Exhibit 4.1
_____________________________________
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 10, 2001
BETWEEN
ELECTRONIC DATA SYSTEMS CORPORATION
AS ISSUER
AND
THE CHASE MANHATTAN BANK
AS TRUSTEE
_____________________________________
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms ................................................................................... 1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Designation and Principal Amount ...................................................................... 8
Section 2.2 Maturity .............................................................................................. 8
Section 2.3 Form .................................................................................................. 8
Section 2.4 Global Securities ..................................................................................... 8
ARTICLE III
REDEMPTION AND CONVERSIONS
Section 3.1 Optional Redemption by the Company .................................................................... 8
Section 3.2 Purchase at Option of the Holder upon a Fundamental Change ............................................ 10
Section 3.3 Purchase of Notes at the Option of the Holder; Payment of Purchase Price in Stock ..................... 12
Section 3.4 Deposit of Purchase Price or Fundamental Change Purchase Price ........................................ 18
Section 3.5 Further Conditions for Purchase at the Option of Holders upon a
Fundamental Change and Purchase of Notes at the Option of the Holder................................ 18
Section 3.6 Conversion of Notes ................................................................................... 20
Section 3.7 Adjustments to Conversion Rate ........................................................................ 23
Section 3.8 Miscellaneous Provisions Relating to Conversion ....................................................... 26
Section 3.9 Optional Conversion to Semi-Annual Cash Pay Notes upon Tax Event ...................................... 29
Section 3.10 Calculation and Reporting of Original Issue Discount for U.S. Federal Income Tax Purposes ............ 30
Section 3.11 Payment of Interest ................................................................................... 31
ARTICLE IV
NOTICE
Section 4.1 Notice by the Company ................................................................................. 33
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 Events of Default ..................................................................................... 33
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ARTICLE VI
MODIFICATION
Section 6.1 Purposes for Which Supplemental Indenture May Be Entered Into Without
Consent of Holders.................................................................. 36
Section 6.2 Modification of Indenture with Consent of Holders of Notes.............................. 36
ARTICLE VII
AMENDMENT OF CERTAIN OTHER
PROVISIONS OF THE BASE INDENTURE
Section 7.1 Amendments Relating to the Notes ....................................................... 38
Section 7.2 Interpretation of Base Indenture ....................................................... 40
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Ratification of Indenture .............................................................. 40
Section 8.2 Trustee Not Responsible for Recitals ................................................... 41
Section 8.3 New York Law to Govern ................................................................. 41
Section 8.4 Separability ........................................................................... 41
Section 8.5 Counterparts ........................................................................... 41
EXHIBITS
Exhibit A - Form of Global Security ................................................................ A-1
Exhibit B - Projected Payment Schedule ............................................................. B-1
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THIRD SUPPLEMENTAL INDENTURE, dated as of October 10, 2001 (the "Third
Supplemental Indenture"), between Electronic Data Systems Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), and The Chase Manhattan Bank (formerly Chase Bank of Texas,
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National Association and Texas Commerce Bank, National Association), as trustee
(the "Trustee").
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WHEREAS, the Company executed and delivered the Indenture dated as of
August 12, 1996 (the "Base Indenture") to the Trustee to provide for the
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issuance of the Company's debentures, notes, bonds or other evidence of
indebtedness (the "Debt Securities"), to be issued from time to time in one or
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more series as might be determined by the Company pursuant to the Base
Indenture; and
WHEREAS, pursuant to the terms of the Base Indenture, the
Company desires to provide for the establishment of a new series of its Debt
Securities to be known as its Zero-Coupon Convertible Senior Notes Due October
10, 2021 (the "Notes"), the form and terms of such Notes and the terms,
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provisions and conditions thereof to be set forth as provided in the Base
Indenture and this Third Supplemental Indenture (together, the "Indenture"); and
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WHEREAS, the Company has requested that the Trustee execute and
deliver this Third Supplemental Indenture and all requirements necessary to make
this Third Supplemental Indenture a valid, binding and enforceable instrument in
accordance with its terms, and to make the Notes, when executed, authenticated
and delivered by the Company, the valid, binding and enforceable obligations of
the Company, have been done and performed, and the execution and delivery of
this Third Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the
Notes by the Holders thereof, and for the purpose of setting forth, as provided
in the Base Indenture, the form and terms of the Notes, the Company covenants
and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms. Unless the context otherwise
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requires:
(a) a term defined in the Base Indenture has the same meaning when
used in this Third Supplemental Indenture;
(b) a term defined anywhere in this Third Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in this
Section 1.1(e):
"Accreted Conversion Price" as of any date means the price determined
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by dividing (x) the Accreted Value at such date, by (y) the Conversion Rate at
such date.
"Accreted Value" means, at any date of determination, (1) prior to
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such time as the Notes are converted to Cash Pay Notes, the sum of (x) the Issue
Price of each Note and (y) the portion of the excess of the Principal Amount of
each Note over the Issue Price ("Original Issue Discount") which shall have been
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amortized by the Company in accordance with GAAP through such date, such amount
to be so amortized on a daily basis and compounded semi-annually on each October
10 and April 10 at the rate of 1.25% per annum from the Issue Date through the
date of determination computed on the basis of a 360-day year of twelve 30-day
months and (2) at or after such time as the Notes are converted to Cash Pay
Notes, the Restated Principal Amount.
"Bid Agent" means a bid solicitation agent appointed by the Company to
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act in such capacity pursuant to paragraph 3 of the Notes.
"Capital Stock" means, with respect to any Person, any and all shares,
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interests, participations or other equivalents (however designated) of or in
such Person's capital stock or other equity interests, and options, rights or
warrants to purchase such capital stock or other equity interests, whether now
outstanding or issued after the Issue Date, including, without limitation, all
Preferred Stock.
"Cash" has the meaning provided in Section 3.3(c).
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"Cash Dividends" has the meaning assigned thereto in Exhibit A hereto.
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"Cash Pay Notes" means the Notes, after they have been converted to
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semi-annual cash pay Notes following the occurrence of a Tax Event.
"Common Equity" of any Person means Capital Stock of such Person that
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is generally entitled to (1) vote in the election of directors of such Person or
(2) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management or policies of such Person.
"Common Stock" means the common stock of the Company, par value $0.01
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per share, as it exists on the Issue Date and any shares of any class or classes
of Capital Stock of the Company resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided, however, that if at any time there shall be more than
one such resulting class, the shares of each such class then so issuable on
conversion of Notes shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from such
reclassifications.
"Common Stock Record Date" means, with respect to any dividend,
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distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is
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exchanged for or converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders entitled to receive
such cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
"Company Notice" has the meaning provided in Section 3.3(f).
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"Company Notice Date" has the meaning provided in Section 3.3(f).
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"Continuing Director" means a director who either was a member of the
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Board of Directors of the Company on October 4, 2001 or who became a director of
the Company subsequent to such date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of the
Continuing Directors on the Board of Directors of the Company at the time of
such approval, either by a specific vote or by approval of the proxy statement
issued by the Company on behalf of the entire Board of Directors of the Company
in which such individual is named as nominee for director.
"Conversion Agent" means the office or agency designated by the
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Company where Notes may be presented for conversion.
"Conversion Date" has the meaning provided in Section 3.6(b).
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"Conversion Rate" has the meaning provided in Section 3.6(a).
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"Defaulted Interest" has the meaning specified in Section
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3.11(c)(ii).
"Distributed Securities" has the meaning provided in Section 3.7(c).
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"Exchange Act" means the Securities Exchange Act of 1934, as amended
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and the rules and regulations promulgated thereunder.
"Fair Market Value" means, with respect to any asset, the price (after
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taking into account any liabilities relating to such assets) that would be
negotiated in an arm's-length transaction for cash between a willing seller and
a willing and able buyer, neither of which is under any compulsion to complete
the transaction, as such price is determined in good faith by the Board of
Directors of the Company or a duly authorized committee thereof, as evidenced by
a resolution of such Board or committee.
"Five-Day Period" has the meaning assigned thereto in Exhibit A
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hereto.
"Fundamental Change" will be deemed to have occurred at such time
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after the Issue Date as any of the following occurs:
(1) any sale, lease or other transfer (in one transaction or a series
of transactions) of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to any Person (other than a Subsidiary);
provided, however, that a transaction where the holders of all classes of
Common Equity of the Company immediately prior to such transaction own,
directly or indirectly, more than 50% of all
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classes of Common Equity of such Person immediately after such
transaction shall not be a Fundamental Change;
(2) a "person" or "group" (within the meaning of Section 13(d) of
the Exchange Act) (other than the Company) becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of Common
Equity of the Company representing more than 50% of the voting power of
the Common Equity of the Company;
(3) Continuing Directors cease to constitute at least a majority
of the Board of Directors of the Company; or
(4) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; provided, however,
that a liquidation or dissolution of the Company which is part of a
transaction that does not constitute a Fundamental Change under the
proviso contained in clause (1) above shall not constitute a
Fundamental Change.
A Fundamental Change will not be deemed to have occurred,
however, if either:
(I) the Sale Price of the Common Stock for (a) any 10
Trading Days within the 20 consecutive Trading Days ending
immediately before the Fundamental Change, and (b) at least
five-Trading-Days within the 10 consecutive Trading Days ending
immediately before the Fundamental Change, shall equal or exceed
105% of the Accreted Value, divided by the Conversion Rate, or
(II) both:
(a) at least 90% of the consideration (excluding cash
payments for fractional shares) in the transaction or
transactions constituting the Fundamental Change consists of
shares of Common Equity traded on a national securities
exchange or quoted on the Nasdaq Stock Market (or which will
be so traded or quoted when issued or exchanged in
connection with such Fundamental Change) (such securities
being referred to as "Publicly Traded Securities") and as a
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result of such transaction or transactions the Notes become
convertible solely into such Publicly Traded Securities
(excluding cash payments for fractional shares); and
(b) the consideration to be received per share of Common
Stock in the transaction or transactions constituting the
Fundamental Change consists of cash, Publicly Traded
Securities or a combination of cash and Publicly Traded
Securities with an aggregate fair market value (which, in the
case of Publicly Traded Securities, shall be equal to the
average closing price of such Publicly Traded Securities
during the five consecutive Trading Days commencing with the
Trading Day following consummation of the transaction or
transactions constituting the Fundamental Change) of at least
105% of the Accreted Value, divided by the Conversion Rate.
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"Fundamental Change Purchase Date" has the meaning provided in Section
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3.2(a).
"Fundamental Change Notice" has the meaning provided in Section
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3.2(b).
"Fundamental Change Purchase Notice" has the meaning provided in
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Section 3.2(c).
"Fundamental Change Purchase Price" has the meaning provided in
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Section 3.2(a).
"GAAP" means generally accepted accounting principles set forth in the
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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 may be approved by a significant segment of the accounting
profession of the United States, as in effect on the date of this Supplemental
Indenture.
"Holder" means the Person in whose name a Note is registered in the
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books of the Registrar for the Notes.
"Interest Payment Date" has the meaning specified in Section 3.9.
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"Investment Grade" shall mean BBB- or higher by S&P or Baa3 or higher
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by Moody's or the equivalent of such ratings by S&P or Moody's.
"Issue Date" means the date on which the Notes that constitute the
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Initial Securities (as defined in the Underwriting Agreement) are originally
issued under this Third Supplemental Indenture. The Issue Date for the Option
Securities (as defined in the Underwriting Agreement) shall be deemed to be the
same as the Issue Date of the Initial Securities.
"Issue Price" of the Notes means, in connection with the original
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issuance of the Notes, the initial issue price at which the Notes were issued as
set forth on the face of the Notes.
"Original Issue Discount" has the meaning specified in the definition
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of "Accreted Value."
"Market Price" means, on any date, the average of the Sale Prices of
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the Common Stock for the 20 Trading Day period ending on the third business day
(if the third business day prior to the applicable date is a Trading Day or, if
not, then on the last Trading Day prior to such third business day) prior to
such date, appropriately adjusted to take into account the occurrence, during
the period commencing on the first of such Trading Days during such 20 Trading
Day period and ending on such date, of certain events with respect to the Common
Stock that would result in an adjustment of the Conversion Rate under this Third
Supplemental Indenture.
"Maturity or Maturity Date" means October 10, 2021.
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"Moody's" means Xxxxx'x Investors Service, Inc. or any successor to its
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debt rating business.
"Note Price" has the meaning assigned thereto in Exhibit A hereto.
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"Option Exercise Date" has the meaning specified in Section 3.9.
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"Paying Agent" means the Trustee or any successor paying agent.
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"Preferred Stock" of any Person means all Capital Stock of such Person
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which has a preference in liquidation or with respect to the payment of
dividends.
"Principal Amount" of a Note means the principal amount of such Note at
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Maturity.
"Publicly Traded Securities" has the meaning provided in the definition of
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"Fundamental Change."
"Purchase Date" has the meaning specified in Section 3.3(a).
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"Purchase Notice" has the meaning provided in Section 3.3(a)(1).
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"Purchase Price" has the meaning provided in Section 3.3(a).
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"Redemption Date" when used with respect to any Note to be redeemed, means
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the date fixed for such redemption by or pursuant to this Third Supplemental
Indenture.
"Redemption Price" when used with respect to any Note to be redeemed, means
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the price at which it is to be redeemed pursuant to this Third Supplemental
Indenture.
"Regular Record Date" has the meaning specified in Section 3.9.
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"Restated Principal Amount" has the meaning specified in Section 3.9.
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"S&P" means Standard and Poor's Ratings Services or any successor to its
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debt rating business.
"Sale Price" of the Common Stock on any date means the closing sale price
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per share (or, if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the average bid
and average ask prices) on such date as reported in the composite transactions
for the principal United States securities exchange on which the Common Stock is
traded or, if the Common Stock is not listed on a United States national or
regional securities exchange, as reported by the Nasdaq Stock Market.
"Special Record Date" has the meaning specified in Section 3.11(c)(ii)(A).
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"Stated Maturity", when used with respect to any Note or any installment of
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semi-annual or contingent interest thereon, means the date specified in such
Note as the fixed date on
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which an amount equal to the Principal Amount of such Note or such installment
of semi-annual or contingent interest is due and payable.
"Tax Event" means that the Company shall have received an opinion from
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independent tax counsel experienced in such matters to the effect that, on or
after October 4, 2001, as a result of:
(1) any amendment to, or change (including any announced prospective
change) in, the laws, rules or regulations thereunder of the United States
or any political subdivision or taxing authority thereof or therein, or
(2) any amendment to, or change in, an interpretation or application
of such laws, rules or regulations by any legislative body, court,
governmental agency or regulatory authority,
in each case which amendment or change is enacted, promulgated, issued or
announced or which interpretation is issued or announced or which action is
taken, on or after October 4, 2001, there is more than an insubstantial risk
that interest (including Original Issue Discount or contingent interest, if any)
payable on the Notes either (i) would not be deductible on a current accrual
basis, or (ii) would not be deductible under any other method, in either case in
whole or in part, by the Company (by reason of deferral, disallowance, or
otherwise) for U.S. federal income tax purposes.
