EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
between
LEVEL 3 COMMUNICATIONS, INC.
and
THE BANK OF NEW YORK
as Trustee
$373,750,000
2.875% Convertible Senior Notes due 2010
________________________
Dated as of July 8, 2003
Supplement to Amended and Restated Indenture dated as of July 8, 2003
(Senior Debt Securities)
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of July 8, 2003, is
by and between Level 3 Communications, Inc., a Delaware corporation
(the "Company"), and The Bank of New York, a New York banking
corporation, as successor to IBJ Whitehall Bank & Trust Company (the
"Trustee"), having a Corporate Trust Office at 000 Xxxxxxx Xxxxxx,
Xxxxx 8 West, New York, New York 10286, as Trustee under the Indenture
(defined below).
WHEREAS IBJ Whitehall Bank & Trust Company (f/k/a IBJ Xxxxxxxx Bank &
Trust Company) ("IBJ") was originally named as trustee in an indenture, the form
of which was an exhibit to the Company's registration statement on Form S-3
filed on February 3, 1999, and the Trustee has succeeded to all or substantially
all of IBJ's corporate trust business, and the Company and the Trustee have as
of July 8, 2003, entered into an amended and restated indenture (as
supplemented, the "Indenture"), providing for the issuance by the Company from
time to time of its senior debt securities;
WHEREAS Section 901 of the Indenture provides, among other things, that
the Company, when authorized by or pursuant to a Board Resolution, and the
Trustee may, without the consent of the Holders of Securities, enter into one or
more indentures supplemental to the Indenture to establish the form or terms of
Securities of any series, including the provisions and procedures providing for
the adjustment of conversion rights with respect to Securities convertible into
Common Stock, or to change or eliminate any of the provisions of the Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provisions;
WHEREAS the Company desires to issue one series of senior convertible
debt securities under the Indenture, and has duly authorized the creation and
issuance of such debt securities under the Indenture, and has duly authorized
the execution and delivery of this First Supplemental Indenture to modify the
Indenture and to provide certain additional provisions as hereinafter described;
WHEREAS the Company and the Trustee deem it advisable to enter into
this First Supplemental Indenture for the purposes of establishing the terms of
such senior convertible debt securities and providing for the rights,
obligations and duties of the Trustee with respect to such debt securities;
WHEREAS, concurrently with the execution hereof, the Company has
delivered an Officers' Certificate and has caused its counsel to deliver to the
Trustee an Opinion of Counsel or a reliance letter upon an opinion of counsel;
and
WHEREAS all conditions and requirements of the Indenture necessary to
make this First Supplemental Indenture a valid, binding and legal instrument in
accordance with its terms have been performed and fulfilled by the parties
hereto, and the
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execution and delivery thereof have been in all respects duly authorized by the
parties hereto.
NOW, THEREFORE, for and in consideration of the mutual premises and
agreements herein contained, the Company and the Trustee covenant and agree, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE I
Creation of the Securities
SECTION 1.1. Designation of the Series. Pursuant to the terms hereof
and Sections 201 and 301 of the Indenture, the Company hereby creates a series
of its senior convertible debt securities designated as the "2.875% Convertible
Senior Notes due 2010" (the "Notes"), which Notes shall be deemed "Securities"
for all purposes under the Indenture.
SECTION 1.2. Form of Securities. The Notes will be issued in definitive
form without coupons and the definitive form of the Notes shall be substantially
in the form set forth in Exhibit A attached hereto, which is incorporated herein
and made part hereof. The Notes shall bear interest, be payable and have such
other terms as are stated in the form of definitive Note or in the Indenture, as
supplemented by this First Supplemental Indenture. The Stated Maturity of the
Notes shall be July 15, 2010.
SECTION 1.3. Limit on Amount of Securities. The Notes will not exceed
$373,750,000 and may, upon the execution and delivery of this First Supplemental
Indenture or from time to time thereafter, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the Company Order, without
further action by the Company.
SECTION 1.4. Ranking. The Notes will be the Company's unsecured and
unsubordinated obligations and rank equal in right of payment with all of the
Company's existing and future unsecured and unsubordinated indebtedness.
SECTION 1.5. Certificate of Authentication. The Trustee's certificate
of authentication to be borne on the Notes shall be substantially as provided in
the form of note attached hereto as Exhibit A.
SECTION 1.6. No Sinking Fund. No sinking fund will be provided with
respect to the Notes (notwithstanding any provisions of the Indenture with
respect to sinking fund obligations).
SECTION 1.7. No Additional Amounts. No Additional Amounts will be
payable with respect to the Notes (notwithstanding any provisions of the
Indenture with respect to Additional Amount obligations).
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SECTION 1.8. Repayment at the Option of Holders. There will be no right
of repayment at the option of the holders pursuant to Article Thirteen of the
Indenture.
SECTION 1.9. Definitions. (a) Capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned thereto in the
Indenture.
(b) Solely for purposes of this First Supplemental Indenture and the
Notes, the following definitions of Section 101 of the Indenture are hereby
amended in their entirety to read as follows:
"Material Subsidiary" means any Subsidiary of the Company which at the
date of determination is a "significant subsidiary" as defined in Rule 1-02(w)
of Regulation S-X under the Securities Act and the Exchange Act.
"Person" means any individual, corporation, company, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"Subsidiary" of any Person means (a) a corporation more than 50% of the
combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (b) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person and one or more other Subsidiaries thereof,
directly or indirectly, has at least a majority ownership and power to direct
the policies, management and affairs thereof.
(c) Solely for purposes of this First Supplemental Indenture and the
Notes, the following terms shall have the indicated meanings:
"Acquired Debt" means, with respect to any specified Person, (a)
indebtedness of any other Person existing at the time such Person merges with or
into or consolidates with such specified Person and (b) indebtedness secured by
a Lien encumbering any property acquired by such specified Person, which
indebtedness in each case was not incurred in anticipation of, and was
outstanding prior to, such merger, consolidation or acquisition.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person and any rights (other than debt securities convertible
and exchangeable into an equity interest), warrants or options to acquire an
equity interest in such Person.
"Change of Control" at such time after the original issuance of the
Notes means the occurrence of one or more of the following events: (a) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act or any
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successor provisions to either of the foregoing), including any group acting for
the purpose of acquiring, holding, voting or disposing of securities within the
meaning of Rule 13d-5(b)(1) under the Exchange Act, other than any one or more
of the Permitted Holders, becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 35% or more of the total voting power of
the Voting Stock of the Company; provided, however, that the Permitted Holders
are the "beneficial owners" (as defined in Rule 13d-3 under the Exchange Act,
except that a person will be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, in the
aggregate of a lesser percentage of the total voting power of the Voting Stock
of the Company than such other person or group (for purposes of this clause (a),
such person or group shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other corporation (the
"parent corporation") so long as such person or group beneficially owns,
directly or indirectly, in the aggregate a majority of the total voting power of
the Voting Stock of such parent corporation); or (b) the sale, transfer,
assignment, lease, conveyance or other disposition, directly or indirectly, of
all or substantially all the assets of the Company and its Subsidiaries,
considered as a whole (other than a disposition of such assets as an entirety or
virtually as an entirety to a wholly owned Subsidiary or one or more Permitted
Holders) shall have occurred; or (c) during any period of two consecutive years,
individuals who at the beginning of such period constituted the board of
directors of the Company (together with any new directors whose election or
appointment by such board or whose nomination for election by the shareholders
of the Company was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of the Company than in
office; or (d) the shareholders of the Company shall have approved any plan of
liquidation or dissolution of the Company; provided, however, that a Change of
Control under (a) and (b) above shall not be deemed to have occurred if either
(x) the daily market price per share of Common Stock for any five Trading Days
within the period of 10 consecutive Trading Days ending immediately after the
later of the Change of Control or the public announcement of the Change of
Control (in the case of a Change of Control under clause (a) above) or the
period of 10 consecutive Trading Days ending immediately before the Change of
Control (in the case of a Change of Control under clause (b) above) shall equal
or exceed 105% of the Conversion Price of the notes in effect on the date of the
Change of Control or the public announcement of the Change of Control (provided
that for purposes of the foregoing, the Conversion Price shall be determined
without regard to temporary increases in the Conversion Rate thereof pursuant to
Section 1605(g) of the Indenture (as supplemented by this First Supplemental
Indenture), as applicable; or (y) all of the consideration (excluding cash
payments for fractional shares) in the transaction or transactions constituting
the Change of Control consists of shares of common stock that are, or upon
issuance will be, traded on the New York Stock Exchange or the American
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Stock Exchange or quoted on the Nasdaq National Market and as a result of such
transaction or transactions the notes become convertible solely into such common
stock.
"Closing Sale Price" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the New York Stock Exchange
or such other principal United States securities exchange on which shares of
Common Stock may be traded or, if the shares of Common Stock are not listed on a
United States national or regional securities exchange, as reported by the
Nasdaq system or by the National Quotation Bureau Incorporated. In the absence
of such quotations, the Company shall be entitled to determine the Closing Sale
Price on the basis of such quotations as it considers appropriate. Closing Sale
Price shall be determined without reference to extended or after hours trading.
"Conversion Agent" means the Trustee or any other Person appointed by
the Company to accept Notes presented for conversion.
"Conversion Price" as of any day equals $1,000 divided by the
Conversion Rate as of such date.
"Conversion Rate" is defined in Section 1604 of the Indenture as
supplemented by this First Supplemental Indenture.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Fair Market Value" has the meaning set forth in Section 1605(f)(2) of
the Indenture.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
security interest, lien, charge, encumbrance or other security agreement of any
kind or nature whatsoever; provided, however, that Liens shall not include
defeasance trusts or funds. For purposes of this definition, the sale, lease,
conveyance or other transfer by the Company or any of its subsidiaries of,
including the grant of indefeasible rights of use or equivalent arrangements
with respect to, dark or lit communications fiber capacity or communications
conduit shall not constitute a Lien.
"Make Whole Payment" is defined in Exhibit A hereto.
