayment of principal, premium, if any, interest or
Additional Amounts, if any, that has become due solely because of the
acceleration.
Section 8.03 Other Remedies. If an Event of Default occurs and is continuing,
the Trustee may pursue any available remedy to collect the payment of principal
of, premium, if any, on or interest and Additional Amounts, if any, on, the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
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Section 8.04 Waiver of Defaults. Subject to Section 8.07 hereof, the Noteholders
of a majority in aggregate principal amount of the then outstanding Securities
by notice to the Trustee may waive an existing Default or Event of Default and
its consequences except a continuing Default or Event of Default in the payment
of the Designated Event Payment or the principal of, premium, if any, on, or
interest or Additional Amounts, if any, on, any Security or in respect of a
covenant in or other provision of this Indenture or the Securities which cannot
be amended or waived without the consent of each Noteholder affected. When a
Default or Event of Default is waived, it is cured and ceases; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon.
Section 8.05 Control by Majority. The Noteholders of a majority in aggregate
principal amount of the then outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
may be unduly prejudicial to the rights of other Noteholders, or that may
involve the Trustee in personal liability; provided that the Trustee may take
any other action deemed by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
Section 8.06 Limitation on Suits. A Noteholder may pursue a remedy with respect
to this Indenture or the Securities only if:
(a) the Noteholder gives to the Trustee a written notice of a continuing Event
of Default;
(b) the Noteholders of at least 25% in aggregate principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(c) such Noteholder or Noteholders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of indemnity; and
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(e) during such 60-day period the Noteholders of a majority in aggregate
principal amount of the then outstanding Securities do not give the Trustee
a direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
Section 8.07 Rights of Noteholders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Noteholder of a Security to
receive payment of principal of, premium, if any on, and interest and Additional
Amounts, if any, on the Security, on or after the respective due dates expressed
in the Security and this Indenture, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Noteholder made pursuant to this Section.
Section 8.08 Collection Suit by Trustee. If an Event of Default specified in
Section 8.01(a) or (b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal, premium, if any, interest and Additional
Amounts, if any, remaining unpaid on the Securities and, to the extent permitted
by law, interest on overdue principal, premium, if any, interest and Additional
Amounts, if any and such further amount as shall be sufficient to cover the
costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due under Section 9.07 hereof.
Section 8.09 Trustee May File Proofs of Claim. The Trustee shall be entitled and
empowered, without regard to whether the Trustee or any holder shall have made
any demand or performed any other act pursuant to the provisions of this Article
and without regard to whether the principal of the Securities shall then be due
and payable as therein expressed or by declaration or otherwise, by intervention
in any proceedings relative to the Company or any other obligor upon the
Securities, or to the creditors or property or assets of the Company or any such
other obligor or otherwise, to take any and all actions authorized under the TIA
in order to have claims of the holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be entitled and empowered in such
instances:
(a) to file and prove a claim or claims for the whole amount of principal and
premium, if any, interest, Additional Amounts, if any, and any other
amounts
61
owing and unpaid in respect of the Securities, and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including all amounts owing to the Trustee and each
predecessor Trustee pursuant to Section 9.07 hereof) and of the holders
allowed in any judicial proceedings relating to the Company or other
obligor upon the Securities property of the Company or any such other
obligor,
(b) unless prohibited by applicable law and regulations, to vote on behalf of
the holders of the Securities in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or Person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other property or assets payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the holders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the holders to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making
of payments directly to the holders, to pay to the Trustee such amounts as
shall be sufficient to cover all amounts owing to the Trustee and each
predecessor Trustee pursuant to Section 9.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for 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 of any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Securities, and it shall not be necessary to make any holders of
the Securities parties to any such proceedings.
Section 8.10 Priorities. If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
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First: to the Trustee for amounts due under Section 9.07 hereof,
including payment of all compensation, expense and liabilities incurred,
and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to the holders of Senior Debt to the extent required by
Article VI;
Third: to the Noteholders, for amounts due and unpaid on the
Securities for principal, premium, if any, interest and Additional Amounts,
if any, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities for principal, premium, if
any, interest and Additional Amounts, if any; and
Fourth: to the Company or to such other party as a court of competent
jurisdiction shall direct.
Except as otherwise provided in Section 2.12 hereof, the Trustee may fix a
record date and payment date for any payment to Noteholders made pursuant to
this Section 8.10. At least 15 days before such record date, the Company shall
mail to each holder and the Trustee a notice that states the record date, the
payment date and amount to be paid. The Trustee may mail such notice in the name
and at the expense of the Company.
Section 8.11 Undertaking for Costs. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant 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 does not apply to a suit by the Trustee, a suit
by a holder pursuant to Section 8.07 hereof, or a suit by Noteholders of more
than 10% in principal amount of the then outstanding Securities.
Section 8.12 Restoration of Rights and Remedies. If the Trustee or any holder of
Securities has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such holder, then
and in every such case the Company, the Trustee and the holders shall, subject
to any determination in such proceeding, be restored severally and
63
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the holders shall continue as though no such
proceeding has been instituted.
Section 8.13 Rights and Remedies Cumulative. Except as otherwise provided in
Section 2.07 hereof, no right or remedy conferred herein, upon or reserved to
the Trustee or to the holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent (to
the extent permitted by law) the concurrent assertion or employment of any other
appropriate right or remedy.
Section 8.14 Delay or Omission Not Waiver. No delay or omission of the Trustee
or of any holder of any Security to exercise any right or remedy accruing upon
any Event of Default shall (to the extent permitted by law) impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article VIII or by
law to the Trustee or to the holders may (to the extent permitted by law) be
exercised from time to time and as often as may be deemed expedient, by the
Trustee or by the holders, as the case may be.
ARTICLE IX
TRUSTEE
Section 9.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent
Person would exercise or use under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default: (i) the Trustee need
perform only those duties that are specifically set forth in this Indenture
and no others; and (ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and, if required by the terms hereof,
conforming to the requirements of this
64
Indenture. However, in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the applicable requirements, if
any, of this Indenture. During the continuance of an Event of Default, the
Trustee may consult with its legal counsel and rely upon advice from such
counsel with respect to legal matters.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that: (i) this paragraph does not limit the effect of paragraph (b)
of this Section 9.01; (ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts and (iii) the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant
to Section 8.05 hereof.
(d) Every provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b) and (c) of this Section 9.01.
(e) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at
the request of any holders, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 9.02 Rights of Trustee. Subject to the provisions of Section 9.01(a)
hereof, the Trustee may conclusively rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(a) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such
65
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its choice and the advice of such counsel or any Opinion of
Counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) 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; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee shall not be charged with knowledge of any Event of Default
under subsection (c), (d), (e), (f), (g) or (h) of Section 8.01 unless
either (1) a Trust Officer assigned to its corporate trust department shall
have actual knowledge thereof, or (2) the Trustee shall have received
notice thereof in accordance with Section 12.02 hereof from the Company or
any holder; provided that the Trustee shall comply with the "automatic
stay" provisions contained in U.S. Bankruptcy Law, if applicable.