"Tax Event Date" has the meaning specified in Section 3.9.
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"Third Supplemental Indenture" has the meaning provided in the
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Preamble.
"Trading Day" means (x) if the applicable security is listed or
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admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or other
national securities exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.
"Trustee" means the party named as such above until a successor
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replaces such party in accordance with the applicable provisions of the
Indenture and thereafter means the successor serving thereunder.
"Underwriting Agreement" means that certain underwriting agreement
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relating to the Notes by and among the Company, Credit Suisse First Boston
Corporation and Xxxxxxx Xxxxx Xxxxxx Inc. dated as of October 4, 2001.
The terms "Indenture," "Base Indenture," and "Notes" shall have the
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respective meanings set forth in the Recitals to this Third Supplemental
Indenture.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Designation and Principal Amount. There is hereby
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authorized a series of Debt Securities designated the Zero-Coupon Convertible
Senior Notes Due October 10, 2021, limited (except as otherwise provided in
Article II of the Base Indenture) in aggregate Principal Amount to
$1,000,756,000. The Notes may be issued from time to time upon written order of
the Company for the authentication and delivery of Notes pursuant to Section
2.05 of the Base Indenture.
Section 2.2 Maturity. The date upon which the Notes shall become due
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and payable at final maturity, together with unpaid interest is October 10,
2021.
Section 2.3 Form. The Notes shall be Registered Securities. The
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certificates for the Notes shall be in substantially the form attached hereto as
Exhibit A. The Notes are being offered and sold by the Company pursuant to the
Underwriting Agreement.
Section 2.4 Global Securities. (a) The Notes will be issued initially
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in the form of one or more Global Securities registered in the name of the
Depositary or its nominee.
ARTICLE III
REDEMPTION AND CONVERSIONS
Section 3.1 Optional Redemption by the Company. (a) Right to Redeem;
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Notice to Trustee. The Company, at its option, may redeem the Notes in
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accordance with the provisions of paragraphs 6 and 8 of the Notes. If the
Company elects to redeem Notes pursuant to paragraph 6 of the Notes, it shall
notify the Trustee in writing of the Redemption Date, the Principal Amount of
Notes to be redeemed, the Redemption Price and the amount of contingent
interest, if any, payable on the Redemption Date. The Company shall give the
notice to the Trustee provided for in this Section 3.1(a) at least 45 days
before the Redemption Date.
(b) Selection of Notes to Be Redeemed. If any Note selected for
---------------------------------
partial redemption is thereafter surrendered for conversion in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed (so far as may be),
solely for purposes of determining the aggregate Principal Amount of Notes to be
redeemed by the Company, to be the portion selected for redemption. Notes which
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection. Nothing in this
Section 3.1(b) shall affect the right of any Holder to convert any Note pursuant
to Sections 3.5, 3.6 and 3.7 before the termination of the conversion right with
respect thereto.
(c) Notice of Redemption. At least 30 days but not more than 60 days
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before a Redemption Date, the Company shall provide notice of redemption to each
Holder of Notes to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
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(i) the Redemption Date;
(ii) the Redemption Price and, to the extent known at the time of
such notice, the amount of contingent interest, if any, payable on the
Redemption Date;
(iii) the then current Conversion Rate;
(iv) the name and address of the Paying Agent and the Conversion
Agent;
(v) that Notes called for redemption must be presented and
surrendered to the Paying Agent to collect the Redemption Price and
contingent interest, if any;
(vi) that the Notes called for redemption may be converted at any
time before the close of business on the Redemption Date;
(vii) that Holders who wish to convert Notes must comply with the
procedures in paragraph 9 of the Notes;
(viii) that, unless the Company defaults in making payment of such
Redemption Price and contingent interest, if any, Original Issue Discount
and interest (including contingent interest), if any, on the Notes called
for redemption will cease to accrue on and after the Redemption Date and
the only remaining right of the Holder will be to receive payment of the
Redemption Price upon presentation and surrender to the Paying Agent of the
Notes;
(ix) if fewer than all the outstanding Notes are to be redeemed, the
certificate number and Principal Amounts of the particular Notes to be
redeemed;
(x) the CUSIP number or numbers for the Notes called for
redemption; and
(xi) the election of the Company (which, subject to the provisions
of Sections 3.6, 3.7 and 3.8, shall be irrevocable) to deliver shares of
Common Stock or to pay cash in lieu of delivery of such shares with respect
to any Notes that may converted after the mailing of such notice and prior
to the Redemption Date.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
(d) Effect of Notice of Redemption. Once notice of redemption is
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given, Notes called for redemption become due and payable on the Redemption Date
and at the Redemption Price (together with accrued and unpaid contingent
interest, if any) stated in the notice, except for Notes that are converted in
accordance with the provisions of Sections 3.6, 3.7 and 3.8. Upon presentation
and surrender to the Paying Agent, Notes called for redemption shall be paid at
the Redemption Price (together with accrued and unpaid contingent interest, if
any).
(e) Sinking Fund. There shall be no sinking fund provided for the
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Notes.
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(f) Deposit of Redemption Price. On or before 11:00 a.m. (New York
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City time) on the Redemption Date, the Company shall deposit with the Trustee or
with the Paying Agent (or, if the Company or an Affiliate of the Company is
acting as the Paying Agent, shall segregate and hold in trust) an amount of
money sufficient to pay the aggregate Redemption Price of, and any accrued and
unpaid contingent interest with respect to, all the Notes to be redeemed on that
date other than the Notes or portions thereof called for redemption which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Trustee and the Paying Agent shall, as promptly as
practicable, return to the Company any money not required for that purpose
because of conversion of the Notes in accordance with the provisions of Sections
3.6, 3.7 and 3.8. If such money is then held by the Company or a Subsidiary in
trust and is not required for such purpose, it shall be discharged from such
trust.
Section 3.2 Purchase at Option of the Holder upon a Fundamental
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Change. (a) If a Fundamental Change shall occur at any time prior to October 10,
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2003, each Holder of Notes shall have the right, at such Holder's option, to
require the Company to purchase such Holder's Notes on the date (the
"Fundamental Change Purchase Date") (or if such date is not a business day, the
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next succeeding business day) that is 35 business days after the date of the
Fundamental Change. The Notes shall be purchased in integral multiples of $1,000
of Principal Amount. The Company shall purchase such Notes for Cash at a price
per Note (the "Fundamental Change Purchase Price") equal to the Accreted Value
---------------------------------
on the Fundamental Change Purchase Date as set forth in Section 3.4. No Notes
may be purchased at the option of the Holders due to a Fundamental Change if
there has occurred and is continuing an Event of Default other than an Event of
Default that is cured by the payment of the Purchase Price of all such Notes.
(b) The Company, or at its request (which must be received by the
Trustee at least three business days (or such lesser period as agreed to by the
Trustee) prior to the date the Trustee is requested to give such notice as
described below) the Trustee in the name of and at the expense of the Company,
shall mail to all Holders of record of the Notes a notice (a "Fundamental Change
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Notice") of the occurrence of a Fundamental Change and of the purchase right
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arising as a result thereof, on or before the 20/th/ business day after the
occurrence of such Fundamental Change.
The Fundamental Change Notice shall state:
1. briefly, the events causing a Fundamental Change and the date of
such Fundamental Change;
2. the date by which the Fundamental Change Purchase Notice pursuant
to this Section 3.2 must be given;
3. the Fundamental Change Purchase Date;
4. the Fundamental Change Purchase Price;
5. the name and address of the Paying Agent and the Conversion
Agent;
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6. the Conversion Rate and any adjustments thereto applicable on the
Fundamental Change Notice Date;
7. that Notes as to which a Fundamental Change Purchase Notice has been
given may be converted pursuant to Sections 3.6, 3.7 and 3.8 of the
Third Supplemental Indenture only if the applicable Fundamental Change
Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;
8. that Notes must be surrendered to the Paying Agent for cancellation to
collect payment of the Fundamental Change Purchase Price;
9. that the Fundamental Change Purchase Price for any Note as to which a
Fundamental Change Purchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Fundamental
Change Purchase Date and the time of surrender of such Note as
described in (8);
10. briefly, the procedures the Holder must follow to exercise rights
under this Section 3.2;
11. briefly, the conversion rights of the Notes;
12. the procedures for withdrawing a Fundamental Change Purchase Notice;
13. that, unless the Company defaults in making payment of such
Fundamental Change Purchase Price, Original Issue Discount and
interest, if any, on Notes covered by any Fundamental Change Purchase
Notice (or interest, if the Notes have been converted into Cash Pay
notes pursuant to Section 3.9 of this Third supplemental Indenture, if
any) will cease to accrue on and after the Fundamental Change Purchase
Date; and
14. the CUSIP number or ISIN number of the Notes; and
15. the procedures for withdrawing a Fundamental Change Purchase Notice.
The Company shall promptly furnish to the Trustee a copy of such notice.
(c) For a Note to be so purchased at the option of the Holder, the Paying
Agent must receive such Note duly endorsed for transfer, together with the form
entitled "Fundamental Change Purchase Notice" (the "Fundamental Change Purchase
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Notice") on the reverse thereof duly completed, prior to the close of business
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on the Fundamental Change Purchase Date; provided, however, if the Notes are in
book-entry form such transfer shall be made in accordance with the customary
practices of the Depositary.
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Note for purchase shall be determined by the Company,
whose determination shall be final and binding.
11
The Company shall purchase from the Holder thereof, pursuant
to this Section 3.2, a portion of a Note if the Principal Amount of such portion
is $1,000 or a multiple of $1,000 if so requested by the Holder. Provisions of
this Third Supplemental Indenture that apply to the purchase of all of a Note
also apply to the purchase of such portion of such Note.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.2 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Fundamental Change Purchase Date and the time of delivery or book-entry transfer
of the Note.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Fundamental Change Purchase Notice
contemplated by this Section 3.2 shall have the right at any time prior to the
close of business on the Fundamental Change Purchase Date to withdraw such
Fundamental Change Purchase Notice (in whole or in part) by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
3.5(a).
The Paying Agent shall promptly notify the Company of the
receipt by it of any Fundamental Change Purchase Notice or written notice of
withdrawal thereof.
Section 3.3 Purchase of Notes at the Option of the Holder;
----------------------------------------------
Payment of Purchase Price in Stock.
-----------------------------------
(a) Purchase of Notes at the Option of the Holder. A Holder
---------------------------------------------
of Notes shall have the option to require the Company to purchase any of such
Holder's Notes, on each of October 10, 2003, October 10, 2004, October 10, 2006,
October 10, 2011 and October 10, 2016 (each, a "Purchase Date"), at the purchase
-------------
price specified in paragraph 7 of the Notes (each, a "Purchase Price"), upon:
--------------
(1) delivery to the Paying Agent by the Holder of a written
notice of purchase (a "Purchase Notice") at any time from the opening
---------------
of business on the date that is 30 business days prior to a Purchase
Date until the close of business on such Purchase Date, stating:
(i) if certificated, the certificate numbers of the
Notes which the Holder shall deliver to be purchased;
(ii) the portion of the Principal Amount of the Notes
which the Holder shall deliver to be purchased, which portion
must be $1,000 in Principal Amount or a multiple thereof;
(iii) that such Notes shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified
in paragraph 7 of the Notes and in this Third Supplemental
Indenture; and
(iv) if the Company elects, pursuant to a Company
Notice, to pay the Purchase Price to be paid as of such
Purchase Date, in whole or in part, in Common Stock but such
portion of the Purchase Price shall ultimately be payable to
such Holder in Cash because any of the conditions to the
payment of the
12
Purchase Price in Common Stock are not satisfied prior to or on the
Purchase Date, as set forth in Section 3.3(e), whether such Holder elects
(x) to withdraw such Purchase Notice as to some or all of the Notes to
which such Purchase Notice relates (stating the Principal Amount and
certificate numbers, if the Notes are in certificated form, of the Notes as
to which such withdrawal shall relate), or (y) to receive Cash in respect
of the entire Purchase Price for all Notes (or portions thereof) to which
such Purchase Notice relates; and
(2) delivery or book-entry transfer of such Note to the Paying
Agent prior to, on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery or transfer
being a condition to receipt by the Holder of the Purchase Price therefor;
provided, however, that such Purchase Price shall be so paid pursuant to this
Section 3.3 only if the Note so delivered or transferred to the Paying Agent
shall conform in all respects to the description thereof in the related
Purchase Notice.
(b) Procedures. (a) If a Holder, in such Holder's Purchase Notice (and in
----------
any written notice of withdrawal of a portion of a Holder's Notes previously
submitted for purchase pursuant to a Purchase Notice, the portion that remains
subject to the Purchase Notice), fails to indicate such Holder's choice with
respect to the election regarding a conditional withdrawal pursuant to the terms
of clause (iv) of Section 3.3(a)(1), such Holder shall be deemed to have elected
to receive Cash in respect of all Notes subject to such Purchase Notice in the
circumstances set forth in such clause (iv).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.3, a portion of a Note if the Principal Amount of such portion is
$1,000 or a multiple of $1,000 if so requested by the Holder. Provisions of
this Third Supplemental Indenture that apply to the purchase of all of a Note
also apply to the purchase of such portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.3 shall be consummated by the delivery of them consideration to be
received by the Holder (together with accrued and unpaid contingent interest, if
any) promptly following the later of the Purchase Date and the time of delivery
or book-entry transfer of the Note.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 3.3(b) shall
have the right at any time prior to the close of business on the Purchase Date
to withdraw such Purchase Notice (in whole or in part) by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 3.5(a).