"Permitted Holders" means the members of the Company's Board of
Directors on April 28, 1998, and their respective estates, spouses, ancestors,
and lineal descendants, the legal representatives of any of the foregoing and
the trustees of any bona
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fide trusts of which the foregoing are the sole beneficiaries or the grantors,
or any person of which the foregoing "beneficially owns" (as defined in Rule
13d-3 under the Exchange Act) at least 66-2/3% of the total voting power of the
Voting Stock of such person.
"Redemption Price" when used with respect to any of the Notes to be
redeemed, means the price fixed for such redemption pursuant to Article VI and
the Notes.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Specified Indebtedness" means (a) the Company's 9.125% Senior Notes
due 2008, 11% Senior Notes due 2008, 10.5% Senior Discount Notes due 2008,
10.75% Senior Euro Notes due 2008, 12.875% Senior Discount Notes due 2010,
11.25% Senior Euro Notes due 2010, 11.25% Senior Notes due 2010, 6.0%
Convertible Subordinated Notes due 2009 and 6.0% Convertible Subordinated Notes
due 2010, and (b) any indebtedness of the Company for borrowed money that (i) is
in the form of, or represented by, bonds, notes, debentures or other securities
(other than promissory notes or similar evidence of indebtedness under bank
loans, reimbursement agreements, receivables facilities or other bank, insurance
or other institutional financing agreements under Section 4(2) of the Securities
Act) or any guarantee thereof and (ii) is, or may be, quoted, listed or
purchased and sold on any stock exchange, automated securities trading system or
over-the-counter or other securities market (including, without prejudice to the
generality of the foregoing, the market for securities eligible for resale
pursuant to Rule 144A under the Securities Act).
"Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the Notes are then convertible) is
neither listed for trading on a U.S. national securities exchange nor approved
for trading on the Nasdaq National Market.
"Trading Day" means (a) if the applicable security is quoted on the
Nasdaq National Market, a day on which trades may be made thereon, (b) if the
applicable security is listed or admitted for trading on the New York Stock
Exchange or another national securities exchange, a day on which the New York
Stock Exchange or such other national securities exchange is open for business
or (c) 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.
"Voting Stock" of any Person means the Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only for
so long as no senior class of securities has such voting power by reason of any
contingency.
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ARTICLE II
Events of Default
SECTION 2.1. Amendments to Article Five. Article Five of the Indenture
is amended in its entirety with respect to the Notes as follows:
"SECTION 501. Events of Default. An "Event of Default" with respect to
any Notes occurs if:
(a) the Company defaults in the payment of principal of, or Make Whole
Payment, if any, on, the Notes when due at maturity, upon repurchase, upon
acceleration or otherwise, including, without limitation, failure of the Company
to make any optional redemption payment (including the Make Whole Payment) when
required pursuant to Article VI of the First Supplemental Indenture; or
(b) the Company defaults in the payment of any installment of interest
on the Notes when due (including any interest payable in connection with a
repurchase pursuant to Section 1006 or in connection with any optional
redemption payment pursuant to Article VI of the First Supplemental Indenture)
and continuance of such default for 30 days or more; or
(c) the Company defaults in the payment of the Designated Event Payment
in respect of the Notes on the date therefor; or
(d) the Company fails to provide timely notice of any Designated Event
in accordance with Section 1006; or
(e) the Company defaults (other than a default set forth in clause (a),
(b), (c) or (d) above) in the performance of, or breaches, any other covenant or
warranty of the Company set forth in this Indenture or the Notes and fails to
remedy such default or breach within a period of 60 days after the receipt of
written notice (specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder) from
the Trustee or the holders of at least 25% in aggregate principal amount of the
then outstanding Notes; or
(f) a default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any Material
Subsidiary (or the payment of which is guaranteed or secured by the Company or
any of its Material Subsidiaries), whether such indebtedness or guarantee exists
on the date of this Indenture or is created thereafter, which default (i) is
caused by a failure to pay when due any principal of such indebtedness within
the grace period provided for in such indebtedness, which failure continues
beyond any applicable grace period (a "Payment Default"), or (ii) results in the
acceleration of such indebtedness prior to its express maturity (without such
acceleration being rescinded or annulled) and, in each case, the principal
amount of such indebtedness, together with the principal amount of any other
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such indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates $25,000,000 or its foreign currency
equivalent or more and such Payment Default is not cured or such acceleration is
not annulled within 10 days after receipt of written notice (specifying such
default and requiring the Company to cause such Payment Default to be cured or
cause such acceleration to be rescinded or annulled and stating that such notice
is a "Notice of Default" hereunder) by the Company from the Trustee or by the
Company and the Trustee from any holder of Notes; or
(g) failure to pay a final, nonappealable judgment or final,
nonappealable judgments (other than any judgment as to which a reputable
insurance company has accepted full liability) for the payment of money entered
by a court or courts of competent jurisdiction against the Company or any
Material Subsidiaries of the Company, which judgments remain unstayed, unbonded
or undischarged for a period of 60 days, provided that the aggregate amount of
all such judgments exceeds $25,000,000 or its foreign currency equivalent; or
(h) the Company or any Material Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) makes the admission in writing that it generally is unable
to pay its debts as the same become due; or
(i) a court of competent jurisdiction enters a judgment, order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case, and the order or decree remains unstayed
and in effect for 90 days,
(ii) appoints a Custodian of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for 90
days, or
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for 90
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
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SECTION 502. Acceleration. If an Event of Default (other than an Event
of Default with respect to the Company specified in clauses (h) and (i) of
Section 501) occurs and is continuing, then and in every such case the Trustee,
by written notice to the Company, or the holders of at least 25% in aggregate
principal amount of the then outstanding Notes, by written notice to the Company
and the Trustee, may declare the unpaid principal of, Make Whole Payment, if
any, and accrued and unpaid interest on all the Notes to be due and payable.
Upon such declaration, such principal amount, Make Whole Payment, if any, and
accrued and unpaid interest shall become immediately due and payable,
notwithstanding anything contained in this Indenture or the Notes to the
contrary. If any Event of Default with respect to the Company specified in
clause (h) or (i) of Section 501 occurs, all unpaid principal of, and Make Whole
Payment, if any, and accrued and unpaid interest on the Notes then outstanding
shall become automatically due and payable, without any declaration or other act
on the part of the Trustee or any holder of Notes.
The holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may rescind an acceleration of the
Notes and its consequences if all existing Events of Default (other than
nonpayment of principal of, Make Whole Payment, if any, and interest on the
Notes which has become due solely by virtue of such acceleration) have been
cured or waived and if the rescission would not conflict with any judgment or
decree of any court of competent jurisdiction. No such rescission shall affect
any subsequent Default or Event of Default or impair any right consequent
thereto.
In the case of any Event of Default, pursuant to the provisions of
this Section 502, occurring by reason of any wilful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the Make Whole Payment which the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to paragraph 5 of the
Notes, an equivalent Make Whole Payment shall also become and be immediately due
and payable to the extent permitted by law, upon the acceleration of the Notes
notwithstanding anything contained in this Indenture or in the Notes to the
contrary. If an Event of Default occurs on any date on which the Company is
prohibited from redeeming the Notes, pursuant to paragraph 5 of the Notes, by
reason of any wilful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding the prohibition on redemption of
the Notes on such date, then the Make Whole Payment specified in this Indenture
shall also become immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. A Make Whole Payment is due under this
Indenture and under the Notes only pursuant to this paragraph, Article VI of the
First Supplemental Indenture and paragraph 5 of the Notes.
SECTION 503. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture. The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them
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in the proceeding. A delay or omission by the Trustee or any holder of a Note in
exercising any right or remedy occurring upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 504. Waiver of Past Defaults. The holders of a majority in
aggregate principal amount of the Notes then outstanding may, on behalf of the
holders of all the Notes, waive an existing Default or Event of Default and its
consequences, except a Default or Event of Default in the payment of the
principal of, and Make Whole Payment, if any, or interest on the Notes (other
than the non-payment of principal of, and Make Whole Payment, if any, and
interest on the Notes which has become due solely by virtue of an acceleration
which has been duly rescinded as provided above), or in respect of a covenant or
provision of this Indenture which cannot be modified or amended without the
consent of all holders of Notes. When a Default or Event of Default is waived,
it is cured and stops continuing. No waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
SECTION 505. Control by Majority. The holders of a majority in
aggregate principal amount of the then outstanding Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
holders of Notes or that may involve the Trustee in personal liability;
provided, however, that the Trustee shall have no duty or obligation (subject to
Section 601) to ascertain whether or not such actions or forbearances are unduly
prejudicial to such holders; provided further, however that the Trustee may take
any other action the Trustee deems proper that is not inconsistent with such
directions.
SECTION 506. Limitation on Suits. A holder of a Note may not pursue
any remedy with respect to this Indenture or the Notes unless:
(a) the holder gives to the Trustee notice of a continuing Event of
Default;
(b) the holders of at least 25% in aggregate principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such holder or holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 30 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 30-day period the holders of a majority in aggregate
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A holder of a Note may not use this Indenture to prejudice the rights
of another holder or to obtain a preference or priority over another holder.
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SECTION 507. Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any holder of a Note to receive
payment of principal, a Make Whole Payment, if any, and interest on the Note, on
or after the respective due dates expressed in the Note, or to bring suit for
the enforcement of any such payment on or after such respective dates, or to
bring suit for the enforcement of the right to convert the Note shall not be
impaired or affected without the consent of the holder of a Note.
SECTION 508. Collection Suit by Trustee. If an Event of Default
specified in Section 501(a), (b) or (c) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal, Make Whole Payment, if any, and
interest remaining unpaid on the Notes and interest on overdue principal, Make
Whole Payment, if any, and interest and such further amount as shall be
sufficient to cover the costs and, to the extent lawful, expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 509. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the holders of Notes
allowed in any judicial proceedings relative to the Company, its creditors or
its property. Nothing contained herein shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any holder of a Note
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any holder thereof, or to authorize the Trustee to vote
in respect of the claim of any holder in any such proceeding.