(f) Prior to the occurrence of an Event of Default hereunder and after the
curing and waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debentures, note, other evidence
of indebtedness or other paper or document unless requested in writing to
do so by the holders of not less than a majority in aggregate principal
amount of the Securities then outstanding; provided that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against expenses or liabilities as a condition
to proceeding; the reasonable expenses of every such examination shall be
paid by the Company or, if advanced by the Trustee, shall be repaid by the
Company upon demand. The Trustee shall not be bound to ascertain or inquire
as to the performance or observance of any covenants, conditions, or
agreements on the part of the Company, except as otherwise set forth
herein, but the Trustee may, in
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its discretion, make such further inquiry or investigation into such facts
or matters as it may see fit and if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company personally or by agent or
attorney at the sole cost of the Company.
(g) The Trustee shall not be required to give any bond or surety in respect of
the performance of its powers and duties hereunder.
(h) The rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder and to each Agent employed to act hereunder.
Section 9.03 Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Securities and may otherwise
deal with the Company or an Affiliate with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. However, in the
event that the Trustee acquires any conflicting interest (as defined in the TIA)
it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue as Trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 9.10 and 9.11 hereof.
Section 9.04 Trustee's Disclaimer. The Trustee makes no representation as to the
validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any statement in the Securities (other than its certificate of authentication)
or for compliance by the Company with the Registration Agreement.
Section 9.05 Notice of Defaults. If a Default or Event of Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to
Noteholders a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default relating to the
failure to pay any principal of or premium, if any, interest or Additional
Amounts, if any, on any Security, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
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Section 9.06 Reports by Trustee to Noteholders. Within 60 days after the
reporting date stated in Section 12.10, the Trustee shall mail to Noteholders a
brief report dated as of such reporting date that complies with TIA ss. 313(a)
if and to the extent required by such ss. 313(a). The Trustee also shall comply
with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all reports as
required by TIA ss. 313(c).
A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange and of any delisting thereof.
Section 9.07 Compensation and Indemnity. The Company shall pay to the Trustee
from time to time such compensation for its services hereunder as shall be
agreed upon from time to time in writing by the Company and the Trustee. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances incurred or made
by it in connection with the performance of its duties hereunder. Such
disbursements and expenses may include the reasonable disbursements,
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and each predecessor
Trustee against any and all loss, damage, claim, liability or expense, including
taxes (other than taxes based on the income of the Trustee) incurred by it in
connection with the performance of its duties hereunder except as set forth in
the next paragraph. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to notify the Company
shall not release the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. If in the
reasonable opinion of Trustee's counsel, a conflict of interest exists between
the Trustee and the Company with respect to such claim, the Trustee may have
separate counsel and the Company shall pay the reasonable fees, disbursements
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through the Trustee's negligence or
bad faith.
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The obligations of the Company under this Section 9.07 shall survive
the resignation or removal of the Trustee and the satisfaction and discharge of
the Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien on all money or property held or collected by the
Trustee, except money or property held in trust to pay principal of, or premium,
if any, interest or Additional Amounts, if any, on, particular Securities. Such
lien shall survive the satisfaction or discharge of the indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.01(g) or (h) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.08 Replacement of Trustee. A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Noteholders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof, unless the Trustee's
duty to resign is stayed as provided in TIAss.310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief
is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its property;
or
(d) the Trustee 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 a successor
Trustee. Within one year after the successor Trustee takes office, the
Noteholders of a majority
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in principal amount of the then outstanding Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Noteholders of at least 10% in principal amount of the then outstanding
Securities may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA ss. 310(b), any Noteholder
who has been a bona fide holder of a Security for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of 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 Noteholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 9.07 hereof. Notwithstanding the resignation or
replacement of the Trustee pursuant to this Section 9.08, the Company's
obligations under Section 9.07 hereof shall continue for the benefit of the
retiring trustee with respect to expenses and liabilities incurred by it prior
to such resignation or replacement.
Section 9.09 Successor Trustee by Merger, Etc. If the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have
70
the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
Section 9.10 Eligibility; Disqualification. This Indenture shall always have a
Trustee who satisfies the requirements of TIA ss. 310(a)(1), (2) and (5). The
Trustee shall always have a combined capital and surplus as stated in Section
12.10 hereof. The Trustee is subject to TIA ss. 310(b); provided, however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 9.11. Preferential Collection of Claims Against Company. The Trustee is
subject to TIAss. 311(a), excluding any creditor relationship listed in TIAss.
311(b). A Trustee who has resigned or been removed shall be subject to TIAss.
311(a) to the extent indicated therein.
ARTICLE IX
DISCHARGE OF INDENTURE
Section 10.01 Termination of the Company's Obligations. This Indenture shall
cease to be of further effect (except as to any surviving rights of conversion,
registration of transfer or exchange of Securities herein expressly provided for
and except as further provided below), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.07 and (ii) Securities
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company as provided in Section 10.02) have
been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
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(B) will become due and payable at the final maturity date within one
year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of clause (A), (B) or (C) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust for the purpose cash in an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal, premium, if any, interest and Additional Amounts, if
any, to the date of such deposit (in the case of Securities which have
become due and payable) or to the final maturity date or redemption
date, as the case may be, in all other cases;
(b) the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 9.07, the obligations of
the Company to pay Additional Amounts under this Indenture, the Securities and
the Registration Agreement and, if money shall have been deposited with the
Trustee pursuant to subclause (ii) of clause (a) of this Section, the provisions
of Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.11 (second paragraph only),
2.13, 2.15, 3.08, 4.02 (second paragraph only), 4.04, 4.07 and 4.08, Article V
and this Article X, shall survive; and, notwithstanding the satisfaction and
discharge of this Indenture, the Company agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the Trustee and
to compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture, the Registration
Agreement or the Securities. Thereupon, the Trustee upon request of the Company,
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture, except for those surviving obligations specified above.
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Subject to the provisions of Section 10.02, the Trustee shall hold in
trust, for the benefit of the holders, all money deposited with it pursuant to
this Section 10.01 and shall apply the deposited money in accordance with this
Indenture and the Securities to the payment of the principal of, and premium, if
any, interest and Additional Amounts, if any, on the Securities. Money so held
in trust shall not be subject to the subordination provisions of Article VI.
Section 10.02 Repayment to Company. The Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or securities held by
them at any time.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided, however, that the Company shall have first caused
notice of such payment to the Company to be mailed to each Noteholder entitled
thereto no less than 30 days prior to such payment or within such period shall
have published such notice in a financial newspaper of widespread circulation
published in The City of New York, including, without limitation, The Wall
Street Journal (national edition). After payment to the Company, the Trustee and
the Paying Agent shall have no further liability with respect to such money and
Noteholders entitled to the money must look to the Company for payment as
general creditors unless any applicable abandoned property law designates
another person.
Section 10.03. Reinstatement. If the Trustee or any Paying Agent is unable to
apply any money in accordance with the second paragraph of Section 10.01 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 10.01 until such time as the Trustee or such Paying Agent is
permitted to apply all such money in accordance with Section 10.01; provided,
however, that if the Company has made any payment of the principal of or
premium, if any, interest or Additional Amounts, if any, on any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Securities to receive any such payment from
the money held by the Trustee or such Paying Agent.