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(c) Company's Right to Elect Manner of Payment of Purchase Price. The
------------------------------------------------------------
Company may elect with respect to any Purchase Date to pay the Purchase Price in
respect of the Notes to be purchased pursuant to Section 3.3(a) as of such
Purchase Date, in U.S. legal tender ("Cash") or Common Stock, or in any
----
combination of Cash and Common Stock, subject to the
13
conditions set forth in Section 3.3(d) and (e); provided, however, that any
Purchase Price paid on October 10, 2003 pursuant to Section 3.3(a) must be paid
fully in Cash. The Company shall designate, in the Company Notice delivered
pursuant to Section 3.3(f), whether the Company shall purchase the Notes for
Cash or Common Stock, or, if a combination thereof, the percentages of the
Purchase Price of Notes in respect of which it shall pay in Cash and/or Common
Stock; provided that the Company shall pay Cash for fractional interests in
Common Stock. For purposes of determining the existence of potential fractional
interests, all Notes subject to purchase by the Company held by a Holder shall
be considered together (no matter how many separate certificates are to be
presented). Each Holder whose Notes are purchased pursuant to this Section 3.3
shall receive the same percentage of Cash and/or Common Stock in payment of the
Purchase Price for such Notes, except (i) as provided in Section 3.3(e) with
regard to the payment of Cash in lieu of fractional interests in Common Stock
and (ii) in the event that the Company is unable to purchase the Notes of a
Holder or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable federal or state securities
laws cannot be obtained, the Company may purchase the Notes of such Holder or
Holders for Cash. Once the Company has given its Company Notice to Holders, the
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid except pursuant to
this Section 3.3(c) or Section 3.3(e).
At least five business days before the Company Notice Date,
the Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 3.3(f);
(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to
such manner of payment set forth in Section 3.3(e) have been or shall
be complied with; and
(iv) whether the Company desires the Trustee to give the
Company Notice required by Section 3.3(f).
(d) Purchase with Cash. On the initial Purchase Date, the
------------------
Purchase Price of all Notes in respect of which a Purchase Notice pursuant to
Section 3.3(a) has been given shall be paid by the Company with cash equal to
the aggregate Purchase Price of such Notes. On each other Purchase Date, at the
option of the Company, the Purchase Price in respect of which a Purchase Notice
pursuant to Section 3.3(a) has been given, or a specified percentage thereof,
may be paid by the Company with Cash equal to the aggregate Purchase Price, or
such specified percentage thereof, as the case may be, of such Notes.
(e) Payment by Issuance of Common Stock. On each Purchase
-----------------------------------
Date other than initial one, at the option of the Company, subject to Section
3.3(c), the Purchase Price of Notes in respect of which a Purchase Notice
pursuant to Section 3.3(a) has been given, or a specified percentage thereof,
may be paid by the Company by the issuance of a number of shares of Common Stock
equal to the quotient obtained by dividing (x) the amount of Cash to which the
14
Holders would have been entitled had the Company elected to pay all or such
specified percentage, as the case may be, of the Purchase Price of such Notes in
Cash by (y) the Market Price of a share of Common Stock, subject to the next
succeeding paragraph.
The Company shall not issue a fractional share of Common Stock in payment
of the Purchase Price. Instead the Company shall pay Cash for the current market
value of the fractional share. The current market value of a fraction of a share
shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one Note purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Notes to be purchased.
The Company's right to exercise its election to purchase the Notes pursuant
to Section 3.3 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company having given timely notice in accordance with
Section 3.3(f) of its election to purchase all or a specified percentage of
the Notes with Common Stock as provided herein;
(ii) the shares of Common Stock having been admitted for listing or
admitted for listing subject to notice of issuance on the United States
national securities exchange on which the Common Stock is then listed on
or, if the Common Stock is not then listed on a national securities
exchange, having been approved for trading on the Nasdaq National Market;
(iii) (A)(1) the registration of the shares of Common Stock to be
issued in respect of the payment of the specified percentage of the
Purchase Price under the Securities Act of 1933 or (2) the issuanceof the
shares of Common Stock in a transaction which is exempt from the
registration requirements of the Securities Act of 1933 and which will not
result in such shares of Common Stock being deemed "restricted securities"
under the Securities Act of 1933 or otherwise and (B) the registration of
the shares of Common Stock under the Exchange Act, to the extent required
thereby;
(iv) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(v) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Third Supplemental Indenture and
(B) the shares of Common Stock to be issued by the Company in payment of
the specified percentage of the Purchase Price in respect of Notes have
been duly authorized and, when issued and delivered pursuant to the terms
of this Third Supplemental Indenture in payment of the specified percentage
of the Purchase Price in respect of Notes, shall be validly issued, fully
paid and nonassessable, and, to the best of such counsel's knowledge, free
from preemptive rights, and in the case of such Officers' Certificate,
stating that conditions (i), (ii), (iii) and (iv) above have been
15
satisfied and, in the case of such Opinion of Counsel, stating that
condition (iii) has been satisfied.
Such Officers' Certificate shall also set forth the number of shares
of Common Stock to be issued for each $1,000 Principal Amount of Notes and the
Sale Price of a share of Common Stock on each Trading Day during the period
during which the Market Price is calculated and ending on the Purchase Date. The
Company may elect to pay the Purchase Price (or any portion thereof) in Common
Stock only if the information necessary to calculate the Market Price is
publicly reported. If any of the conditions set forth in this Section 3.3(e) are
not satisfied with respect to a Holder or Holders prior to or on the Purchase
Date and the Company elected to purchase the Notes to be purchased as of such
Purchase Date pursuant to this Section 3.3 through the issuance of shares of
Common Stock, the Company shall pay the entire Purchase Price in respect of such
Notes of such Holder or Holders in Cash.
Upon determination of the actual number of shares of Common Stock
which the Holder of each $1,000 Principal Amount of the Notes shall receive, the
Company shall provide notice of such determination.
(f) Notice of Election. The Company's notices of election to purchase
------------------
with Cash or Common Stock, or any combination thereof (each, a "Company
-------
Notice"), shall be sent to the Holders (and to beneficial owners if required by
------
applicable law) at their addresses shown in the Note register maintained by the
Registrar, and delivered to the Trustee, not less than 30 business days prior to
the Purchase Date (the "Company Notice Date"). Such Company Notices shall state
-------------------
the manner of payment elected and shall contain the following information.
In the event the Company has elected to pay a Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(i) state that each Holder shall receive Common Stock in
respect of the specified percentage of the Purchase Price of the Notes
held by such Holder (except any Cash amount to be paid in lieu of
fractional shares);
(ii) state that the total number of shares of Common Stock to be
issued to Holders will be equal to the quotient obtained by dividing
(x) the amount of cash to which the Holders would have been entitled
had the Company elected to pay all or such specified percentage, as
the case may be, of the Purchase Price of such Notes in cash by (y)
the Market Price of a share of Common Stock;
(iii) set forth the method of calculating the Market Price of
the Common Stock; and
(iv) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market
risk with respect to the value of the Common Stock to be received from
the date such Market Price is determined to the Purchase Date.
In any case, each Company Notice shall include a form of Purchase
Notice to be completed by a Holder and shall state:
16
(i) the Purchase Price, the Conversion Rate and, to the extent
known at the time of such notice, the amount of contingent interest, if
any, that will be payable with respect to the Notes on the Purchase Date;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Notes as to which a Purchase Notice has been given may be
converted only if the applicable Purchase Notice has been withdrawn in
accordance with the terms of this Third Supplemental Indenture;
(iv) that Notes must be surrendered to the Paying Agent to collect
payment of the Purchase Price and contingent interest, if any;
(v) that the Purchase Price for any Note as to which a Purchase
Notice has been given and not withdrawn, together with any accrued
contingent interest payable with respect thereto, shall be paid promptly
following the later of the Purchase Date and the time of surrender of such
Note as described in (iv);
(vi) the procedures the Holder must follow under Section 3.3;
(vii) briefly, the conversion rights of the Notes;
(viii) that, unless the Company defaults in making payment of such
Purchase Price and contingent interest, if any, Original Issue Discount and
interest (including contingent interest), if any, on Notes covered by any
Purchase Notice (or interest, if the Notes have been converted into Cash
Pay Notes pursuant to Section 3.9 of this Third Supplemental Indenture, if
any) will cease to accrue on and after the Purchase Date;
(ix) the CUSIP or ISIN number of the Notes; and
(x) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 3.3(a)(1)(iv).
At the Company's request and at the Company's expense, the Trustee shall
give the Company Notice in the Company's name; provided, however, that, in all
cases, the text of the Company Notice shall be prepared by the Company.
(g) Covenants of the Company. All shares of Common Stock delivered upon
------------------------
conversion or purchase of the Notes shall be newly issued shares or treasury
shares, shall be fully paid and nonassessable and shall be free from preemptive
rights and free of any lien or adverse claim.
The Company shall cause to have listed or quoted all such shares of Common
Stock on each United States national securities exchange or over-the-counter or
other domestic market on which the Common Stock is then listed or quoted.
17
(h) Taxes. If a Holder of a Note is paid in Common Stock, the Company
-----
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which shall be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
Section 3.4 Deposit of Purchase Price or Fundamental Change Purchase
--------------------------------------------------------
Price. On or before 11:00 a.m. (New York City time) on the Purchase Date or
-----
Fundamental Change Purchase Date, the Company shall deposit with the Trustee or
with the Paying Agent Cash (or, if the Company or an Affiliate of the Company is
acting as Paying Agent, shall segregate and hold in trust an amount of Cash) in
respect of a Cash purchase under Section 3.3(d) or for fractional interests or
contingent interest, as applicable, or shares of Common Stock, or a combination
thereof, as applicable, sufficient to pay the aggregate Purchase Price or
Fundamental Change Purchase Price of, and any accrued and unpaid interest with
respect to, all Notes or portions thereof to be purchased pursuant to Section
3.2 or 3.3. Payment of the Purchase Price or Fundamental Change Purchase Price
for such Note shall be made as soon as practicable following the later of the
Purchase Date or Fundamental Change Purchase Date or the time of book-entry
transfer or delivery of such Note. If the Company is delivering Common Stock,
the Company shall deliver to each Holder entitled to receive Common Stock,
through the Paying Agent, a certificate for the number of full shares of Common
Stock, as applicable, issuable in payment of such Purchase Price and Cash in
lieu of any fractional interests. The Person in whose name the certificate for
Common Stock is registered shall be treated as a holder of record following the
Purchase Date. Subject to Section 3.3(e), no payment or adjustment shall be made
for dividends on the Common Stock in respect of a Common Stock Record Date for
which occurred on or prior to the Purchase Date. If the Paying Agent holds, in
accordance with the terms of the Indenture, money or securities sufficient to
pay the Purchase Price or Fundamental Change Purchase Price of such Note on the
business day following the Purchase Date or Fundamental Change Purchase Date,
then, on and after such date, such Note shall cease to be outstanding and
Original Issue Discount on such Note shall cease to accrue, whether or not
book-entry transfer of such Note is made or such Note is delivered to the Paying
Agent, and all other rights of the Holder shall terminate (other than the right
to receive the Purchase Price or Fundamental Change Purchase Price upon delivery
or transfer of the Note).
Section 3.5 Further Conditions for Purchase at the Option of Holders
--------------------------------------------------------
upon a Fundamental Change and Purchase of Notes at the Option of the Holder.
---------------------------------------------------------------------------
(a) Effect of Purchase Notice or Fundamental Change Purchase Notice.
---------------------------------------------------------------
Upon receipt by the Company of the Purchase Notice or Fundamental Change
Purchase Notice specified in Section 3.3(a) or Section 3.2(b), as applicable,
the Holder of the Note in respect of which such Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Fundamental Change Purchase Notice is withdrawn as specified
in the following two paragraphs) thereafter be entitled to receive solely the
Purchase Price or Fundamental Change Purchase Price, as the case may be, and any
accrued and unpaid
18
contingent interest, if any, with respect to such Note. Such Purchase Price or
Fundamental Change Purchase Price and contingent interest, if any, shall be paid
to such Holder promptly following the later of (x) the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, with respect to such Note
(provided the conditions in Section 3.3(a) or Section 3.2(c), as applicable,
have been satisfied) and (y) the time of delivery or book-entry transfer of such
Note to the Paying Agent by the Holder thereof in the manner required by Section
3.3(a) or Section 3.2(c), as applicable. Notes in respect of which a Purchase
Notice or Fundamental Change Purchase Notice, as the case may be, has been given
by the Holder thereof may not be converted for shares of Common Stock on or
after the date of the delivery of such Purchase Notice (or Fundamental Change
Purchase Notice, as the case may be), unless such Purchase Notice (or
Fundamental Change Purchase Notice, as the case may be) has first been validly
withdrawn as specified in the following two paragraphs.
A Purchase Notice or Fundamental Change Purchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent at any time prior to the close of business on the
Purchase Date or the Fundamental Change Purchase Date, as the case may be, to
which it relates specifying:
(a) if certificated, the certificate number of the Notes in respect of
which such notice of withdrawal is being submitted;
(b) the Principal Amount of the Notes with respect to which such
notice of withdrawal is being submitted; and
(c) the Principal Amount, if any, of the Notes which remain subject to
the original Purchase Notice or Fundamental Change Purchase Notice, as the
case may be, and which has been or shall be delivered for purchase by the
Company.
A written notice of withdrawal of a Purchase Notice or Fundamental
Change Purchase Notice may be in the form of (i) a conditional withdrawal
contained in a Purchase Notice pursuant to the terms of Section 3.3(a)(1)(iv) or
(ii) a conditional withdrawal containing the information set forth in the
preceding paragraph and contained in a written notice of withdrawal delivered to
the Paying Agent as set forth in the preceding paragraph.
There shall be no purchase of any Notes pursuant to Section 3.2 or
Section 3.3 (other than through the issuance of Common Stock in payment of the
Purchase Price, including Cash in lieu of any fractional shares) if there has
occurred prior to, on or after, as the case may be, the giving, by the Holders
of such Notes, of the required Purchase Notice (or Fundamental Change Purchase
Notice, as the case may be) and is continuing an Event of Default (other than an
Event of Default that is cured by the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be, and any accrued and
unpaid contingent interest with respect to such Notes). The Paying Agent will
promptly return to the respective Holders thereof any Notes (x) with respect to
which a Purchase Notice or Fundamental Change Purchase Notice, as the case may
be, has been withdrawn in compliance with this Third Supplemental Indenture, or
(y) held by it during the continuance of an Event of Default (other than an
Event of Default that is cured by the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be, and any accrued and
unpaid contingent interest with respect to such Notes) in
19
which case, upon such return, the Purchase Notice or Fundamental Change Purchase
Notice with respect thereto shall be deemed to have been withdrawn.
(b) Notes Purchased in Part. Any Note that is to be purchased only in
-----------------------
part shall be surrendered at the office of the Paying Agent (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Note, without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of the
Note so surrendered which is not purchased.
(c) Covenant to Comply with Securities Laws upon Purchase of Notes. In
--------------------------------------------------------------
connection with any offer to purchase Notes under Section 3.2 or 3.3, the
Company shall (i) comply with Rules 13e-4 and 14e-1 (which terms, as used
herein, include any successor provision thereto) under the Exchange Act, if
applicable; (ii) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, if applicable; and (iii) otherwise comply
with all federal and state securities laws so as to permit the rights and
obligations under Sections 3.2 and 3.3 to be exercised in the time and in the
manner specified in Sections 3.2 and 3.3.