SECTION 510. Priorities. Any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (or Make Whole Payment, if any) or interest, upon presentation of
the Notes or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Notes and coupons for principal (and Make Whole Payment, if any) and
interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the aggregate amounts due and payable on such Notes and
coupons for principal (and Make Whole Payment, if any) and interest,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 511. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action
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taken or omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit, other than the Trustee, of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a holder pursuant to Section 507 or a suit by
holders of more than 10% in principal amount of the then outstanding Notes."
SECTION 2.2. Notice of Default or Event of Default. The Company shall
deliver to the Trustee, as soon as reasonably practicable and in any event
within 30 days after an executive officer of the Company becomes aware of the
occurrence of any Event of Default or any event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or Default and the action
which the Company proposes to take with respect thereto.
ARTICLE III
Consolidation, Merger, Sale, Lease or Conveyance
SECTION 3.1. Amendments to Article Eight. Article Eight of the
Indenture is amended in its entirety with respect to the Notes as follows:
"SECTION 801. When the Company May Merge, Etc. The Company may not, in
a single transaction or series of related transactions, consolidate or merge
with or into or effect a share exchange with (whether or not the Company is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets as an entirety
or substantially as an entirety to, any Person unless:
(a) either
(i) the Company shall be the surviving or continuing
corporation, or
(ii) the Person formed by or surviving any such consolidation,
merger or share exchange (if other than the Company) or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company substantially as an
entirety:
(1) shall be a corporation organized and validly existing
under the laws of the United States or any State thereof or the
District of Columbia and
(2) shall expressly assume, by supplemental indenture in
form reasonably satisfactory to the Trustee, executed and
delivered to the Trustee, the due and punctual payment of the
principal of, and Make Whole Payments, if any, on all of the
Notes and the performance of
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every covenant of the Notes and this Indenture on the part of the
Company to be performed or observed, including, without
limitation, modifications to rights of holders to cause the
repurchase of Notes upon a Designated Event in accordance with
the penultimate paragraph of Section 1006 and conversion rights
in accordance with Section 1606 to the extent required by such
Sections;
(b) immediately after giving effect to such transaction no Default
and no Event of Default shall have occurred and be continuing; and
(c) the Company or such successor Person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger, share exchange, conveyance, transfer or lease and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this provision of this Indenture and
that all conditions precedent in this Indenture relating to such transaction
have been satisfied.
For purposes of this Section 801, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company, the Capital Stock of which individually or in the aggregate constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 802. Successor Corporation Substituted. Upon any such
consolidation, merger, share exchange, sale, assignment, conveyance, lease,
transfer or other disposition in accordance with Section 801, the successor
Person formed by such consolidation or share exchange or into which the Company
is merged or to which such sale, assignment, conveyance, lease, transfer or
other disposition is made will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein, and
thereafter (except in the case of a lease) the predecessor corporation will be
relieved of all further obligations and covenants under this Indenture and the
Notes.
SECTION 803. Purchase Option on Change of Control. This Article Eight
does not affect the obligations of the Company (including without limitation any
successor to the Company) under Section 1006."
ARTICLE IV
Supplemental Indentures
SECTION 4.1. Amendments to Article Nine. (a) Section 901 is hereby
amended with respect to the Notes by deleting the word "or" from the end of
clause (9) thereof, deleting the "." from the end of clause (10) thereof and
substituting a ";" in its place and by adding the following to the end thereof:
15
"(11) to provide for the assumption of our obligations to holders of
Notes in the Indenture as supplemented by Article III of this First Supplemental
Indenture;
(12) to provide for conversion rights or repurchase rights of holders
of Notes in the event of consolidation, merger, share exchange or sale of all or
substantially all of the assets of the Company as required to comply with
Sections 801 or 1606;
(13) to reduce the Conversion Price;
(14) to add guarantees with respect to the Notes; or
(15) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA."
(b) Section 902 is hereby amended by inserting "including defaulted
interest," after the words "or interest on," in clause (1) thereof and by
deleting the "." from the end of clause (4) thereof and substituting a "; or" in
its place and by adding the following to the end thereof:
"(5) to waive a Default or Event of Default in the payment of
principal of or Make Whole Payment, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the holders of at least a majority in
aggregate principal amount of the Notes then outstanding and a waiver of the
payment default that resulted from such acceleration); or
(6) to make any change in the provisions of this Indenture relating
to waivers of past Defaults or Events of Default or the rights of holders of
Notes to receive payments of principal of, Make Whole Payment, if any, or
interest on the Notes; or
(7) to make any adverse change to the abilities of holders of Notes
to enforce their rights under this Indenture."
ARTICLE V
Repurchase of Notes at the Option of the Holder Upon a Designated Event;
Limitation on Liens
SECTION 5.1. Amendment to Article Ten. Article Ten is amended by
adding to the end the following new Section 1006 and Section 1007, in each case
with respect to the Notes to read as follows:
"SECTION 1006. Repurchase Upon Designated Event. Following a
Designated Event (the date of each such occurrence being the "Designated Event
Date"), the Company shall notify the holders of Notes in writing of such
occurrence and shall make an offer (the "Designated Event Offer") to repurchase
all Notes then outstanding at a repurchase price in cash (the "Designated Event
Payment") equal to 100% of the principal amount thereof, plus accrued and unpaid
interest to, but excluding, the Designated Event Payment Date (as defined
below).
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Notice of a Designated Event shall be mailed by or at the direction of
the Company to the holders of Notes as shown on the Security Register of such
holders maintained by the Security Registrar not more than 20 days after the
applicable Designated Event Date at the addresses as shown on the Security
Register of holders maintained by the Security Registrar, with a copy to the
Trustee and the Paying Agent. The Designated Event Offer shall remain open until
a specified date (the "Designated Event Offer Termination Date") which is at
least 20 Business Days from the date such notice is mailed. During the period
specified in such notice, holders of Notes may elect to tender their Notes in
whole or in part in integral multiples of $1,000 in exchange for cash. Payment
shall be made by the Company in respect of Notes properly tendered pursuant to
this Section 1006 on a specified Business Day (the "Designated Event Payment
Date") which shall be no later than 60 days after the applicable Designated
Event.
The notice, which shall govern the terms of the Designated Event
Offer, shall include such disclosures as are required by law and shall state:
(a) that any Note not accepted for payment will continue to accrue
interest in accordance with the terms thereof;
(b) that a Designated Event Offer is being made pursuant to this
Section 1006 and that all Notes properly tendered and not withdrawn will be
accepted for payment;
(c) the event, transaction or transactions that constitute the
Designated Event;
(d) the Designated Event Payment for each Note, the Designated Event
Offer Termination Date and the Designated Event Payment Date;
(e) that, unless the Company defaults on making the Designated Event
Payment, any Note accepted for payment pursuant to the Designated Event Offer
shall cease to accrue interest on the Designated Event Payment Date and no
further interest shall accrue on or after such date;
(f) that holders electing to have Notes repurchased pursuant to a
Designated Event Offer will be required to surrender their Notes to the Paying
Agent at the address specified in the notice prior to 5:00 p.m., New York City
time, on the Designated Event Offer Termination Date and must complete any form
letter of transmittal proposed by the Company and acceptable to the Trustee and
the Paying Agent;
(g) that holders of Notes will be entitled to withdraw their election
if the Paying Agent receives, not later than 5:00 p.m., New York City time, on
the Designated Event Offer Termination Date, a facsimile transmission or letter
setting forth the name of the holder, the principal amount of Notes the holder
delivered for purchase, the principal amount of Notes the holder is withdrawing
from his election (if less than the full
17
election), the Note certificate number (if any) and a statement that such holder
is withdrawing his election to have such Notes purchased;
(h) that holders whose Notes are repurchased only in part will be
issued Notes equal in principal amount to the unpurchased portion of the Notes
surrendered;
(i) the instructions that holders must follow in order to tender their
Notes; and
(j) that in the case of a Designated Event Payment Date that is also
an Interest Payment Date, the interest due on such date shall be paid to the
person in whose name the Note is registered at the close of business on the
relevant Designated Event Offer Termination Date.
On the Designated Event Offer Termination Date, the Company shall (i)
accept for payment all Notes or portions thereof properly tendered pursuant to
the Designated Event Offer, (ii) deposit with the Paying Agent money sufficient
to pay the Designated Event Payment with respect to all Notes or portions
thereof so tendered and accepted and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate setting
forth the aggregate principal amount of Notes or portions thereof tendered to
and accepted for payment by the Company. On the Designated Event Payment Date,
the Paying Agent shall mail or deliver the Designated Event Payment to the
holders of Notes so accepted and the Trustee shall promptly authenticate and
deliver or cause to be transferred by book entry to such holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered, if
any; provided, however, that such new Notes will be in a principal amount of
$1,000 or an integral multiple thereof. Any Notes not so accepted shall be
promptly mailed or delivered by the Company to the holder thereof.
In the case of any reclassification, change, consolidation, merger,
share exchange, combination or sale or conveyance to which Section 1606 applies
in which the Common Stock of the Company is changed or exchanged as a result
into the right to receive stock, securities or other property or assets
(including cash) which includes shares of common stock of the Company or another
person that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate Fair Market Value of such stock, securities, other property and assets
(including cash) (as determined by the Company, which determination shall be
conclusive and binding), then the person formed by such consolidation or
resulting from such merger or share exchange or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (which shall comply with the TIA as in force at the date of execution
of such supplemental indenture) modifying the provisions of this Indenture
relating to the right of holders of Notes to cause the Company to repurchase
Notes following a Designated Event, including the applicable provisions of this
Section 1006 and the definitions of Designated Event, Change of Control and
Termination of Trading, as appropriate, as determined in good faith by the
18
Company (which determination shall be conclusive and binding), to make such
provision apply to such common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
The Designated Event Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act, and all applicable tender
offer rules promulgated thereunder, to the extent such laws and regulations are
then applicable and shall include all instructions and materials that the
Company shall reasonably deem necessary to enable such holders of Notes to
tender their Notes.