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ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.01 Without Consent of Noteholders. The Company and the Trustee may
amend or supplement this Indenture or the Securities without the consent of any
Noteholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Sections 5.13 and 7.01 hereof;
(c) to provide for uncertificated Securities in addition to certificated
Securities;
(d) to make any change that does not adversely affect the legal rights
hereunder of any Noteholder;
(e) to qualify this Indenture under the TIA or to comply with the requirements
of the SEC in order to maintain the qualification of the Indenture under
the TIA;
(f) to make any change that provides any additional rights or benefits to the
holders of Securities; or
(g) to evidence and provide for the acceptance under the Indenture of a
successor Trustee.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 11.07 hereof,
the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
An amendment under this Section may not make any change that adversely
affects the rights under Article VI of any holder of Senior Debt then
outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
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Section 11.02 With Consent of Noteholders. Except as provided below in this
Section 11.02, the Company and the Trustee may amend or supplement this
Indenture or the Securities with the written consent (including consents
obtained in connection with any tender or exchange offer for Securities) of the
Noteholders of at least a majority in aggregate principal amount of the then
outstanding Securities. Subject to Sections 8.04 and 8.07 hereof, the
Noteholders of a majority in aggregate principal amount of the Securities then
outstanding may also by their written consent (including consents obtained in
connection with any tender offer or exchange offer for Securities) waive any
existing Default or Event of Default as provided in Section 8.04 or waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Securities. However, without the consent of each Noteholder
affected, an amendment, supplement or waiver under this Section may not (with
respect to any Securities held by a nonconsenting Noteholder):
(a) reduce the amount of Securities whose Noteholders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of, or change the time for payment of, interest or
Additional Amounts on any Security;
(c) reduce the principal of or change the fixed maturity of any Security or
alter the redemption provisions with respect thereto (including, without
limitation, the amount of any premium payable upon redemption);
(d) make any Security payable in money other than that stated in the Security;
(e) make any change in Section 8.04, 8.07 or 11.02 hereof (this sentence);
(f) waive a default in the payment of the Designated Event Payment or any
principal of, or premium, if any, or interest or Additional Amounts, if
any, on, any Security (other than a rescission of acceleration pursuant to
Section 8.02 hereof and a waiver of nonpayment of principal, premium, if
any, interest or Additional Amounts, if any, that have become due solely
because of such acceleration of the Securities);
(g) waive a redemption payment payable on any Security; or
75
(h) make any change in the rights of holders of Securities to receive payment
of principal of, or premium, if any, or interest or Additional Amounts, if
any, on, the Securities;
(i) modify the conversion or subordination provisions in a manner adverse to
the holders of the Securities; or
(j) impair the right of Noteholders to convert Securities into Common Stock of
the Company or otherwise to receive any cash, securities or other property
receivable by a holder upon conversion of Securities.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Securities as aforesaid, and upon receipt by the
Trustee of the documents described in Section 11.07 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
To secure a consent of the Noteholders under this Section 11.02, it
shall not be necessary for the Noteholders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
Section 11.03 Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Securities shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.
Section 11.04 Revocation and Effect of Consents. Until an amendment, supplement
or waiver becomes effective, a consent to it by a Noteholder of a Security is a
continuing consent by the Noteholder and every subsequent Noteholder of a
Security or portion of a Security that evidences the same debt as the consenting
Noteholder's Security, even if notation of the consent is not made on any
Security. However, any such Noteholder or subsequent Noteholder may revoke the
consent as to such Noteholder's Security or portion of a Security if the Trustee
receives the notice of revocation before the date on which the Trustee receives
an Officers' Certificate certifying that the Noteholders of the requisite
76
principal amount of Securities have consented to the amendment, supplement or
waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Noteholders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Noteholders of the principal amount of Securities required hereunder for such
amendment, supplement or waiver to be effective shall have also been given and
not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall
bind every Noteholder, unless it is of the type described in any of clauses (a)
through (j) of Section 11.02 hereof. In such case, the amendment, supplement or
waiver shall bind each Noteholder who has consented to it and every subsequent
Noteholder that evidences the same debt as the consenting Noteholder's Security.
Upon the execution of any supplemental indenture under this Article XI,
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. After a supplemental indenture becomes effective, the
Company shall mail to holders a notice briefly describing such amendment. The
failure to give such notice to all holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Article.
Section 11.05. Notation on or Exchange of Securities. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new security shall
not affect the validity and effect of such amendment, supplement or waiver.
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Section 11.06 Trustee Protected. The Trustee shall sign all supplemental
indentures, except that the Trustee may, but need not, sign any supplemental
indenture that adversely affects its rights.
Section 11.07 Trustee to Sign Supplemental Indentures. The Company may not sign
a supplemental Indenture until the Board of Directors approves it. In executing
any supplemental indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive and (subject to Section 9.01) shall
be fully protected in relying upon, in addition to the documents required by
Section 12.04, an Officers' Certificate and an Opinion of Counsel stating that:
(a) such supplemental indenture is authorized or permitted by this Indenture
and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company has all necessary corporate power and authority to execute and
deliver the supplemental indenture and that the execution, delivery and
performance of such supplemental indenture has been duly authorized by all
necessary corporate action of the Company;
(c) the execution, delivery and performance of the supplemental indenture do
not conflict with, or result in the breach of or constitute a default under
any of the terms, conditions or provisions of (i) this Indenture, (ii) the
charter documents or by-laws of the Company, or (iii) any material
agreement or instrument to which the Company is subject and of which such
counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of Counsel, the
execution, delivery and performance of the supplemental indenture do not
conflict with, or result in the breach of any of the terms, conditions or
provisions of (i) any law or regulation applicable to the Company, or (ii)
any material order, writ, injunction or decree of any court or governmental
instrumentality applicable to the Company;
(e) such supplemental indenture has been duly and validly executed and
delivered by the Company, and this Indenture together with such
supplemental indenture constitutes a legal, valid and binding obligation of
the Company enforceable against the Company, in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
or similar laws
78
affecting the enforcement of creditors' rights generally and general
equitable principles (whether considered in a proceeding at law or in
equity); and
(a) this Indenture together with such amendment or supplement complies with the
TIA.
(b) Payment for Consent. Neither the Company nor any Affiliate of the Company
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any holder for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all holders that so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies, or conflicts with another provision which is automatically
deemed to be incorporated in this Indenture by the TIA, the incorporated
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the TIA that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
Section 12.02 Notices. Any notice or communication by the Company or the Trustee
to the other is duly given if in writing and delivered in person or mailed by
first-class mail (registered or certified, return receipt requested), telecopier
(promptly confirmed in writing) or overnight air courier guaranteeing next day
delivery to the other's address stated in Section 12.10 hereof. 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 to a Noteholder shall be mailed by
first-class mail, postage prepaid to his address shown on the register kept by
the Registrar. Any notice or communication shall also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail
a notice or
79
communication to a Noteholder or any defect in it shall not affect its
sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it; a notice or communication, however, shall not be effective unless,
in the case of the Trustee, actually received.