(d) Repayment to the Company. The Trustee and the Paying Agent shall
------------------------
return to the Company any Cash or shares of Common Stock that remain unclaimed
as provided in paragraph 14 of the Notes, together with interest that the
Trustee has agreed to pay, if any, or dividends, if any, paid thereon while such
shares are held by the Trustee or the Paying Agent, held by them for the payment
of a Purchase Price or Fundamental Change Purchase Price, as the case may be, or
contingent interest, if any; provided, however, that to the extent that the
aggregate amount of Cash or shares of Common Stock deposited by the Company
pursuant to Section 3.4 exceeds the aggregate Purchase Price or Fundamental
Change Purchase Price, as the case may be, of, and any accrued and unpaid
contingent interest with respect to, the Notes or portions thereof which the
Company is obligated to purchase as of the Purchase Date or Fundamental Change
Purchase Date, as the case may be, then promptly after the business day
following the Purchase Date or Fundamental Change Purchase Date, as the case may
be, the Trustee and the Paying Agent shall return any such excess to the Company
together with interest that the Trustee has agreed to pay, if any, or dividends,
if any, paid thereon while such Cash or shares are held by the Trustee or the
Paying Agent.
Section 3.6 Conversion of Notes. (a) Right to Convert. A Holder of
------------------- ----------------
a Note may convert such Note into Common Stock at any time during which the
conditions stated in paragraph 9 of the Notes are met. The number of shares of
Common Stock issuable upon conversion of a Note per $1,000 of Principal Amount
(the "Conversion Rate") shall be that set forth in paragraph 9 in the Notes,
---------------
subject to adjustment as herein set forth.
A Holder may convert a portion of the Principal Amount of a Note if
the portion is $1,000 or a multiple of $1,000. Provisions of this Third
Supplemental Indenture that apply to conversion of all of a Note also apply to
conversion of a portion of a Note.
20
The Holders' right to convert Notes into shares of Common Stock is
subject to the Company's right to elect instead to pay such Holder the amount of
cash set forth in this Section 3.6(b), in lieu of delivering such shares of
Common Stock; provided, however, that if an Event of Default (other than a
default in a cash payment upon conversion of the Notes) shall have occurred
(prior to, on or after, as the case may be, the Conversion Date or the date on
which the Company delivers its notice of whether such Note shall be converted
into shares of Common Stock or cash pursuant to Section 3.6(b and be continuing,
the Company shall deliver shares of Common Stock (and cash in lieu of fractional
shares of Common Stock) in accordance with this Article III, whether or not the
Company has delivered a notice pursuant to Section 3.1(c) or this Section 3.6(b)
to the effect that the Notes would be paid in cash. The amount of cash to be
paid pursuant to this Section 3.6(b) hereof for each $1,000 of principal amount
of a Note upon conversion shall be equal to the average Sale Price of the Common
Stock for the five consecutive Trading Days immediately following (i) the date
of the Company's notice of its election to deliver cash upon conversion, if the
Company shall not have given a notice of redemption pursuant to Section 3.1(c),
or (ii) the Conversion Date, in the case of a conversion following such a notice
of redemption specifying an intent to deliver cash upon conversion, in either
case multiplied by the Conversion Rate in effect on such Conversion Date.
(b) Conversion Procedures. To convert a Note a Holder must satisfy
---------------------
the requirements in paragraph 9 of the Notes. The date on which the Holder of
Notes satisfies all those requirements is the conversion date (the "Conversion
----------
Date"). The Conversion Agent shall notify the Company of the Conversion Date
----
within one business day of the Conversion Date. Within two business days
following the Conversion Date, the Company shall deliver to the Holder, through
the Conversion Agent, written notice of whether such Note shall be converted
into shares of Common Stock or paid in cash, unless the Company shall have
delivered such notice previously pursuant to Section 3.1(c). If the Company
shall have notified the Holder that all of such Note shall be converted into
shares of Common Stock, the Company shall deliver to the Holder through the
Conversion Agent, as promptly as practicable but in any event no later than the
fifth business day following the date of the Company's notice of its election to
deliver shares of Common Stock, a certificate for the number of full shares of
Common Stock deliverable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 3.6(c) hereof. Except as provided in the
last sentence in the second paragraph of Section 3.6(a) hereof, if the Company
shall have notified the Holder that all or a portion of such Note shall be paid
in cash, the Company shall deliver to the Holder surrendering such Note the
amount of cash payable with respect to such Note no later than the tenth
business day following such Conversion Date, together with a certificate for the
number of full shares of Common Stock deliverable upon the conversion and cash
in lieu of any fractional share determined pursuant to Section 3.6(c) hereof.
Except as provided in the last sentence in the second paragraph of Section
3.6(a) hereof, the Company may not change its election with respect to the
consideration to be delivered upon conversion of a Note once the Company has
notified the Holder in accordance with this paragraph. If shares of Common Stock
are delivered as consideration, then the Person in whose name the certificate
representing such shares is registered shall be treated as a stockholder of
record on and after the Conversion Date; provided, however, that no surrender of
a Note on any date when the stock transfer books of shall be closed shall be
effective to constitute the Person or Persons entitled to receive the shares of
Common Stock upon such conversion as the record holder or holders of such shares
of Common Stock on such date, but such surrender shall be effective to
constitute the Person or Persons entitled to receive such
21
shares of Common Stock as the record holder or holders thereof for all purposes
at the close of business on the next succeeding day on which such stock transfer
books are open; such conversion shall be at the Conversion Rate in effect on the
date that such Note shall have been surrendered for conversion, as if the stock
transfer books of had not been closed. Upon conversion of a Note, such Person
shall no longer be a Holder of such Note and such Note shall be cancelled and no
longer Outstanding.
No payment or adjustment shall be made for dividends on or other
distributions with respect to any Common Stock except as provided in Section
3.7. On conversion of a Note, that portion of Accreted Value (or interest, if
the Company has exercised its option to convert the Notes to Cash Pay Notes
pursuant to Section 3.9) attributable to the period from the Issue Date of the
Note to the Conversion Date and accrued contingent interest with respect to the
converted Note shall not be canceled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the Holder thereof through delivery of the
Common Stock (together with the Cash payment, if any, in lieu of fractional
shares) in exchange for the Note being converted.
If a Holder converts more than one Note at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
total Principal Amount of the Notes converted.
Upon surrender of a Note that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Note in an authorized denomination equal in Principal Amount (or the Restated
Principal Amount, if applicable) to the unconverted portion of the Note
surrendered.
If the last day on which a Note may be converted is a legal holiday in
a place where a Conversion Agent is located, the Note may be surrendered to that
Conversion Agent on the next succeeding day that it is not a legal holiday.
(c) Cash Payments in Lieu of Fractional Shares. The Company shall
------------------------------------------
not issue a fractional share of Common Stock upon conversion of a Note. Instead
the Company shall deliver Cash for the current market value of the fractional
share. The current market value of a fractional share shall be determined to the
nearest 1/10,000th of a share by multiplying the Sale Price of a full share of
Common Stock on the Trading Day immediately preceding the Conversion Date by the
fractional amount and rounding the product to the nearest whole cent.
(d) Taxes on Conversion. If a Holder converts a Note, the Company
-------------------
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue of shares of Common Stock upon the conversion. However, the Holder shall
pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which shall be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.
22
(e) Company to Provide Stock. The Company shall, prior to issuance
------------------------
of any Notes hereunder, and from time to time as may be necessary, reserve out
of its authorized but unissued Common Stock a sufficient number of shares of
Common Stock to permit the conversion of the Notes.
All shares of Common Stock delivered upon conversion of the Notes
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company shall endeavor promptly to comply with all federal and
state securities laws regulating the order and delivery of shares of Common
Stock upon the conversion of Notes, if any, and shall cause to have listed or
quoted all such shares of Common Stock on each United States national securities
exchange or over-the-counter or other domestic market on which the Common Stock
is then listed or quoted.
Section 3.7 Adjustments to Conversion Rate. The Conversion Rate
------------------------------
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend, or make a
distribution, in shares of Common Stock or other Capital Stock, on Common
Stock; (ii) subdivide its outstanding Common Stock into a greater number of
shares; or (iii) combine its outstanding Common Stock into a smaller number
of shares, the Conversion Rate in effect immediately prior thereto shall be
adjusted so that the holder of any Note thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common
Stock which such holder would have owned or have been entitled to receive
after the happening of any of the events described above had such Note been
converted immediately prior to the happening of such event. An adjustment
made pursuant to this Section 3.7 shall become effective immediately after
the Common Stock Record Date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of
subdivision, combination or reclassification. If any dividend or
distribution of the type described in clause (i) above is not so paid or
made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such dividend, distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all
holders of its Common Stock entitling them (for a period expiring within 60
days after the date fixed for determination of stockholders entitled to
receive such rights or warrants) to subscribe for or purchase Common Stock
at a price per share less than the Sale Price per share of Common Stock on
the day preceding the date of announcement of the Common Stock Record Date
for the determination of stockholders entitled to receive such rights or
warrants, the Conversion Rate in effect immediately prior thereto shall be
adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date of
the issuance of such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase, and of which
the denominator shall be the number of shares of Common Stock outstanding
on the date
23
of issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Sale Price. Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately after the
opening of business on the day following the Common Stock Record Date for the
determination of the stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock are not delivered after the expiration
of such rights or warrants, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. If such rights or
warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect if such Common Stock Record
Date for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Sale Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors.
(c) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock (excluding any distribution in connection with
the liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary) any evidences of its indebtedness or assets (other than Cash) or
rights or warrants to subscribe for or purchase any of its securities (excluding
those referred to in Section 3.7(b)) (any of the foregoing hereinafter in this
Section 3.7 called the "Distributed Securities"), then, the Conversion Rate
----------- ----------
shall be adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the Market Price per
share of the Common Stock on the Common Stock Record Date mentioned below, and
the denominator shall be the Sale Price per share of the Common Stock on such
Common Stock Record Date less the Fair Market Value on such Common Stock Record
Date (as determined by the Board of Directors, whose determination shall be
conclusive, and described in a certificate filed with the Trustee) of the
Distributed Securities so distributed applicable to one share of Common Stock.
Such adjustment shall become effective immediately after the Common Stock Record
Date for the determination of stockholders entitled to receive such
distribution. Notwithstanding the foregoing, in the event (a) the then Fair
Market Value (as so determined) of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Market Price of the Common Stock on the Common Stock Record Date or (b) such
Market Price exceeds the Fair Market Value of such Distributed Securities by
less than $1.00, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder shall have the right to receive upon conversion the
amount of Distributed Securities such Holder would have received had such Holder
converted each Note immediately prior to such Common Stock Record Date. In the
event that such distribution is not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate which would then be in effect if such
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes
24
of this Section 3.7(c) by reference to the actual or when issued trading market
for any securities, it must in doing so consider the prices in such market on
the same day used in computing the Sale Price of the Common Stock.
Notwithstanding the foregoing provisions of this Section 3.7,
no adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper provision so that each Holder of a Note
who converts such Note (or any portion thereof) after the Common Stock Record
Date for such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the amount
and kind of Distributed Securities that such Holder would have been entitled to
receive if such Holder had, immediately prior to such Common Stock Record Date,
converted such Note into Common Stock; provided that, with respect to any
Distributed Securities that are convertible, exchangeable or exercisable, the
foregoing provision shall only apply to the extent (and so long as) the
Distributed Securities receivable upon conversion of such Note would be
convertible, exchangeable or exercisable, as applicable, without any loss of
rights or privileges for a period of at least 60 days following conversion of
such Note.
Upon conversion of the Notes the Holders shall receive, in addition to the
Common Stock issuable upon such conversion, any rights issued under any existing
or future stockholder rights plan the Company implements (notwithstanding the
occurrence of an event causing such rights to separate from the Common Stock at
or prior to the time of conversion).
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock Cash (excluding any Cash that is distributed
upon a merger or consolidation to which Section 3.8(f) applies) in an aggregate
amount that, combined together with the aggregate amount of any other such
distributions to all holders of its Common Stock made exclusively in Cash within
the 12 months preceding the date of payment of such distribution, and in respect
of which no adjustment pursuant to this Section 3.7 has been made, exceeds on a
per share basis 15% of the Sale Price on the day preceding the date of
declaration of such dividend or distribution, then, and in each such case,
immediately after the close of business on such date, the Conversion Rate shall
be increased so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the Common Stock
Record Date by a fraction of which the numerator shall be such Sale Price of the
Common Stock and the denominator shall be such Sale Price of the Common Stock
less the amount of Cash and the Fair Market Value (as so determined) of such
other consideration so distributed (and not excluded as provided above)
applicable to one share of Common Stock, such increase to be effective
immediately prior to the opening of business on the day following the Common
Stock Record Date; provided, however, that no adjustment will be made in respect
of any such dividends and distributions that are paid during any period for
which we are paying contingent interest to Holders; provided, further, that, if
the portion of the Cash so distributed applicable to one share of Common Stock
is equal to or greater than the Market Price of the Common Stock on the day
preceding the date of declaration of such dividend or distribution then, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion, in
25
addition to the shares of Common Stock, Cash and other consideration
the Holder would have received had such Holder converted such Note
immediately prior to such Common Stock Record Date. If such dividend
or distribution is not so paid or made, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 3.7(d)
as a result of a distribution that is a quarterly dividend, such
adjustment shall be based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as
set forth in this Section 3.7(d) above as a result of a distribution
that is not a quarterly dividend, such adjustment shall be based upon
the full amount of the distribution.
(e) For purposes of this Section 3.7, 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
Common Stock. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Company.
Section 3.8 Miscellaneous Provisions Relating to Conversion(a).
--------------------------------------------------
When Adjustment May Be Deferred. No adjustment in the Conversion Rate need be
-------------------------------
made unless the adjustment would require an increase or decrease of at least 1%
in the Conversion Rate then in effect; provided that any adjustment that would
otherwise be required to be made shall be carried forward and taken into account
in any subsequent adjustment. Except as stated in Section 3.7, the Conversion
Rate will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock or carrying the right to
purchase any of the foregoing. Any adjustments that are made shall be carried
forward and taken into account any subsequent adjustment. All calculations under
Sections 3.6, 3.7 and 3.8 shall be made to the nearest cent or to the nearest
1/10,000th of a share, as the case may be.
(b) When No Adjustment Required. 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. To the extent the Notes become convertible
into cash, assets, property or securities (other than Capital Stock of the
Company), no adjustment need be made thereafter as to the cash, assets, property
or such securities subject to Section 3.8(f). Interest shall not accrue on the
Cash.