SECTION 1007. Limitation on Liens. The Company will not, directly or
indirectly, incur or suffer to exist any Lien (other than existing Liens)
securing Specified Indebtedness of any nature whatsoever on any of its
properties or assets, whether owned at the issue date of the Notes or thereafter
acquired, without making effective provision for securing the Notes equally and
ratably with (or, if the obligation to be secured by the Lien is subordinated in
right of payment to the Notes, prior to) the obligations so secured for so long
as such obligations are so secured. The Lien, if granted, to secure the Notes
may also secure obligations in addition to Specified Indebtedness. Any Lien
created to secure the Notes pursuant to this Section 1007 may provide by its
terms that such Lien will be automatically and unconditionally released and
discharged upon the full and unconditional release and discharge of the Lien
securing the Specified Indebtedness and that the holders of some or all of such
Specified Indebtedness may exclusively control the disposition of property
subject to such Lien.
The foregoing restrictions in this Section 1007 shall not apply to (a)
Liens to secure Acquired Debt; provided, however, that (i) such Lien attaches to
the acquired property prior to the time of the acquisition of such property and
(ii) such Lien does not extend to or cover any other property; and (b) Liens to
secure indebtedness incurred to refinance, in whole or in part, debt secured by
any Lien referred to in the foregoing clause (a) or this clause (b) so long as
such Lien does not extend to any other property (other than improvements and
accessions to the original property) and the principal amount of indebtedness so
secured is not increased."
ARTICLE VI
Optional Redemption
Pursuant to Section 301(6) of the Indenture, so long as any of the
Notes are Outstanding, the following provisions shall be applicable to the Notes
in lieu of the provisions of Article Eleven of the Indenture:
SECTION 6.1. Optional Redemption. Prior to July 15, 2007, the Company
cannot redeem the Notes. Beginning on July 15, 2007, the Company may redeem the
Notes for cash in whole at any time, or in part from time to time, in accordance
with the provisions of paragraph 5 of the Notes. Any redemption shall be made
pursuant to paragraph 5 of the Notes and this Article VI. The Company must pay
19
the Make Whole Payment, if any, on all Notes called for redemption, including on
any Notes converted after the date the notice of redemption is mailed.
SECTION 6.2. Notices to Trustee. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of paragraph 5 of the Notes, it
shall furnish to the Trustee, at least 30 days but not more than 60 days before
a Redemption Date (unless a shorter period shall be satisfactory to the
Trustee), an Officers' Certificate setting forth (i) the Section of this
Indenture pursuant to which the redemption shall occur, (ii) the Redemption
Date, (iii) the principal amount of Notes (if less than all) to be redeemed,
(iv) the Redemption Price and the amount of any accrued and unpaid interest and
the Make Whole Payment, if any, payable on the Redemption Date and (v) the CUSIP
number of the Notes being redeemed.
SECTION 6.3. Selection of Notes To Be Redeemed. If less than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed by a
method that complies with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or quoted or, if the Notes are
not so listed, on a pro rata basis by lot or by any other method that the
Trustee considers fair and appropriate. The Trustee shall make the selection not
more than 60 days and not less than 30 days before the Redemption Date from
Notes outstanding and not previously called for redemption. The Trustee may
select for redemption a portion of the principal of any Notes that has a
denomination larger than $1,000. Notes and portions thereof will be redeemed in
the amount of $1,000 or integral multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption. The Trustee shall notify
the Company promptly of the Notes or portions of Notes to be called for
redemption.
If any Note selected for partial redemption is converted in part after
such selection, the converted portion of such Note shall be deemed (so far as
possible) to be the portion to be selected for redemption. The Notes (or portion
thereof) so selected shall be deemed duly selected for redemption for all
purposes hereof, and Holders shall receive the Make Whole Payment, if any,
notwithstanding that any such Note is converted in whole or in part before the
mailing of the notice of redemption. Upon any redemption of less than all the
Notes, the Company and the Trustee may treat as outstanding any Notes
surrendered for conversion during the period of 15 days next preceding the
mailing of a notice of redemption and need not treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
In the event of any redemption of less than all the Notes, the Company
will not be required to (i) issue or register the transfer or exchange of any
Note during a period of 15 days next preceding the mailing of a notice of
redemption for such Notes for redemption, or (ii) register the transfer or
exchange of any Note so selected for redemption, in whole or in part, except the
unredeemed portion of any Note being redeemed in part, in which case the Company
will execute and the Trustee will
20
authenticate and deliver to the holder a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
SECTION 6.4. Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail by first class mail a
notice of redemption to each holder whose Notes are to be redeemed, at such
holder's registered address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and any accrued and unpaid interest and
an estimate of the Make Whole Payment, if any, payable on the
Redemption Date;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued in the
name of the holder thereof;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price and any accrued and
unpaid interest and Make Whole Payment, if any;
(5) that interest on Notes called for redemption and for which
funds have been set apart for payment, ceases to accrue on and after
the Redemption Date (unless the Company defaults in the payment of the
Redemption Price or any accrued and unpaid interest or the Make Whole
Payment, if any, or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture);
(6) the paragraph of the Notes pursuant to which the Notes called
for redemption are being redeemed;
(7) the aggregate principal amount of Notes (if less than all)
that are being redeemed;
(8) the CUSIP number of the Notes (provided that any such notice
may state that no representation is made as to the correctness or
accuracy of the CUSIP numbers printed in the notice or on the Notes
and that reliance may be placed only on the other identification
numbers printed on the Notes);
(9) the name and address of the Paying Agent;
(10) that Notes called for redemption may be converted at any time
21
prior to the close of business on the last Trading Day immediately
preceding the Redemption Date and if not converted prior to the close
of business on such date, the right of conversion will be lost; and
(11) that in the case of Notes or portions thereof called for
redemption on a date that is also an Interest Payment Date, the
interest and any Make Whole Payment due on such date shall be paid to
the person in whose name the Note is registered at the close of
business on the relevant Regular Record Date.
The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been given, whether or not the holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the holder of any Note designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
Note.
At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at the Company's expense.
SECTION 6.5. Effect of Notice of Redemption. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the Redemption
Date at the Redemption Price set forth in the Note.
SECTION 6.6. Deposit of Redemption Price. On or before 10 a.m. New
York City time on the Redemption Date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the Redemption Price of and accrued interest and the Make Whole Payment,
if any, on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall return to the Company any money not required for that purpose.
On and after the Redemption Date, unless the Company shall default in
the payment of the Redemption Price or any accrued and unpaid interest or the
Make Whole Payment, if any, interest will cease to accrue on the principal
amount of the Notes or portions thereof called for redemption and for which
funds have been set apart for payment, and such Notes, or portions thereof,
shall cease after the close of business on the Business Day immediately
preceding the Redemption Date to be convertible into Common Stock and, except as
provided in this Section 6.6 and Article Four of the Indenture, to be entitled
to any benefit or security under the Indenture, and the holders thereof shall
have no right in respect of such Notes, or portions thereof, except the right to
receive the Redemption Price thereof and unpaid interest to (but excluding) the
Redemption Date and the Make Whole Payment. In the case of Notes or portions
thereof redeemed on a Redemption Date which is also an Interest Payment Date,
the interest and Make Whole Payment due on such date shall be paid to the person
in whose name the Note is registered at the close of business on the relevant
Regular Record Date.
SECTION 6.7. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part only, the Company shall issue and the Trustee shall
authenticate and
22
deliver to the holder of a Note a new Note equal in principal amount to the
unredeemed portion of the Note surrendered, at the expense of the Company,
except as specified in Section 305 of the Indenture.
SECTION 6.8. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an arrangement with one or more
investment bankers or other purchasers to purchase such Notes by paying to the
Trustee in trust for the holders, on or before the date fixed for redemption, an
amount not less than the applicable Redemption Price, together with interest
accrued to the date fixed for redemption and the Make Whole Payment, if any, of
such Notes. Notwithstanding anything to the contrary contained in this Article
VI, the obligation of the Company to pay the Redemption Price of such Notes,
together with interest accrued to the date fixed for redemption and the Make
Whole Payment, if any, shall be deemed to be satisfied and discharged to the
extent such amount is so paid by the purchasers. If such an agreement is entered
into, a copy shall be filed with the Trustee prior to the date fixed for
redemption. Any Notes not duly surrendered for conversion by the holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article VIII) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Notes shall be deemed to
have been extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would moneys deposited
with it by the Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this Indenture, and the Company agrees to indemnify the Trustee from, and
defend and hold it harmless against, any loss, liability or expense arising out
of or in connection with any such arrangement for the purchase and conversion of
any Notes between the Company and such purchasers to which the Trustee has not
consented in writing, including the costs and expenses incurred by the Trustee
in the defense of any claim or liability arising out of or in connection with
the exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE VII
Conversion of Securities
SECTION 7.1. Applicability of Conversion Provisions. Pursuant to
Section 301(24) of the Indenture, the Notes will be convertible in accordance
with the provisions of, and pursuant to, Article Sixteen of the Indenture, as
amended hereby, and the definitive form of the Notes; provided, however, that,
prior to any conversion, any applicable governmental consents have been received
by the Company or the Holder.