If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by the Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Section 12.03 Communication by Noteholders with Other Noteholders. Noteholders
may communicate pursuant to TIA ss. 312(b) with other Noteholders with respect
to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to
the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
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In any case where several matters are required by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more such Persons as
to other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based insofar as it
relates to factual matters upon a certificate or opinion of, or representations
by, an Officer or Officer of the Company stating that the information with
respect to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representation by an accountant (who may be an employee of the
Company), or firm of accountants, unless such Officer or counsel, as the case
may be, knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representation with respect to the accounting matters
upon which his or her certificate, statement or opinion may be based as
aforesaid is erroneous.
Section 12.05 Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture (other than pursuant to Section 4.03) shall include:
(a) a statement that the Persons signing such certificate or rendering such
opinion has read such covenant or condition;
81
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, such Person has made such
examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
Section 12.06 Rules by Trustee and Agents. The Trustee may make reasonable rules
for action by, or a meeting of, Noteholders. The Registrar or Paying Agent may
make reasonable rules and set reasonable requirements for its functions.
Section 12.07 Legal Holidays. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest or Additional Amounts shall accrue for the
intervening period unless the Company shall default in making the payment due on
such next succeeding day. If any other operative date for purposes of this
Indenture shall occur on a Legal Holiday then for all purposes the next
succeeding day that is not a Legal Holiday shall be such operative date.
Section 12.08 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. Each Noteholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
Section 12.09 Counterparts. This Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 12.10 Variable Provisions. "Officer" means the Chairman of the Board,
the Chief Executive Officer, the President, any Senior Vice-President or
Vice-President, the Chief Financial Officer, the Treasurer, the Secretary, any
Assistant Treasurer, any Assistant Secretary, the Controller of the Company or
the Assistant Controller of the Company.
82
The Company initially appoints the Trustee as Paying Agent, Registrar
and Conversion Agent, and the Trustee hereby accepts such appointments.
The first certificate pursuant to Section 4.03 hereof shall be for the
fiscal year ending on December 31, 2001.
The reporting date for Section 9.06 hereof is January 1 of each year.
The first reporting date is January 1, 2001.
The Trustee shall always have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address for purposes of the Indenture is:
Young & Rubicam Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
The Trustee's address is:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Trustee Administration
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
The Company or the Trustee may change its address for purposes of this
Indenture by written notice to the other.
Section 12.11 GOVERNING LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD, TO THE EXTENT
PERMITTED BY LAW, TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
83
Section 12.12 No Adverse Interpretation of Other Agreements. This Indenture may
not be used to interpret another indenture, loan or debt agreement of the
Company or an Affiliate. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
Section 12.13 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 12.14 Severability. In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 12.15 Table of Contents, Headings, Etc. The Table of Contents and
headings of the Articles and Sections of this Indenture and the Securities have
been inserted for convenience of reference only, are not to be considered a part
hereof or thereof, and shall in no way modify or restrict any of the terms or
provisions hereof or thereof.
84
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
Young & Rubicam Inc., as Company,
By
----------------------------------
Name:
Title:
The Bank of New York, as Trustee,
By
----------------------------------
Name:
Title:
EXHIBIT A
FORM OF CONVERTIBLE SUBORDINATED NOTE
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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 HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Global Securities Legend--For Inclusion in Global Securities Only]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY
A-1
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL
ACCREDITED INVESTOR") (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION AND THAT, PRIOR TO
SUCH TRANSFER, DELIVERS TO THE COMPANY AND THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS
ATTACHED TO THIS SECURITY), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT
OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. PRIOR TO A TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (6) ABOVE), THE HOLDER OF THIS SECURITY MUST FURNISH TO THE
COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) AN INSTITUTIONAL
ACCREDITED INVESTOR AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN
ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT."
[Restricted Definitive Security Legend--For Inclusion in
Definitive Securities Only]
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"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED INVESTOR") (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION AND THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE COMPANY
AND THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER IS ATTACHED TO THIS SECURITY), (5) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES
A-3
LAWS OF ANY STATE OF THE UNITED STATES. PRIOR TO A TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE (6) ABOVE), THE HOLDER OF THIS
SECURITY MUST FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) AN
INSTITUTIONAL ACCREDITED INVESTOR AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) NOT A U.S. PERSON AND IS
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY,
ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE
SECURITIES ACT."
A-4
No. CUSIP No. Global Security: 000000XX0
Definitive Security: 000000XX0
3% Convertible Subordinated Note due 2005
Young & Rubicam Inc.
Young & Rubicam Inc., a Delaware corporation (the "Company"), promises
to pay to Cede & Co. or its registered assigns, the principal sum [indicated on
Schedule A hereof]1* [of _________ Dollars ($_________)]** on January 15, 2005.
Interest Payment Dates: January 15 and July 15, commencing July 15, 2000.
Record Dates: January 1 and July 1.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof which further provisions shall for all purposes have
the same effect as if set forth at this place.
[Signature Page Follows]
--------------------------
1* Applicable to Global Securities only.
2** Applicable to Definitive Securities only.
A-5
IN WITNESS WHEREOF, Young & Rubicam Inc. has caused this Security to be
signed manually or by facsimile by its duly authorized Officers and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon.
Young & Rubicam Inc.
By
----------------------------------
Name:
Title:
[Seal]
By
----------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities described in the within-
mentioned Indenture.
THE BANK OF NEW YORK, as Trustee,
by
----------------------------------
Authorized Signatory
A-6
Young & Rubicam Inc.
3% Convertible Subordinated Note due 2005
1. Interest. Young & Rubicam Inc., a Delaware corporation (the "Company"), is
the issuer of the 3% Convertible Subordinated Notes due 2005 (the
"Securities"), of which this Security is a part. The Company promises to
pay interest on the Securities in cash semiannually on each January 15 and
July 15, commencing on July 15, 2000, to holders of record at the close of
business on the immediately preceding January 1 or July 1, as the case may
be.
Interest on the Securities will accrue from the most recent date to
which interest has been paid, or if no interest has been paid, from January 20,
2000. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal of and premium, if any, interest, and Additional Amounts, if any, on
the Securities (in each case without regard to any applicable grace period) at
the Default Rate, compounded semi-annually.
2. Method of Payment. The Company will pay interest and Additional Amounts, if
any, on the Securities (except Defaulted Interest) to the Persons who are
registered holders of the Securities at the close of business on the record
date for the applicable interest payment date even though Securities are
canceled after the record date and on or before the interest payment date.
The Noteholder hereof must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal, premium, if
any, interest and Additional Amounts, if any, in money of the United States
that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay interest by check payable in
such money. It may mail an interest check to a holder's registered address.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent, Registrar
and Conversion Agent. The Company may change any Paying Agent, Registrar,
or Conversion Agent without prior notice.
4. Indenture. The Company issued the Securities under an indenture, dated as
of January 20, 2000 (the "Indenture"), between the Company and The Bank of
New
A-7
York, as Trustee. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by the Trust Indenture Act
of 1939 (15 U.S. Xxxxxx.xx. 77aaa-77bbbb) as in effect on the date of the
Indenture. The Securities are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and Noteholders are referred to the
Indenture and such Act for a statement of such terms. The Securities are
general unsecured obligations of the Company limited to an aggregate
principal amount of up to $287,500,000. The Indenture does not limit the
ability of the Company or any of its Subsidiaries to incur indebtedness or
to grant security interests or liens in respect of their assets.