No adjustment need be made for a transaction referred to in
Section 3.7(a), (b), (c) or (d) if Holders are to participate in the transaction
without conversion on a basis and with notice that the Board of Directors
determines to be fair and appropriate in light of the basis and notice on which
holders of Common Stock participate in the transaction and the Holder is not
economically harmed by such transaction and the failure to make an adjustment.
Such participation by Holders may include participation in the transaction upon
conversion of their Note by the Holder provided that an adjustment shall be made
at such time as the Holder is not entitled to participate on the basis described
in the prior sentence.
26
(c) Notice of Adjustment. Whenever the Conversion Rate is
--------------------
adjusted, the Company shall promptly provide to Holders a notice of the
adjustment. The Company shall file with the Trustee and the Conversion Agent
such notice. The certificate shall, absent manifest error, be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
(d) Voluntary Increase. The Company may make such increases in
------------------
the Conversion Rate, in addition to those required by Section 3.7, as the Board
of Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. To the extent permitted by applicable
law, the Company may from time to time increase the Conversion Rate by any
amount for any period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. Whenever the Conversion Rate is so
increased, the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice of such increase. Neither the Trustee nor any
Conversion Agent shall be under any duty or responsibility with respect to any
such certificate except to exhibit the same to any holder desiring inspection
thereof. The Company shall mail the notice at least 15 days before the date the
increased Conversion Rate takes affect. The notice shall state the increased
Conversion Rate and the period it shall be in effect.
(e) Notice to Holders Prior to Certain Actions. In case:
------------------------------------------
(i) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 3.7;
(ii) the Company shall authorize the granting to all or
substantially all the Holders of its Common Stock of rights or warrants to
subscribe for or purchase any Common Stock;
(iii) of any reclassification or reorganization of the Common
Stock of the Company (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from par value to no
par value, or from no par value to par value), or of any consolidation or
merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or transfer of all
or substantially all of the assets of the Company; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company.
the Company shall cause to be filed with the Trustee and to be provided to
Holders of Notes, as promptly as possible but in any event at least 15 days
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be taken, the date
as of which
27
the holders of Common Stock of record to be entitled to such dividend,
distribution, or rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
(f) Effect of Reclassification, Consolidation, Merger or Sale. If any of
---------------------------------------------------------
the following events occur, namely (i) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination); (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including Cash) with respect to or in exchange for such Common Stock; or (iii)
any sale conveyance of or other transfer of all, or substantially all, of the
properties and assets of the Company to any other corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities or
other property or assets (including Cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing corporation,
as the case may be, shall execute with the Trustee a supplemental indenture,
providing that each Note shall be convertible into the kind and amount of shares
of stock and other securities or property or assets (including Cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale,
conveyance or transfer by a holder of a number of shares of Common Stock
issuable upon conversion of such Notes immediately prior to such
reclassification, change, consolidation, merger, combination, sale, conveyance
or transfer. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 3.8(f).
The Company shall cause notice of the execution of such supplemental
indenture to be provided to Holders of Notes, within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 3.8(f) applies to any event or occurrence, Section 3.7
shall not apply.
(g) Responsibility of Trustee. The Trustee and any other Conversion Agent
-------------------------
shall not at any time be under any duty or responsibility to any Holder of Notes
to either calculate the Conversion Rate or determine whether any facts exist
which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same and shall be protected in relying
upon an Officer's Certificate with respect to the same. The Trustee and any
other
28
Conversion Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note and the Trustee and any other Conversion Agent make no representations
with respect thereto. Subject to the provisions of Article Five of the Base
Indenture, neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or Cash upon the
surrender of any Note for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Section.
Without limiting the generality of the foregoing, neither the Trustee nor any
Conversion Agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 3.8(f) relating either to the kind or amount of shares of stock or
securities or property (including Cash) receivable by Holders upon the
conversion of their Notes after any event referred to in such Section 3.8(f) or
to any adjustment to be made with respect thereto, but, subject to the
provisions of Article Five of the Base Indenture, may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, the Officer's Certificate (which the Company shall be obligated to
file with the Trustee prior to the execution of any such supplemental indenture)
with respect thereto.
(h) Simultaneous Adjustments. In the event that Sections 3.6, 3.7 or 3.8
------------------------
require adjustments to the Conversion Rate under more than one of Section
3.7(a), (b), (c) or (d), and the Common Stock Record Dates for the distributions
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying, first, the provisions of Section 3.7(c),
second, the provisions of Section 3.7(d), third, the provisions of Section
3.7(a), and fourth, the provisions of Section 3.7(b).
(i) Successive Adjustments. After an adjustment to the Conversion Rate
----------------------
under Sections 3.6, 3.7 or 3.8, any subsequent event requiring an adjustment
under Sections 3.6, 3.7 or 3.8 shall cause an adjustment to the Conversion Rate
as so adjusted.
(j) General Considerations. Whenever successive adjustments to the
----------------------
Conversion Rate are called for pursuant to Sections 3.6, 3.7 or 3.8, such
adjustments shall be made to the Sale Price or Market Price as may be necessary
or appropriate to effectuate the intent of Sections 3.6, 3.7 or 3.8 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.
Section 3.9 Optional Conversion to Semi-Annual Cash Pay Notes upon Tax
----------------------------------------------------------
Event. From and after (i) the date (the "Tax Event Date") of the occurrence of a
----- --------------
Tax Event and (ii) the date the Company exercises its option set forth in this
Section 3.9, whichever is later (the "Option Exercise Date"), at the option of
--------------------
the Company, cash interest in lieu of future Accreted Value shall accrue at the
rate of 1.25% per annum on a restated principal amount per $1,000 original
Principal Amount (the "Restated Principal Amount") equal to its Accreted Value
-------------------------
on the Option Exercise Date and shall be payable semi-annually on October 10 and
April 10 of each year (each, an "Interest Payment Date") to holders of record at
---------------------
the close of business on September 25 and March 26 (each, a "Regular Record
--------------
Date") immediately preceding such Interest Payment Date. Interest will be
----
computed on the basis of a 360-day year comprised of twelve 30-day months and
will accrue from the most recent date on which interest has been paid
29
or, if no interest has been paid, from the Option Exercise Date. Within 15 days
of the occurrence of a Tax Event, the Company shall deliver a written notice of
such Tax Event by facsimile and first-class mail to the Trustee and within 15
days of their exercise of such option the Company shall deliver a written notice
of the Option Exercise Date by facsimile and first-class mail to the Trustee and
provide notice to the Holders of the Notes. From and after the Option Exercise
Date, (i) the Company shall be obligated to pay at Maturity or upon a Redemption
Date, Purchase Date or Fundamental Change Purchase Date, in lieu of the
Principal Amount or Accreted Value, as applicable, of a Note, the Restated
Principal Amount thereof plus accrued and unpaid interest and (ii) contingent
interest shall cease to accrue on the Notes. Notes authenticated and delivered
after the Option Exercise Date may, and shall if required by the Trustee, bear a
notation in a form approved by the Trustee as to the conversion of the Notes to
Cash Pay Notes.
Section 3.10 Calculation and Reporting of Original Issue Discount for U.S.
-------------------------------------------------------------
Federal Income Tax Purposes. The Company agrees, and each Holder and any
---------------------------
beneficial holder of a Note by its purchase thereof shall be deemed to agree, to
treat (in the absence of an administrative determination or judicial ruling to
the contrary), for United States federal income tax purposes, the Notes as debt
instruments that are subject to Section 1.1275-4(b) of the Treasury Regulations.
For United States federal income tax purposes, the Company shall accrue interest
with respect to outstanding Notes as original issue discount according to the
"noncontingent bond method," set forth in Section 1.1275-4(b) of the Treasury
Regulations, based on a comparable yield of 5.32% compounded semiannually and
the projected payment schedule attached hereto as Exhibit B.
The Trustee, on its own behalf and on behalf of the Company, will comply
with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (a) any payments or
accruals of interest and original issue discount with respect to the Notes or
(b) the issuance, delivery, holding, transfer, redemption, conversion, or
exercise of rights under the Notes. Such compliance shall include, without
limitation, (i) preparing, timely filing with the applicable taxing authority,
and (to the extent required under applicable tax laws) timely furnishing Holders
with copies of, all tax reports or statements with respect to payments or
accruals of interest and original issue discount on, or redemptions or
conversions of, the Notes which are required to be prepared, filed, and
furnished under applicable tax laws, (ii) withholding and paying over to the
applicable taxing authorities any tax withholdings that are required to be made
with respect to payments or accruals of interest and original issue discount on,
or redemptions or conversions of, the Notes under applicable tax laws, and (iii)
making reasonable efforts to obtain from Holders all IRS Forms (and similar
forms under applicable state, local, and foreign tax law) and other
documentation required under applicable tax laws in order to establish
exemptions from or reductions in withholding taxes. The Trustee shall also
maintain all appropriate records documenting compliance with such requirements
until such time as all applicable periods of limitation for assessing or
collecting any taxes or penalties for failure to fully comply with such
requirements have expired, and shall make such records available, on written
request, to the Company or its authorized representative within a reasonable
period of time after receipt of such request. The Trustee shall comply with any
direction received from the Company with respect to the foregoing or in other
particular circumstances, and may rely on any
30
such direction or upon an Opinion of Counsel in accordance with the provisions
of Article VII of the Base Indenture.
The Company acknowledges and agrees, and each Holder and any
beneficial holder of a Note by its purchase thereof shall be deemed to
acknowledge and agree, that (i) the comparable yield means the annual yield the
Company would pay, as of the Issue Date, on a fixed-rate cash pay nonconvertible
debt security with no contingent payments, but with terms and conditions
otherwise comparable to those of the Notes, but the comparable yield may not be
less than the "applicable Federal Rate" within the meaning of United States
Treasury Regulation 1.275-4(b)(4)(i)(A); (ii) the schedule of projected payments
attached hereto as Exhibit B is determined on the basis of the comparable yield
and an assumption of linear growth of the stock price and a constant dividend
yield; (iii) the comparable yield and the schedule of projected payments are not
determined for any purpose other than for the determination of interest accruals
and adjustments thereof in respect of the Notes for United States federal income
tax purposes; and (iv) the comparable yield and the schedule of projected
payments do not constitute a projection or representation regarding the future
stock price or the amounts payable on the Notes.
Section 3.11 Payment of Interest
-------------------
(a) Paying Agent to Hold Money in Trust. Prior to 11:00 a.m. (New
-----------------------------------
York City time) on any applicable payment date, the Company shall deposit with
the Paying Agent (or if the Company or a Subsidiary is acting as Paying Agent,
segregate and hold in trust for the benefit of the Persons entitled thereto) a
sum sufficient to pay semi-annual or contingent interest when due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Notes and shall notify the Trustee of any default by the Company
in making any such payment. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
(b) Holder 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 Holders. If the Trustee is not the Registrar, the Company shall
furnish, or cause the Registrar to furnish, to the Trustee, in writing at least
five 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 Holders.
(c) Payment of Interest; Interest Rights Preserved. (i) Semi-annual
----------------------------------------------
or contingent interest on any Note that is payable, and is punctually paid or
duly provided for, on any applicable payment date shall be paid to the Person in
whose name that Note is registered at the close of business on the Regular
Record Date or accrual date, as the case may be, for such interest at the office
or agency of the Company maintained for such purpose. Each installment of
semi-annual or contingent interest on any Note shall be paid in same-day funds
by transfer to an account maintained by the payee located inside the United
States. In the case of a Global
31
Security, semi-annual or contingent interest payable on any applicable payment
date will be paid to the Depositary, with respect to that portion of such Global
Security held for its account by Cede & Co. for the purpose of permitting such
party to credit the interest received by it in respect of such Global Security
to the accounts of the beneficial owners thereof.
(ii) Except as otherwise specified with respect to the Notes, any
semi-annual or contingent interest on any Note that is payable, but is not
punctually paid or duly provided for, within 30 days following any
applicable payment date (herein called "Defaulted Interest", which term
------------------
shall include any accrued and unpaid interest that has accrued on such
defaulted amount in accordance with paragraph 1 of the Notes), shall
forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date or accrual date, as the case may be, by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (A) or (B)
below.
(A) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes are registered at the
close of business on a 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 each Note and the date of the proposed
payment (which shall not be less than 20 days after such notice is
received by the Trustee), 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 or
shall make arrangements satisfactory to the Trustee for such deposit
on or 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 in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment (the "Special Record Date"). 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 mailed, first-class postage prepaid, to each
Holder of Notes at his address as it appears on the list of Holders
maintained pursuant to the Indenture not less than 10 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 Notes are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (B).
(B) Alternatively, the Company may make payment of any
Defaulted Interest on the Notes in any other lawful manner not
inconsistent with the requirements of any Notes exchange on which such
Notes may be listed, and upon such Notice as may be required by such
exchange, if, after notice given by the
32
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 3.11, each Note
delivered under this Third Supplemental Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to semi-annual or contingent interest accrued and unpaid to, and to
accrue, which were carried by such other Note.
ARTICLE IV
NOTICE
Section 4.1 Notice by the Company. The Company shall give prompt
---------------------
written notice to a responsible officer of the Trustee of any fact known to the
Company that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes. Notwithstanding any of the provisions of the
Base Indenture and this Third Supplemental Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the Notes;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 4.1 at least two business days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Note), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two business days prior to such date.