23
SECTION 7.2. Amendments to Article Sixteen. Article Sixteen is amended
in its entirety with respect to the Notes to read as follows:
"SECTION 1601. Right To Convert. Subject to and upon compliance with
the provisions of this Indenture (including Section 6.8 of the First
Supplemental Indenture), each holder of Notes shall have the right, at his or
her option, at any time on or before the close of business on the last Trading
Day prior to the Stated Maturity Date (except that, (a) with respect to any Note
or portion thereof which is called for redemption prior to such date, such right
shall terminate, except as provided in the fourth paragraph of Section 1602, at
the close of business on the last Trading Day preceding the date fixed for
redemption (unless the Company defaults in payment of the Redemption Price in
which case the conversion right will terminate at the close of business on the
date such default is cured) and (b) with respect to any Note or portion thereof
subject to a duly completed election for repurchase, such right shall terminate
at the close of business on the Designated Event Offer Termination Date (unless
the Company defaults in the payment due upon repurchase or such holder elects to
withdraw the submission of such election to repurchase in accordance with
Section 1006)) to convert the principal amount of any Note held by such holder,
or any portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof to be converted by the
Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided in Section 1602. A holder
of Notes is not entitled to any rights of a holder of Common Stock until such
holder of Notes has converted his or her Notes to Common Stock, and then only to
the extent such Notes are deemed to have been converted to Common Stock under
this Article Sixteen
SECTION 1602. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. To exercise, in
whole or in part, the conversion privilege with respect to any Note, the holder
of such Note shall surrender such Note, duly endorsed, at an office or agency
maintained by the Company pursuant to Section 1002, accompanied by the funds, if
any, required by the last paragraph of this Section 1602, and shall give written
notice of conversion in the form provided on the Notes (or such other notice
which is acceptable to the Company) to the office or agency that the holder of
Notes elects to convert such Note or such portion thereof specified in said
notice. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
which are issuable on such conversion shall be issued, and shall be accompanied
by transfer taxes, if required pursuant to Section 1607. Each such Note
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Note, be duly endorsed
by, or be accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder of Notes or his or her duly authorized
attorney. The holder of such Notes will not be required to pay any tax or duty
which may be payable in respect of the issue or delivery of Common Stock on
conversion, but will be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue or delivery of Common Stock in a
name other than the same name as the registration of such Note.
24
As promptly as practicable after satisfaction of the
requirements for conversion set forth above, the Company shall issue and shall
deliver to such holder at the office or agency maintained by the Company for
such purpose pursuant to Section 1002, a certificate or certificates for the
number of full shares of Common Stock (including any full shares as a result of
rounding fractional shares up to a full number of shares pursuant to Section
1603) issuable upon the conversion of such Note or portion thereof in accordance
with the provisions of this Article Sixteen and (i) a check or cash (which
payment, if any, shall be paid no later than five Business Days after
satisfaction of the requirements for conversion set forth above) or (ii)
fractional shares (if not rounded up to a full number of shares pursuant to
Section 1603), in each case in respect of any fractional interest in respect of
a share of Common Stock, pursuant to Section 1603 . Certificates representing
shares of Common Stock will not be issued or delivered unless all taxes and
duties, if any, payable by the holder have been paid. In case any Note of a
denomination of an integral multiple greater than $1,000 is surrendered for
partial conversion, and subject to Section 303, the Company shall execute, and
the Trustee shall authenticate and deliver to the holder of the Note so
surrendered, without charge to him or her, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Note.
Each conversion shall be deemed to have been effected as to
any such Note (or portion thereof) on the date on which the requirements set
forth above in this Section 1602 have been satisfied as to such Note (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock are issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the Company's stock
transfer books are closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note is surrendered.
Any Note or portion thereof surrendered for conversion during
the period from the close of business on the Regular Record Date for any
interest payment through the close of business on the last Trading Day
immediately preceding such Interest Payment Date shall (unless such Note or
portion thereof being converted has been called for redemption on a date during
the period from the close of business on such Regular Record Date to the close
of business on the last Trading Day immediately preceding the corresponding
Interest Payment Date pursuant to a notice of redemption mailed by the Company
to the holders in accordance with the provisions of Section 6.4 of the First
Supplemental Indenture) be accompanied by payment, in funds acceptable to the
Company, of an amount equal to the interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided, however, that
such payment may be reduced by the amount of any existing payment default in
respect of such Notes. An amount equal to such payment shall be paid by the
Company on such Interest Payment Date to the holder of such Note at the close of
business on such Regular Record Date. Except as provided above in this Section
1602, no adjustment shall be made for interest accrued on any Note converted or
for dividends on any shares issued upon the conversion of such Note as provided
in this Article Sixteen. If any Note or portion
25
thereof that has been called for redemption on a date during the period from the
close of business on a Regular Record Date to the close of business on the last
Trading Day immediately preceding the corresponding Interest Payment Date is
converted after such Regular Record Date for the payment of interest and prior
to such corresponding Interest Payment Date, interest payable on such Interest
Payment Date shall be payable notwithstanding such conversion, and such interest
shall be paid to the holder of such Note on the applicable Regular Record Date.
SECTION 1603. Cash Payments in Lieu of Fractional Shares. If
more than one Note shall be surrendered for conversion at one time by the same
holder, the number of full shares which shall be issuable upon conversion shall
be computed on the basis of the aggregate principal amount of the Notes (or
specified portions thereof to the extent permitted hereby) so surrendered for
conversion. In respect of any fractional share of stock that otherwise would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment therefor in cash based upon the current market price thereof or, the
Company shall, at its option, (i) round such fraction up to the nearest full
number of shares for issuance upon conversion or (ii) if permitted by law and
relevant Nasdaq or stock exchange rules, issue such fractional shares. For
purposes of this Section 1603, the "current market price" of a share of Common
Stock shall be the Closing Sale Price on the last Business Day immediately
preceding the day on which the Notes (or specified portions thereof) are deemed
to have been converted.
SECTION 1604. Conversion Rate. Each $1,000 principal amount of
the Notes shall be convertible into the number of shares of Common Stock (the
"Conversion Rate") specified in the form of Note attached as Exhibit A hereto,
subject to adjustment as provided in this Article Sixteen.
SECTION 1605. Adjustment of the Conversion Rate. The
Conversion Rate shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Stock in shares
of Common Stock, the Conversion Rate shall be increased so that the
same shall equal the rate determined by multiplying the Conversion Rate
in effect at the opening of business on the date following the date
fixed for the determination of stockholders entitled to receive such
dividend or other distribution by a fraction,
(i) the numerator of which shall be the sum of the
number of shares of Common Stock outstanding at the close of
business on the date fixed for the determination of
stockholders entitled to receive such dividend or other
distribution plus the total number of shares of Common Stock
constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination,
26
such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination.
For the purpose of this paragraph (a), the number of shares of Common
Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company will not pay any dividend or make
any distribution on shares of Common Stock held in the treasury of the
Company. If any dividend or distribution of the type described in this
Section 1605 is declared but not so paid or made, the Conversion Rate
shall again be adjusted to the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price on the date fixed for determination
of stockholders entitled to receive such rights or warrants, the
Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect
immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the number of
shares of Common Stock outstanding on the date fixed for
determination of stockholders entitled to receive such rights
or warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase, and
(ii) the denominator of which shall be the sum of the
number of shares of Common Stock outstanding at the close of
business on the date fixed for determination of stockholders
entitled to receive such rights or warrants plus the number of
shares that the aggregate offering price of the total number
of shares so offered would purchase at such Current Market
Price.
Such adjustment shall be successively made whenever
any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the date
fixed for determination of 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 that 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 that would then be in effect if such date
fixed 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 Current Market Price, and in
determining the aggregate offering price of such shares of Common
Stock, there shall be taken
27
into account any consideration received by the Company for such rights
or warrants and any amount payable on exercise or conversion thereof,
the value of such consideration, if other than cash, to be determined
by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately increased, and conversely, in case outstanding
shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
capital stock of the Company or evidences of its indebtedness or
assets, including cash and securities (any such distribution, a
"Distribution"; provided, however, that the term "Distribution" shall
not include, and this Section 1605(d) shall not apply to, (x) any
rights or warrants referred to in Section 1605(b) and (y) any dividend
or distribution referred to in Section 1605(a)), then, in each such
case (unless the Company elects to reserve such Distribution for
distribution to the Holders upon the conversion of the Notes so that
any such holder converting Notes will receive upon such conversion, in
addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Distribution which such holder
would have received if such holder had converted its Notes into Common
Stock immediately prior to the Record Date), the Conversion Rate shall
be increased so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect on the Record Date with
respect to such distribution by a fraction,
(i) the numerator of which shall be the Current
Market Price on such Record Date; and
(ii) the denominator of which shall be the Current
Market Price on such Record Date less (A) in the case of
Distributions other than cash, the Fair Market Value (as
determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the
Board of Directors) on the Record Date of the portion of such
Distributions applicable to one share of Common Stock and (B)
in the case of Distributions of cash, the amount of such
Distributions applicable to one share of Common Stock,
such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that
if the then Fair Market Value (as so determined) of the portion of the
Distribution so distributed
28
applicable to one share of Common Stock is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion the amount of Distribution
such holder would have received had such holder converted each Note on
the Record Date. If such Distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that
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 of this Section 1605 by reference to the
actual or when issued trading market for any securities, it must in
doing so consider the prices in such market over the same period used
in computing the Current Market Price on the applicable Record Date.
Notwithstanding the foregoing, if the Distribution distributed by the
Company to all holders of its Common Stock consists of Capital Stock
of, or similar equity interests in, a Subsidiary or other business
unit, the Conversion Rate shall be increased so that the same shall be
equal to the rate determined by multiplying the Conversion Rate in
effect on the Record Date with respect to such distribution by a
fraction:
(i) the numerator of which shall be the sum of (x)
the average Closing Sale Price of one share of Common Stock
over the ten consecutive Trading Day period (the "Spinoff
Valuation Period") commencing on and including the fifth
Trading Day after the date on which "ex-dividend trading"
commences on the Common Stock on the New York Stock Exchange
or such other national or regional exchange or market on which
the Common Stock is then listed or quoted and (y) the average
Fair Market Value (as determined by the Board of Directors,
whose determination shall be conclusive, and described in a
resolution of the Board of Directors) over the Spinoff
Valuation Period of the portion of the Distribution so
distributed applicable to one share of Common Stock; and
(ii) the denominator of which shall be the average
Closing Sale Price of one share of Common Stock over the
Spinoff Valuation Period,
such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that
the Company may in lieu of the foregoing adjustment make adequate
provision so that each Holder shall have the right to receive upon
conversion the amount of Distribution such holder would have received
had such holder converted each Note on the Record Date with respect to
such Distribution.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's Capital Stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common
29
Stock, shall be deemed not to have been distributed for purposes of
this Section 1605 (and no adjustment to the Conversion Rate under this
Section 1605 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment (if any is
required) to the Conversion Rate shall be made under this Section 1605.