5. Optional Redemption. The Securities are not redeemable at the Company's
option prior to January 20, 2003. On such date and thereafter, the
Securities will be subject to redemption at the option of the Company, in
whole or from time to time in part (in any integral multiple of $1,000), at
the following redemption prices (expressed as percentages of the principal
amount), if redeemed during the 12-month period beginning January 15 of the
years indicated (or January 20 in the case of 2003):
Year Redemption Price
2003 101.20%
2004 100.60%
in each case together with accrued interest and Additional Amounts, if any, to
(but excluding) the redemption date (subject to the right of holders of record
on the relevant record date to receive interest and Additional Amounts, if any,
due on the corresponding interest payment date). On or after the redemption
date, interest and Additional Amounts, if any, will cease to accrue on the
Securities, or portions thereof, called for redemption unless the Company shall
default in the payment of the redemption price and accrued interest and
Additional Amounts, if any, payable on the redemption date on the Securities to
be redeemed.
6. 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 the
Securities to be redeemed at his address of record. Securities in
denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000. In the
A-8
event of a redemption of less than all of the Securities, the Securities
will be chosen for redemption by the Trustee in accordance with the
Indenture. Unless the Company defaults in making such redemption payment
(including accrued interest and Additional Amounts, if any), or a Paying
Agent is prohibited from making such payment pursuant to the Indenture, by
law or otherwise, interest and Additional Amounts, if any, cease to accrue
on the Securities or portions of them called for redemption on and after
the redemption date.
If this Security is redeemed subsequent to a record date with respect
to any interest payment date specified above and on or prior to such interest
payment date, then any accrued interest and Additional Amounts, if any, will be
paid to the person in whose name this Security is registered at the close of
business on such record date.
7. Mandatory Redemption. The Company will not be required to make any
mandatory redemption payment with respect to the Securities. There are no
sinking fund payments with respect to the Securities.
8. Repurchase at Option of Holder. If there is a Designated Event, the Company
shall be required to offer to purchase on the Designated Event Payment Date
all outstanding Securities at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Amounts, if any, to the Designated Event Payment Date; provided that, on
the terms and subject to the conditions set forth in the Indenture, the
Company shall not be required to offer to purchase the Securities as
aforesaid if the Company has given notice of redemption of all of the
outstanding Securities to holders in accordance with the Indenture. If
there is a Designated Event, the Company shall mail a Designated Event
Offer to Holder of Securities prior to any related Designated Event Payment
Date. Holders of Securities that are subject to an offer to purchase may
elect to have such Securities or portions thereof in authorized
denominations purchased by completing the form entitled "Option of
Noteholder To Elect Purchase" appearing below. Noteholders have the right
to withdraw their election by delivering a written notice of withdrawal to
the Company or the Paying Agent in accordance with the terms of the
Indenture.
9. Subordination. The payment of the principal of, premium, if any, on,
interest and Additional Amounts, if any, on and any other amounts due on
the Securities is subordinated in right of payment to all existing and
future Senior Debt of the
A-9
Company, as described in the Indenture. Each Noteholder, by accepting a
Security, agrees to such subordination and authorizes and directs the
Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the
Trustee as its attorney-in-fact for such purpose.
10. Conversion. The holder of any Security has the right, exercisable at any
time after 90 days following the Issuance Date and prior to the close of
business on the Business Day immediately preceding the final maturity date
of the Security, to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $1,000) into shares of Common Stock
at the initial Conversion Price of $73.36 per share, subject to adjustment
under certain circumstances as provided in the Indenture, except that if a
Security is called for redemption, the conversion right will terminate at
the close of business on the Business Day immediately preceding the date
fixed for redemption (unless the Company shall default in making the
redemption payment, including interest and Additional Amounts, if any, when
it becomes due, in which case the conversion right shall terminate at the
close of business on the date on which such default is cured).
Beneficial owners of interests in Global Securities may exercise their
right of conversion by delivering to the Depositary the appropriate instructions
for conversion pursuant to the Depositary's procedures. To convert a
certificated Security, the holder must (1) complete and sign a notice of
election to convert substantially in the form set forth below (or complete and
manually sign a facsimile thereof) and deliver such notice to a Conversion
Agent, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (4)
pay any transfer or similar tax, if required by the Conversion Agent. Upon
conversion, no adjustment or payment will be made for accrued and unpaid
interest or Additional Amounts, if any, on the Securities so converted or for
dividends or distributions on, or Additional Amounts, if any, attributable to,
any Common Stock issued on conversion of the Securities, except that, if any
Noteholder surrenders a Security for conversion after the close of business on a
record date for the payment of interest and prior to the opening of business on
the next interest payment date, then, notwithstanding such conversion, the
interest payable on such interest payment date will be paid on such interest
payment date to the person who was the registered holder of such Security on
such record date. Any Securities surrendered for conversion during the period
after the close of business on any record date for the payment of interest and
before the
A-10
opening of business on the next succeeding interest payment date (except
Securities called for redemption on a redemption date or to be repurchased on a
Designated Event Payment Date during such period) must be accompanied by payment
in an amount equal to the interest and Additional Amounts, if any, payable on
such interest payment date on the principal amount of Securities so converted.
The number of shares of Common Stock issuable upon conversion of a Security is
determined by dividing the principal amount of the Security converted by the
Conversion Price in effect on the Conversion Date. No fractional shares will be
issued upon conversion but a cash adjustment will be made for any fractional
interest.
A Security in respect of which a holder has delivered an "Option of
Noteholder to Elect Purchase" form appearing below 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 as provided above and in accordance with the
terms of the Indenture. The above description of conversion of the Securities is
qualified by reference to, and is subject in its entirety to, the more complete
description thereof contained in the Indenture.
11. Registration Agreement. The holder of this Security is entitled to the
benefits of a Registration Agreement, dated January 20, 2000, between the
Company and the Initial Purchasers (the "Registration Agreement"). Pursuant
to the Registration Agreement the Company has agreed for the benefit of the
holders of the Securities and the Common Stock issued and issuable upon
conversion of the Securities, that (i) it will, at its cost, within 90 days
after the Closing Date, file a shelf registration statement (the "Shelf
Registration Statement") with the Securities and Exchange Commission (the
"Commission") with respect to resales of the Securities and the Common
Stock issuable upon conversion thereof, (ii) the Company will use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission under the Securities Act within 180
days after the Closing Date and (iii) the Company will keep such Shelf
Registration Statement continuously effective under the Securities Act
until the earliest of (a) the second anniversary of the Closing Date or, if
later, the second anniversary of the last date on which any Securities are
issued upon exercise of the Initial Purchasers' over-allotment option, (b)
the date on which the Securities or the Common Stock issuable upon
conversion thereof may be sold to Persons who are not "affiliates" (as
defined in Rule 144) of the Company pursuant to paragraph (k) of Rule 144
(or any successor provision)
A-11
promulgated by the Commission under the Securities Act, (c) the date as of
which the Securities or the Common Stock issuable upon conversion thereof
have been (A) transferred pursuant to Rule 144 under the Securities Act (or
any similar provision then in force) or (B) sold pursuant to such Shelf
Registration Statement (in any such case, such period being called the
"Shelf Registration Period").