ARTICLE V
EVENTS OF DEFAULT
Section 5.1 Events of Default. For the sole benefit of the holders of
the Notes, Section 6.01 of the Base Indenture is hereby deleted in its entirety
and replaced by the following Section 6.01:
"SECTION 6.01. If any one or more of the following shall have
occurred and be continuing (each of the following, an "Event of Default"):
----------------
(a) default in the payment of the Principal Amount (or if the
Notes have been converted to Cash Pay Notes following a Tax Event pursuant
to Section 3.9, the Restated Principal Amount), Issue Price plus accrued
Original Issue Discount, Redemption Price, Purchase Price or Fundamental
Change Purchase Price with respect to any Notes, when such amount becomes
due and payable at Maturity, upon redemption, upon declaration, when due
for purchase by the Company or otherwise; or
(b) if contingent interest is payable or the Notes have been
converted to Cash Pay Notes following a Tax Event pursuant to Section 3.9,
the failure to pay such interest due within 30 days of the due date; or
33
(c) default in the performance, or breach, of any covenant of the Company
in this Indenture, including failure on the part of the Company to comply with
Article Ten (other than a covenant or a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a series of
Debt Securities other than the Notes), and continuance of such default or breach
for a period of 90 days after the date on which written notice specifying such
failure, stating that such notice is a "notice of default" hereunder, and
requiring the Company to remedy the same shall have been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in aggregate Principal Amount of the Notes at the
time Outstanding; or
(d) if an event of default as defined in any mortgage, indenture, bonds,
debentures, notes or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Company for money
borrowed, whether such indebtedness now exists or shall hereafter be created,
shall happen and shall result in more than $50,000,000 (or its equivalent in any
other currency) in principal amount of such indebtedness becoming or being
declared due and payable before the date on which it would otherwise become due
and payable, and that acceleration shall not be rescinded or annulled, or that
indebtedness shall not have been discharged, within a period of 10 days after
there has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate Principal Amount of the Notes at the time Outstanding a written notice
specifying the event of default and requiring the Company to cause the
acceleration to be rescinded or annulled or to cause that indebtedness to be
discharged and stating that such notice is a "notice of default" hereunder; or
(e) the Company shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code or any other
Federal or State bankruptcy, insolvency or similar law, (ii) consent to the
institution of, or fail to controvert within the time and in the manner
prescribed by law, any such proceeding or the filing of any such petition, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or for a substantial part of
its property, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) admit in writing its inability or fail
generally to pay its debts as they become due, (vii) take corporate action for
the purpose of effecting any of the foregoing, or (viii) take any comparable
action under any foreign laws relating to insolvency; or
(f) the entry of an order or decree by a court having competent
jurisdiction in the premises for (i) relief in respect of the Company or a
substantial part of any of its property under Title 11 of the United States Code
or any other Federal or State bankruptcy, insolvency or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for the Company or for a substantial part of any of its property or (iii) the
winding-up or liquidation of the Company, and such order or decree shall
continue unstayed and in effect for 60 consecutive days; or any similar relief
34
is granted under any foreign laws and the order or decree stays in effect
for 60 consecutive days;
then and in each and every case that an Event of Default described in clause
(a), (b), (c) or (d) occurs and is continuing, either the Trustee or the Holders
of not less than 25% in aggregate Principal Amount of the Notes then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
Holders), may declare the Issue Price plus the Original Issue Discount accrued
through the date of such declaration, and any accrued and unpaid contingent
interest through the date of such declaration, on all the Notes to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Notes
appertaining thereto contained to the contrary notwithstanding. If an Event of
Default described in clause (e) or (f) occurs, then and in each and every such
case, the Issue Price plus the Original Issue Discount accrued through the
occurrence of the event described in clause (e) or (f) and any accrued and
unpaid contingent interest through the date of such event on all the Notes then
Outstanding hereunder shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders,
anything in this Indenture or in the Notes contained to the contrary
notwithstanding.
If the Notes have been converted to Cash Pay Notes following the
occurrence of a Tax Event, the amount due on an acceleration will be the
Restated Principal Amount plus accrued and unpaid interest.
In case the Trustee or any Holder shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee or such Holder, then and in
every such case the parties hereto shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the parties hereto shall continue as though no such proceeding had been taken.
The Holders of a majority in aggregate Principal Amount of the Notes
at the time Outstanding by notice to the Trustee and without notice to any other
Holder may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree already rendered and if all existing
Events of Default have been cured or waived except nonpayment of the Issue Price
plus accrued Original Issue Discount and accrued and unpaid contingent interest,
if any, that has become due solely because of acceleration. Upon any such
rescission, the parties hereto shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
parties hereto shall continue as though no such proceeding had been taken. The
foregoing Events of Default shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (d), (e) or (f) indicating its status and what
action the Company is taking or proposes to take with respect thereto."
35
ARTICLE VI
MODIFICATION
Section 6.1 Purposes for Which Supplemental Indenture May Be Entered
--------------------------------------------------------
Into Without Consent of Holders. For the sole benefit of the Holders of the
-------------------------------
Notes, Section 9.01 of the Base Indenture is modified by deleting paragraph (e)
in its entirety.
Section 6.2 Modification of Indenture with Consent of Holders of
----------------------------------------------------
Notes. For the sole benefit of the Holders of the Notes, Section 9.02 of the
-----
Base Indenture is hereby deleted in its entirety and replaced by the following
Section 9.02:
"SECTION 9.02. Modification of Indenture with Consent of Holders of
----------------------------------------------------
Notes. Without notice to any Holder but with the consent (evidenced as provided
-----
in Section 8.01 of the Base Indenture) of the Holders of not less than a
majority in aggregate Principal Amount of the Outstanding Notes, the Company,
when authorized by a resolution of the Board of Directors, and the Trustee may
from time to time and at any time enter into an Indenture or Indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of execution thereof) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Notes; provided that no such
supplemental indenture, without the consent of the Holders of each Note so
affected, shall:
(i) reduce the percentage in Principal Amount of Notes whose
Holders must consent to an amendment;
(ii) reduce the Principal Amount, Restated Principal Amount or Issue
Price or extend the Maturity of any Note;
(iii) reduce the Redemption Price, Purchase Price or Fundamental
Change Purchase Price of any Note;
(iv) make any change that adversely affects the rights of Holders to
convert their Notes;
(v) make any change in the manner of calculation or rate of accrual
of, or that adversely affects the right to receive, Original Issue Discount or
interest, in respect of any Note; reduce the rate of interest referred to in
paragraph 1 of the Notes; reduce the rate of interest referred to in Section 3.9
upon the occurrence of a Tax Event, or extend the time for payment of Original
Issue Discount, contingent interest or interest, if any, on any Notes.
(vi) make any change that adversely affects the right to require the
Company to purchase the Notes.
(vii) make any Note payable in Currency other than that stated in the
Note;
(viii) release any security that may have been granted in respect of
the Notes;
36
(ix) make any change in Section 6.06 of the Base Indenture or the
second sentence of this Section 9.02;
(x) impair the right to institute suit for the enforcement of
any payment with respect to, or a conversion of, the Notes; or
(xi) modify any of the provisions of this Section 9.02, Section
4.09 of the Base Indenture or Section 6.06 of the Base Indenture, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby, provided, however, that
this Section 9.02 shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the Trustee" and concomitant
changes in this Section 9.02, Section 4.09 or the deletion of this proviso,
in accordance with the requirements of Section 7.08 of the Base Indenture
and Section 9.01(j) of the Base Indenture.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has been expressly included solely for
the benefit of one or more particular series of debt securities and coupons, if
any, or which modifies the rights of the Holders of debt securities and coupons
of such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the Holders of the Notes of any
other series.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Directors authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Holders as aforesaid, the Trustee shall join with the Company in the execution
of such supplemental indenture unless such 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 supplemental indenture. The Trustee shall be entitled to receive, and
shall be fully protected in relying upon (subject to Section 7.01 of the Base
Indenture), an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of the Notes affected thereby a notice briefly
describing such amendment. The failure to give such notice to all such Holders,
or any defect therein, shall not impair or affect the validity of an amendment
under this Section 9.02."
37
ARTICLE VII
AMENDMENT OF CERTAIN OTHER
PROVISIONS OF THE BASE INDENTURE
Section 7.1 Amendments Relating to the Notes. The Base Indenture is
--------------------------------
hereby further amended, solely with respect to the Notes, as follows:
(a) Section 2.08 of the Base Indenture is hereby amended by replacing
the words therein "principal amount" with "Principal Amount."
(b) Section 2.09 of the Base Indenture is hereby amended by replacing
the words therein "principal amount" with "Principal Amount" and "bona fide
purchaser" with "protected purchaser."
(c) Section 4.01 of the Base Indenture is hereby amended by replacing
it in its entirety with the following:
"Section 4.01. Payment of Notes. The Company shall promptly make all
----------------
payments in respect of the Notes on the dates and in the manner provided in the
Notes or pursuant to this Indenture or the Third Supplemental Indenture. Any
amounts to be given to the Trustee or Paying Agent, shall be deposited with the
Trustee or Paying Agent by 10:00 a.m., New York City time, by the Company.
Principal Amount, Restated Principal Amount, Issue Price plus accrued Original
Issue Discount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price and cash interest shall be considered paid on the applicable date due if
on such date (or, in the case of a Purchase Price or Fundamental Change Purchase
Price, on the business day following the applicable Purchase Date or Fundamental
Change Purchase Date, as the case may be) the Trustee or the Paying Agent holds,
in accordance with this Indenture or the Third Supplemental Indenture, money or
securities, if permitted hereunder, sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay cash interest
on overdue amounts at the rate per annum set forth in paragraph 1 of the Notes,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand. The accrual of such interest on overdue amounts shall be in lieu of,
and not in addition to, the continued accrual of Original Issue Discount."
(d) Section 4.04 of the Base Indenture is hereby amended as follows:
i. Section 4.04(a)(i) of the Base Indenture is hereby amended by
replacing the phrase therein "payment of the principal of, and premium, if
any, or interest on," with "payment in respect of."
ii. Section 4.04(a)(ii) of the Base Indenture is hereby amended by
replacing the phrase therein "payment of the principal of, and premium, if
any, or interest on," with "payment in respect of."
38
iii. Section 4.04(b) of the Base Indenture is hereby amended by (i)
replacing the phrase on the second line therein "the principal of, and
premium, if any, or interest on," with "payments in respect of", (ii)
replacing the phrase on the fifth line therein "pay such principal,
premium, if any, or interest" with "make such payments" and (iii) replacing
the phrase on the seventh line therein "any payment of the principal of,
and premium, if any, or interest on," with "any payment in respect of."
iv. Section 4.04(d) of the Base Indenture is hereby amended by (i)
replacing the phrase on the third line therein "the principal of, and
premium, if any, or interest on," with "payments in respect of" and (ii)
replacing the phrase on the fourth line therein "pay the principal, premium
or interest" with "make such payments."
(e) Section 4.09 of the Base Indenture is hereby amended by replacing
the words therein "principal amount" with "Principal Amount."
(f) Section 6.04 of the Base Indenture is hereby amended by replacing
the words therein "principal amount" with "Principal Amount" and "payment of the
principal of, and premium, if any, or interest on," with "payment in respect
of."
(g) Section 6.06 of the Base Indenture is hereby amended by replacing
the words "principal amount" with "Principal Amount."
(h) Section 6.07 of the Base Indenture is hereby amended by replacing
the phrase therein "payment of the principal of, and premium, if any, or
interest on," with "payment in respect of."
(i) Section 6.08 of the Base Indenture is hereby amended by replacing
the phrase therein "payment of the principal of, and premium, if any, or
interest on," with "payment in respect of."
(j) Section 7.01(d) of the Base Indenture is hereby amended by
replacing the words therein "principal amount" with "Principal Amount."
(k) Section 7.02(g) of the Base Indenture is hereby amended by
replacing the words therein "principal amount" with "Principal Amount."
(l) Section 7.08 of the Base Indenture is hereby amended by replacing
the words in the first and second paragraphs therein "principal amount" with
"Principal Amount."
(m) Section 8.01 of the Base Indenture is hereby amended by replacing
the words therein "principal amount" with "Principal Amount."
(n) Section 8.03 of the Base Indenture is hereby amended by replacing
the phrase therein "payment of or on account of the principal of and premium, if
any, and (subject to Section 2.03) interest on" with "payments in respect of."
(o) Section 8.04 of the Base Indenture is hereby amended by replacing
the words therein "principal amount" with "Principal Amount."
39
(p) Section 9.01(b) of the Base Indenture is hereby amended by
replacing the words therein "principal amount" with "Principal Amount."
(q) Article XI of the Base Indenture is hereby amended by replacing it
in its entirety with the following:
"ARTICLE XI
DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Liability on Notes. When (i) the Company
-------------------------------
delivers to the Trustee all Outstanding Notes (other than Notes replaced
pursuant to Section 2.09) for cancellation or (ii) all Outstanding Notes have
become due and payable and the Company deposits with the Trustee cash or, if
expressly permitted by the terms of the Notes, Common Stock sufficient to pay
all amounts due and owing on all outstanding Notes (other than Notes replaced
pursuant to Section 2.09 of this Indenture), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture and
the Third Supplemental Indenture shall, subject to Section 7.06 of this
Indenture, cease to be of further effect with respect to the Notes. The Trustee
shall join in the execution of a document prepared by the Company acknowledging
satisfaction and discharge of this Indenture and the Third Supplemental
Indenture on demand of the Company accompanied by an Officers' Certificate and
Opinion of Counsel and at the cost and expense of the Company.
SECTION 11.02. Repayment to the Company. The Trustee and the Paying
------------------------
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Notes that
remains unclaimed for two years, subject to applicable unclaimed property law.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Holders with respect to such money
or securities for that period commencing after the return thereof."
Section 7.2 Interpretation of Base Indenture. Except as otherwise
--------------------------------
specifically provided in this Third Supplemental Indenture, whenever in the Base
Indenture there is mentioned, in any context, the principal of or principal
amount of any Debt Security of any series or a percentage in principal amount of
the Outstanding Debt Securities of any series, such mention shall be deemed to
be, solely with respect to the Notes, the Principal Amount of the Notes or such
percentage of the aggregate Principal Amount of the Notes at the time
Outstanding.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Ratification of Indenture. The Indenture as supplemented
-------------------------
by this Third Supplemental Indenture, is in all respects ratified and confirmed,
and this Third
40
Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
Section 8.2 Trustee Not Responsible for Recitals. The recitals herein
------------------------------------
contained are made by the Company and not by the Trustee, and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Third Supplemental
Indenture.
Section 8.3 New York Law to Govern. THIS THIRD SUPPLEMENTAL INDENTURE,
----------------------
EACH NOTE AND EACH COUPON SHALL BE DEEMED TO BE NEW YORK CONTRACTS, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE (WITHOUT
REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW).
Section 8.4 Separability. In case any one or more of the provisions
------------
contained in this Third Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, then, to
the extent permitted by law, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Third Supplemental Indenture or of
the Notes, but this Third Supplemental Indenture and the Notes shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
Section 8.5 Counterparts. This Third Supplemental Indenture may be
------------
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
41
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.
ELECTRONIC DATA SYSTEMS CORPORATION,
as Issuer
By: /s/ D. Xxxxxxx Xxxxxxxxxxx
_____________________________________
Name: D. Xxxxxxx Xxxxxxxxxxx
Title: Senior Vice President
Attest:
By: /s/ Xxxxx X. Xxxxxxxxx
______________________________________
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Secretary
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Xxxxxx X. Xxxxxxx
_____________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
---
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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.