If any such right or warrant, including any such existing rights or
warrants distributed prior to the date of this Indenture, are subject
to events, upon the occurrence of which such rights or warrants become
exercisable to purchase different securities, evidences of indebtedness
or other assets, then the date of the occurrence of any and each such
event shall be deemed to be the date of distribution and record date
with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without
exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any
Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of
calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 1605 was made, (1) in the case of
any such rights or warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion
Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be,
as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of
Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of
Common Stock as of the date of such redemption or repurchase, and (2)
in the case of such rights or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate
shall be readjusted as if such rights and warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 1605 in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or
warrants are actually distributed, or reserved by the Company for
distribution to holders of Securities upon conversion by such holders
of Securities to Common Stock.
For purposes of this Section 1605(d) and 1605(a) and (b), any dividend
or distribution to which this Section 1605(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for
or purchase shares of Common Stock (or both), shall be deemed instead
to be (1) a dividend or distribution of the evidences of indebtedness,
assets or shares of capital stock other than such shares of Common
Stock or rights or warrants (and any Conversion Rate adjustment
required by this Section 1605 with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend
or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by
Sections 1605(a) and (b) with respect to such dividend or distribution
shall then be made), except
30
(A) the Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination
of stockholders entitled to receive such dividend or other
distribution", "the date fixed for the determination of
stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of
Section 1605(a) and (b) and
(B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such
determination" within the meaning of Section 1605(a).
(e) In case a tender or exchange offer made by the Company or
any Subsidiary for all or any portion of the Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per
share of Common Stock having a Fair Market Value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) that as of the
last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it may be amended)
exceeds the Closing Sale Price of a share of Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Rate
shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x)
the Fair Market Value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of
the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Closing Sale
Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time multiplied by the
Closing Sale Price of a share of Common Stock on the Trading
Day next succeeding the Expiration Time
such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is
obligated to purchase shares pursuant to any such tender or exchange
offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate that
31
would then be in effect if such tender or exchange offer had not been made.
(f) For purposes of this Section 1605, and, in the case of the term
"Fair Market Value", Section 1006, the following terms shall have the
meaning indicated:
(1) "Current Market Price" shall mean the average of the daily
Closing Sale Prices per share of Common Stock for the ten consecutive
Trading Days immediately preceding the earlier of such date of
determination and the day before the "ex" date with respect to the
issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question. For purpose of
this paragraph, the term "ex" date, (1) when used with respect to any
issuance or distribution, means the first date on which the Common
Stock trades, regular way, on the relevant exchange or in the relevant
market from which the Closing Sale Price was obtained without the
right to receive such issuance or distribution, and (2) when used with
respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades, regular way, on
such exchange or in such market after the time at which such
subdivision or combination becomes effective.
If another issuance, distribution, subdivision or combination to which
this Section 1605 applies occurs during the period applicable for
calculating "Current Market Price" pursuant to the definition in the
preceding paragraph, "Current Market Price" shall be calculated for
such period in a manner determined by the Board of Directors to
reflect the impact of such issuance, distribution, subdivision or
combination on the Closing Sale Price of the Common Stock during such
period.
(2) "Fair Market Value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's-length transaction.
(3) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security)
is 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).
(g) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 1605(a), (b), (c), (d) or (e) 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
32
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time
if the period is at least twenty (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 increased pursuant to the preceding sentence, the Company shall
mail to holders of record of the Securities a notice of the increase at
least fifteen (15) days prior to the date the increased Conversion Rate
takes effect, and such notice shall state the increased Conversion Rate and
the period during which it will be in effect.
(h) No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
(1%) in such rate; provided, however, that any adjustments that by reason
of this Article Sixteen are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article Sixteen shall be made by the Company and
shall be made to the nearest cent or to the nearest one-ten thousandth
(1/10,000) of a share, as the case may be. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest. 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. Interest will not accrue on any cash into
which the Notes are convertible. The Conversion Rate shall be adjusted only
once for a single event or occurrence that would require an adjustment
under more than one of Section 1605(a), (b), (c), (d) or (e).
(i) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Unless and until a Responsible Officer of the
Trustee shall have received such Officers' Certificate, the Trustee shall
not be deemed to have actual knowledge of any adjustment of the Conversion
Rate and may assume that the last Conversion Rate of which it has knowledge
is still in effect. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date on which each
adjustment becomes effective and shall mail such notice of such adjustment
of the Conversion Rate to the holder of each Note, within twenty (20) days
after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of any such adjustment.
(j) In any case in which this Section 1605 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date
for an
33
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 1605(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 1605(b), or (4) the Expiration Time for any
tender or exchange offer pursuant to Section 1205, (each a "Determination
Date"), the Company may elect to defer until the occurrence of the
applicable Adjustment Event (as hereinafter defined) (x) issuing to the
holder of any Security converted after such Determination Date and before
the occurrence of such Adjustment Event, the additional shares of Common
Stock or other securities issuable upon such conversion by reason of the
adjustment required by such Adjustment Event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment
and (y) paying to such holder any amount in cash in lieu of any fraction
pursuant to Section 1603. For purposes of this Section 1605(j), the term
"Adjustment Event" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence
of such event,
(ii) in any case referred to in clause (2) hereof, the date any
such dividend or distribution is paid or made,
(ii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the date a
sale or exchange of Common Stock pursuant to such tender or exchange
offer is consummated and becomes irrevocable.
(k) For purposes of this Section 1605, 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 will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
SECTION 1606. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur: (i) any reclassification or change
of the 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, share
exchange or combination of the Company with another Person or (iii) any sale or
conveyance of all or substantially all of the properties and assets of the
Company as an entirety or substantially as an entirety, in each case as a result
of which holders of Common Stock shall 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 Person, as the
case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the TIA as in force at the date of execution of such
supplemental indenture if such supplemental
34
indenture is then required to so comply) providing that the Notes 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, share exchange, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
the Notes (assuming, for such purposes, a sufficient number of authorized shares
of Common Stock available to convert all such Notes) immediately prior to such
reclassification, change, consolidation, merger, share exchange, combination,
sale or conveyance assuming such holder of Common Stock did not exercise his or
her rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, share exchange, sale
or conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such consolidation, merger, share exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election have not been exercised ("Non-electing Share"), then,
for the purposes of this Section 1606, the kind and amount of securities, cash
or other property receivable upon such consolidation, merger, share exchange,
sale or conveyance for each Non-electing Share shall be deemed to be the kind
and amount so receivable per share by a plurality of the Non-electing Shares).
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article Sixteen. If, in the case of any such reclassification, change,
consolidation, merger, share exchange, combination, sale or conveyance, the
stock or other securities and assets receivable thereupon by a holder of shares
of Common Stock includes shares of stock or other securities and assets of a
person other than the successor or purchasing person, as the case may be, in
such reclassification, change, consolidation, merger, share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other person and shall contain such additional provisions to
protect the interests of the holders of the Notes as the Board of Directors
shall reasonably consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder 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 1606 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, share exchanges,
combinations, sales and conveyances.
If this Section 1606 applies to any event or occurrence, Section 1605
shall not apply.
SECTION 1607. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting holder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and
35
until the person or persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 1608. Reservation of Shares; Shares to Be Fully Paid; Listing
of Common Stock. The Company shall provide, free from preemptive rights, out of
its authorized but unissued shares or shares held in treasury, sufficient shares
to provide for the conversion of the Notes from time to time as such Notes are
presented for conversion. Before taking any action which would cause an
adjustment increasing the Conversion Rate to an amount that would cause the
Conversion Price to be reduced below the then par value, if any, of the shares
of Common Stock issuable upon conversion of the Notes, the Company shall take
all corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common Stock
at such adjusted Conversion Rate.
The Company covenants that all shares of Common Stock issued upon
conversion of Notes will be fully paid and nonassessable by the Company and free
from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants that as long as the Common Stock is
quoted on the Nasdaq National Market, or its successor, the Company shall cause
all Common Stock issuable upon conversion of the Notes to be eligible for such
quotation in accordance with, and at the times required under, the requirements
of such market, and if at any time the Common Stock becomes listed on the New
York Stock Exchange or any other national securities exchange, the Company shall
cause all Common Stock issuable upon conversion of the Notes to be so listed and
remain listed.
SECTION 1609. Responsibility of Trustee. The Trustee and any
Conversion Agent shall have no duty, responsibility or liability to any Holder
to determine whether any facts exist which may require any adjustment of the
Conversion Rate, or with respect to the nature or extent 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. Neither the
Trustee nor any Conversion Agent shall be accountable with respect to the
registration under securities laws, listing, validity or value (or the kind or
amount) of any shares of Common Stock, or of any other securities or property,
which may at any time be issued or delivered upon the conversion of any Note,
and neither the Trustee nor any Conversion Agent makes any representation with
respect thereto. Neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of stock or stock certificates or other
securities or property upon the surrender of any Note for the purpose of
conversion; and the Trustee and any Conversion Agent shall not be responsible
for any failure of the Company to comply with any of the covenants of the
Company contained in this Article Sixteen.
36
SECTION 1610. Notice to Holders Prior to Certain Actions. If:
(a) the Company declares a dividend (or any other distribution) on its
Common Stock (other than in cash out of retained earnings);
(b) the Company authorizes the granting to the holders of its Common
Stock of rights or warrants to subscribe for or purchase any share of any class
of Common Stock or any other rights or warrants (other than rights or warrants
referred to in the second paragraph of Section 1605(d));
(c) there is any reclassification of the Common Stock (other than a
subdivision or combination of 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, merger or share exchange to which the Company is a party,
or of the sale or transfer of all or substantially all of the assets of the
Company; or
(d) there is any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall cause to be filed with the Trustee and at the office or
agency maintained for the purpose of conversion of the Notes pursuant to Section
1002, and shall caused to be mailed to each holder of Notes, at their last
addresses as they shall appear on the Security Register of the Company as
promptly as possible but in any event at least 10 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 or distribution of rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend or distribution are to
be determined or (y) the date on which such reclassification, consolidation,
merger, share exchange, 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, share exchange, 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, share exchange, sale,
transfer, dissolution, liquidation or winding-up. Such notice shall also be
published by and at the expense of the Company not later than the aforesaid
filing date at least once in an Authorized Newspaper."