If (i) the Shelf Registration Statement is not filed with the SEC on or
prior to 90 days after the Closing Date, (ii) the Shelf Registration Statement
has not been declared effective by the SEC within 180 days, after the Closing
Date or (iii) the Shelf Registration Statement is filed and declared effective
but shall thereafter cease to be effective (without being succeeded immediately
by a replacement shelf registration statement filed and declared effective) or
usable (including, as a result of a Suspension Period) for the offer and sale of
Transfer Restricted Securities for a period of time (including any Suspension
Period) which shall exceed 90 days in the aggregate in any 12-month period
during the period beginning on the Closing Date and ending on the second
anniversary of the Closing Date or, if later, the second anniversary of the last
date on which any Securities are issued upon exercise of the Initial Purchasers'
over-allotment option (each such event referred to in clauses (i) through (iii)
being referred to herein as a "Registration Default"), the Company will pay
Additional Amounts ("Additional Amounts") to each holder of Transfer Restricted
Securities who has complied with such Holder's obligations under the
Registration Agreement. The amount of Additional Amounts payable during any
period in which a Registration Default shall have occurred and be continuing is
that amount which is equal to one-quarter of one percent (25 basis points) per
annum per $1,000 principal amount of Securities and $2.50 per annum per 13.6314
shares of Common Stock (subject to adjustment from time to time in the event of
a stock split, stock recombination, stock dividend and the like) constituting
Transfer Restricted Securities for the first 90 days during which a Registration
Default has occurred and is continuing and one-half of one percent (50 basis
points) per annum per $1,000 principal amount of Securities and $5.00 per annum
per 13.6314 shares of Common Stock (subject to adjustment as set forth above)
constituting Transfer Restricted Securities for any additional days during which
such Registration Default has occurred and is continuing; it being understood
that all calculations pursuant to this sentence shall be carried out to five
decimals. Following the cure of a Registration Default, Additional Amounts will
cease to accrue with respect to such Registration Default. All accrued
Additional Amounts by wire transfer of immediately available funds to the
accounts specified by the Record Holders or, if a Record Holder has not
A-12
specified such an amount, by check mailed by the Company to the registered
address of such Record Holder on each Damages Payment Date, and Additional
Amounts will be calculated on the basis of a 360-day year consisting of twelve
30-day months.
"Transfer Restricted Securities" means each Security and each share of
Common Stock issued on conversion thereof until the earlier of (A) the date on
which such Security or share, as the case may be, (i) has been transferred
pursuant to the Shelf Registration Statement or another registration statement
covering such Security or share which has been filed with the Commission
pursuant to the Securities Act, in either case after such registration statement
has become and while such registration statement is effective under the
Securities Act, (ii) has been transferred pursuant to Rule 144 under the
Securities Act (or any similar provision then in force), or (iii) may be sold or
transferred pursuant to Rule 144(k) under the Securities Act (or any similar
provision then in force) or (B) the second anniversary of the Closing Date, or,
if later, the second anniversary of the last date on which any Securities are
issued upon exercise of the Initial Purchasers' over-allotment option.
Pursuant to the Registration Agreement, the Company may suspend the use
of the prospectus which is a part of the Shelf Registration Statement for a
period not to exceed 30 days in any three-month period or for three periods not
to exceed an aggregate of 90 days in any twelve-month period under certain
circumstances (each, a "Suspension Period"); provided that the existence of a
Suspension Period will not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Additional Amounts.
The above description of certain provisions of the Registration
Agreement is qualified by reference to, and is subject in its entirety to, the
more complete description thereof contained in the Registration Agreement.
12. Denominations, Transfer, Exchange and Replacement. The Securities are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered, and
Securities may be exchanged, as provided in the Indenture. The Registrar
may require a Noteholder, 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 exchange or
register the transfer of any Security or portion of a Security selected for
redemption (except the unredeemed portion of any Security being redeemed in
part). Also, it need not exchange or
A-13
register the transfer of any Security for a period beginning at the opening
of business 15 days before the day of mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing.
Replacement Securities for lost, stolen or mutilated Securities may be
issued in accordance with the terms of the Indenture.
13. Persons Deemed Owners. The registered Noteholder of a Security may be
treated as its owner for all purposes.
14. Unclaimed Money. If money for the payment of principal of or premium, if
any, interest or Additional Amounts, if any, on Securities remains
unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Noteholders
of Securities entitled to the money must look to the Company for payment,
unless an abandoned property law designates another person, and all
liability of the Trustee and such Paying Agent with respect to such money
shall cease.
15. Defaults and Remedies. The Securities shall have the Events of Default as
set forth in Section 8.01 of the Indenture. Subject to certain limitations
in the Indenture, if an Event of Default occurs and is continuing, the
Trustee, by notice to the Company, or the Noteholders of at least 25% in
aggregate principal amount of the then outstanding Securities, by notice to
the Company and the Trustee, may declare all the Securities to be due and
payable immediately, except that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all unpaid principal,
premium, if any, and accrued and unpaid interest and Additional Amounts, if
any, on the Securities shall become due and payable immediately without
further action or notice. Upon acceleration as described in either of the
preceding sentences, the subordination provisions of the Indenture preclude
any payment being made to Noteholders for at least 5 Business Days except
as otherwise provided in the Indenture.
The Noteholders of a majority in principal amount of the Securities
then outstanding by written notice to the Trustee 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 principal, premium, if any, Additional Amounts, if any, and
interest that has become due solely because of the acceleration. Noteholders may
not enforce the Indenture or the Securities except as provided in the Indenture.
Subject to certain limitations,
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Noteholders of a majority in principal amount of the then outstanding Securities
issued under the Indenture may direct the Trustee in its exercise of any trust
or power. The Company must furnish compliance certificates to the Trustee
annually. The above description of Events of Default and remedies is qualified
by reference to, and subject in its entirety to, the more complete description
thereof contained in the Indenture.
16. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented with the consent
of the Noteholders of at least a majority in principal amount of the then
outstanding Securities (including consents obtained in connection with a
tender offer or exchange offer for Securities), and any existing default
may be waived with the consent of the Noteholders of a majority in
principal amount of the then outstanding Securities (including consents
obtained in connection with a tender offer or exchange offer for
Securities). Without the consent of any Noteholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
defect or inconsistency, to provide for assumption by a successor of the
Company's obligations to Noteholders, to make any change that does not
adversely affect the rights of any Noteholder, to qualify the Indenture
under the TIA, or to comply with the requirements of the SEC in order to
maintain the qualification of the Indenture under the TIA.
17. Trustee Dealings with the Company. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of the Securities and may
otherwise deal with the Company or an Affiliate of the Company with the
same rights it would have, as if it were not Trustee, subject to certain
limitations provided for in the Indenture and in the TIA. Any Agent may do
the same with like rights.
18. 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. Each
Noteholder, by accepting a Security, waives and releases all such
liability. The waiver and release are part of the consideration for the
issue of the Securities.
19. Governing Law; Indenture to Control. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD, TO THE
EXTENT PERMITTED BY
A-15
LAW, TO CONFLICT OF LAW PROVISIONS THEREOF. IN THE EVENT OF ANY CONFLICT
BETWEEN THE PROVISIONS OF THIS SECURITY ON THE ONE HAND AND THE INDENTURE
OR THE REGISTRATION AGREEMENT, ON THE OTHER HAND, THE PROVISIONS OF THE
INDENTURE OR THE REGISTRATION AGREEMENT, AS THE CASE MAY BE, SHALL CONTROL.