A-1
ELECTRONIC DATA SYSTEMS CORPORATION
ZERO-COUPON CONVERTIBLE SENIOR NOTE DUE OCTOBER 10, 2021
No. __________ CUSIP:
ISIN:
Issue Date: October 10, 2001 Original Issue Discount: $220.59
Issue Price: $779.41 (for each $1,000 Principal Amount
(for each $1,000 Principal at Final Maturity)
Amount at Maturity)
Electronic Data Systems Corporation, a Delaware corporation, promises
to pay to __________ or registered assigns, on October 10, 2021 the Principal
Amount of __________ Dollars ($__________).
This Note shall not bear periodic interest except as specified on the
other side of this instrument. This Note shall accrete as specified on the other
side of this Note. This Note is convertible as specified on the other side of
this Note.
Additional provisions of this Note are set forth on the other side of
this Note.
A-2
IN WITNESS WHEREOF, Electronic Data Systems Corporation has caused
this instrument to be duly executed.
Dated: October 10, 2001 ELECTRONIC DATA SYSTEMS CORPORATION
By:________________________________
Name:
Title:
Attest:
By:________________________________________
Name:
Title:
The Chase Manhattan Bank, as Trustee, certifies that this is
one of the Securities referred to in the within
mentioned Indenture.
By:________________________________________
Name:
Title: Authorized Signatory
Dated: October 10, 2001
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[FORM OF REVERSE SIDE OF GLOBAL SECURITY]
ELECTRONIC DATA SYSTEMS CORPORATION
ZERO-COUPON CONVERTIBLE SENIOR NOTE DUE OCTOBER 10, 2021
1. INTEREST
This Note shall not bear periodic interest, except as specified in
this paragraph and in paragraphs 5 and 10 hereof. If the Principal Amount hereof
or any portion of such Principal Amount is not paid when due (whether upon
acceleration pursuant to the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 6 hereof, upon the date set for payment
of a Purchase Price or Fundamental Change Purchase Price pursuant to paragraph 7
hereof or upon the Maturity Date of this Note) or if interest (including
semi-annual contingent interest, if any) due hereon or any portion of such
interest is not paid when due in accordance with paragraph 5 or 10 hereof, then
in each such case the overdue amount shall bear interest at the rate of 1.25%
per annum, compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest shall accrue from the
date such overdue amount was due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. The accrual of such interest on overdue amounts shall be in
lieu of, and not in addition to, the continued accretion.
The Notes shall increase in Accreted Value commencing on the Issue
Date.
"Accreted Value" means, at any date of determination, (1) prior to
--------------
such time as this Note is converted to a Cash Pay Note, the sum of (x) the Issue
Price of this Note and (y) the portion of the excess of the Principal Amount of
this Note over the Issue Price ("Original Issue Discount") which shall have been
amortized by the Company in accordance with GAAP through such date, such amount
to be so amortized on a daily basis and compounded semiannually on each April 10
and October 10 at the rate of 1.25% per annum from the Issue Date through the
date of determination compounded on the basis of a 360-day year and twelve
30-day months and (2) at or after such time as this Note is converted to a Cash
Pay Note, its Restated Principal Amount.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, the Company
shall make payments in respect of the Notes to the Persons who are registered
Holders of Notes at the close of business on the business day preceding the
Redemption Date or Maturity Date, as the case may be, or at the close of
business on a Purchase Date or Fundamental Change Purchase Date, as the case may
be. Holders must surrender Notes to a Paying Agent to collect such payments in
respect of the Notes. The Company shall pay cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check payable
in such money.
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3. PAYING AGENT, CONVERSION AGENT, BID AGENT AND REGISTRAR
Initially, The Chase Manhattan Bank (the "Trustee"), shall act as
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Paying Agent, Conversion Agent, Bid Agent and Registrar. The Company may appoint
and change any Paying Agent, Conversion Agent, Bid Agent, Registrar or
co-registrar without notice, other than notice to the Trustee except that the
Company will maintain at least one Paying Agent in the State of New York, The
City of New York, Borough of Manhattan, which shall initially be an office or
agency of the Trustee. The Company or any of its Subsidiaries or any of their
Affiliates may act as Paying Agent, Conversion Agent, Registrar or co-registrar.
None of the Company or any of its Subsidiaries or any of these Affiliates shall
act as Bid Agent.
4. INDENTURE
The Company issued the Notes under an Indenture dated as of August 12,
1996 between the Company and Trustee, as supplemented by a Third Supplemental
Indenture relating to the Notes between the Company and Trustee dated October
10, 2001 (together, the "Indenture"). The terms of the Notes include those
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stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 ("TIA") as in effect on the date of the Indenture.
---
The Notes are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of them. Capitalized terms not defined
herein have the meanings given to those terms in the Indenture.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to: Electronic Data
Systems Corporation, 0000 Xxxxxx Xxxxx, Xxxxx, XX 00000, Attention: Investor
Relations.
5. CONTINGENT INTEREST
Subject to the accrual and Common Stock Record Date provisions
specified in this paragraph 5, the Company shall pay contingent interest to the
Holders during any six-month period (a "Contingent Interest Period") from
--------------------------
October 10 to April 9 and from April 10 to October 9, commencing October 10,
2004, if the average Note Price for the Five-Day Period with respect to such
Contingent Interest Period equals 120% or more of the Accreted Value of such
Note to the day immediately preceding the first day of the relevant Contingent
Interest Period.
The amount of contingent interest payable per $1,000 Principal Amount
hereof in respect of any Contingent Interest Period shall equal the greater of
(x) Cash Dividends paid by the Company per share of Common Stock during that
Contingent Interest Period multiplied by the number of shares of Common Stock
into which $1,000 Principal Amount hereof is convertible pursuant to paragraph 9
hereof as of the accrual date for such contingent interest and (y) 0.125% of the
average Note Price for the Five-Day Period with respect to such Contingent
Interest Period.
Contingent interest, if any, will accrue and be payable to Holders as
of the Common Stock Record Date for the related Cash Dividend or, if no Cash
Dividend is paid by the Company during a quarter within the relevant Contingent
Interest Period, to Holders as of the
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15th day preceding the last day of the relevant Contingent Interest Period. Such
payments shall be paid on the payment date of the related Cash Dividend or, if
no Cash Dividend is paid by the Company during a quarter within the relevant
Contingent Interest Period, on the last day of the relevant Contingent Interest
Period. In addition, on any Purchase Date, Fundamental Change Purchase Date or
Redemption Date that occurs during a Contingent Interest Period for which a
Holder is entitled to contingent interest pursuant to clause (y) of the
preceding paragraph, contingent interest will be payable to such Holder in an
amount equal to the amount that would have been otherwise payable to such Holder
on the last day of such Contingent Interest Period divided by the actual number
of days from the first day of such Contingent Interest Date to the Purchase
Date, Fundamental Change Purchase Date or Redemption Date, as the case may be,
using a 360-day year composed of twelve 30-day months.
"Five-Day Period" means, with respect to any Contingent Interest Period,
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the five Trading Days ending on the second Trading Day immediately preceding the
first day of such Contingent Interest Period; provided, however, if the Company
shall have declared a Cash Dividend on its Common Stock that is payable during
such Contingent Interest Period but for which the Common Stock Record Date for
determining stockholders entitled thereto precedes the first day of such
Contingent Interest Period, then "Five-Day Period" means, with respect to such
Contingent Interest Period, the five Trading Days ending on the second Trading
Day immediately preceding such Common Stock Record Date.
"Cash Dividends" means all cash dividends on the Common Stock (whether
--------------
regular, periodic, extraordinary, special, nonrecurring or otherwise) as
declared by the Company's Board of Directors as part of its cash dividend
payment practices.
"Note Price" means, as of any date of determination, the average of the
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secondary market bid quotations per $1,000 Principal Amount obtained by the Bid
Agent for $10 million Principal Amount of Notes at approximately 4:00 p.m. (New
York City time) on such determination date from three recognized securities
dealers in The City of New York (none of which shall be an Affiliate of the
Company) selected by the Company; provided, however, if (a) at least three such
bids are not obtained by the Bid Agent or (b) in the Company's reasonable
judgment, the bid quotations are not indicative of the secondary market value of
the Notes as of such determination date, then the Note Price for such
determination date shall equal (i) the Conversion Rate in effect as of such
determination date multiplied by (ii) the average Sale Price of Common Stock for
the five Trading Days ending on such determination date, appropriately adjusted
to take into account the occurrence, during the period commencing on the first
of such Trading Days during such five Trading Day period and ending on such
determination date, of any event described in Section 3.7(a), 3.7(b), 3.7(c) or
3.7(d) (subject to the conditions set forth in Sections 3.8(a) and 3.8(b)) of
the Indenture.
Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
issue a press release and publish such information on its web site on the World
Wide Web or through such other similar public medium, if any, as the Company may
use at that time.
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6. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Notes. Beginning on October 10,
2004, the Company may redeem the Notes for cash, in whole, or from time to time
in part, at a redemption price equal to the Accreted Value. The Company will
give holders not less than 30-days' nor more than 60-days' notice of redemption.
The table below shows what the Accreted Value of a Note per $1,000
Principal Amount would be on October 10, 2004, and at specified dates thereafter
prior to maturity and at Maturity Date. The Accreted Value, in dollars, of a
Note per $1,000 Principal Amount redeemed between such dates shall include an
additional amount reflecting the increase in Accreted Value since the next
preceding date in the table to but excluding the actual Redemption Date.
Increase
in
Accreted
Issue Value at Redemption
Redemption Date Price(1) 1.25%(2) Price (1/2)
--------------- -------- --------- -----------
October 10, 2004..................... $779.41 $ 29.69 $ 809.10
October 10, 2005..................... $779.41 $ 39.83 $ 819.24
October 10, 2006..................... $779.41 $ 50.11 $ 829.52
October 10, 2007..................... $779.41 $ 60.51 $ 839.92
October 10, 2008..................... $779.41 $ 71.04 $ 850.45
October 10, 2009..................... $779.41 $ 81.70 $ 861.11
October 10, 2010..................... $779.41 $ 92.50 $ 871.91
October 10, 2011..................... $779.41 $ 103.43 $ 882.84
October 10, 2012..................... $779.41 $ 114.50 $ 893.91
October 10, 2013..................... $779.41 $ 125.71 $ 905.12
October 10, 2014..................... $779.41 $ 137.06 $ 916.47
October 10, 2015..................... $779.41 $ 148.55 $ 927.96
October 10, 2016..................... $779.41 $ 160.19 $ 939.60
October 10, 2017..................... $779.41 $ 171.97 $ 951.38
October 10, 2018..................... $779.41 $ 183.90 $ 963.31
October 10, 2019..................... $779.41 $ 195.98 $ 975.39
October 10, 2020..................... $779.41 $ 208.21 $ 987.62
October 10, 2021..................... $779.41 $ 220.59 $ 1,000.00
If this Note has been converted to a Cash Pay Note, the
Redemption Price will be equal to the Restated Principal Amount plus accrued and
unpaid interest from the date of such conversion to the Redemption Date; but in
no event will this Note be redeemable before October 10, 2004.
In addition to the Redemption Price payable with respect to all
Notes or portions thereof to be redeemed as of a Redemption Date, the Holders of
such Notes (or portions thereof) shall be entitled to receive accrued and unpaid
contingent interest, if any, with respect thereto, which contingent interest
shall be paid in cash on the Redemption Date.
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7. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; PURCHASE AT
THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE
Subject to the terms and conditions of the Indenture, a Holder of Notes
shall have the option to require the Company to purchase the Notes held by such
Holder on the following Purchase Dates and at the following Purchase Prices per
$1,000 Principal Amount, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, from the opening of business on the date
that is 30 business days prior to such Purchase Date until the close of business
on such Purchase Date and upon delivery of the Notes to the Paying Agent by the
Holder as set forth in the Indenture. For any Purchase Date after October 10,
2003, such Purchase Prices may be paid, at the option of the Company, in cash or
by the issuance and delivery of shares of Common Stock, or in any combination
thereof. The Company will pay the Purchase Price for any purchase on October 10,
2003 only in cash.
The purchase price of a Note will be:
. $799.08 per Note on October 10, 2003;
. $809.10 per Note on October 10, 2004;
. $829.52 per Note on October 10, 2006;
. $882.84 per Note on October 10, 2011; and
. $939.60 per Note on October 10, 2016.
Notes in denominations larger than $1,000 of Principal Amount may be
purchased in part, but only in multiples of $1,000 of Principal Amount.
If prior to a Purchase Date this Note has been converted to a Cash Pay
Note, the Purchase Price will be equal to the Restated Principal Amount plus
accrued and unpaid interest from the date of conversion to the Purchase Date.
In addition to the Purchase Price payable with respect to all Notes or
portions thereof to be purchased as of the Purchase Date, the Holders of such
Notes (or portions thereof) shall be entitled to receive accrued and unpaid
contingent interest, if any, with respect thereto, which contingent interest
shall be paid in cash promptly following the later of the Purchase Date and the
time of delivery of such Notes to the Paying Agent pursuant to the Indenture.
If a Fundamental Change shall occur at any time prior to October 10,
2003, each Holder shall have the right, at such Holder's option and subject to
the terms and conditions of the Indenture, to require the Company to purchase
such Holder's Notes on a date no later than 35 business days after the date of
the Fundamental Change, for a Fundamental Change Purchase Price equal to the
Accreted Value on the Fundamental Change Purchase Date. The Fundamental Change
Purchase Price shall be paid in cash. If, prior to the Fundamental Change
Purchase Date, this Note was converted to a Cash Pay Note the Fundamental Change
Purchase Price will be equal to the Restated Principal Amount plus accrued and
unpaid interest from the date of
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conversion to the Fundamental Change Purchase Date. Notes in denominations
larger than $1,000 of Principal Amount may be surrendered for purchase in part
in connection with a Fundamental Change, but only in multiples of $1,000 of
Principal Amount.
Holders have the right to withdraw any Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, by delivery to the
Paying Agent of a written notice of withdrawal in accordance with the provisions
of the Indenture.
8. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company shall be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of, together with any accrued and unpaid
contingent interest with respect to, all Notes (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent prior to or
on the Redemption Date, on and after such date Original Issue Discount and
interest (including contingent interest), if any, on the Notes (or portions
thereof) called for redemption will cease to accrue (or portions thereof). Notes
in denominations larger than $1,000 Principal Amount may be redeemed in part but
only in multiples of $1,000 or Principal Amount.