ARTICLE IX
Miscellaneous
SECTION 9.1. Application of First Supplemental Indenture. Each and
every term and condition contained in this First Supplemental Indenture that
modifies, amends or supplements the terms and conditions of the Indenture shall
apply only to the
37
Notes created hereby and not to any future series of Notes established under the
Indenture.
SECTION 9.2. Benefits of First Supplemental Indenture. Nothing
contained in this First Supplemental Indenture shall or shall be construed to
confer upon any person other than a Holder of the Notes, the Company or the
Trustee any right or interest to avail itself or himself, as the case may be, of
any benefit under any provision of the Indenture or this First Supplemental
Indenture.
SECTION 9.3. Effective Date. This First Supplemental Indenture shall
be effective as of the date first above written and upon the execution and
delivery hereof by each of the parties hereto.
SECTION 9.4. Governing Law. This First Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflicts of laws principles thereof.
SECTION 9.5. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
38
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first above written.
XXXXX 0 COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK, as Trustee
By: /s/ Van X. Xxxxx
----------------------------
Name: Van X. Xxxxx
Title: Vice President
39
EXHIBIT A
(Face of Security)
[Global Securities Legend]
[The following legend shall appear on the face of each Global Security:
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE
DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT
THEREOF AS OWNER AND HOLDER OF THIS NOTE FOR ALL PURPOSES.]
[The following legend shall appear on the face of each Global Security
for which The Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY THE 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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN
THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]
40
No. _______
$___________ CUSIP 00000XXX0
Xxxxx 0 Communications, Inc.
2.875% CONVERTIBLE SENIOR NOTE DUE 2010
promises to pay to [ ] or registered assigns, the principal sum of ____________
Dollars on ____________________
Interest Payment Dates: January 15 and July 15, commencing January 15, 2004
Regular Record Dates: July 1 and January 1
Level 3 Communications, Inc.,
By _________________________________
Name:
Title:
Certificate of Authentication
This is one of the Convertible Senior Notes referred to in the within-mentioned
Indenture.
Dated: _______________
The Bank of New York,
as Trustee
By ___________________________
Authorized Signatory
41
(Back of Security)
42
Level 3 Communications, Inc.
2.875% CONVERTIBLE SENIOR NOTE DUE 2010
1. INTEREST. Level 3 Communications, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. The Company will pay interest
semi-annually in arrears on January 15 and July 15 of each year, beginning
January 15, 2004. Interest on the Notes will accrue from the most recent
Interest Payment Date to which interest has been paid or, if no interest
has been paid, from July 8, 2003. Interest will be computed on the basis
of a 360-day year composed of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) to the person in whose name each Note is registered at
the close of business on the January 1 or July 1 immediately preceding the
relevant Interest Payment Date (each a "Regular Record Date") (other than
with respect to a Note or portion thereof called for redemption on a
Redemption Date, or repurchased in connection with a Designated Event on a
repurchase date, during the period from the close of business on a Regular
Record Date to (but excluding) the next succeeding Interest Payment Date,
in which case accrued interest shall be payable (unless such Note or
portion thereof is converted) to the holder of the Note or portion thereof
redeemed or repurchased in accordance with the applicable redemption or
repurchase provisions of the Indenture). The holder must surrender Notes
to a Paying Agent to collect principal payments. The Company will pay the
principal of, Make Whole Payment, if any, and interest on the Notes at the
office or agency of the Company maintained for such purpose, in money of
the United States that at the time of payment is legal tender for payment
of public and private debts. Until otherwise designated by the Company,
the Company's office or agency maintained for such purpose will be the
principal Corporate Trust Office of the Trustee (as defined below).
However, the Company may pay principal, the Make Whole Payment, if any,
and interest by check payable in such money, and may mail such check to
the holders of the Notes at their respective addresses as set forth in the
Security Register of holders of Notes.
3. PAYING AGENT AND REGISTRAR. The Bank of New York (together with any
successor Trustee under the Indenture referred to below, the "Trustee")
will act as Paying Agent and Security Registrar. The Company may change
the Paying Agent, Registrar or co-registrar without prior notice. Subject
to certain limitations in the Indenture, the Company or any of its
subsidiaries may act in any such capacity.
4. INDENTURE. This is one of a duly authorized issue of securities of the
Company designated as its "2.875% Convertible Senior Notes Due 2010"
issued
43
under an amended and restated indenture dated as of July 8, 2003 (the
"Base Indenture"), between the Company and the Trustee, and a supplemental
indenture to be dated as of July 8, 2003 (the "Supplemental Indenture"),
between the Company and the Trustee (the Base Indenture as supplemented by
the Supplemental Indenture, the "Indenture"). The terms of the Notes
include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (the "TIA") as in effect
on the date of the Indenture. The Notes are subject to, and qualified by,
all such terms, certain of which are summarized hereon, and holders are
referred to the Indenture and the TIA for a statement of such terms. The
Notes are unsecured and unsubordinated obligations of the Company limited
to (except as otherwise provided in the Indenture) up to $373,750,000 in
aggregate principal amount. Capitalized terms not defined below have the
same meaning as is given to them in the Indenture.
5. OPTIONAL REDEMPTION. No sinking fund is provided for the Notes. The Notes
are redeemable as a whole, or from time to time in part, at any time at
the option of the Company in accordance with the Indenture and this Note,
provided that the Notes are not redeemable prior to July 15, 2007.
If redeemed at the option of the Company, the Notes will be redeemed on
the conditions and at the Redemption Prices set forth below.
If the Closing Sale Price of the Common Stock has exceeded a Specified
Percentage (as defined below) of the then applicable Conversion Price for
at least 20 Trading Days in any consecutive 30-day trading period ending
on the Trading Day prior to the mailing of the notice of redemption, the
Company may redeem for cash all or a portion of the Notes at any time
after July 15, 2007, by providing not less than 30 nor more than 60 days'
notice by mail to each Holder of the Notes to be redeemed, at a price in
cash equal to 100% of the principal amount of the Notes to be redeemed
plus accrued and unpaid interest to, but excluding, the Redemption Date
plus the Make Whole Payment (as defined below). The Company must pay the
Make Whole Payment on all Notes called for redemption, including on any
Notes converted after the date the notice of redemption is mailed.
"Specified Percentage" is equal to (1) 170% if the date of the mailing of
the notice of redemption is during the 12-month period beginning July 15,
2007, (2) 160% if the date of the mailing of the notice of redemption is
during the 12-month period beginning July 15, 2008, and (3) 150% if the
date of the mailing of the notice of redemption is during the 12-month
period beginning July 15, 2009.
"Make Whole Payment" means a cash amount equal to the present value of all
remaining scheduled payments of interest on the Notes to be redeemed
through and including July 15, 2010. The present value of the remaining
interest payments will be computed using a discount rate equal to the
Treasury Yield. "Treasury Yield" means the yield to maturity at the time
of computation of United States Treasury securities with a constant
maturity (as compiled and published in
44
the most recent Federal Reserve Statistical Release H.15 (519) that has
become publicly available at least two Business Days prior to the date
fixed for redemption (or, if such Statistical Release is no longer
published, any publicly available source for similar market data)) most
nearly equal to the then remaining term to July 15, 2010; provided,
however, that if the then remaining term to July 15, 2010, is not equal to
the constant maturity of a United States treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by
linear interpolation (calculated to the nearest one-twelfth of a year)
from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the then remaining term to
July 15, 2010, is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity
of one year shall be used.
Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the date fixed for redemption to
each holder of Notes to be redeemed at his or her registered address.
Notes in denominations larger than $1,000 may be redeemed in part but only
in integral multiples of $1,000. If less than all the Notes are to be
redeemed, the Trustee shall select the Notes to be redeemed by a method
that complies with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or quoted, or, if the
Notes are not so listed, on a pro rata basis by lot or by any other method
that the Trustee considers fair and appropriate. On and after the
Redemption Date, interest ceases to accrue on Notes or portions thereof
called for redemption (unless the Company defaults in the payment of the
Redemption Price). If this Note is redeemed on a date which is also an
Interest Payment Date, the interest due on such date will be paid to the
person in whose name this Note is registered at the close of business on
the relevant Regular Record Date.
6. DESIGNATED EVENT. Upon the occurrence of a Designated Event, the Company
shall make a Designated Event Offer to repurchase all outstanding Notes at
a price equal to 100% of the aggregate principal amount of the Notes, plus
accrued and unpaid interest to, but excluding, the date of repurchase,
such offer to be made as provided in the Indenture. To accept the
Designated Event Offer, the holder hereof must comply with the terms
thereof, including surrendering this Note, with the "Option of Holder to
Elect Repurchase" portion hereof completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent, at the address specified
in the notice of the Designated Event Offer mailed to holders as provided
in the Indenture, prior to the Designated Event Offer Termination Date.
7. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. As a condition of transfer, the Security
Registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents, and the Company
and the Security Registrar may require a holder to pay any taxes and fees
required by law or
45
permittedby the Indenture. The Company or the Security Registrar need not
exchange or register the transfer of any Note or portion of a Note selected
for redemption or submitted for repurchase or surrendered for conversion.
Also, the Company or the Security Registrar need not exchange or register
the transfer of any Note for a period of 15 days before the mailing of a
notice of redemption for such Notes to be redeemed.
8. PERSONS DEEMED OWNERS. The registered holder of a Note shall be treated as
its owner for all purposes.
9. AMENDMENTS AND WAIVERS. 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 then outstanding Notes, and any
existing default may be waived with the consent of the holders of a
majority in principal amount of the then outstanding Notes.