20. Authentication. The Securities shall not be valid until authenticated by
the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
20. Abbreviations. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (for tenants in common), TEN
ENT (for tenants by the entireties), JT TEN (for joint tenants with right
of survivorship and not as tenants in common), CUST (for Custodian), and
U/G/M/A (for Uniform Gifts to Minors Act).
21. Definitions. Capitalized terms not defined in this Security have the
meanings given to them in the Indenture.
The Company will furnish to any Noteholder of the Securities upon
written request and without charge a copy of the Indenture and the Registration
Agreement. Request may be made to:
Young & Rubicam Inc.
Attention: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
A-16
CERTIFICATE OF TRANSFER
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Your Signature:
--------------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Date:
-----------------------------------------------
Medallion Signature Guarantee:
[FOR INCLUSION ONLY IF THIS SECURITY BEARS A RESTRICTED SECURITIES LEGEND] In
connection with any transfer of any of the Securities evidenced by this
certificate which are "restricted securities" (as defined in Rule 144 (or any
successor thereto) under the Securities Act of 1933), the undersigned confirms
that such Securities are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
A-17
(3) [ ] pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) [ ] to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter can be obtained from the Trustee);
(5) [ ] pursuant to an exemption from registration under the
Securities Act of 1933 provided by Rule 144
thereunder; or
(6) [ ] pursuant to an effective registration statement under
the Securities Act of 1933.
Unless one of the boxes is checked, the Registrar will refuse
to register any of the Securities evidenced by this
certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (3),
(4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such
certifications and other information, and if box (5) is
checked such legal opinions, as the Company has reasonably
requested in writing, by delivery to the Trustee of a standing
letter of instruction, to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act of 1933; provided that this paragraph shall not be
applicable to any Securities which are not "restricted
securities" (as defined in Rule 144 (or any successor thereto)
under the Securities Act of 1933).
Your Signature:---------------------------------
(Sign exactly as your name appears
on the other side of this Security)
Date:
Medallion Signature Guarantee:
A-18
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be $______.
The following increases or decreases in the principal amount of this Global
Security have been made:
======================================================================================================
Date Made Amount of Amount of Principal Amount of Signature of
Increase in decrease in this Global Security authorized
Principal Principal Amount following such signatory of
Amount of this of this Global decrease or increase. Trustee or
Global Security Security Securities
including upon Custodian
exercise of
over-allotment
option
======================================================================================================
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A-19
OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Security or a portion thereof
repurchased by the Company pursuant to Section 3.08 or 4.07 of the Indenture,
check the box: [ ]
If the purchase is in part, indicate the portion ($1,000 or any
integral multiple thereof) to be purchased: ____________
Your Signature:
--------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Date: ____________
Medallion Signature Guarantee: _______________________
A-20
ELECTION TO CONVERT
To Young & Rubicam Inc.:
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Common
Stock of Young & Rubicam Inc. in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated below. If shares are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto.
The undersigned agrees to be bound by the terms of the Registration
Agreement relating to the Common Stock issued upon conversion of the Securities.
If you want to convert this Security in whole, check the box below. If
you want to convert this Security in part, indicate the portion of this Security
to be converted in the space provided below.
In whole [ ] or Portion of Security to be
converted ($1,000 or any
integral multiple thereof):
$______________
Date: ______________ Your Signature:
-----------------------------
(Sign exactly as your name
appears on the other side of
this Security)
Medallion Signature Guarantee: --------------------
Please print or typewrite your name and address, including zip code, and social
security or other identifying number:
If the Common Stock is to be issued and delivered to someone other than you,
please print or typewrite the name and address, including zip code, and social
security or other identifying number of that person:
A-21
EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL SECURITY OR DEFINITIVE SECURITY
TO DEFINITIVE SECURITY
(Transfers pursuant toss. 2.06(a)(ii) orss. 2.06(a)(iii) of the Indenture)
The Bank of New York, as Registrar
Attn: Corporate Trust Trustee Administration
Re: Young & Rubicam Inc. 3% Convertible Subordinated Notes
due 2005 (the "Securities")
Reference is hereby made to the Indenture dated as of January 20, 2000
(the "Indenture") between Young & Rubicam Inc. and The Bank of New York, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given them in the Indenture.
This letter relates to U.S. $ aggregate principal amount of
Securities which are held [in the form of a [Definitive] [Global Security (CUSIP
No. _____________)]* in the name of [name of transferor] (the "Transferor") to
effect the transfer of the Securities.
In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Securities and
the Indenture and (ii) to a transferee that is an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the U.S. Securities Act of 1933, as amended) (an "Institutional Accredited
Investor") which is acquiring such Securities for its own account or for one or
more accounts, each of which is an Institutional Accredited Investor, over which
it exercises sole investment discretion and (iii) in accordance with applicable
securities laws of any state of the United States; and further certifies that
the transferee and each such account, if any, is acquiring at least $100,000
principal amount of Securities.
--------------------------------
* Insert, if appropriate.
B-1
[Names of Transferor],
By
---------------------------------
Name:
Title:
Dated:
cc: Young & Rubicam Inc.
Attn: Secretary
B-2
EXHIBIT C
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(Transfers pursuant toss. 2.06(a)(ii) andss. 2.06(a)(iii))
The Bank of New York, as Registrar
Attn: Corporate Trust Trustee Administration
Re: Young & Rubicam Inc. 3% Convertible Subordinated Notes
due 2005 (the "Securities")
Reference is hereby made to the Indenture dated as of January 20, 2000
(the "Indenture") between Young & Rubicam Inc., a Delaware corporation (the
"Company"), and The Bank of New York, as Trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given them in the
Indenture.