9. CONVERSION
A Holder of a Note may convert this Note into Common Stock at any time
on or before the close of business on October 10, 2021 if at least one of the
following conditions is satisfied:
(a) the Twenty-Day Average Price on the Conversion Date is at
least a specified percentage of the Accreted Conversion Price, such
percentage beginning at 120% for the first year following the Issue Date
and declining 1/2% on October 10 each year thereafter, declining to 110% at
Maturity Date;
(b) the long-term credit rating assigned to the Notes by either
Xxxxx'x or S&P is reduced to below Investment Grade, or any one of these
rating services withdraws its long-term credit rating assigned to the
Notes;
(c) the Notes have been called for redemption by the Company; or
(d) the Company elects (i) to distribute to all holders of
Common Stock rights entitling them to purchase, for a period expiring within 60
days after the date of such distribution, Common Stock at a purchase price less
than the Sale Price at the time of such distribution, (ii) to distribute to all
holders of Common Stock assets, debt, securities or rights to purchase
securities of the Company, which distribution has a per share value as
determined by the Company's Board of Directors exceeding 15% of the Sale Price
of the Common Stock on the day preceding the declaration date for such
distribution, or (iii) in the event the Company is a party to a consolidation,
merger or binding share exchange pursuant to which the Common Stock would be
converted into cash, securities or other property, at any time from and after
the date which is 15 days
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prior to the anticipated effective date for the transaction until 15
days after the actual effective date of such transaction.
For purposes of the foregoing, "Twenty Day Average Price" means
the average of the Sale Price of the Common Stock for each Trading Day in the 20
Trading Day period ending on the last Trading Day prior to the applicable
Conversion Date, appropriately adjusted to take into account the occurrence,
during such 20 Trading Day period, of any event requiring adjustment of the
Conversion Rate under this Third Supplemental Indenture.
In the case of the foregoing clauses (d)(i) and (ii), the Company
must notify the Holders of Notes at least 20 days prior to the ex-dividend date
for such distribution. Once the Company has given such Notice, Holders may
surrender their Notes for conversion at any time thereafter until the earlier of
the close of business on the business day prior to the ex-dividend date or the
Company's announcement that such distribution will not take place.
If this Note is called for redemption, the Holder may convert it
at any time before the close of business on the last business day prior to the
Redemption Date. A Note in respect of which a Holder has delivered a notice of
exercise of the option to require the Company to purchase such Note or to
purchase such Note in the event of a Fundamental Change may be converted only if
the notice of exercise is withdrawn in accordance with the terms of the
Indenture.
A Holder's right to convert Notes into shares of Common Stock is
also subject to the Company's right to elect to pay such Holder the amount of
cash set forth in the next succeeding sentence in lieu of delivering all or part
of such shares of Common Stock; provided, however, that if such payment of cash
is not permitted pursuant to the provisions of the Indenture, the Company shall
deliver shares of Common Stock (and cash in lieu of fractional shares of Common
Stock) in accordance with the Indenture, whether or not the Company has
delivered a notice pursuant to the Indenture to the effect that the Notes will
be paid in cash. The amount of cash to be paid for each $1,000 Principal Amount
of a Note shall be equal to the average Sale Price of a share of Common Stock
for the five consecutive Trading Days immediately following (i) the date of the
Company's notice of its election to deliver cash upon conversion, if the Company
shall not have given a notice of redemption pursuant to the Indenture, or (ii)
the Conversion Date, in the case of an conversion following such a notice of
redemption specifying an intent to deliver cash upon conversion, in either case
multiplied by the Conversion Rate in effect on such Conversion Date. If the
Company shall elect to make such payment wholly in shares of Common Stock, then
such shares shall be delivered through the Conversion Agent to Holders
surrendering Notes as promptly as practicable but in any event no later than the
fifth business day following the date of the Company's notice of its election to
deliver shares upon conversion. If, however, the Company shall elect to make any
portion of such payment in cash, then the payment, including any delivery of
Common Stock, shall be made to Holders surrendering Notes no later than the
tenth business day following the Conversion Date.
The Company may not pay cash in lieu of delivering all or part of
such shares of Common Stock upon the conversion of any Note pursuant to the
terms of the Indenture (other than cash in lieu of fractional shares) if there
has occurred (prior to, on or after, as the case may
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be, the Conversion Date or the date on which the Company delivers its notice
specifying whether each Note shall be converted into shares of Common Stock or
cash) and is continuing an Event of Default (other than a default in such
payment on such Notes).
The initial Conversion Rate is 9.7294 shares of Common Stock per Note
with a $1,000 Principal Amount, subject to adjustment in certain events
described in the Indenture. The Company shall deliver cash or a check in lieu of
any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section 3.9
of the Indenture to convert the Notes to Cash Pay Notes, the Holder will be
entitled on conversion to receive the same number of shares of Common Stock such
Holder would have received if the Company had not exercised such option. If the
Company exercises such option, Notes surrendered for conversion during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business of such Interest Payment Date
(except Notes with respect to which the Company has mailed a notice of
redemption) must be accompanied by payment of an amount equal to the interest
thereon that the registered Holder is to receive. Except where Notes surrendered
for conversion are so surrendered after a Regular Record Date but prior to the
opening of business on the corresponding Interest Payment Date (in which case
such converting Holder shall receive a final interest payment on such Interest
Payment Date, which interest payment may be repayable to the Company upon
conversion as described in this paragraph), no interest on converted Notes will
be payable by the Company on any Interest Payment Date subsequent to the date of
conversion.
Notes surrendered for conversion during the period from the close of
business on any date on which contingent interest accrues to the opening of
business on the date on which such contingent interest is payable (except Notes
with respect to which the Company has mailed a notice of redemption) must be
accompanied by payment of an amount equal to the contingent interest with
respect thereto that the registered Holder is to receive. Except where Notes
surrendered for conversion are so surrendered during the period from the close
of business on any date on which contingent interest accrues to the opening of
business on the date on which such contingent interest is payable (in which case
such converting Holder shall receive a final contingent interest payment on the
date such contingent interest is payable, which contingent interest payment may
been repayable to the Company upon conversion as described in this paragraph),
no contingent interest on converted Notes will accrue after the date of
conversion.
To convert this Note a Holder must (1) complete and manually sign the
conversion notice on the back of this Note (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent at the
office maintained by the Conversion Agent for such purpose, (2) surrender this
Note to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar tax, if required.
A Holder may convert a portion of this Note only if the Principal
Amount of such portion is $1,000 or a multiple of $1,000. No payment or
adjustment shall be made for dividends on the Common Stock except as provided in
the Indenture. On conversion of this Note, that portion of Accreted Value (or,
interest, if the Company has exercised its option provided for in paragraph 10
hereof) attributable to the period from the Issue Date (or, if the Company has
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exercised the option referred to in paragraph 10 hereof, the later of (x) the
date of such exercise and (y) the date on which interest was last paid) to the
Conversion Date and (except as provided below) accrued contingent interest with
respect to the converted portion of this Note shall not be canceled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through the delivery of the Common Stock (together with any cash
payment in lieu of fractional shares) in exchange for the portion of this Note
being converted pursuant to the terms hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for Original Issue Discount accrued through the Conversion Date and
accrued contingent interest, and the balance, if any, of such fair market value
of such Common Stock (and any such cash payment) shall be treated as issued in
exchange for the Issue Price of the Note being converted pursuant to the
provisions hereof.
10. TAX EVENT
(a) From and after (i) the date (the "Tax Event Date") of the
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occurrence of a Tax Event and (ii) the date the Company exercises such
option, whichever is later (the "Option Exercise Date"), at the option
--------------------
of the Company, all of the Notes will cease to accrete, and cash
interest shall accrue at the rate of 1.25% per annum on the restated
principal amount (the "Restated Principal Amount"), equal to the
-------------------------
Accreted Value on the Option Exercise Date, and shall be payable
semi-annually on October 10 and April 10 of each year (each an
"Interest Payment Date") to holders of record at the close of business
---------------------
on September 25 or March 26 (each a "Regular Record Date") immediately
-------------------
preceding such Interest Payment Date. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months and will
accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from the Option Exercise Date.
(b) Interest on any Note that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid
to the person in whose name that Note is registered at the close of
business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose. Each installment of
interest on any Note shall be paid in same-day funds by transfer to an
account maintained by the payee located inside the United States.
(c) From and after the Option Exercise Date, contingent
interest provided for in paragraph 5 hereof shall cease to accrue on
this Note.
11. DEFAULTED INTEREST
Except as otherwise specified with respect to the Notes, any
Defaulted Interest on any Note shall forthwith cease to be payable to
the registered Holder thereof on the relevant Regular Record Date or
accrual date, as the case may be, by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company as
provided for in Section 3.11(c)(ii) of the Indenture.
12. DENOMINATIONS; TRANSFER; EXCHANGE
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The Notes are in registered form, without coupons, in denominations of
$1,000 of Principal Amount and multiplies of $1,000. A Holder may transfer or
convert Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Notes selected for
redemption (except, in the case of a Note to be redeemed in part, the portion of
the Note not to be redeemed) or any Notes in respect of which a Purchase Notice
or Fundamental Change Purchase Notice has been given and not withdrawn (except,
in the case of a Note to be purchased in part, the portion of the Note not to be
purchased) or any Notes for a period of 15 days before any selection of Notes to
be redeemed.
13. PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the owner of this Note
for all purposes.
14. UNCLAIMED MONEY OR PROPERTY
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another person.
15. AMENDMENT; SUPPLEMENT; WAIVER
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in Principal
Amount of the Outstanding Notes and any past default or compliance with any
provision relating to the Notes may be waived in a particular instance with the
consent of the Holders of a majority in Principal Amount of the Outstanding
Notes. Without the consent of any Holder, the Company and the Trustee may amend
or supplement the Indenture or the Notes to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to create a Series and establish its terms, or to make any
other change, provided such action does not adversely affect the rights of any
Holder.
16. SUCCESSOR CORPORATION
When a successor corporation assumes all the obligations of its predecessor
under the Notes and the Indenture, the predecessor corporation will be released
from those obligations.
17. TRUSTEE DEALINGS WITH THE COMPANY
The Chase Manhattan Bank, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its affiliates, and may otherwise deal with
the Company or its affiliates, as if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS
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A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
19. AUTHENTICATION
This Note shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Note.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors Act).
A-14
FORM OF CONVERSION NOTICE
To: Electronic Data Systems Corporation
The undersigned registered holder of this Note hereby exercises the
option to convert this Note, or portion hereof (which is $1,000 Principal Amount
or a multiple thereof) designated below, for shares of Common Stock of
Electronic Data Systems Corporation in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check for cash
deliverable upon such conversion, and any Notes representing any unconverted
Principal Amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares or any portion of
this Note not converted are to be issued in the name of a Person other than the
undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.
This notice shall be deemed to be an irrevocable exercise of the
option to convert this Note.
Dated:____________________________
____________________________
Signature(s)
Fill in for registration of shares if
to be delivered, and Notes if to
be issued other than to and in the
name of registered holder:
Principal Amount
to be converted (if less than all):
____________________________
(Name)
____________________________
(Xxxxxx Xxxxxxx)
____________________________ Social Security or
(City, state and zip code) Other Taxpayer Number______________
Please print name and address
A-15
FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
To: Electronic Data Systems Corporation
The undersigned registered holder of this Note hereby acknowledges receipt
of a notice from Electronic Data Systems Corporation (the "Company") as to the
-------
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to purchase this Note, or the portion hereof (which is
$1,000 Principal Amount or a multiple thereof) designated below, in accordance
with the terms of the Indenture referred to in this Note and directs that the
check in payment for this Note or the portion thereof and any Notes representing
any unpurchased Principal Amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
any portion of this Note not repurchased is to be issued in the name of a Person
other than the undersigned, the undersigned shall pay all transfer taxes payable
with respect thereto.
Dated:
_______________________________
Signature(s)
Fill in for registration of shares if to be delivered, and Notes if to be
issued other than to and In the name of registered holder:
_______________________________
(Name)
_______________________________
(Xxxxxx Xxxxxxx)
_______________________________
(City, state and zip code)
Please print name and address
Principal Amount to be purchased (if
less than all): $__,000
A-16
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below:
I or we assign and transfer this Note to
__________________________________________________________
__________________________________________________________
(Insert assignee's social security or tax ID number)
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Print or type assignee's name, address, and zip code)
and irrevocably appoint
__________________________________________________________
agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
__________________________________________________________
Date: ______________ Your signature: _________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Signature Guarantee: ___________________________________________________________
Signature must be guaranteed by participant in a recognized
Signature Guarantee Medallion Program (or other signature
guarantor program reasonably acceptable to the Trustee
A-17
EXHIBIT B
PROJECTED PAYMENT SCHEDULE*
Period Ending Payment
------------- -------
October 10, 2001 $0.0000
April 10, 2002 $0.0000
October 10, 2002 $0.0000
April 10, 2003 $0.0000
October 10, 3003 $0.0000
April 10, 2004 $0.0000
October 10, 2004 $0.0000
April 10, 2005 $0.0000
October 10, 2005 $0.0000
April 10, 2006 $0.0000
October 10, 2006 $0.0000
April 10, 2007 $0.0000
October 10, 2007 $0.0000
April 10, 2008 $2.9188
October 10, 2008 $2.9188
April 10, 2009 $2.9188
October 10, 2009 $2.9188
April 10, 2010 $2.9188
October 10, 2010 $2.9188
April 10, 2011 $2.9188
October 10, 2011 $2.9188
April 10, 2012 $2.9188
October 10, 2012 $2.9188
April 10, 2013 $2.9188
October 10, 2013 $2.9188
April 10, 2014 $2.9188
October 10, 2014 $2.9188
April 10, 2015 $2.9188
October 10, 2015 $2.9188
April 10, 2016 $2.9705
October 10, 2016 $3.1191
April 10, 2017 $3.2750
___________________________
* The comparable yield means the annual yield the Company would pay, as
of the Issue Date, on a fixed-rate cash-pay nonconvertible debt
security with no contingent payments but with terms and conditions
otherwise comparable to those of the Notes, but the comparable yield
may not be less than the "applicable Federal rate" within the meaning
of United States Treasury regulation Section 1.275-4(b)(4)(i)(A). The
schedule of projected payments is determined on the basis of the
comparable yield and an assumption of linear growth of the Company's
stock price and a constant dividend yield. The comparable yield and the
schedule of projected payments are not determined for any purpose other
than for the determination of interest accruals and adjustment thereof
in respect of the Notes for United States federal income tax purposes.
The comparable yield and the schedule of projected payments do not
constitute a projection or representation regarding the future stock
price or the amounts payable on the Notes.
B-1
Period Ending Payment
------------- -------
October 10, 2017 $ 3.4388
April 10, 2018 $ 3.6107
October 10, 2018 $ 3.7912
April 10, 2019 $ 3.9808
October 10, 2019 $ 4.1798
April 10, 2020 $ 4.3888
October 10, 2020 $ 4.6083
April 10, 2021 $ 4.8387
October 10, 2021 $2,100.0606
B-2