Without the consent of any holder, the Indenture or the Notes may be
amended to: (a) cure any ambiguity or correct or supplement any defective
or inconsistent provision contained in the Indenture, or make any other
changes in the provisions of the Indenture which the Company and the
Trustee may deem necessary or desirable provided such amendment does not
materially and adversely affect the legal rights under the Indenture of the
holders of Notes; (b) provide for uncertificated Notes in addition to or in
place of certificated Notes or to provide for bearer Notes; (c) evidence
the succession of another person to the Company and provide for the
assumption by such successor of the covenants and obligations of the
Company thereunder and in the Notes as permitted by Section 801 of the
Indenture; (d) provide for conversion rights or repurchase rights of
holders of Notes in the event of consolidation, merger, share exchange or
sale of all or substantially all of the assets of the Company as required
to comply with Sections 801 or 1606 of the Indenture; (e) reduce the
Conversion Price; (f) evidence and provide for the acceptance of the
appointment under the Indenture of a successor Trustee; (g) make any change
that would provide any additional rights or benefits to the holders of
Notes or that does not adversely affect the legal rights under the
Indenture of any such holder; (h) comply with the requirements of the
Commission in order to effect or maintain the qualification of the
Indenture under the TIA; or (i) secure the Notes.
Without the consent of each holder affected, an amendment or waiver
may not (with respect to any Notes held by a nonconsenting holder): (a)
reduce the principal amount of Notes whose holders must consent to an
amendment, supplement or waiver; (b) reduce the principal of, or change the
fixed maturity of any Note or alter the provisions with respect to the
redemption or mandatory repurchase of the Notes; (c) reduce the rate of, or
change the time for payment of, interest, including defaulted interest, if
any, on any Notes; (d) waive a Default or Event of Default in the payment
of principal of or the Make Whole Payment, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the holders of at
least a majority in aggregate principal amount of the Notes then
46
outstanding and a waiver of the payment default that resulted from such
acceleration); (e) make the principal of, or interest on, any Note payable
in money other than as provided for in the Indenture and in the Notes; (f)
make any change in the provisions of the Indenture relating to waivers of
past Defaults or Events of Default or the rights of holders of Notes to
receive payments of principal of, Make Whole Payment, if any, or interest
on the Notes; (g) waive a redemption or mandatory repurchase payment with
respect to any Note; (h) except as permitted by the Indenture (including
Section 901(9)), increase the Conversion Price or modify the provisions of
the Indenture relating to conversion of the Notes in a manner adverse to
the holders thereof or (i) make any adverse change to the ability of
holders of Notes to enforce their rights under the Indenture.
10. DEFAULTS AND REMEDIES. An Event of Default is: (a) default in payment of
the principal of, or Make Whole Payment, if any, on the Notes, when due at
maturity, upon repurchase, upon acceleration or otherwise; (b) default for
30 days or more in payment of any installment of interest on the Notes; (c)
default in the payment of the Designated Event Payment in respect of the
Notes on the date therefor; (d) failure to provide timely notice of a
Designated Event; (e) default by the Company (other than a default set
forth in clause (a), (b), (c) or (d) above) for 60 days or more after
notice in the observance or performance of any other covenants in the
Indenture; (f) default under any credit agreement, mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company or any of
its Material Subsidiaries (or the payment of which is guaranteed or secured
by the Company or any of its Material Subsidiaries), whether such
indebtedness or guarantee exists on the date of the Indenture or is created
thereafter, which default (i) is caused by a failure to pay when due any
principal of such indebtedness within the grace period provided for in such
indebtedness, which failure continues beyond any applicable grace period (a
"Payment Default"), or (ii) results in the acceleration of such
indebtedness prior to its express maturity (without such acceleration being
rescinded or annulled) and, in each case, the principal amount of such
indebtedness, together with the principal amount of any other such
indebtedness under which there is a Payment Default or the maturity of
which has been so accelerated, aggregates $25,000,000 or more and such
Payment Default is not cured or such acceleration is not annulled within 10
days after notice; or (g) failure by the Company or any Material Subsidiary
of the Company to pay final, nonappealable judgments (other than any
judgment as to which a reputable insurance company has accepted full
liability) aggregating in excess of $25,000,000, which judgments are not
stayed, bonded or discharged within 60 days after their entry; or (h)
certain events involving bankruptcy, insolvency or reorganization of the
Company or any Material Subsidiary. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount
of the then outstanding Notes may declare the unpaid principal of, Make
Whole Payment, if any, and accrued and unpaid interest on all Notes then
outstanding to be due and payable immediately, except that in the case of
an Event of Default arising from certain events of bankruptcy, insolvency,
or reorganization with respect to the Company, all outstanding Notes become
due
47
and payable without further action or notice. The Make Whole Payment is due
under the Indenture and under the Notes only pursuant to the last paragraph
of Section 502, Article VI of the Supplemental Indenture and paragraph 5 of
the Notes. Holders of Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require an indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject
to certain limitations, holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from holders notice of any continuing
default (except a default in payment of principal, Make Whole Payment, if
any, or interest) if it determines that withholding notice is in their
interests. The Company must furnish annual compliance certificates to the
Trustee.
11. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its Affiliates, in
their individual or any other capacities, may make or continue loans to or
guaranteed by, 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.
12. NO RECOURSE AGAINST OTHERS. No director, officer, employee, shareholder or
Affiliate, as such, of the Company shall 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
Notes.
13. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
14. ABBREVIATIONS. Customary abbreviations may be used in the name of a holder
or an assignee, such as: TEN CO = 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 Gifts to
Minors Act.
15. CONVERSION. Subject to and upon compliance with the provisions of the
Indenture, the registered holder of this Note has the right at any time on
or before the close of business on the last Trading Day prior to the
Maturity Date (or in case this Note or any portion hereof is (a) called for
redemption prior to such date, before the close of business on the last
Trading Day preceding the date fixed for redemption (unless the Company
defaults in payment of the Redemption Price in which case the conversion
right will terminate at the close of business on the date such default is
cured) or (b) subject to a duly completed election for repurchase, on or
before the close of business on the Designated Event Offer Termination Date
(unless the Company defaults in payment due upon repurchase or such holder
elects to withdraw the submission of such election to repurchase ) to
convert the principal amount hereof, or any portion of such principal
amount
48
which is $1,000 or an integral multiple thereof, into that number of fully
paid and non-assessable shares of common stock of the Company ("Common
Stock") obtained by dividing the principal amount of the Note or portion
thereof to be converted by the conversion price of $7.18 per share (the
"Conversion Price") (which is equivalent to a conversion rate of 139.2758
shares per $1,000 of notes (the "Conversion Rate"), as adjusted from time
to time as provided in the Indenture), upon surrender of this Note to the
Company at the office or agency maintained for such purpose (and at such
other offices or agencies designated for such purpose by the Company),
accompanied by written notice of conversion duly executed (and if the
shares of Common Stock to be issued on conversion are to be issued in any
name other than that of the registered holder of this Note by instruments
of transfer, in form satisfactory to the Company, duly executed by the
registered holder or its duly authorized attorney) and, in case such
surrender shall be made during the period from the close of business on the
Regular Record Date immediately preceding any Interest Payment Date through
the close of business on the last Trading Day immediately preceding such
Interest Payment Date (unless this Note or the portion thereof being
converted has been called for redemption on a date in such period), also
accompanied by payment, in funds acceptable to the Company, of an amount
equal to the interest otherwise payable on such Interest Payment Date on
the principal amount of this Note then being converted. Subject to the
aforesaid requirement for a payment in the event of conversion after the
close of business on a Regular Record Date immediately preceding an
Interest Payment Date, no adjustment shall be made on conversion for
interest accrued hereon or for dividends on Common Stock delivered on
conversion. The right to convert this Note is subject to the provisions of
the Indenture relating to conversion rights in the case of certain
consolidations, mergers, share exchanges or sales or transfers of
substantially all the Company's assets.
The Company shall, in respect of fractional shares representing
fractions of shares of Common Stock upon any such conversion, (i) make an
adjustment in cash based upon the current market price of the Common Stock
on the last Trading Day prior to the date of conversion, (ii) round such
fraction up to the nearest whole number of shares or (iii) if permitted by
law and relevant Nasdaq or stock exchange rules, issue fractional shares.
The Company will furnish to any holder upon written request and
without charge a copy of the Indenture. Requests may be made to: Level 3
Communications, Inc., 0000 Xxxxxxxx Xxxx., Xxxxxxxxxx, XX 00000, Attention:
Vice President, Investor Relations, or by telephone at (000) 000-0000.
49
FORM OF CONVERSION NOTICE
To: Xxxxx 0 Communications, Inc.
The undersigned owner of the Note hereby irrevocably exercises the
option to convert this Note, or portion hereof (which is $1,000 or an integral
multiple thereof) below designated, into shares of Common Stock of Xxxxx 0
Xxxxxxxxxxxxxx, Xxx., in accordance with the terms of the Indenture referred to
in this Note, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and Notes
representing any unconverted principal amount hereof, be issued and delivered to
the owner 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 will pay all transfer taxes payable
with respect thereto. Any amount required to be paid by the undersigned on
account of interest and taxes accompanies this Note.
Dated:
Fill in for registration of shares if to be __________________________________
delivered, and Notes if to be issued, other than to __________________________________
and in the name of the owner __________________________________
(Please Print): Signature
__________________________________ Principal amount to be converted (if less than all):
(Name) ______________________________________
$____,000
__________________________________ ______________________________________
(Street Address) Social Security or other Taxpayer Identification
Number
__________________________________
(City, State and Zip Code)
Signature Guarantee:
__________________________________________________
Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Notes are to be delivered, other than to and in the name of the registered
holder.
50
ASSIGNMENT FORM
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 I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(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.
Your Signature: ____________________________________________________________
(Sign exactly as your name appears on the other side of this
Note)
Date: _____________________________
Medallion Signature Guarantee: _______________________________________
51
OPTION OF HOLDER TO ELECT REPURCHASE
If you wish to have this Note repurchased by the Company pursuant to
Section 1006 of the Indenture, check the Box: [_]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 1006 of the Indenture, state the amount (in multiples of
$1,000): $_____.
Date: ______ Your Signature: __________________________________
(Sign exactly as your name appears on the other side of this Note)
Medallion Signature Guarantee:
_______________________________________