In connection with our proposed purchase of $ aggregate principal
amount of the Securities, which are convertible into shares of common stock
("Common Stock") of the Company, we confirm that:
1. We understand that the Securities and the Common Stock issuable upon
conversion thereof have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), and may not be sold except as
permitted in the following sentence. We understand and agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, (x) that such Securities are being transferred to us in a
transaction not involving any public offering within the meaning of the
Securities Act, (y) that if we should resell, pledge or otherwise transfer
any such Securities or any shares of Common Stock issuable upon conversion
thereof prior to the later of (I) the expiration of the holding period
under Rule 144(k) (or any successor thereto) under the Securities Act which
is applicable to such Securities or shares of Common Stock, as the case may
be, or (II) within three months after we cease to be an affiliate (within
the meaning of Rule 144 under the Securities Act) of the Company, such
Securities or the Common Stock issuable upon
conversion thereof may be resold, pledged or transferred only (i) to the
Company, (ii) so long as such Securities are eligible for resale pursuant
to Rule 144A under the Securities Act ("Rule 144A"), to a person whom we
reasonably believe is a "qualified institutional buyer" (as defined in Rule
144A) ("QIB") that purchases for its own account or for the account of a
QIB to whom notice is given that the resale, pledge or transfer is being
made in reliance on Rule 144A (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of the certificate
for the Securities), it being understood that the Common Stock is not
eligible for resale pursuant to Rule 144A, (iii) in an offshore transaction
(as defined in Regulation S under the Securities Act) in accordance with
Regulation S under the Securities Act (as indicated by the box checked by
the transferor on the Certificate of Transfer on the reverse of the
certificate for the Securities or on a comparable Certificate of Transfer
for the Common Stock issuable upon conversion thereof), (iv) to an
institution that is an "accredited investor" as defined in Rule 501 (a)
(1), (2), (3) or (7) under the Securities Act (an "Institutional Accredited
Investor") (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the certificate for the
Securities or on a comparable Certificate of Transfer for the Common Stock
issuable upon conversion thereof) that is acquiring the securities for its
own account or for the account of one or more other Institutional
Accredited Investors over which it exercises sole investment discretion and
that prior to such transfer, delivers a signed letter to the Company and
the Trustee (or the transfer agent in the case of Common Stock issuable
upon conversion thereof) certifying that it and each such account is such
an Institutional Accredited Investor and is acquiring the Securities or the
Common Stock issuable upon conversion thereof for investment purposes and
not for distribution and agreeing to the restrictions on transfer of the
Securities or the Common Stock issuable upon
C-1
conversion thereof, (v) pursuant to an exemption from registration under
the Securities Act provided by Rule 144 (if applicable) under the
Securities Act (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the certificate for the
Securities or a comparable Certificate of Transfer for the Common Stock
issuable upon conversion thereof), or (vi) pursuant to an
C-2
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States, and we will notify any purchaser of the Securities or the Common
Stock issuable upon conversion thereof from us of the above resale
restrictions, if then applicable. We further understand that in connection
with any transfer of the Securities or the Common Stock issuable upon
conversion thereof (other than a transfer pursuant to clause (vi) above) by
us that the Company and the Trustee (or the transfer agent in the case of
Common Stock issuable upon conversion thereof) may request, and if so
requested we will furnish, such certificates and other information and, in
the case of a transfer pursuant to clause (v) above, a legal opinion as
they may reasonably require to confirm that any such transfer complies with
the foregoing restrictions. Finally, we understand that in any case we will
not directly or indirectly engage in any hedging transactions with regard
to the Securities or the Common Stock issuable upon conversion of the
Securities except as permitted by the Securities Act.
2. We are able to fend for ourselves in connection with our purchase of
the Securities, we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment and
can afford the complete loss of such investment.
3. We understand that the minimum principal amount of Securities that
may be purchased by an Institutional Accredited Investor is $100,000 and
also represent that we and any accounts for which we are purchasing
Securities are each purchasing at least such minimum principal amount of
Securities.
4. We understand that the Company and others will rely upon the truth
and accuracy of the foregoing acknowledgments, representations, agreements
and warranties and we agree that if any of the acknowledgments,
representations, agreements or warranties made or deemed to have been made
by us by our purchase of the Securities, for our own account or for one or
more accounts as to each
C-4
of which we exercise sole investment discretion, are no longer accurate, we
shall promptly notify the Company.
5. With respect to the certificates representing Securities we are
purchasing, we understand that such certificates will be in definitive
registered form and that the notification requirement referred to in (1)
above requires that, until the expiration of the holding period with
respect to sales of the Securities under clause (k) of Rule 144 under the
Securities Act (unless such Securities have been sold pursuant to a
registration statement that has been declared effective under the
Securities Act), that such Securities will bear a legend substantially to
the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED
C-4
INVESTOR") (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION AND THAT, PRIOR TO SUCH TRANSFER,
DELIVERS TO THE COMPANY AND THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER IS ATTACHED TO THIS
SECURITY), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. PRIOR TO A TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (6) ABOVE), THE HOLDER OF THIS SECURITY MUST FURNISH TO THE
COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) AN INSTITUTIONAL
ACCREDITED INVESTOR AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN
ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT.
6. With respect to certificates representing shares of Common Stock
issuable upon conversion of the Securities, we understand that the
notification requirement referred to in (1) above requires that, until the
expiration of the holding period with respect to
C-5
sales of such Common Stock under clause (k) of Rule 144 under the
Securities Act (unless such Common Stock has been sold pursuant to a
registration statement that has been declared effective under the
Securities Act), such certificates will bear a legend substantially to the
effect set forth as Exhibit D to the Indenture and that a copy of such
legend may be obtained from the Trustee.
7. We are acquiring the Securities purchased by us for investment
purposes, and not for distribution, for our own account or for one or more
accounts as to each of which we exercise sole investment discretion and we
are and each such account is an Institutional Accredited Investor.
8. You and the Company are entitled to rely on this letter and you and
the Company are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
------------------------------------
(Name of Purchaser)
By:
------------------------------------
Dated:
--------------
cc: Young & Rubicam Inc.
Attn: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
C-6
EXHIBIT D
FORM OF RESTRICTED COMMON STOCK LEGEND
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT (RULE 144A), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED INVESTOR") (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION, AND THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE COMPANY
AND THE TRANSFER AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER IS ATTACHED TO THIS SECURITY), (5) PURSUANT TO
AN EXEMPTION
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FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAW OF ANY STATE OF THE UNITED STATES. PRIOR TO A TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (6) ABOVE), THE HOLDER OF
THIS SECURITY MUST FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM
THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144a OR (2) AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND
NOT FOR DISTRIBUTION OR (3) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(k)(2) OF RULE 902 UNDER) REGULATION 2 UNDER THE SECURITIES ACT. IN ANY CASE THE
HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTION WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES
ACT.
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EXHIBIT E
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
OF RESTRICTED COMMON STOCK
(Transfers pursuant toss.5.16(c) of the Indenture)
[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]
Re: Young & Rubicam Inc. 3% Convertible Subordinated Notes
due 2005 (the "Securities")
Reference is hereby made to the Indenture dated as of January 20, 2000
(the "Indenture") between Young & Rubicam Inc. and The Bank of New York, as
Trustee. Capitalized terms used but not defined herein shall have the meanings
given them in the Indenture.
This letter relates to _________ shares of Common Stock represented by
the accompanying certificate(s) that were issued upon conversion of Securities
and which are held in the name of [name of transferor] (the "Transferor") to
effect the transfer of such Common Stock.
In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(3) [ ] to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933) that has furnished to
the transfer agent a signed letter containing
certain representations and agreements (the form
of which letter can be obtained from the Company
or transfer agent);
(4) [ ] pursuant to an exemption from registration under
the Securities Act of 1933 provided by Rule 144
thereunder; or
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(5) [ ] pursuant to an effective registration statement
under the Securities Act of 1933.
Unless one of the boxes is checked, the transfer agent will
refuse to register any of the Common Stock evidenced by this
certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (2),
(3) or (4) is checked, the transfer agent may require, prior
to registering any such transfer of the Common Stock such
certifications and other information, and if box (4) is
checked such legal opinions, as the Company has reasonably
requested in writing, by delivery to the transfer agent of a
standing letter of instruction, to confirm that such transfer
is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of
the Securities Act of 1933.
[Name of Transferor],
By
------------------------
Name:
Title:
Dated:
cc: Young & Rubicam Inc.
Attn: Secretary
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